The Tamil Nadu Real Estate Appellate Tribunal (TNREAT) has reduced the penalty imposed on the Tamil Nadu Housing Board (TNHB) for partial non-compliance with an order of the Tamil Nadu Real Estate Regulatory Authority (TNRERA) from ₹1 lakh to ₹30,000.
The tribunal passed the order on August 24, 2026, while disposing of an appeal filed by TNHB against an order passed by TNRERA on May 8. The tribunal observed that the higher penalty was excessive, particularly considering that the housing board was running at a loss.
Dispute arose over HIG flat and promised amenities
The matter originated from a complaint filed in 2022 by P. Malathi, an allottee of an HIG flat developed by the Tamil Nadu Housing Board.
Malathi had approached TNRERA alleging non-compliance with commitments made by the housing board regarding the project and its amenities.
After considering the complaint, TNRERA directed TNHB to provide the amenities promised in its advertisements and pamphlets. The Authority also directed the housing board to:
- Execute the sale deed for the undivided share of land;
- Register the project under Section 3 of the RERA Act; and
- Provide the amenities that had been promised to the allottee.
However, TNRERA subsequently found that the housing board had only partially complied with its directions.
TNRERA imposed ₹1 lakh penalty
Since the directions had not been fully complied with, TNRERA imposed a ₹1 lakh penalty on TNHB.
The Authority also directed the housing board to complete the RERA registration of the project by June 30, 2026.
Aggrieved by the order, TNHB approached the Tamil Nadu Real Estate Appellate Tribunal.
TNHB challenged direction relating to water treatment equipment
Before TNREAT, the housing board specifically challenged the direction requiring it to provide water treatment equipment to every flat in the project.
TNHB argued that the direction was excessive because Malathi was the only allottee who had sought the facility.
The project comprised 133 flats, and according to the housing board, there was no justification for directing it to install the equipment for every flat merely because one allottee had sought it.
TNREAT accepts TNHB’s contention
The Tribunal accepted this argument.
It held that the direction requiring TNHB to provide the water treatment equipment in all 133 flats could not be sustained.
Accordingly, TNREAT set aside the direction requiring the equipment to be provided to every flat.
However, this did not completely relieve the housing board of its obligation.
The Tribunal directed TNHB to provide the water treatment equipment to Malathi, along with the other promised amenities.
The facilities are required to be provided by September 30, 2026.
Penalty reduced from ₹1 lakh to ₹30,000
A significant aspect of the order was the Tribunal’s decision to reduce the penalty imposed on TNHB.
TNHB had already deposited ₹30,000 as a pre-deposit under Section 43(5) of the Real Estate (Regulation and Development) Act, 2016, while filing the appeal.
Considering the circumstances of the case, including the financial position of the housing board, TNREAT held that the ₹30,000 already deposited would suffice as the penalty.
Thus, the penalty imposed by TNRERA was effectively reduced from ₹1 lakh to ₹30,000.
Key takeaway for housing authorities and allottees
The TNREAT ruling highlights that promoters and housing authorities are expected to comply with commitments made to homebuyers through advertisements and project literature.
At the same time, the Tribunal has indicated that directions issued by a RERA authority must remain proportionate to the relief sought and the facts of the case.
In this matter, while TNHB was required to honour the promised amenities for the complainant, the Tribunal found it excessive to require the housing board to provide a particular facility to all 133 flat owners when the complaint had been made by a single allottee.
The ruling therefore draws a distinction between the individual statutory or contractual entitlement of an allottee and a direction that extends the same relief across an entire project without sufficient justification.
TNHB must provide amenities to Malathi by September 30
While reducing the financial penalty, TNREAT did not absolve TNHB of its remaining obligations.
The housing board has been directed to provide the water treatment equipment to P. Malathi and the other promised amenities by September 30, 2026.
The decision reinforces the principle that reduction of a penalty does not mean that a promoter or housing authority is relieved from complying with substantive directions concerning an allottee’s rights.
