Freddy Wilson, 35, a resident of Mumbai’s Mulund, says his father passed away last year after a cardiac arrest, having waited a painful decade for possession of a dream home that wasn’t to be.
Wilson’s father was among 763 buyers of apartments in three projects being constructed by Nirmal Lifestyle -- Nirmal Zircon, Nirmal Amethyst and Nirmal Turquoise. Not one apartment has been delivered yet.
Wilson’s family sold its one room-kitchen flat to book a two- Bedroom, Hall, Kitchen (BHK) apartment in Nirmal Zircon for Rs. 70 lakh in 2009, and had paid 97 percent of the purchase price when the father died.
“The booking was made thinking of extra space for the family members. But we lost him (the father) due to cardiac arrest last year as he was under immense stress,” Freddy Wilson said. “We were compelled to break into our other savings and purchase another one-BHK apartment due to non-delivery by the developer."
Records at the Maharashtra Real Estate Regulatory Authority (MahaRERA) show that, in all, 763 apartments -- 2 BHK, 2.5 BHK, 3 BHK and 4 BHK -- had been booked in the three projects that were to consist of 922 units.
Also read: India's most delayed residential projects
According to documents uploaded on MahaRERA’s website by Nirmal Lifestyle, the developer received initial permission for the three residential projects on May 30, 2005.
Representative image of the stuck project site.
Homebuyers’ plight
According to homebuyers, many of them had invested their life savings in booking the flats. They allege that the developer is showing no signs of interest in completing the projects despite the absence of any legal hurdles in doing so.
The developer has not communicated in writing to the buyers any reasons for not constructing and giving delivery of their apartments. But the developer, in conversations with buyers, claimed to be confronting financial trouble, said some buyers Moneycontrol spoke to.
Meanwhile, several buyers said the very purpose of booking a flat in the Nirmal Lifestyle projects had passed them by because of the long delay.
Take the case of 52-year-old Pooja Rasal, who booked a 3-BHK apartment costing Rs 85 lakh in Nirmal Zircon in 2008. She took a home loan to purchase the flat and has completed repaying it.
“I booked the flat 14 years ago when my son was in the 8th standard, and the purpose was to buy a bigger house for his studies. Today, he has turned 27, but we still have not got possession,” said Rasal. “Currently, we are residing on rent in hope of getting the possession soon while we await the results from the hearings at MahaRERA.”
Also read: MahaRERA to have dedicated vertical for 4,500 stalled real estate projects in Maharashtra
Problems plaguing the projects
The developer, in several hearings in response to complaints filed by home buyers in MahaRERA, maintained that the Development Control Regulation (DCR) for Mumbai had been amended in 2012, and the concept of fungible Floor Space Index (FSI) was introduced.
Fungible FSI is the additional floor area developed by the builder over and above the FSI limit set by the government. Nirmal Lifestyle has claimed earlier that the change in regulation led to delays in the completion of the projects.
In the case of Nirmal Zircon, the developer informed MahaRERA in 2021 that the company had submitted an application to the authorities for an Occupation Certificate because work on the project had been completed, but is yet to receive it.
Buyers claim the developer is not able to complete the project because of a ‘stop work’ notice by Brihanmumbai Municipal Corporation (BMC) over non-payment of dues.
Pankaj Thadani, 35, booked a two-BHK apartment in 2011 in Nirmal Zircon for Rs 58 lakh.
Representative image of the project site.
Today, the value of his apartment has more than doubled, but the appreciation remains on paper because the building is yet to receive a possession certificate.
“Our project received a ‘stop work’ notice from BMC in June 2021, because the developer had got the permissions on an instalment scheme and he has defaulted on paying these instalments. The pending dues were Rs 88.6 crore as of 2020; today, with added interest it should easily be around 100 crore. The developer has taken all money which was due from us but has not handed us over the flats and also defaulted on paying the required dues with BMC," Thadani said.
“In January 2021, the developer registered a society for Nirmal Zircon and since then, this society’s members have been passing resolutions demanding extra contributions from all members in the name of completing pending construction work even without having any legal approval from any authorities regarding the same. The developer denies charging extra money and claims it is being demanded by the society and not him. I have even filed a complaint with the deputy registrar regarding these unethical practices being followed by society members who are in a way assisting the developer in achieving his ulterior motive of making people desperate enough to make sure they agree to substandard possession and occupy the flat without an OC," Thadani said.
Thadani added that even if buyers took possession of their flats without an OC, they would be at risk of being evicted by BMC over non-payment of dues by Nirmal Lifestyle.
Also read: Homebuyers wait anxiously as construction of Thane residential project drags on
Developer’s response
In a statement issued to Moneycontrol, spokesperson of Nirmal Lifestyle also known as Nirmal Developers said, “We have already completed 95 percent of the internal finishing work of the tower and full Commencement Certificate (CC) has also been obtained for the Zircon building. We have also formed the society named Zircon Co-Operative Housing Society Limited with the consent of the majority of the members and the society with our support has initiated and completed the balance work in the last few years to make the building habitable."
It added, "We have also applied for the electrical power supply MSEB connection and BMC water connection and we are hopeful to give possession of the building soon.”
Legal route for homebuyers
Around 50 home buyers in Nirmal Zircon filed a First Information Report (FIR) with the Economic Offences Wing (EOW) of Mumbai Police in December 2021 against the developer under non-bailable clauses.
“We have recorded our statements, and the investigation is ongoing. It will be a year in December since we approached the EOW, but nothing has worked out. The superstructure of the building has been ready for five years now. We are appealing and want the developer to complete the project and give us possession after clearing all his liabilities,” said Abhijeet Gawde, a homebuyer in Nirmal Zircon.
When contacted, a senior police officer in the EOW told Moneycontrol: “We are investigating the matter, and have recorded statements of both homebuyers and the developer. We are pushing the developer to complete the work.”
The officer said Nirmal Lifestyle had completed 80-85 percent of the work on the site. “If the developer does not perform even after mediation, we will take action as per the law,” the officer said.
According to MahaRERA records, the three Nirmal Lifestyle projects are registered as ongoing projects on which the timeline for completing construction has lapsed. Fifty-six complaints have been made against the three projects with MahaRERA, as of September 2022.
The National Company Law Tribunal (NCLT) in the past two years has also heard applications filed against the developer’s firm regarding alleged default of unpaid dues. These have been filed by lenders such as banks and non-banking financial companies (NBFC).
Also read: Seventeen years after launch, buyers await possession of apartments in Mumbai's Mulund
The options
Legal experts say homebuyers have the option of taking up the remaining work on the projects.
“The homebuyers can form an association and apply to the RERA for orders under Section 7 and 8 of the RERA Act and complete the project with the help of technical as well as legal advisors,” said Suhail Ahmed Khilji, a property lawyer based in Mumbai.
“The homebuyers may also plead before RERA to use its power under RERA Act to make necessary suggestions to the Municipal Corporation or other governing body to grant some concessions to the association for payment of premiums and other charges that may be pending... for the completion of the real estate projects..,” Khilji said.
Also read: MC Explainer: Does 40% lapsed projects post creation of MahaRERA indicate failure of regulator?
Project timeline:
2005: Three premium residential projects, Nirmal Zircon, Nirmal Amethyst and Nirmal Turquoise, receive approval from the authorities.
2005 to 2009: Amethyst is the first tower launched in 2005. Majority of the bookings are made in this period, said homebuyers.
2006: Following a Public Interest Litigation, construction is stayed on grounds that the land on which the projects are being built is forest land, homebuyers said.
2006: Developer challenges the stay order in Bombay High Court, homebuyers said.
2008: Bombay High Court paves the way for construction, homebuyers said.2008: Developer launches the second tower - Zircon -- and starts apartment bookings.
2010: Developer launches the third tower - Turquoise - and starts taking bookings for that as well.
2014-2016: Buyers have multiple meetings with the developer seeking possession of their homes and the developer assures them of possession soon.
2016: In September 2016, the developer raised funding of Rs.500 crore from Altico Capital specifically to refinance some debts and to finance the construction of the three towers. Developer mortgages to Altico the plot of land on which the towers are being constructed. Despite the funding, construction work is stalled, buyers said.
2017 -2018: Individual home buyers approach MahaRERA complaining about delayed possession.
2018-2021: Buyers are at different stages of MahaRERA proceedings and a few receive orders for compensation to be paid by the developer, but the orders are not executed. They fail to win an order that the developer execute the projects by a fixed timeline.
2021: In January 2021, Amethyst homebuyers enter into consent terms with the developer under MahaRERA rules.
2021: In December, buyers of flats in Nirmal Zircon file a complaint against promoters Dharmesh Jain, Rajeev Jain and Pooja Jain with the Economic Offences Wing and get a First Information Report registered.
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