Delayed project: MahaRERA freezes bank account of developer, restricts sales in South Mumbai project

According to homebuyer, the developer obtained initial permissions for the redevelopment in 2013 and was expected to complete the project in February 2017 with six months of grace period.

The Maharashtra Real Estate Regulatory Authority (MahaRERA) has ordered freezing of the bank account of a developer created for an over Rs 100-crore real estate project in south Mumbai. The redevelopment project has been delayed for a decade now.

The MahaRERA has restricted further sales or creating any third-party interest in the project and has issued notice to the developer of the project after homebuyers complained in MahaRERA that the developer's permission for construction in the project was terminated by the Bombay High Court through an order dated August 11.

The case

The complainant, 68-year-old Najaribai Jain, is a tenant of 543 square feet space located in Parvati Building in the Bhuleshwar area of South Mumbai. The said building with around 100 tenants underwent redevelopment with Parekh Constructions being the developer and the complaining tenant became eligible for a 794 sq ft carpet apartment in the new building. However, the tenant paid an additional amount and got himself a 1,017 sq ft carpet apartment in the building which has been undergoing redevelopment since 2013 but is yet to get possession.

Though delayed redevelopment project complaints are not covered under RERA, MahaRERA heard this complaint since the tenant had made a payment of Rs 36 lakh for the purchase of an extra 221 sqft carpet from the developer. The homebuyer's purchase via exchange of money in lieu of property is covered under RERA, according to several orders of MahaRERA.

Related stories

Mehul R Thakkar

Special Correspondent|Moneycontrol

• 
  New players have entered Mumbai real estate market and we welcome their presence: Abhishek Lodha
• 
  Mumbai real estate market records 9% rise in property registrations this month
• 
  MahaRERA tells developers to declare parking space details to homebuyers

Also read: RERA has no jurisdiction over redevelopment component, rules MahaRERA in a South Mumbai project dispute

The delay

According to Jain, the developer obtained initial permissions for the redevelopment in 2013 and was expected to complete the project in February 2017 with six months of grace period. The complainant said that despite promising multiple deadlines the developer has not been able to complete the project.

"In July 2020, we were shared a draft consent copy, and the developer asked us to give consent for partnering in the project. Till date not a single brick is laid at the project even after seven years, only excavation work has started till date. The developer has been oppressing the tenants with impunity and allottees (homebuyers) of the project have also been made to wait indefinitely," the complainant said in his letter to MahaRERA.

Jain had also filed a case in the Bombay High Court, and the court via order dated August 11, 2023,c. The court also directed MHADA to issue a formal letter of cancellation of the no-objection certificate (NOC).

The MahaRERA order

In light of the high court order, the MahaRERA in its order dated August 24, 2023, directed the developer Parekh Constructions to file a reply to the complaint by September 7, 2023, mainly on the issue of revocation of the registration as well as interim orders requested by the complainant for freezing of the accounts as well as not to create any third-party along with written arguments.

"The account created in the said project registration may not be operated and no further third party sale/rights be created till such orders are issued. The future course of action in this complaint will be decided once such an order is issued. The registry is directed to convey the same to the concerned department of the MahaRERA," the regulator said in its order.

Also read: Here's a real estate project in Mumbai delayed for over 17 years

"The project started in 2013 when old tenants vacated and the building was pulled down. For the past decade not a single stone has been laid in the project. The developer has collected crores of rupees in the project by selling units and diverted funds for which there is a need for forensic audit.," said Nilesh Gala representing the tenant in the MahaRERA, said.

Meanwhile, Asif Parekh developer of Parekh Construction told Moneycontrol, "I hold only 1 percent of the stake in the project and  99 percent have been sold by my company by the end of January 2022. It is for the new partners who have come in to do all the compliance as I have very limited minority stakes. I had informed the same to the Bombay High Court and will do so to MahaRERA as well, in case any order has been passed against Parekh Construction."