Bombay HC asks Renaissance Infrastructure to pay Rs 5 crore for delay in property hand over

A single bench of Justice S C Gupte on September 25 upheld the orders of the Maharashtra real estate regulatory authority and the RERA appellate tribunal that had ordered for the compensation amount to be paid to the purchaser.

MUMBAI: The Bombay High Court has directed real estate developer Renaissance Infrastructure to pay Rs 5.04 crore as compensation to a person who had not been handed over his property in Mumbai even after a delay over 80 months.

A single bench of Justice S C Gupte on September 25 upheld the orders of the Maharashtra real estate regulatory authority and the RERA appellate tribunal that had ordered for the compensation amount to be paid to the purchaser.

The developer had approached the HC, challenging orders of RERA and the RERA appellate tribunal passed in January this year.

As per the HC order, the purchaser bought six plots of land and some warehousing buildings from the developer in December 2009.

According to the sale agreement, the warehousing buildings and plots were to be handed over to the purchaser by March 9, 2010.

The agreement also said that if the developer failed to hand over the properties on time, he would be liable to pay the purchaser a compensation amount at the rate of Rs 10 per sq feet per month.

When the developer failed to hand over the property, the purchaser approached the RERA that calculated the compensation amount as Rs 5.04 crore.

The Renaissance Infrastructure challenged this order before the appellate tribunal, which asked the developer to deposit 50 per cent of the compensation amount as per the RERA Act for entertaining the appeal.

But, when the developer failed to pay the pre-deposit, the appellate tribunal dismissed the appeal.

The developer then filed a second appeal in the HC.

In his order, Justice Gupte dismissed the second appeal after holding that there were no infirmities in the orders passed by the RERA and the appellate tribunal.

He held that the orders do not give rise to “any substantial question of law for the consideration of the high court”.

Justice Gupte said the Renaissance Infrastructure was liable to hand over the property as agreed to. “Under this agreement, termed as the agreement for sale, the appellant (Renaissance) was bound to hand over possession of the suit premises to the respondent within an agreed period,” the high court said.

It directed the developer to pay Rs 5.04 crore to the purchaser within four weeks.

Source from: 

https://realty.economictimes.indiatimes.com/news/regulatory/bombay-hc-asks-renaissance-infrastructure-to-pay-rs-5-crore-for-delay-in-property-hand-over/78405019

Haryana Rera: Lender needs 2/3rd buyers’ nod to auction project

GURUGRAM: If a developer fails to repay loans, resulting in the project being taken over by the lender – bank or any other financial institution – the lender will act as promoter and be responsible for protecting the rights of allottees, the Haryana Rera has ordered.
The lender, the order adds, cannot sell the land or the project to recover money without taking permission from the H-Rera and the consent of two-third of homebuyers.

The order was passed by KK Khandelwal, chairman of the Gurugram bench of H-Rera, in a case contested between Deepak Chowdhary and PNB Housing Finance Ltd. It strongly emphasised that rights of allottees are not subservient to those of a bank or financial institution, and therefore, if a lender failed to ensure the funds were used for the purpose they were given, it could not be allowed to supersede the rights of allottees (homebuyers).

Quoting a Supreme Court judgment (Bikram Chatterjee vs Union of India), Khandelwal said in his judgment, “As has been held in the aforementioned Supreme Court judgment, if there has been diversion of funds, banks cannot be allowed to sell the flats and deprive the allottees of their lifetime savings.’’

The case H-Rera was hearing involved Supertech, which had taken a loan of Rs 275 crore to complete its housing project, Supertech Hue, in 2017, by mortgaging title deeds and receivables from homebuyers in the project.

However, Supertech failed to repay the loans. The company’s CMD RK Arora said since the lender, PNB Housing Finance, would take most of the receivables from homebuyers as its instalments towards loan repayment, they were left with hardly any money to continue with construction work. With construction slowing down, homebuyers also stopped paying their instalments. According to the RERA Act, 70% of receivables must be earmarked for construction.

PNB Housing Finance declared Supertech a defaulter and put the project up for e-auction in July in line with terms and conditions of the loan. An allottee, Deepak Chaudhary, then approached H-Rera. The regulator stayed the e-auction as the lender had not taken its prior approval and consent from two-third of the 950 homebuyers who have invested Rs 328.19 crore in the project.

To protect the interest of the allottees, Khandelwal’s order said PNB Housing Finance must make all necessary disclosures on liabilities of the project so that the promoter that takes over is fully aware of them. The new promoter will have to take over the liabilities. Supertech, the order said, would continue to be responsible to pay ‘outgoings’ and penal charges that were due at the time of the transfer.

Khandelwal said around 15,000 allottees in Gurugram are facing a situation where banks have taken over projects as developers failed to repay loans taken against land or real estate projects. He also said it was a peculiar trend in the real estate sector that promoters mortgage their project as well as receivables from sold/unsold inventory to banks in order to attain bank loans to fund construction costs. “But when these promoters fail to repay the loans taken, the banks directly auction residential or commercial properties that have been pledged with them to recover loans from borrowers by invoking the SARFAESI Act, 2002,” he said.

Such auctions, he said, invoke anguish and distress among allottees as there is no acknowledgement of the huge investments made by them into buying their homes. “The future of such allottees is in complete darkness and obscurity. Such aggrieved allottees are bound to languish for their own hard-earned money,” he said.

Khandelwal clarified that H-Rera is in no way against auction of real estate projects by a lending institution to secure the repayment of the loan amount, but they would have to follow the mandated process of seeking approvals.

Source from: https://timesofindia.indiatimes.com/city/gurgaon/haryana-rera-lender-needs-2/3rd-buyers-nod-to-auction-project/articleshow/78195292.cms

Can RBI ensure banks infuse funds in Amrapali projects: SC

A bench comprising Justices U.U. Lalit and Ashok Bhushan asked the advocate for the central bank to file an affidavit in the matter clarifying the regulatory provisions.

NEW DELHI: The Supreme Court on Monday asked the RBI to file an affidavit whether it can intervene to ensure that banks infuse funds to complete construction of the Amrapali housing projects.

A bench comprising Justices U.U. Lalit and Ashok Bhushan asked the advocate for the central bank to file an affidavit in the matter clarifying the regulatory provisions.

The observation from the top court came after the court-appointed receiver informed that as per the September 1 order, he had sent a letter to the Governor of RBI and CMDs of other banks inviting them to finance Amrapali projects and for release of the loan amounts.

However, the reply received by him is not very clear, he said.

Kumar Mihir, counsel for home-buyers, said: “I hope the RBI takes a regulatory position and removes all constraints in other banks extending project finance to Amrapali. Especially, when the Supreme Court is trying its best to raise funds to continuity in construction of these projects.”

The receiver also informed the court that no money has been received from the SWAMIH Investment Fund so far and the final approval is taking time.

On September 1, the apex court had said the SBI Caps will issue funds to the tune of Rs 625 crore from the SWAMIH Investment Fund for six projects and also directed the court-appointed receiver and SBI Caps to finalise the legal framework to regulate this funding. The bench asked him to inform about the status on the next date of hearing.

The receiver informed the top court that 5-6 banks have executed MoUs with him and they have started disbursing loan amounts, and it seems, by middle of next month, the home loan issue will be sorted with respect to all home-buyers.

The bench directed all home-buyers, who had defaulted in payment of their dues earlier when Amrapali was in management, to clear their dues by October 31, or otherwise the receiver will be permitted to take action, including cancellation of their allotments.

As the Institute of Chartered Accountants sought an extension of six months to finish disciplinary proceedings against Anil Mittal, the statutory auditor of Amrapali, the court asked the institute to file an additional affidavit giving exact dates of proceedings when they require his presence for necessary directions.

The receiver and MSTC informed the bench that to date, five properties of Amrapali have been sold for Rs 12.54 crore, out of which 25 per cent was deposited before the MSTC and rest was to be deposited in the UCO Bank. The court gave a direction to the receiver to file a detailed note on sale of properties by the next date of hearing, which is scheduled on October 5.

Source from: https://realty.economictimes.indiatimes.com/news/regulatory/can-rbi-ensure-banks-infuse-funds-in-amrapali-projects-sc/78247902

Haryana RERA stays e-auction of Supertech Hues | Rera Consultants

Gurgaon bench of Haryana Real Estate Regulatory Authority has threatened to take penal action against the banks if they auction the project of any builder to recover dues, without taking the approval of the authority. The order came after PNB housing finance ltd decided to auction project of Supertech in order to recover its dues.

One of the buyer approached the RERA and on Friday, the authority stayed the e-auction proceeding. The authority has also said that in future before auctioning any project, banks have to take prior approval of RERA and 2/3rd of home buyers.

About 950 homebuyers have invested Rs 328.19 crore in the project. “The financial institutions/lending banks/creditors have to take prior approvals from the authority at two stages – first before initiating the auction of real estate project and second at the time of transferring the auctioned property to the new buyer,” Haryana RERA said.

The authority in its order dated September 11, has said that the rights of the allottees are not subservient to those of the bank and therefore, in case of failure of the banks to ensure that the funds were applied for the purpose they were granted, banks cannot be allowed to supersede the rights of the allottees. The authority has also clarified that the financial institutions are duty bound to ensure that the loan payments are released to the promoters after due verification of the fact that the payment so released is actually utilized towards the construction of the project.

“The lending institutions/individuals shall be held equally responsible if the amount, so released is not put into construction purpose and is allowed to be diverted,” authority has said. The order is expected to hurt the lending in situations who have been auditioning properties as many developers have failed to pay dues since the lockdown. According to the authority, promoters usually mortgage their project land as well as all receivables from the sold/unsold inventory to lending organisations to get loans to fund the construction costs.

But when these promoters fail to repay the loans taken, then the financial institutions directly auction residential or commercial properties that have been pledged with them to recover loans from borrowers by invoking the SARFAESI Act, 2002.

“Such auctions invoke great anguish and distress to the allottees of the project as there is no acknowledgement of the huge investments made by the allottees into buying their dream home. The future of such allottees is in complete darkness and obscurity. Such aggrieved allottees are bound to languish for their own hard-earned money,” RERA said.

Supertech Limited has approached PNB Housing Finance Limited for a construction loan for the project “Supertech Hues”. The promoter failed to repay the loans taken and the project was put for e-auction by the creditor company.

Source from: https://realty.economictimes.indiatimes.com/news/regulatory/haryana-rera-stays-e-auction-of-supertech-hues-by-pnb-housing/78187240

Almost 75% complaints from National Capital Region in 2 years: UP RERA

Almost 75 per cent complaints lodged with the Uttar Pradesh Real Estate Regulatory Authority (RERA) in two years have been from the NCR districts, including Noida and Ghaziabad, it stated on Friday.

UP-Rera

A total of 28,020 complaints have been registered with the RERA, which had started judicial work two exactly years ago.

Of these, 20,740 (74.01 per cent) are from the NCR and 7,280 (25.9 per cent) from non-NCR parts of the state, the authority said in a statement.

The complaints disposed of included 16,136 from the NCR region and 4,893 from the non-NCR region. The orders passed by RERA include 5,036 orders for the refund of funds and 7,242 for the grant of possession, it stated.

Formed over the Real Estate (Regulation and Development) Act, 2016 of Parliament, RERA’s primary job includes ensuring transparency in projects, protecting the interest of consumers and to establish an adjudicating mechanism for speedy dispute redressal besides providing proper information about the builder.

The UP RERA said it has implemented e-courts since February 2020. All complaints filed under e-courts and old complaints are being heard via virtual conferences.

During the COVID-19 pandemic, 2,860 complaints were filed and of these, 2,781 have been given a decision through virtual hearings, according to the statement.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Source From: https://www.business-standard.com/article/current-affairs/almost-75-complaints-from-national-capital-region-in-2-years-up-rera-120090500007_1.html

UP-RERA urge state government to fix all dues to be paid at MCLR

According to UP-RERA these recommendations if approved will help stuck or delayed projects, financial stress of various projects and reduce the disputes between home buyers and builders.

NEW DELHI: The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has urged the state government to direct all development authorities and housing boards to charge interest on all dues at marginal cost of funds based lending rate (MCLR) of SBI from home buyers, promoters, as well as group housing societies.

The recommendations have been made as per the Supreme Court’s February and July 2020 order to Noida and Greater Noida authorities to restructure all dues from developers and link it to the MCLR from January 1, 2010. For period prior to 2010, the authorities were directed to charge as per allotment terms.

UP-RERA also impose penalties at MCLR.

According to the apex court’s order, both the authorities must recalculate due amount within one month and developers must pay 25 per cent of the dues within three months and rest of the amount in one year. If the payment is not made within one year, the rebate will stand cancelled.

UP-RERA has hence made a similar recommendations to the state government to direct all development authorities and housing boards to pass the same benefit to all home buyers and developers.

In a separate letter written to chief secretary, housing and urban planning department and industrial development authorities, UP-RERA has also recommended that all dues from April 4, 2016 of allottees of group housing and independent plots/apartments be charged at MCLR of 9.35 per cent.

According to UP-RERA these recommendations if approved will help stuck or delayed projects, financial stress of various projects and reduce the disputes between home buyers and builders. It will also help development authorities to recover their stuck dues.

Source from: https://realty.economictimes.indiatimes.com/news/industry/up-rera-urge-state-government-to-fix-all-dues-to-be-paid-at-mclr/77703529