A housing project in Borivali East, which was left in limbo by absconding diamantaire Mehul Choksi, will soon be completed with a new developer after the intervention of housing regulator MahaRERA.
Over 100 home buyers can breathe a sigh of relief after the construction of 20-storey Tatva Urja and 21-storey Tatva Prayan in Borivali East has resumed after developer Laxmi Infra Developers Ltd agreed to complete the project.
The project was initiated by Gitanjali Gems Ltd, promoted by Mehul Choksi, and subsequently sold to its wholly owned subsidiary Gitanjali Infratech Ltd, which started the development of the property in 2014 and registered it with MahaRERA. The project was supposed to have 155 flats in two 20 storey towers, of which 101 were sold. In 2015, the construction work slowed down and stopped completely in early 2018.
“Most of the buyers had paid 80 to 85 per cent of the flat cost when Mehul Choksi fled from India in January 2018. Around 15 days before he left, Choksi had entered into a development agreement with Laxmi Infra Developers Ltd to finish the balance work of 50 flats. Enforcement Directorate probing the PNB Scam attached 54 unsold flats of these flats as part of attachment of Choksi’s assets,” said housing activist Ramesh Prabhu of Ramesh Prabhu & Associates.
When Tatva home buyers approached MahaRERA to use powers under Section 7 and 8 to complete the project, Laxmi Infra Developers filed an intervention application. The Authority then asked both the parties to hold discussions to reach an amicable settlement and sign consent terms.
This is the first of nearly 70 stuck projects that MahaRERA is looking at reviving using the powers vested in Section 7 and 8 of Real Estate (Regulation and Development) Act (RERA) after a severe liquidity crunch hit the real estate market. These new sections were introduced in March 2019 which allow home buyers to form an association of allottees and revoke the registration of a failed developer as well as revive a project.
“The parties agreed to protect the interest of the allottees and allowed Laxmi Infra Developers to complete the project in a time bound manner,” observed MahaRERA member Dr Vijay Satbir Singh in his July 11 order. Some home buyers had also sought payment of interest for delays in possession. However, MahaRERA ruled that the payment of interest at this stage could adversely impact the completion of the project, and said home buyers could approach the authority again when the project nears completion.
“The cost of completing the project was estimated to be Rs 30 crore. The buyers agreed to pay the 10 per cent balance payments and contribute around Rs 20 crore, and Laxmi Infra agreed to contribute Rs 10 crore. The developer agreed to complete construction within 9 months and will be given three months grace period to get Occupancy Certificate by February 2020 as per the consent terms,” said Prabhu. “It is a landmark order by MahaRERA and shows the way to revive and complete a stuck project in the interest of the home buyers.”
