Bombay HC order enabling work on stuck Khar project a welcome move, say legal experts

Silver Sunshine building in Khar, for which the HC has appointed a court receiver to complete the redevelopment work

A recent Bombay High Court order appointing a court receiver for completion of a stalled residential project in Khar has been welcomed by legal experts practicing in MahaRERA. They said it is high time that hundreds of stalled projects across the city and state, which have in turn kept thousands of flat buyers stuck for decades, see the light of the day, and added that unfortunately MahaRERA is not utilising all its power to act against errant developers in larger interest of common man.

The case

The HC had recently appointed a court receiver and directed that an incomplete redevelopment project of a MHADA leased building Silver Sunshine in RK Nagar, Khar be completed by appointing third-party contractor and architect for the remaining work up to 13th floor, the cost of which is to be borne by applicants/plaintiff till Occupancy Certificate is obtained. The project had left 18 home buyers in the lurch, as the developer M/s Silvex Developers Private Limited abandoned the project a decade ago.

Advocate Anil D'souza, who appeared for one of the litigants before the HC in the Khar case, said, "This is indeed a landmark order which can set a precedent for aggrieved societies and new flat purchasers. The court has taken into account the issues of all stakeholders. Appointment of the court receiver will ensure that every party comes on one level and works together to move ahead. This can be a benchmark case for all stuck projects."

Stuti Galiya, solicitor

Advocate Godfrey Pimenta, who practices in MahaRERA, said, "The HC's recent decision is a progressive order in respect of stalled real estate projects. RERA Authority was formed mainly to provide relief to buyers from the malpractices of unfair builders. There are many applications filed by flat buyers' associations with MahaRERA for takeover of stalled real estate projects under Sections 7 and 8 of RERA, but unfortunately such real estate projects do not get listed on priority for hearings."

"The need of the hour is to expedite the hearing of such stalled projects particularly of buyers' associations intending to take over the stalled real estate projects. I have yet to come across a case where a stalled project under the aegis of a resolution panel appointed by MahaRERA has successfully completed a stalled real estate project," Pimenta said.

Pending complaints

CA Ramesh Prabhu, founder-chairman of Maharashtra Societies Welfare Association, said, "On the failure of the promoter, section 8 of RERA has put an obligation on the authority to get the remaining development work completed. MahaRERA has already published more than 2,000 projects the registration of which lapsed in 2020. Therefore, it is high time that MahaRERA initiates some proactive actions to ensure that the stalled projects resume their work."

When asked about the statistical numbers of registered projects and pendency of cases, Prabhu said, "Complaints against registered projects filed till date is 15,593, of which orders have been passed in 10,189 cases. There are 5,404 pending complaints and the number is increasing. In terms of complaints against unregistered projects, the number stands at 839, of which 784 have been disposed of."

"Similarly, out of the 32,093 projects registered so far, 7,216 projects are completed and 24,877 are ongoing or stalled. Of this, 3,161 have lapsed over the past five years," he added.

Solicitor Stuti Galiya said, "Today, despite stringent regulations and creation of separate real estate authority, there are several projects which are abandoned or which have not received occupancy certificate, for more than a decade now…A system needs to be put in place, where after a stipulated period, the government takes over the project and replaces the errant builder and ensures completion of the project, in the interest of the flat owners."

Expert view

Advocate Vinod Sampat, founder president of Cooperative Societies and Resident Users Association, said, "We all know there are thousands of projects which have not been completed. In such a scenario what is expected from RERA is they should ensure that all the flat purchasers get the desired flat. In the event there is no cooperation from the builder, a new set of developers should be appointed."

"The best alternative, in my view, is that RERA tighten its screws on builders. Also Parliament should frame laws making such developers punishable. Today developers go scot-free. Standing instructions should be given and laws should be enacted specifically to ensure that even if a builder is not able to complete the project, he will not delay the project and will himself approach the authorities, seeking assistance. A practice that is lacking today," Sampat concluded.

5,404
Pending complaints against MahaRERA registered projects