Mumbai builder moves HC against RERA
In a fresh challenge to the new real estate regulatory law, Mumbai-based realty firm MIG (Bandra) Realtors and builders Pvt Ltd, a subsidiary of construction company, DB Realty, has moved the Bombay high court to prevent any coercive action for non-registration of a large redevelopment project in Bandra east by July 31.
The project is for 104ft-high towers, spread over four acres where Maharashtra Housing and Area Development Authority (Mhada) had constructed 19 middle-income group (MIG) buildings in 1961-62.
The firm has assailed the constitutional validity of four main sections under the Real Estate (Regulation and Development) Act, which provide for penal action and even imprisonment for failing to register ongoing development projects by the month-end. It requires real estate projects that were ongoing at the time to get registered and stipulates that developers abide by completion deadlines. The petition says that certain provisions under sections 3, 4, 5 and 6 pertaining to registration of projects must be declared unconstitutional. The alternate plea is that the HC declare that the RERA provisions do not apply to the DB group’s “ongoing real estate projects”, which are yet to receive completion certificate.
The petition is likely to be heard on July 31, the last day of the RERA registration deadline.
The petition draws the court’s attention to the genesis of the project and the process of approvals and legal hurdles over the years. It says that in 1962 the housing board allotted flats on 15-year hire-purchase basis and they formed MIG society in 1977. The society has 176 members.
In 2004, Mhada offered to convey the plot to the society and in 2006, with most buildings dilapidated the society invited bids for redevelopment and accepted one from L&T Bombay Developers Pvt Ltd.
In 2008, Mhada executed a lease in favour of the society for 90 years with effect from May 16, 1977. But two years later in 2010, DB Realty Ltd expressed their interest to the society to redevelop the property and proposed to settle disputes that had arisen between the society and L&T Bombay Developers. The society agreed. DB Realty Ltd subscribed to 100% shareholding of the L&T Bombay Developers Pvt Ltd.
The society granted the developer rights to develop in 2010 and received Rs 1.15 crore as security deposit. L&T Bombay Developers changed its name to DB MIG Realtors and Builders in October 2010 and the Development Agreement was confirmed by 174 of the 176 society members, says the petition.
In November 2011, Mhada issued their NOC for redevelopment after getting plans. But with fungible floor space being made available by an amendment in 2012, in 2013 the developer amended its building plans and went higher to 72 m. The society approved the new plans subject to the builder getting clearance from the civil aviation ministry and other conditions.