The dispute between the tenants and the developers of high profile X BKC project in Kala Nagar has escalated further with the MIG Co-operative Housing Society Ltd serving a termination notice on MIG (Bandra) Realtors & Builders Private Limited, a part of DB Realty group, last week, and the developer invoking the arbitration clause in its reply.
In a notice dated May 8, MIG CHS managing committee has informed the developer that the society was terminating the development agreement with the developer with effect from March 10 in line with the resolutions passed in the society’s special general meeting held February 9.
The resolutions had said that if the post-dated cheques for hardship compensation for December 2019 to June 2020, and Rs 5 crore as liquidated damages for delays in paying the rent could not be encashed as per specific timelines, the society would terminate the agreement and invoke the bank guarantee from Yes Bank.
In his reply, Pankaj Rajmachikar, the legal head of MIG (Bandra) Realtors & Builders Private Limited, said the company had not been served a copy of the February 9 resolutions. The letter said the company could not issue the amended bank guarantee due to the Yes Bank crisis followed by the lockdown and assured that they would issue it as soon as the lockdown was lifted.
The reply also pointed out that the termination notice was invalid as the development agreement required a 30-day notice in case of any breach by the developer. It also said that there was no question of termination from March 10 as the society members had accepted and deposited the rent cheques till May 29.
“Without prejudice, we may add that such purported termination is in violation of existing law and lacks the necessary consents as required in law,” said the three page reply from Rajmachikar who suggested that since disputes had arisen, the company would like to invoke arbitration as per a clause in the Development Agreement. He also suggested the names of two retired High Court judges, and asked the society to select one of them as sole arbitrator within 5 days as the High Court was functional only on certain days during the lockdown and was hearing only urgent matters.
In a reconciliatory tone, the developer said it was committed to releasing the outstanding hardship compensation to tenants and recommencing the construction and sales and offered to meet up the managing committee to resolve differences. The letter claimed that out of 29 floors in four society wings, the RCC construction had already reached up to 28 floors in two wings, and up to 21 floors in two wings.
Rajmachikar said he was not authorised to speak on the subject to the media.
