Grant adequate meeting time to jailed Unitech MD Sanjay Chandra: SC to Tihar Jail authorities

The Supreme Court today directed Tihar Jail authorities to grant adequate meeting time to their inmate Sanjay Chandra, Managing Director Unitech BSE -1.12 % Ltd, for allowing him to strike deals with prospective buyers.

Chandra, head of the embattled real estate group, was recently asked by the apex court to deposit Rs 750 crore with it by December end to safeguard the interests of homebuyers.

A bench of Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud considered the submission of senior advocate Ranjit Kumar that Chandra gets 30 minutes meeting time in jail to deal with prospective buyers and for arranging money.

The apex court had on October 30 said that the jailed businessman will be granted bail only after the real estate group deposits money with its registry by December end.

Today, the senior lawyer said that Chandra has been required to be produced in various courts, consumer forum and commissions on a regular basis which hampered his endeavour to arrange money and hence, the production warrants issued against him by various judicial bodies be stayed for 15 days.

He also said that the accused be allowed to appear in courts through his lawyers. The plea was declined.The apex court, however, clarified that its earlier order directing all courts below not to take any coercive action against the accused for the time being would also be made applicable on all forums including state and national consumer commissions.

It had said if any proceedings were pending against Chandra and the company, those may continue and the final order be passed but no coercive steps would be taken for executing those orders.

Chandra is seeking interim bail from the apex court after the Delhi High Court on August 11 had rejected the plea in a criminal case lodged in 2015 by 158 home buyers of Unitech projects’ — ‘Wild Flower Country’ and ‘Anthea Project’ — situated in Gurugram.

Source – TOI

Maha RERA makes only developer, not land owner, answerable to homebuyers

Maharashtra Real Estate Regulatory Authority (MahaRERA) has withdrawn its office order making land owners equally liable as that of builders and developers

Maharashtra Real Estate Regulatory Authority (MahaRERA) has withdrawn its office order making land owners equally liable as that of builders and developers under the Real Estate (Regulation and Development) Act, 2016, the Bombay high court (HC) was told last week.

Advocate general Ashutosh Kumbhakoni told a division bench of justice Naresh Patil and justice Rajesh Ketkar that the authority has withdrawn the order dated May 1 by which it had introduced definition of the term “co-promoter” in the Real Estate (Regulation and Development) Act, 2016.

The office order defined co-promoter as the person or organisation, who under an agreement with the promoter (builder or developer) of a real estate project, is allotted or entitled to a share of the total revenue generated from sale of apartments in the project or in terms of constructed apartments in the project.

Kumbhakoni was responding to a petition filed by seven city residents, who own a 12,531 sqm plot at Nahur and who have given the land for development to a private developer, Shivkripa Enterprises.

 In the petition filed through advocate Vishwajeet Kapse they challenged validity of the office order primarily on grounds that the authority under RERA was not empowered to introduce any such new term into the enactment. “The impugned office order is tantamount to legislation,” stated the petition. “Respondent (MahaRERA) cannot legislate for the state, much less for the Union,” it added.

They took strong objection to the fact that the office order foisted a liability on land owners which was not contemplated either under provisions of the Maharashtra Ownership of Flats Act or under provisions of the RERA, 2016.

They said the authority under RERA failed to appreciate that the land owner, who is not himself the developer, does not undertake any construction activity and only parts with his rights as owner of the land to the builder or developer (promoter under RERA) to develop the land, and he has no further role to play in construction of the apartments and their sale to individual purchasers.

They withdrew the petition last week after Kumbhakoni made a statement to the effect that the office order has been withdrawn.

Source HT

MahaRERA orders Neptune to give home buyers flats in other wings

The Neptune 100 Above Buyers’ Welfare Association, set up by 53 home buyers who had booked apartments in Neptune Eleve’s B wing in Kanjurmarg in suburban Mumbai

In a first ruling on a complaint filed by an association of home buyers, Maharashtra Real Estate Regulatory Authority (MahaRERA) has directed Neptune Ventures and Developers Private Limited, which failed to give promised possession of flats in B wing of Neptune Eleve project in Kanjurmarg in 2014, to shift the flat buyers to flats in C and D wing, which are likely to be completed earlier. So far, the Maha- RERA had given orders on individual complaints only.

The Neptune 100 Above Buyers’ Welfare Association, set up by 53 home buyers who had booked apartments in Neptune Eleve’s B wing in Kanjurmarg in suburban Mumbai, had filed a complaint with MahaRERA that despite paying 10 to 30 per cent of the flat cost between 2010 and 2012, the developer had entered into registered agreements and had failed to give possession promised in 2014.

During the first hearing of the matter last month, the developer Neptune Ventures and Developers Private Limited had sought time to settle the matter amicably with the buyers. At the second hearing, the developer said that after discussions with the buyers, he had agreed to shift all 53 buyers to Neptune Eleve’s C and D wings which are likely to be completed earlier than the remaining wings in the project.

The association members agreed to option given by the developer withfour conditions. They demanded that the developer should not demand any fees for transferring their flat to a higher floor. They also demanded that the promoter should charge the money as per the subvention scheme he had advertised, and not impose additional costs.

They also demanded that the input credit on GST paid should be passed on to the association when the money comes to the promoter’s account, and that the developer should prepone his revised possession deadline from December 31, 2025 put on the MahaRERA website to June 2021.

MahaRERA adjudicating officer and chairperson Gautam Chatterjee then directed the developer to shift the home buyers’ flats to C and D wing of Neptune Eleve, and asked him to execute and register the agreements for sale as per RERA provisions before effecting any payments from them. He also directed that the future payment schedule should also be in accordance with the model form of agreement prescribed by RERA. As per the model agreement, the developer has to place 70 per cent of the project cost in an escrow account, and withdraw funds for the project in line with the construction schedule with the requisite certification by the structural engineer, the chartered accountant, and the architect.

Chatterjee also directed the developer to handover possession of the apartments by June 31, 2021 failing which the developer would be liable to pay interest to the buyers from July 2021 till the actual date of possession on the entire amount paid by the buyers. He also directed that the developer should not charge any extra money for floor rise if the buyers are shifted within 4 floors of the originally allotted floor or if shifted to a higher floor due to non-availability of apartments in Wings C or D. He also directed the developer to pass on the GST input credit to the home buyers after it is credited to the promoter’s account.

Source – Mumbai Mirror

‘Price of flat not relevant in case of claim for refund’

Ruhi Seth had booked an apartment in a housing projected to be constructed by Ireo Grace Realtech, a private construction company. Out of the total agreed consideration of Rs 1,84,44,568, Seth had paid Rs 33,56,942.
When the builder sent the draft of the agreement, Seth objected to certain clauses, refused to sign the agreement and sent it back to the builder, who revised the agreement, which too was not accepted. So Seth refused to pay further instalments till the dispute about the agreement clauses was resolved. Taking umbrage, the builder cancelled the flat allotted to her, and forfeited the entire amount paid by Seth.
Seth filed a complaint before the Delhi State Commission seeking a refund of the amount of Rs 33,56,942 paid by her together with interest amounting to Rs 34,24,081 computed at 24% per annum from Match 20, 2013 till May 20, 2017. She also claimed compensation and costs. The sum total of all the relieves claimed under various heads came to Rs 73,81,023. The state commission referred to the National Commission’s judgement in Ambrish Kumar Shukla & Ors versus Ferrous Infrastructure Pvt Ltd case and observed that the aggregate value of refund claimed and the value of the flat would exceed state commission’s pecuniary limit of Rs 1 crore. So it asked for filing of case before the appropriate forum having jurisdiction.

Seth then filed the same complaint before the National Commission The National Commission stated that the value of the flat would have to be added only when the complaint is in respect of possession, construction, or defects in a flat. Since Seth’s dispute was restricted to the claim for refund of the amount along with interest, compensation, and costs.
Accordingly, by its judgement on November 13 delivered by Prem Narain, the Commission concluded that the claim for refund of the deposit along with interest, compensation and costs aggregating to Rs 73,81,023 was below its pecuniary jurisdiction and would have to be adjudicated by the state commission. The National Commission asked Seth to a fresh complaint or revive her earlier complaint before the Delhi State Commission.
Source – TOI

‘Price of flat not relevant in case of claim for refund’

Ruhi Seth had booked an apartment in a housing projected to be constructed by Ireo Grace Realtech, a private construction company. Out of the total agreed consideration of Rs 1,84,44,568, Seth had paid Rs 33,56,942.
When the builder sent the draft of the agreement, Seth objected to certain clauses, refused to sign the agreement and sent it back to the builder, who revised the agreement, which too was not accepted. So Seth refused to pay further instalments till the dispute about the agreement clauses was resolved. Taking umbrage, the builder cancelled the flat allotted to her, and forfeited the entire amount paid by Seth.
Seth filed a complaint before the Delhi State Commission seeking a refund of the amount of Rs 33,56,942 paid by her together with interest amounting to Rs 34,24,081 computed at 24% per annum from Match 20, 2013 till May 20, 2017. She also claimed compensation and costs. The sum total of all the relieves claimed under various heads came to Rs 73,81,023. The state commission referred to the National Commission’s judgement in Ambrish Kumar Shukla & Ors versus Ferrous Infrastructure Pvt Ltd case and observed that the aggregate value of refund claimed and the value of the flat would exceed state commission’s pecuniary limit of Rs 1 crore. So it asked for filing of case before the appropriate forum having jurisdiction.

Seth then filed the same complaint before the National Commission The National Commission stated that the value of the flat would have to be added only when the complaint is in respect of possession, construction, or defects in a flat. Since Seth’s dispute was restricted to the claim for refund of the amount along with interest, compensation, and costs.
Accordingly, by its judgement on November 13 delivered by Prem Narain, the Commission concluded that the claim for refund of the deposit along with interest, compensation and costs aggregating to Rs 73,81,023 was below its pecuniary jurisdiction and would have to be adjudicated by the state commission. The National Commission asked Seth to a fresh complaint or revive her earlier complaint before the Delhi State Commission.
Source – TOI

RERA has revived home sector demand

SBI is seen to be among the major gainers from the government’s move to inject equity into state-run banks to enable them to lend more and spur economic activity. In an interview with TOI, Rajnish Kumar, the newly-appointed chairman of the country’s largest bank, talks about signs of change in the economic situation and expects a pick-up in demand after Tuesday’s Rs 7-lakh-crore package for the road sector. At the same time, he says, the bank may reduce interest rates in some basket, given the low credit demand. Excerpts:The government announced a major recapitalisation plan on Tuesday. What is your fund requirement?

We will work out our numbers and estimate the capital requirement. But we are better than the Basel III estimate. Given that we account for one-fourth of the banking system, I am sure the government will prioritise our requirement.

The government has also talked about monetisation of non-core assets. What is your plan, including on the real estate assets?

That programme will continue. It’s a separate exercise.Our properties will be handled by SBI Infrastructure Management but hiving it off is not a very tax-efficient option and there are complications.

How do you see the overall economic situation?

The India story remains intact, which is a view that is shared by everyone. There is no real slowdown in con sumption. In manufacturing sector, things can be better.But the government’s announcements for the infrastructure sector will give a major boost to employment and given the linkages with other sectors, higher government spending will help a lot of industries. I see major gains for cement and steel. Higher manufacturing activity may not see as much increase in jobs as in the past due to automation, which has reduced the employment potential. But more construction will mean more employment and the sector will have a cascading effect on other sectors.

Given the slowdown in growth and inflation remaining below 4%, do you expect RBI to cut rates?

We don’t see an immediate reduction in rates, especially in the December review.

Is there scope for banks such as yours to reduce deposit rates and also lending rates, especially for housing and other retail loans?

It will depend on individual banks. But given that credit growth is muted, there is scope for some further reduction in interest rates in certain baskets. While the overall decision will be taken by the assetliability committee, but some changes may happen.

One of the problems for low demand for loans is over-capacity in the system. Have you seen an improvement in the situation?

There is a problem in sectors such as power, where a lot of capacity is idle or under-utilised. The demand for loans from generation projects is not there. In other sectors such as steel, there is a balance between production and consumption. There will be more demand from the engineering sector in the coming months and I also expect demand from defence production and railways. With the latest thrust on infrastructure, the investment cycle will pick up. Automobiles are doing well with car sales being strong and light commercial vehicles also doing well. There was some disruption due to RERA but now all developers are marketing RERA-approved projects, which has reduced the trust gap between the buyer and the builder. Now buyers feel assured and the residential sector demand has revived. The thrust on affordable housing is also positive for the sector. These are pointers to things turning around (in the economy).

The finance minister spoke about indiscriminate lending between 2008 and 2014, creating problems for banks. Going forward, how do you prevent that?

When we do business, the risk management department has to be very strong, something that is a focus for us. We need to strike a balance between business growth and the risk appetite. Pricing of risk is a very crucial element. In the past, the problem was excess liquidity, which meant that pricing of the risk was not proper. If the risk is higher, then the reward has to be adequate. Due to higher liquidity , everyone was chasing few assets and the risk was underpriced. We need to get the riskreward framework right and the anxiety for growth should not upset that.

GST is seen to have created pressure on SMEs. What is your feedback?

The steps announced by the government should help clear some of the problems as most of them have concerns related to timely realisation of receivables. The move for electronic registration of public sector companies will help clear the dues of MSMEs on time. I hope the private sector also responds in a similar fashion.

Source – TOI

With RERA help, 2 home buyers get refund 3 yrs after cancelling booking

NAVI MUMBAI: After a complaint filed with Maharashtra Real Estate Regulatory Authority (MahaRERA), realty firm Nirmal Lifestyle Kalyan Pvt Ltd was on Monday forced to refund booking amounts for two flats in their project. What makes this case a rare one is that the refund has been made almost three years after the buyers had cancelled their bookings.

Thane resident Mansi Shrivastava and Sandeep Ranjan had booked two flats in 2013 in a MahaRERA-registered project of Nirmal Lifestyle by paying Rs 6.10 lakhand Rs 6.26 lakh for flats worth around Rs 30 lakh. However, due to financial problems, the complainants cancelled the booking in 2014 and sought a refund. Nirmal Lifestyle paid them Rs 1lakh each and dilly dallied on paying the rest.

“They never said they would not return the amount, but they never paid it till the matter was brought before MahaRERA,” said Ranjan.”MahaRERA resolved our issue in a short time.”

 A RERA official said that the buyers were harried due to the construction firm’s attitude. “RERA has come has a boon to them,” he said. After the complaint, the firm simply issued two cheques for Rs 5.10 lakh and Rs 5.26 lakh to the two complainants.
MahaRERA member Vijay Satbir Singh said, “MahaRERA has given stakeholders aplatform to come together to resolve disputes through negotiation.”
A public relations firm representing Nirmal Lifestyle was to respond to a request by TOI for a comment on the issue till the time of going to press.
Source – TOI

HC sets 2021 deadline for builder in Powai

MUMBAI: The Bombay High Court on Tuesday directed Lakeview Developers run by the Hiranandani group to construct around 2,398 affordable houses in Powai before June 1, 2021, according to the undertaking given by them. The developer will have to build around 887 flats of 861 square feet each and 1,511 flats of 430 square feet each.A specified number of flats would have to be sold to the Maharashtra government at a rate of Rs 135 per square feet. A division bench of Chief Justice Manjula Chellur and Justice Nitin Jamdar said if the developer fails to meet the deadline, they would have to earmark an additional 10% of the flats for sale to the state government.

 The court was hearing an application by the developer over a 2012 order that restrained it from constructing buildings on its Powai land without permission.The court’s orders had come on a PIL that alleged violation of lease conditions. Hiranandani had signed a lease for the 230 acres of land in 1986 in a tripartite agreement with the state and MMRDA. As per the agreement, the builder was to construct 50% of the flats admeasuring 430 square feet and the remaining of 861 square feet. Instead, according to the petitioner, flats were allowed to be merged to as large as 4,000-5,000 sq ft and sold at prices touching Rs 7 crore. One of the important conditions was that around 15% of the floor space index consumed would have to be sold to the state government at a rate of Rs 135 per square feet. These flats would be used by the state to house its staff. The PIL had claimed MMRDA initially imposed a fine of around Rs 2,000 crore on the builder, which was brought down to Rs 89 crore and finally the state further slashed it to Rs 3 crore. As per the 2012 HC order, the builder has to construct 2,200 flats admeasuring 431 square feet and another 2,200 flats admeasuring 861 square feet.
Earlier this year, the HC appointed a committee to inspect and verify the affordable flats constructed and the remaining ones that need to be built. The flats will be in six residential towers.While some flats would be ready by December 2018, the rest have to be constructed before June 1, 2021. The court has allowed the developer one month to apply for permissions and around six months for the BMC to grant approvals. The builder will also have to open a joint account with the proto-notary of the HC, where the proceeds from around 207 flats would be deposited.
Source – TOI