Real Estate Projects Cracking Down
Shilpi Rawat was just 25 when she put all her savings and those of her father, a retired government employee, in an Earth Towne flat in Sector 1, Greater Noida. She was thrilled to see the glossy brochure showing an artist’s impression of a lush-green and posh colony. Rawat was supposed to get possession of her flat in May 2015.
However, little did she know that her ordeal with the developer, Earth Infrastructures Ltd., had just started. The salesperson convinced her to opt for a payment plan where she would immediately have to pay 95 percent of the total cost of the flat. That was six and a half years ago. Today, there is no sign of any flat at the site. A guard, who was stationed there, has disappeared, the sales executive who briefed her has quit, the company’s phones are dead and the builders are in jail.
Rawat has attended numerous court hearings in Tis Hazari in Delhi along with others who had paid for the flats. But they have only seen the proceedings get adjourned time and again. The builder has refused the court’s suggestion to pay a corpus to it. Rawat told India Legal: “I have no hope left. I am planning to get married soon and need that house. The hearings leave me exasperated. This is precisely what the developers want so that they can make a quiet escape.”
During the court hearings, Rawat learnt that the builder had actually sold off more flats than envisaged as the same flat was sold off to multiple buyers. This made her realise that the developer never intended to construct those flats. Most of the buyers the builder had targeted were retired. They had a lump sum amount after retirement and were mostly from Tier-II and Tier-III cities and wanted to shift to the National Capital Region.
There are millions of middle class buyers like Rawat who have been duped by builders and developers. There was Raj Narain, in his late eighties, who could not even stand and had come all the way by metro for the court hearing. Rawat booked a cab for him to go back, but he pleaded with her not to as he did not have the money to pay for it. He told her that he had put his entire retirement fund in the flat. In the course of the six-year wait, he lost his wife too. He has now rented a part of his Faridabad house with a request to the tenant to provide him two meals a day. “Old and helpless people like him are completely at the mercy of the developer, the court and associations formed to fight the cases. Many have died waiting for justice,” said Rawat.
Arvind Jain, president, Developers Township Property Owners Welfare Society, told India Legal: “The judgment must be widely publicised and all resident welfare associations should display it on their websites so that people know that there is such a direction and can challenge errant builders.”
The bench said that due to rampant violations and its consequences, display of layout plans is a must and should be enforced by the Real Estate Regulatory Authority (RERA). This direction came up in a case filed by Ferani Hotels Pvt. Ltd., which challenged a High Court order asking for the release of certain documents relating to a development plan of a plot in Mumbai to Nusli Wadia under the Right to Information Act.
Wadia had entered into an agreement with Ferani Hotels for carrying out development work in 1995 on three plots of land. But disputes between the parties in 2008 resulted in Wadia terminating the agreement. He asked for certified copies of all PR cards, plans and amendments submitted by Ferani Hotels to the municipal commissioner along with his approvals. The State Information Commission allowed the application, reasoning that the development of the property concerned public interest.
Aggrieved by this order, Ferani Hotels filed a writ petition in the Bombay High Court which dismissed it. The Court held that the information sought in the application was part of public records and had to be revealed in public interest. The appellant then approached the Supreme Court.
The apex court said that in order to make builders and developers accountable to the public, the documents need to be put in the public domain and do not constitute “personal information”. It found that the information sought did not fall under the ambit of trade secrets or commercial confidence and were required under RERA. It dismissed the appeal and asked Ferani Hotels to pay Rs 2.50 lakh to Wadia as costs.
As Diwali is round the corner, developers and real estate companies are coming out with tempting offers to homebuyers. Many are offering huge discounts running into lakhs of rupees. The real estate market is reeling with poor sales as public confidence has plummeted with many housing scams.
One Mumbai-based developer is offering discounts of up to Rs 44 lakh to homebuyers, while another in Uttar Pradesh is offering free car parking and a waiver of the Goods and Services Tax. A Thane-based developer is offering an early bird discount of Rs 6 lakh to those who book an apartment. A Gurugram-based developer is asking for just five percent of the payment of the flat during booking, with the remainder to be paid only when possession is given. But buyers don’t want to take the risk and would rather invest in projects which are completed.
It is best for customers to be careful and check out the credentials of the builder or developer. They should invest in a property that has been completed rather than one where construction has not even begun. Noida and Gurgaon are full of half-complete high-rises that stand like sentinels without a single worker.
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