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In a rare and significant relief for 78 flat purchasers of RNA Palazzo, a stalled residential project in Kandivli, the Bombay High Court has granted their plea for self-development of the remaining parts of the project. The decision was taken after a group of over 75 flat purchasers formed an association and filed a suit against the developer, East &West Developers, seeking specific performance by the builder of their agreements for flats. The association had filed an application for interim relief in 2018 and requested that a court receiver be appointed for completion of the project.
The builder, represented by advocates Nilesh Ojha and Tanveer Nizam, agreed to the order being passed in the partly constructed project up to the 14th floor. There had been no construction activity since 2012, and the counsel appearing on behalf of builder Anubhav Agarwal had agreed to the appointment of a court receiver for the completion of the project in August 2019.
The association and builder consented to the court receiver being appointed and handed over to the association "with powers to sell unsold flats, transfer, settle with third parties, make and receive payments and complete the construction through self-development and complete the project." The high court appointed the association of flat purchasers as an agent of the court receiver to take charge of the project and self-develop the remaining parts.
The builder's counsel, Nilesh Ojha, submitted that there were certain pending cases filed by the flat purchasers regarding the construction of the project and in view of the association having taken over construction, the complaints made by the flat purchasers are required to be addressed to the association. The HC disposed of the interim application, keeping the rest of the issues open and would hear both sides later on.
With the appointment of a court receiver and the association taking charge, there is now hope that the project will finally be completed, and the flat purchasers will be able to move into their homes, said the association's counsel, Sneha Prabhu. The balance construction of 27 floors is estimated to cost over Rs 40 crore.
This decision by the Bombay High Court sets an important precedent for stalled real estate projects in India, giving flat purchasers the right to self-develop projects that have been abandoned by builders. This could be a significant relief for other flat purchasers who have been stuck in similar situations with stalled projects.
It is important for the government to take note of this decision and make appropriate changes in the Real Estate (Regulation and Development) Act, 2016 to ensure that flat purchasers have the right to self-develop stalled projects. The government should also take strict action against builders who abandon projects and leave flat purchasers stranded.
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