Apartments of about 2,000 homebuyers in Bengaluru are at stake after the local municipal body Bruhat Bengaluru Mahanagara Palike (BBMP) scrapped all partial occupancy certificates (OC) issued to the Sobha City project for alleged fabrication of documents.
In its order, the civic authority said developer Sobha Limited secured partial OCs and got the project’s building plan approved by fabricating documents.
The order dated January 21 said the approved building plan in 2013, and the partial OCs provided in 2016, 2019, and 2020 stand cancelled.
"In case of any false information, misrepresentation of facts, or pending court cases, the permission shall be deemed to be cancelled," the BBMP order quoted the building plan and the partial OCs as stating.
A senior official at Sobha Limited confirmed that the team is working with BBMP on the matter and will close it as early as possible.
Several homebuyers Moneycontrol spoke to, who have already started living in the apartments, remain unclear about the next course of action.
Srinivasa Talla, one of the homebuyers who has taken possession of his apartment, is the chief complainant in the BBMP order.
Talla had filed a Right to Information (RTI) appeal to the Karnataka fire department in January 2022.
"During that time, the fire department clearly noted that the NOCs (No-Objection Certificates) and certificates collected from the BBMP were not issued by the department," he added.
Talla said the developer bifurcated the project in 2017 without the required consent of 51 percent of the homebuyers.
"Right now after the BBMP order, it is clear that the buildings we are staying in are illegal," he said.
Subroto Chakraborty, another homebuyer, paid about Rs 1.3 crore for an apartment in the project.
"We did not move in because anyway the developer had provided a partial OC; the practice has been challenged by several high courts in other cases," he added.
After paying the entire amount in 2014, to date, Chakraborty claimed that the developer has not registered the sale agreement at the sub-registrar's office.
In 2016, Chakraborty filed a complaint at the National Consumer Disputes Redressal Commission (NCDRC) claiming that the developer defrauded him in case of the Undivided Share of Interest (UDS) and by manipulating the layout plan.
A copy of a hearing dated December 2021 said, "According to FAR ratio, the complainant should have a UDS of 1077 sq ft, however, has been allotted 652 sq ft." FAR is short for Floor Area Ratio, the ratio of a building's total floor area to the size of the land on which it is built.
The matter has been posted for further hearing in May 2023.
Sources at Sobha Limited told Moneycontrol, "This action of BBMP has been taken on certain Fire NOC & Fire Clearance documentation. Sobha Limited took immediate remedial steps in consultation with the fire department to comply with necessary regulations to obtain renewed approvals. The re-issued clearances were duly submitted to BBMP and appropriate representations were made."
In Sobha Limited's recent letter dated January 7 to BBMP, the company has once again submitted all necessary explanations and documents including the revised Fire NOC and Fire clearance certificates, a senior official inside the company added.
It is unclear after the initial communication between the developer and the BBMP on January 7, why the partial OCs remained withdrawn on January 21.
Sources in BBMP said, "If the developer has submitted updated documents, then that will again go through several official procedures, and we will look into it. As of now, we cannot confirm the same."
BBMP chief Tushar Girinath, on January 23, said while addressing questions from journalists that the first OC was issued based on the wrong documents and has been withdrawn. He added that fresh OCs will be issued after probing the matter and action will be taken against wrongdoers.
A Karnataka Real Estate Regulatory Authority (KRERA) complaint by Chakraborty was disposed of in November 2021. The order said the matter does not fall under KRERA's jurisdiction because the completion certificate was issued before the enactment of the Karnataka RERA Act.
The matter is currently at the appellate tribunal for further hearing.
In a separate case, another order dated November 2022 representing the apex Resident Welfare Association (RWA), KRERA cited Section 31 of the RERA Act and asked the developer to register all blocks of the Sobha City project under KRERA.
"The promoter is directed to register all blocks of Sobha City under Section 4 of the RERA Act except for Block 4 for which the registration has already been completed," the order added.
Chaitanya SG, an advocate representing the homebuyers, said the developer has appealed against this order, and the matter will be heard again.
Abhilash Naik, an advocate, said the matter will not affect homebuyers' rights, including possession of the apartments.
"OC is a document that deems that apartment is fit for living only, However, we need to check if the developer has complied with all restrictions put in place by several local bodies, including the fire department and the municipal bodies," he added.
RTI activist and Bangalore City Flat Owners' Welfare Association (BCFOWA) President Anil Kalgi said: "The order also mentioned that the deposit and the fund paid by the developer to obtain the partial OCs and clearances remain confiscated. Now the developer has to pay the entire amount again and rectify the project plans to recover the OCs."
Lawyers point out that homebuyers need to crosscheck every sanction plan and contractual commitment before entering an agreement.
"Largely, homebuyers need to be more aware today, especially when it comes to real estate," Naik added.
