Moneycontrol PRO

Ozone Urbana: 6 years on, this Bengaluru township is yet to touch the sky

Launched in 2014, the Pavilion apartment block in this township was scheduled to be completed by 2016. After the builder failed to complete the project, the buyers filed cases with KRERA. While cases continue piling up, buyers feel financially strangled and mentally stressed

The Ozone Group started construction in 2014 but today at least a 100 homebuyers, who paid close to Rs 1 crore each, have been left in the lurch.

The Ozone Group started construction in 2014 but today at least a 100 homebuyers, who paid close to Rs 1 crore each, have been left in the lurch.

Barely a 16-minute drive—on a good traffic day—from the Bengaluru Airport lies Ozone Urbana Township. Spread across 185 acres, its empty buildings rattle every time an aircraft flies over.

For the last four years, work on more than 10 projects in the township has been stalled. The Ozone Group started construction in 2014 but today at least 100 homebuyers, some of whom paid close to Rs 1 crore each, have been left in the lurch. Many of them face severe mental and financial crises, the homebuyers claim.

A plan to impress

The integrated township promised several amenities with world-class infrastructure and residential development. From malls to schools, hospitals and office spaces, it was a dream locale for entrepreneurs like Vinod Kumar, who immediately after seeing an advertisement, booked an apartment in the Pavilion Block in 2014. As part of the township, there are 13 blocks of apartments, senior living communities, and residential plots, with Urbana Pavilion being one of them.

Kumar took a bank loan of Rs 25 lakh and paid almost 90 percent of the cost to the builder within a year. "My kids were very small at that time. One was four, while another was 10 years old. And I also had an ageing mother. I thought with school and hospitals accessible at a stone's throw, this will be a great investment," Kumar said.

Close

He was promised a completed apartment by 2016 but construction continued well into next year. "Things remained the same till 2019 and after that construction completely halted," Kumar said.

Almost seven apartments in the Pavilion's block have been completed and people have moved in. Three, however, are still pending completion.

After 2019, Kumar, along with other buyers, approached the developer for new completion timeline. The buyers, from many blocks in the township, claim the developer did not answer any of their emails or phone calls.

Kumar said first the builder blamed demonetisation and then the coronavirus outbreak for the delay.

A spokesperson in Ozone Group’s legal department said that the delay occurring due to demonetisation was “subtle and multifaceted”.

 “Though demonetization had little on the recordable impact it had a huge cascading effect not only on the real estate industry but also on all the allied and supplementary arenas,” said the Ozone Group’s spokesperson.

Moreover, the “pandemic and several other factors such as price hike including the known aspects of force-majeure … seriously impacted the real estate and construction industry,” the spokesperson said.    

The Ozone group has four ongoing projects, including the Ozone Urbana, in Bengaluru. It has delivered six projects to buyers in the city.

"At that time, I had already paid almost the entire amount and was paying EMI and rent. Finally, I decided to file a legal case against the builder with the Karnataka Real Estate Regulation and Development (KRERA)," Kumar said.

In 2020, buyers started connecting on social media. More than 100 of them came together and by the end of 2021, they filed individual cases with KRERA. As many as 143 cases, including those against delayed compensations and for complete refunds, have been filed against the Ozone Urbana project, the KRERA website mentions.

"In August 2021, we filed a case at the National Consumer Court in New Delhi. At the same time, the hearing of our RERA cases went on online throughout the pandemic," Kumar said. In December 2021, 19 buyers filed an FIR at the Kodigehalli police station against the builder and Ozone Group for breach of trust and criminal conspiracy.

Yelahanka Assistant Commissioner of Police Manoj Kumar said the Karnataka High Court stayed the investigation until further orders.

On July 4, Kodigehalli Police Inspector Rajanna N. approached Karnataka High Court to remove the stay order on their investigation. The affidavit said, "Since the interim order is in force, the entire investigation has been stalled and it is one of the long pending cases of our police station."

In January 2022, KRERA conducted a site inspection, Vinod Kumar said, adding it also directed the builder to form an Association of Allottees but that is still pending.

Ozone Group’s spokesperson clarified that KRERA has not ordered Ozone group to form an Association.

“Even before all the units are sold, an association cannot be formed because the actual allottees alone are the beneficiaries of the association. The ones who are raising the cries of the association are not the actual home occupants and they are the investment buyers. They want to use the umbrella of association for soiled purposes,” the spokesperson said. She also added that many customers “who are occupying the apartments refuse to pay the maintenance charges which is running in to crores of rupees. Still we continue to provide the service.”

Compensation trouble

Ashok, who uses only one name, bought an apartment in 2014 that was to be delivered in 2016 but when it did not happen, he sought compensation in October 2019.

According to the agreement with the builder, he was to get Rs 7,000 a month for the delay but he wanted Rs 13,000. “The amount the builder was offering was nominal and if I had rented out the apartment, I could have earned Rs 13,000 in rent every month,” he said. The Ozone Urbana officials refused to pay, he added.

In January 2019, before other buyers had started connecting on social media, he moved KRERA to file a case against the builder. "Fortunately, we were one of the few buyers who won the KRERA case and the authorities asked the builder to pay us Rs 55,000 compensation a month," Ashok said.

The builder again failed to pay. "I went back to KRERA, and the officials said they will redirect the Karnataka revenue department to recover the amount," he added.

In June 2020, the builder sought a mutual settlement with him. Ashok said he agreed to Rs 40,000 as monthly compensation.

After paying around Rs 7 lakh, the builder stopped the payments in January 2021. Ozone customer relationship managers promised to get back to Ashok but he did not hear from them.

In April 2022, Ashok filed a writ petition in the Karnataka High Court. "The case is pending, and I am hoping the High Court will redirect the builder to reissue the compensation," he said.

Today, after seven years, he is still paying an EMI of Rs 60,000. He is hoping for a complete refund before exiting the project. On the other hand, Vinod Kumar won an order from the KRERA on June 30 which it directed the builder to refund him Rs. 92 lakh for the apartment he had booked.

“As of now we have in fact refunded many investment customers. Not even a single rupee of the customer's money is misused, and we have rather raised funds from many sources” to complete the project, said Ozone Group’s spokesperson. “The worth of the unsold units is running in to thousands of crores which is a speaking proof of the fact that what we have raised from customers is little and what is incurred by us hundreds of times more.”

The project was a ray of hope

In 2016, Vaibhav Shah decided to buy an apartment in Ozone Urbana. His father had a kidney problem, and his mother was a cardiac patient. Shah said transportation inside the city took a long time, and he had hoped to relocate his parents to the township in their old age.

"During the time, this was among the few projects that had hospitals and doctors onboard inside the same premises," Shah said.

Within eight months, he paid Rs 7 lakh from his savings and the rest was paid through a bank loan of Rs 50 lakh.

Over the years, he has paid Rs 17 lakh in EMIs. In February 2022, he moved the Karnataka High Court, seeking relief from paying EMIs for an apartment still pending completion. In March 2022, he filed a KRERA case for a complete refund.

"The apartment was a ray of hope for me. Even today, I do not have any idea if the hospital that the township had promised will ever come up," Shah said.

His financial planning has gone for a toss. "In a family of five people, I am the only breadwinner. Every month, I spend Rs 50,000 on my parents' medical expenses. Additionally, I pay a monthly bank EMI of Rs 50,000 for the apartment," Shah said.

As he struggles, his child is growing up and will be in school soon. "That is another uncertainty looming over me," he added.

On June 28, the Karnataka High Court passed an interim order directing the Ozone Group to pay the pre-EMIs or EMIs of the home buyers. The interim order also restained banks from recovering EMI payments from the homebuyers.

The dispute drags on

Akash Bantia, an advocate representing the buyers said, “Most of the cases are getting delayed because of a difference in compensation/refund between the builder and the buyers. Though KRERA is speeding up the hearings, it will take some more months before we can find common ground."

The buyers have also filed a group petition in the National Consumer Disputes Redressal Commission of India in July 2021, and as a quasi-judicial commission they will have more powers in this case, he added.

A group of 183 home buyers also filed a case against Ozone under the Insolvency and Bankruptcy Code, however, the case was dismissed by the tribunal since the signature of many petitioners was not notarised and the joint owners of many flats were not part of the petition.

Reacting to homebuyers' claim that they have stopped getting delayed compensation, Ozone Group’s spokesperson said that the delayed compensation is contractual, and it is covered by force-majeure conditions as well.

“There is never a refusal by us to pay the compensation which is lawfully payable as we are bound by contractual conditions. But the issue is that the investment customers are acting smart … claiming exorbitant sums [to] to which they are not entitled. RERA is the forum to decide the grievances of the customers and if there is any such decision we are bound to comply or even appeal if we find if untenable. The only way to deal with is through the forum of law and not the arm-twisting methods.”

Ozone Group’s spokesperson told Moneycontrol that RERA has extended the project registration for Ozone Urbana to September 30, 2023.

Project Timeline

2014: Work on the Pavilion block begins

2016: Handover deadline but is not met

2017: Delay continues

2018-19: Construction comes to a halt

2020: Buyers start filing cases in KRERA

2020: KRERA begins online hearing

August 2021: Buyers file complaints with National Consumer Forum

December 2021: Buyers file FIR at the Kodigehalli Police Station

January 2022: KRERA officials conduct a site survey

July 2022: Next hearing in the case at National Consumer Forum
Souptik Datta Sub Editor at Moneycontrol
first published: Aug 4, 2022 05:07 pm
Sections
ISO 27001 - BSI Assurance Mark