Given the severe circumstances, the state may need to take drastic measures to stop rogue defaulting builders: HC Bombay

MUMBAI: The Bombay high court stated this week that the situation in the city was “now so dire” that the government would need to intervene and take “drastic steps to curb errant constructors in default of their obligations” while carrying out redevelopment projects, including paying transit rent to tenants who had to vacate their properties for new permanent residences.

In a case regarding tenant rights, the High Court bench of Justices Gautam Patel and Neela Gokhale stated, “We will not sit by and allow residents of this city to be considered as a necessary evil, an irritant or a nuisance in developers’ pursuit of profits or their worship of Mammon.”

Genuine and qualified inhabitants’ rights come first. The August 7 HC ruling in a petition filed by Sushila G. Parikh and others against the state, MHADA, builders, and the BMC stated that the developers’ rights are clearly secondary and will continue to be subordinate to the rights of such residents.

Justice Patel and Justice Gokhale wrote in the ruling, “Petition is the by now familiar story of pain to several dozen individual inhabitants, some of them senior folks, all subjected to immense suffering in the course of what was supposed to be a fast renovation of a cessed building.

There were numerous HC 65 Petitioners present.

The owner of one of the two properties, Darshana, first selected Parekh Constructions as the developer.

Then Nishcon Realty Private Limited joined Parekh Constructions, and the two of them allegedly established Parekh Constructions LLP.

The HC stated that disagreements between Parekh Constructions and Nishcon Realty are expected.

Two properties exist. One belongs to Darshana, and the other is Trust property. There was a structure on the Darshana-owned property that has since been demolished. The building is still standing on the Trust’s property.

The builder Nishcon Realty acknowledged before the bench that it has transit rent arrears dating back to 2020 totaling little about Rs 7 crores.

It reveals that an enormous sum of Rs 11 Crores in transportation rent had gone unpaid for the better part of a decade. The Parvati building’s occupants have lost their houses, according to the HC.

The court ordered that the first Rs 3.5 crores, or 50% of the sum owed even according to Nishcon, be brought in by Friday, August 11, 2023.

We make it plain that this is a direction against Nishcon Realty, Parekh Constructions, and their LLP jointly and severally, regardless of how Nishcon Realty handles its dealings with Parekh Constructions.

The HC further directed, “If the amount of Rs 3.50 crores is not brought to Court by Friday, August 11, 2023, we will direct MHADA to immediately cancel the NOC of the only Developer it has on record, namely Parekh Constructions. We will not contemplate a situation where any one of these entities continues in this project if there is a default.”

On August 11, there would be another hearing.