Authorities in Karnataka have sealed the site office of real estate developer Sanchalaya and Estates Pvt Limited in Bengaluru, and a land seizure notice sent for acquiring 2.09 acres of land owing to delayed possession being given to home buyers.
"In pursuance of Section 190 of the Karnataka Land Revenue Act, 1964, despite serving final notice to comply with orders, and pay petitioners based on orders by Sanchaya Land and Estate Pvt Ltd. In light of this, the government is taking possession of the flats belonging to the company totalling to 2 acres, 9 guntas (sic)," the notice served by the revenue department mentioned.
The action for the delayed project named The Greens, Anekal, follows a recovery order issued by the Karnataka Real Estate Regulatory Authority (KRERA) in favour of home buyers.
The Real Estate (Regulation and Development) Act of 2016 says the regulatory authority may issue a revenue recovery certificate (RRC), instructing the state revenue department to begin recovery from builders who have failed to deliver apartments to buyers, or pay compensation, or refund money to homebuyers.
Vittal BR, an attorney in the High Court of Karnataka, said the district collector's office will notify the builder and recover the amount if KRERA issues the RRC. "It is collected as land arrears. And if the builder doesn't respond, the district collector’s office can attach the property instead of the land arrears," he added.
Big struggle
Ragunathan KC, one of the homebuyers, booked for a flat in The Greens Phase I in March 2013. When the delivery date of December 2014, extended to June 2015 according to the sale agreement signed by the parties, passed without the flats being handed over, the homebuyers started filing KRERA cases in 2018.
"Phase 1 has 1,275 homebuyers, while Phase 2 has 630. After 2015, only 30 percent of Phase 1 was complete, while Phase 2 remains without a building structure to date," Raghunathan added.
Another Phase 2 homebuyer, who paid about Rs 25 lakh for an apartment, said, "When I purchased the unit, my children were young. Today, they are ready to go to college and I still do not have the apartment."
Raghunathan is one of about 600 homebuyers. Since May 2017, he has been part of the ‘Fight For and Bring RERA into Karnataka’ movement. "After the central government notified the RERA Act in 2016, we continued our protests at Town Hall and several places to get them implemented in the state," he said.
Today, after having established KRERA in the state, homebuyers at The Greens have spent five years to get the judgments passed. By 2020, KRERA had passed 26 RRC orders for the revenue department to act on and recover the amounts from the builder by seizing the assets.
"However, after that for two years the revenue department did not act on the order to recover the money from the developers. The cases got further delayed due the Covid-19 pandemic," Raghunathan added.
Homebuyers protest again
According to the homebuyers, the regulatory body takes four to six months to pass a judgment in each case. "On December 4, 2021, about 100 homebuyers protested in front of KRERA and met the chairman urging him for speedy judgments," Raghunathan said.
In February 2022, the homebuyers submitted a memorandum to KRERA and the district collector to provide relief to homebuyers, by seizing the assets and refunding the homebuyers.
Authorities take action
On March 25, 2022, the district collector wrote a letter to the special tahsildar, Bengaluru (North, East, South, Yelahanka, and Anekal taluks), to initiate appropriate action based on the RRC.
On November 4, a land seizure notice for acquiring 2.09 acres of land in The Greens, Anekal, was sent to the developer. And on November 7, a team of revenue department officials, the district collector and the tahsildar sealed the project site office of the developer.
Homebuyers say recoveries are too slow
The Karnataka Revenue Department has recovered only about Rs 26 crore from builders in the state as compensation or refunds to homebuyers for delayed delivery of apartments, and an amount of more than Rs 245 crore is still pending.
Of 683 recovery orders passed by KRERA, money has been collected from builders in only 84 cases, according to a document issued by the undersecretary of the regulator that Moneycontrol reviewed.
Ragunathan said about 65 orders filed by the homebuyers of The Greens after 2020, are still pending judgment.
Chaitanya MG, an advocate, said the RRC orders passed by KRERA mostly relate to delayed or stuck projects. "The state government will further auction the assets recovered by the revenue department to refund the homebuyers. However, at the auction the rates should be reasonable. (After all), who will buy an asset from a delayed project?" he added.
Advocates say, KRERA imposes interest on the builders in addition to the refund amount.“Apartments are depreciating assets. So, at such auctions, the rates decrease. Additionally, it is difficult to recover the interest amounts on top of the principal amounts for the apartments. Hence, the auctions never succeed,” Chaitanya added.
A revenue department official, who did not wish to be named, said the department is frequently overworked due to the large number of cases filed, in addition to the normal workload.
The district collector could not be reached for comments. A list of questions has been sent to the revenue department and Moneycontrol will update the story after receiving a response.
One option, Chaitanya said, is to arm RERA with the authority to press criminal charges and issue non-bailable warrants against the developers.
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