Neelkanth Kingdom developer's office sealed over pending dues

Updated: 21 November, 2020 07:57 IST | Vinod Kumar Menon | Mumbai

Resident says the housing project in Vidhyavihar West is still incomplete even though the developers stated that it was finished way back in 2013

The sealed developers' office at Neelkanth Kingdom
The sealed developers' office at Neelkanth Kingdom

The collector's office has sealed the developers' office within the premises of Neelkanth Kingdom in Vidhyavihar West due to non-payment of suburban collector dues worth Rs 89 lakh. A fine of Rs 175 crore imposed in 2017 was later revised to Rs 4 crore. However, a resident of the complex is likely to challenge the matter before the Ministry of Revenue as she claims that the project still remains incomplete even though the developers stated that it was completed in 2013. On the other hand, this might lead to more trouble for the 300 flat owners at the society, as none of them have paid the mandatory transfer and mortgage charges to the suburban collector and recovery procedures could be levied."

Construction delay

Stuti Galiya, a solicitor by profession and also a resident of the complex said, "Neelkanth Kingdom is a residential project having two phases. The land has been leased by the collector to Vidya-Vihar Containers Ltd, who is the lessee. The project has been constructed by partnership firm Gammon Neelkanth Realty Corporation (GNRC). The GNRC has three partners – Neelkanth Mansions and Infrastructure Private Limited, Neelkanth Realtors Private Limited and Treetops Housing and Estate Private Limited. Since the project has been constructed on leasehold land, development premium needs to be paid to the collector for carrying out construction activities. This is in addition to annual lease rent and transfer premium, which needs to be paid on every property transaction. The project was launched in 2005, but remained stalled till 2010, on account of disputes amongst the GNRC partners. GNRC and Vidya-Vihar Containers Ltd started handing over fit-out possessions to flat owners in 2015 (pending receipt of occupation certificate). On account of delay in construction, accumulated collector dues turned out to be R175 crore, which remained unpaid till November 10, 2017. Hence, the collector issued a demand notice in 2017 against Vidya-Vihar Containers Ltd."

Stuti Galiya, resident
Stuti Galiya, resident

Fine revised

"The collector's order was challenged by Vidya-Vihar Containers Ltd before the office of the divisional collector and the fine was revised to approximately Rs 4 crore. Considering R89 lakh is yet to be paid, the collector recently attached and sealed the sales/project office of GNRC in the Neelkanth Kingdom complex," added Galiya.

She further said, "The Ministry of Revenue has powers to revise the order given by the collector's office within a period of five years. The development premium has been reduced to R4 crore on the basis of certain representations made by Vidya-Vihar Containers Ltd, such as the project was completed and possession of flats given to owners in 2013. However, as of date, most of the amenities are yet to be provided. Further, flat owners have only been provided with fit-out possessions as occupation certificate for the project is still pending. Even water connection for the entire complex has been received on humanitarian grounds. If the Ministry of Revenue chooses to revisit the order, there is a possibility that the outstanding dues may increase to R500 crore. This is because one may need to consider penalty and premium, which will be charged over and above the original dues of R175 crore. Being a flat owner we are contemplating filing a revision petition with the Ministry of Revenue on an individual basis against the aforesaid order of the divisional collector."

According to Galiya, "There is an additional premium which needs to be paid to the collector on certain property transactions undertaken in respect of flats, such as sale, mortgage, etc, apart from the requirement of procuring a no-objection certificate from the collector's office. As per notification dated January 7, 2020 issued by the Revenue and Forest department, an NOC is no longer required for leave and license arrangement, however, requirement of payment of premium and NOC continue to exist for sale and mortgage transactions." As per collector resolution issued in 2018, the managing committee members of cooperative housing societies are personally liable for ensuring such compliance. For more than 10 years, several property transactions have been entered into for all the seven residential buildings in the complex. Such transfer premium alone could be to the tune of R40 crore."

Expert view

Advocate Vinod Sampat, founder of Co-operative Societies Residents Association, said, "Whenever a person is buying a property, he/she should focus on a house situated on a free hold land. Property on collector's land is a leasehold property and in these types of properties the terms and conditions of the lease are applicable to the purchaser as well as the subsequent purchasers."

"The risk of sealing the flats on account of non-payment of collector charges cannot be ruled out. If the developer/builder has not paid the collector charges, the entire building can be sealed, as the right of the flat purchaser flows from the transaction done by the developer/builder with the buyer. However, the liability is usually on the present occupier of the flat," Sampat concluded.

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First Published: 21 November, 2020 07:45 IST

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