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Mantri Energia: A project that left several dreams shattered in Bengaluru

Construction began in 2014, and completion was scheduled for 2018. But with completion nowhere in sight, allottees filed cases against the builder with KRERA. Meanwhile, the builder seems to be struggling with a debilitating cash crunch.

August 05, 2022 / 03:15 PM IST
Construction of the Mantri Energia project began in 2014, and completion was scheduled for 2018. But with completion nowhere in sight, allottees filed cases against the builder with KRERA.

Construction of the Mantri Energia project began in 2014, and completion was scheduled for 2018. But with completion nowhere in sight, allottees filed cases against the builder with KRERA.

Just behind one of the biggest tech parks in Bengaluru, a road forks into two. A path leads into the bustling Manyata Tech Park, but the other halts in front of a large white gate. Behind the shut doors is Mantri Manyata Energia, one of the projects in the city that has been stalled for the last four years.

Developed by real estate giant Mantri Developers Pvt Ltd, the project offers luxury apartments with a new range of residential units combining innovation and energy conservation.

Construction began in 2014, and the building was to be completed by 2018. The builders are struggling to complete the project due to a debilitating cash crunch, the buyers claim.

As pending legal cases mount at the Real Estate Regulatory Authority, Karnataka (KRERA), some buyers struggle to pay home loan EMIs, while others reel under severe mental stress. At least 150 buyers have come together to form an association, Mantri Energia Frontiers, hoping to spearhead the building completion process.

On June 26, 2022, the Enforcement Directorate said it had arrested Sushil P Mantri director of Bengaluru-based Mantri Developers as a part of the money-laundering/fund diversion investigation.

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An arduous legal turf

Raghava Raju, an IT professional, bought an apartment in Mantri Energia, in 2015. Already a Mantri customer, he had invested almost Rs 85 lakh by 2017.

In February 2020, the buyers individually filed legal cases with KRERA regarding delayed compensation. Throughout the pandemic, the hearings continued remotely on Skype. In August 2021, then an adjudicating officer of RERA, K. Palakshappa, ordered the builder to provide delayed compensation to the buyers.

 

Mantri Manyata Energia is one of the projects in Bengaluru that has been stalled for the last four years. Mantri Manyata Energia is one of the projects in Bengaluru that has been stalled for the last four years.

Raghava Raju said he is supposed to get more than Rs 24 lakh in compensation since the initial completion deadline of 2018. 

“But even after that, when we got no response from the builder, some of us now have appealed for Recovery Certificate at RERA,” he said. A Recovery Certificate is a request letter that the KRERA sends to the district collector asking him to recover the specified amount from the builder in accordance with the Revenue Code. Now KRERA can redirect the state revenue department and the district commissioner’s office to recover the money from the builder. 

“I got my recovery certificate order last month, but even that process is stuck,” Raju added.

Additionally, only 10 of the more than 30 people who applied for delayed compensation have received their judgments till now, Raju claimed. According to data submitted to KRERA by the builder, out of 888 units, 461 units have been sold by the builder.

Another buyer, Sudhakar Lakshman, said the buyers’ association has filed at least 55 complaints with KRERA over the last two years and had seven hearings within the last 20 months. Lakshman, who has invested Rs 78 lakh in the project, said almost all buyers he knows have completed 80 percent of the payments. 

After completing a field survey a few months ago, KRERA instructed the builder to set up an Association of Allottees (AOA). “However, we cannot still form the AOA because we are yet to get a list of buyers from the builder. Despite several requests, we did not get the list,” he said. 

A letter from the builder dated December 2021 reveals that the central government has approved SWAMIH funding for the project. To provide relief to homebuyers of stalled projects, the Government of India has created a ‘Special Window for completing Affordable and Mid-Income Housing’ (SWAMIH) fund.

In November 2019, the Indian central government announced Rs. 25,000 crore to complete over 1,500 stalled projects across the country. The builder can claim the fund by writing a letter to the SWAMIH fund officials to complete the stalled projects. The letter from the builder sent to Mantri Energia buyers mentioned extending the completion time to 12 months from the first reimbursement of the fund. 

However, most buyers do not wish to sign the letter. “The letter also mentioned that the signatories will not be able to make any claims or initiate a legal case against the developers for the next four years,” Lakshman said. The buyers have tried to clarify with SWAMIH officials over emails, whether this is a requirement under its rules, but did not get a response.

“We are already troubled with the whole legal process,” he added. 

The officials at KRERA said the matter is being heard and refused to comment on the issue. The officials also said they were not aware of the SWAMIH fund’s approval. 

Mantri Developers Pvt Ltd is yet to respond to a list of questions sent by Moneycontrol. The story will be updated once they reply. 

To date, neither the builder nor the buyers have come up with a resolution plan.

Lakshman said, on the last June 22 hearing date, the builder had approached KRERA against the formation of the Association of Allottees (AOA). “The builder claimed it does not fall under the RERA Act,” he said. However, the RERA Act 2016 does mention AOA in Chapter 2, under the ‘Grant of registration’ sub-clause. “The KRERA presiding officer had also asked the builder to provide them with a list of all buyers,” Lakshman added.

For other buyers, the project is a shattered dream

For Sriram T.S., the project cost him all of his savings. In 2015, he sold his native house in Tamil Nadu for Rs 40 lakh. He added his entire savings to it and paid Rs 85 lakh to book an apartment.   

“It was like a dream home for me. But now, I am staying in a rented apartment in the other corner of the city,” he added. 

Already struggling with financial stress, today, Sriram cannot enroll his son in an engineering course. “I have invested almost 12 years of my earnings into the project. And today, I do not even have farmland to go back and resume farming,” he added. 

 After retiring from her government job in 2015, Indrani wanted to settle down in life. That’s when she saw an advertisement for the Mantri Energia project. “I gathered all the retirement benefits I had and immediately invested in the project,” she said. 

Initially, when the construction was fast-paced, Indrani invested Rs 85 lakh in the project. But, after the promised completion date of 2018, she found herself grasping at straws. 

“Both my husband and I are retired. I had to fund my son's education in Germany. Additionally, I plan to get my daughter married. But now, this is a difficult situation for me,” she added. 

Today, Indrani continues to wait for a resolution from the builder. “We do not have any clarity on when the project will be completed. We hope to have a resolution soon,” she added. 

Meanwhile, Raju and several others continue paying EMIs on their home loans. Raju pays Rs 50,000 a month and has 10 more years to go for the loan to be fully repaid.

Lakshman pays Rs 4.4 lakh annual interest on a loan on which he cannot claim the income-tax rebate. “We tried speaking to the banks. However, they were not ready to reconsider our loans,” he said.

The way ahead

Anagha Kulkarni, an advocate, explained that cases of delayed projects fall under Section 17 of the Consumer Protection Act, 1986. Section 17 deals with complaints regarding violation of consumer rights or unfair trade practices or false or misleading advertisements. Under the Consumer Protection Act, the builder should refund money to home buyers for delayed projects along with interest at the rate charged by a scheduled nationalised bank on home loans in the corresponding period, she said.

However, for Sriram, the laws only complicate the lives of common people. “I want to build a good future for my son. A future, we all deserve,” he said.

Currently, Mantri has 10 ongoing projects in Bengaluru, including Mantri Energia and all of the projects are for sale. 

Project Timeline:

2014: Project is initiated

2017:  The project starts getting stalled

2017-2020: Communication between builders and buyers continues

2020: Buyers form Mantri Energia Frontiers

July 2020: Buyers file first RERA case

September 2020: The case is admitted and the first hearing held

March-October 2020: Buyers start filing cases for compensation delay

September 2021: RERA commences field inspection, instructs builder to form AOA

November 2021: Buyers file for recovery certificate
Souptik Datta Sub Editor at Moneycontrol
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