Mumbai: In a first, rogue builder's assets to be auctioned off

Nov 27, 2018, 19:40 IST | Vinod Kumar Menon

mid-day impact: The proceeds of the sale will be divided among six homebuyers who did not get possession despite paying for their flats

Mumbai: In a first, rogue builder's assets to be auctioned off
Sainath Sarode, buyer from Girgaum

Days after mid-day highlighted the ordeal of six flat buyers over a refund of Rs 4 crore they had paid in advance for properties of M/s Vidhi Realtors, Kandivli West, the suburban collector's office, on November 14, directed the Borivli tehsildar to attach and auction the properties of the promoters and their partners — Jinam Shah, Ketan Shah and Vijay Kamal Properties Pvt Ltd — under the Maharashtra Land Revenue Code to recover the amount and return it to the buyers.

Sources said as the area is in the jurisdiction of the Borivli tehsildar, he has been directed to execute the MahaRERA order dated October 15, 2018. Interestingly, the developer owes more than R4 crore to these six flat buyers, who as per the MahaRERA order is entitled to an interest of over 10 per cent since the payments were made, apart from the principal amount. mid-day had highlighted their plight in its November 8 article – 'Flat buyers get excuses and a six-month wait after MahaRERA order'.

Confirming the order, Sachin Kurve, Mumbai suburban district collector, said, "The attachment of properties will be carried out by the tehsildar concerned and then they will be auctioned by the sub-divisional officer as per the laid norms. I have directed the officials to complete all formalities (including auctioning) by January 31, 2019, and submit the report accordingly."

The buyers had pre-booked flats in the Vidhi Realtors project and made advance payments over a period of time. File pic
The buyers had pre-booked flats in the Vidhi Realtors project and made advance payments over a period of time. File pic

Interestingly, the six flat buyers learnt about the order only on Monday, when one of their representatives visited the collector's Bandra East office to inquire about the status of the MahaRERA order.

'Where's our dream home?'
Rinchen Wangdi, 62, a retired banker and his wife Nima, a senior government official, had invested Rs 52,78,563 each for a flat in the upcoming project in 2011. The developers had promised to give them possession of the property by December 2015 but that never happened. Speaking to mid-day, Wangdi said, "We had booked the flat knowing that as a banker I would be able to get soft loans. The investment was done with the hope that by the time I retire in 2016, my daughters would have their dream home in suburban Mumbai. But we got duped."

When asked about the collector's order, Wangdi added, "We are happy that such an order has been passed, but there is no clarity on how the long the process would be. Earlier, when we had visited the suburban collector's office for submitting the MahaRERA order, we were told that the process would take around six months."

Commenting further on the January 31 deadline, he said, "It's good that such a deadline has been set, but we'll be happy only when the money comes into our accounts. No one will give me loans at this age, and I no longer have the resources to buy another property for my daughters. So, if I get back the money, I'll divide it between my daughters."

'Hopeful of getting money'
Another buyer, Sainath Sarode, 37, from Kotchi Wadi, Girgaum, had applied for the flat through a pre-launch booking scheme, and had paid more than R41 lakh over a period of time. He said, "I am thankful to mid-day for highlighting our issue. I am aware of the collector's order, but I can only believe it when the money comes into my account. I am hopeful and praying for the same."

Speaking on the issue, advocate Godfrey Peminta, who represented the flat buyers before MahaRERA, said, "The buyers had done advance bookings in the said project and had paid huge amounts to the developers. But even after the MahaRERA order, they have been running from pillar to post to get justice."

"This is definitely the mid-day story's impact, because only after it the notice was issued on November 14. During the MahaRERA hearing, the developers' representative had assured to refund the amounts along with the interest, but they did not keep their word. The developer was to refund the principal amount in three installments, and then the interest in the fourth one, but nothing like that happened.

This forced us to move MahaRERA again and a property attachment order (copy with this paper) was passed for seizing developers' assets and refund the buyers," Peminta added. When contacted Jinam Shah, who represented Vidhi Realtors at MahaRERA said, "I have not received the order copy yet. Once I get it, I will discuss the matter with the developer and take necessary legal steps. I won't be able to say anything further."

Experts' view
Advocate Vinod Sampat said, "This is perhaps the first-of-its-kind order in the state wherein the suburban collector has directed the tehsildar to attach properties of developers for defaulting on the promise of giving possession of flats within a stipulated time period." Another lawyer Nilesh Gala said, "This order is the very essence of the RERA Act. It will help in speedy execution of the order, otherwise due to technical difficulties the developer tries to prolong the procedural part to delay its implementation. It will also be an eye-opener for developers."

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