SC upholds Palais Royale’s 2019 sale to Pune’s Honest Shelters.

MUMBAI: There could be a glimmer of hope for dozens of high net worth individuals who paid tens of crores a decade ago to book luxury apartments in the 3,500-crore Palais Royale, a skyscraper in Worli. At294m (56 floors), it is one of the tallest residential towers in the country.

On December 6, the SC upheld its sale by Indiabulls Housing at a public auction in 2019 under the Sarfaesi Act to a little-known Pune developer, Honest Shelters, which paid Rs 705 crore for it.

“The SC has not only clarified that the NCLT (National Company Law Tribunal) cannot look into the auction sale earlier conducted under the Sarfaesi Act by the secured lender, but has also upheld the orders passed by the high court and MahaRera with respect to rights and obligations of Honest Shelters for completion of the project and handing over the apartments to homebuyers,” said a source connected with the project.

Of the 164 apartments, 76 have been booked and the remaining are unsold. The source said all requisite permissions are in place, the civil construction is complete and part occupation certificate (OC) up to the 27th floor has been received. A flat buyer told TOI that although part OC was received more than a year ago, the builder had failed to hand over a single flat since then. But the source said a part OC won’t allow for a handover since amenities and facilities are yet to be created and made functional. “It is a common practice across all large projects. The handover of interiors will happen by March 2024,” he said.

“Honest Shelters has since made requisite changes in the project to be in full compliance with the building codes. The additional expense involved for the builder, including that for construction, is over Rs 580 crore,” he said.

In 2010, Shreeram Urban Infrastructure Ltd, currently under liquidation, took loans of over Rs 900 crore from Indiabulls Housing Finance Ltd for the project, but defaulted on them. The project was in a limbo for almost a decade.

The project has been mired in a series of litigations, leaving dozens of doctors, builders, fund managers, stock brokers, corporate honchos and NRIs high and dry. Aggrieved purchasers, who formed the Palais Royale Members’ Association, have already paid 20-100% for their homes, each measuring between 4,000sq ft and 8,000sqft. Some of the larger flats were sold for over Rs 50 crore each.

Work commenced in 2009, but charges of building violations by NGO Janhit Manch followed soon after. In 2019, the SC cleared the project completion by overturning a Bombay HC order and dismissed the appeal filed by the NGO.