Meanwhile, residents of Vidyavihar society fear being left homeless as verdict on cases filed by BMC is expected soon; the present dispute is between the lessee (M/s Vidyavihar Containers Ltd) and the developers of M/s Neelkanth Kingdom—a complex of seven buildings with 500 flats
Neelkanth Kingdom society, Vidyavihar. File pic
Trouble for a mega housing complex in Vidyavihar—facing multiple litigations across various forums—seems to be far from over from, with a new complication coming into play. The present dispute is between the lessee (M/s Vidyavihar Containers Ltd) and the developers of M/s Neelkanth Kingdom—a complex of seven buildings with 500 flats. Interestingly, the residential project is on a land parcel leased out to the lessee by the Suburban Collector. Residents, in purview to the case, informed mid-day that Vidyavihar Containers Ltd had terminated the development agreement executed in 2005 with the developer GNRC.
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Sole arbitrator appointed
“Pursuant to the termination of the development agreement, powers of attorney issued in favour of the partners of the developer company have also been terminated. The dispute is now referred to arbitration and a sole arbitrator has been appointed by the Bombay High Court vide its order dated January 21,” said a resident.
Ongoing issue
Stuti Galiya, a solicitor who stays in one of Neelkanth Kingdom’s high-rises, said, “Phase 1 of the project is already facing multiple issues, right from non-receipt of occupation certificate (OC) to non-completion of promised amenities, a temporary water connection granted on humanitarian grounds and pending collector dues. The dispute between the lessee and the developer has now added another layer of complexity and uncertainty.”
What it means
In view of cancellation of the development rights of GNRC, the following have become burning issues for the entire project...
>> Who will now be responsible for procuring OC for Phase 1 of the project?; OC has been pending for more than a decade and BMC has already initiated legal action and court proceedings in this regard
>> Will the land be reclaimed by the collector, in view of the various defaults by the developer and cancellation of the development rights?
>> Who will complete the promised amenities in Phase 1 of the project, including, swimming pool, temple, clubhouse?
>> Who will take the responsibility for procuring a permanent water connection for the project?
>> Who will undertake development of Phase 2 of the project, and whether it would be a developer of same stature and reputation?
>> Will the flat owners be allowed to undertake any resale (as no banks will be willing to sanction loans, in view of the latest Supreme Court guidelines)
A flashback
“The Neelkanth Kingdom project was launched in 2005, with the intention of completing it in 2 phases. Phase 1 was promised to be delivered in 2007. However, despite almost two decades passing, it is yet to be completed. The project initially suffered delays over partnership disputes. Now, with the additional dispute with the lessee of the land, there seems to be no immediate end to the troubles. Amid all these disputes, it is the residents who will finally have to bear the brunt of these issues,” said Stuti.
Flats without OC
Apart from other ongoing legal battles, the court proceedings initiated by the BMC in the Metropolitan Magistrate Court (Shindewadi, Dadar) in 2019 against the flat owners, for occupying flats without OC, is soon expected to reach the hearing stage and a final order would be pronounced anytime soon. “Since the project undisputedly does not have OC, chances are very high that the flat owners may find themselves roofless, as occupying flats without OC is not legally permitted under the Mumbai municipal corporation laws,” she added.
‘Timely action not taken’
The only hope was that the developer and housing societies would make the effort to procure OC before the final order was pronounced by the Shindewadi court. However, the housing societies failed to take any action on behalf of the flat owners and have not been able to push the developer to procure OCs, even after 374 individual cases were filed by the BMC against flat owners. If the housing societies would have taken timely action, the situation would not have been so bad. The opportunity of seeking recourse against the developer for procuring OCs has been lost by the housing societies, on account of the termination of the development agreement and ongoing arbitration proceedings. Since the issue relates to close to 500 flats in the entire complex, an individual flat owner would not be in a position to seek individual remedy before the courts for procuring OCs and such action necessarily is required to be taken by the housing society as a collective effort, claim residents of the society.
Residents fear the worst
Stuti and other residents fear that the legal dispute between the lessee and the developer which has now landed in arbitration may take years to reach a final conclusion. In such a scenario, not only the OC but also several basic necessities, such as a water connection which has been only temporarily procured for the project on humanitarian grounds, may stand suspended. This is especially in view of the latest judgment dated December 17, 2024, pronounced by the Supreme Court in the case of Rajendra Kumar Barjatya & Anr. Vs UP Avas Evam Vikas Parishad & Ors wherein the SC came down heavily on unauthorised buildings and buildings without OC/completion certificates. In the aforesaid matter, the SC issued 11 directions, which include that such buildings should not be granted loans, water connections, electric connections, sewerage connections, etc. The SC has stressed that “violation of any of the directions given in the aforesaid order would lead to initiation of contempt proceedings in addition to prosecution under respective laws”. Accordingly, banks will not be able to sanction loans for any resale of flats in the projects, else, they would be regarded to be in contempt.
Phase 1 still incomplete
Apart from this, since the project is on leasehold land, there is a stipulated time period to complete the project. Phase 1 is still incomplete in several respects, whereas Phase 2 has not even started and is a barren land. Under such circumstances, considering that the lessee has already terminated the development agreement, and it has now been almost 20 years since the permission for development was granted by the Maharashtra Land Revenue Department, it is well within the power of the revenue ministry to reclaim the land. There is already a humongous amount of transfer premium outstanding to be paid to the Collector with respect of Phase 1 of the project. With such major breaches under several laws and involvement of multiple regulators, the situation is scary for the flat owners.
Worried resident speaks up
Dhiren Jhonsa, a resident of Neelkanth Kingdom, said, “We had purchased the flat more than 20 years ago, based on the high reputation of the developer company in Ghatkopar vicinity. With the development rights now being terminated, we are worried about our fate, considering that the project has no OC and has several other lingering issues. After parting with all our hard-earned money, we, the flat owners, are suffering for no fault of ours. For the past 20 years, we are just running from pillar to post for the redressal of our grievances.”
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