MUMBAI: Sounding a stern warning to builders who launch redevelopment projects, get residents to vacate their flats and then miss deadlines, the Bombay high court has cracked down on a developer.
Sachin Kelkar, partner of Icon Builders and Developers that began redeveloping a Vile Parle housing society in 2010 but is yet to hand over flats, was told to deposit his passport and not sell or part with his Audi or Mercedes Benz and properties on Monday. The economic offences wing of the city police was ordered to probe allegations of fabricated commencement certificates in the project and be ready with a report by September 19. The HC noted that since the builder had failed to pay property taxes, the society property could be sold.
Justice S J Kathawalla was hearing a plea by the Homai Mahal Premises Cooperative Society Ltd. Cases of flat owners seeking protective orders against builders had risen “alarmingly”, he said, adding that the Vile Parle case “exceeded all limits”. “Almost every alternate matter called out before us pertains to redevelopment.” The judge added that the grievance was usually about developers who have undertaken projects without own funds. In the Homai Mahal case, the new building has commencement certificate only till the third floor, but has been constructed till the seventh. Advocate Amarendra Mishra, appearing for Kelkar, said he had applied to the BMC for regularization for the four floors and it was approved last year.
The HC observed that the BMC has said there are two bogus and fabricated commencement certificates bearing forged signatures of BMC officials annexed to the sale agreement signed on August 19, 2013, between the developer, Shri Sachin Kelkar, and his general manager Shiva Pasare. The 23 members of the society occupying shops, garages, hospital and residential premises had in 2009 authorized redevelopment. They are still awaiting the promised flats.
“The members of the society have at this point of time not only lost their roofs since the last six years, but have been deprived of compensation for temporary accommodation, and are instead saddled with huge liabilities in the form of taxes and third-party rights created by the developer in respect of flats to be constructed on the property owned by the society,” said the HC.
Once residents agree to redevelopment and vacate their premises, they are left at the mercy of the builder whose project, said the judge, “progresses at a snail’s pace” or is “even abandoned” while they live a lavish life by immediately raking in “crores of rupees” for the “free sale flats”. Builders often stop payment of rent or compensation to the displaced residents, and by the time tenants or residents move court, builders say they “have no assets to offer and are neck deep in debt”.
Justice Kathawalla, who recently pulled up another builder for abandoning a redevelopment project, said in a grave voice: “Despite allegedly being neck deep in debt, the very same builders continue to move around in their branded vehicles like Mercedes/BMW/Audi. The standard answer they give is that the vehicles are hypothecated to financial institutions and they have defaulted on instalments.”
Though aware of the “pain and anguish of tenants and purchasers of free sale flats, in the absence of unencumbered assets in the builder’s name, the court finds itself absolutely helpless in passing protective orders”, he added. On August 22, the HC had directed Kelkar to produce the “annual returns of the last five years of all the companies in which he and his immediate family members are directors or shareholders”. On Monday, Kelkar’s lawyer sought more time to furnish the details and said “the builder has every intention to complete the building and never intended to flee with the money”.
Credits ET Realty