Mumbai: Observing that it was "about time that a message went out to every developer", the Bombay High Court has cancelled No Objection Certificate (NOC) granted to Parekh Constructions LLP for defaulting in payment of transit rent to residents of a south Mumbai building, which was demolished for redevelopment.
A division bench of Justice Gautam Patel and Justice Neela Gokhale has directed Parekh Constructions, Parekh Constructions LLP, and Nishcon Realty Pvt Ltd to entirely vacate the site, including removing personnel, security guards, equipment, and machinery immediately.
“It is about time that a message went out to every developer that if a developer takes on a development project in the city, the developer assumes a significant responsibility and the financial element or aspect of it is not one that will be overlooked or ignored. It is one that this Court will ensure is entirely fulfilled. That is why we have made the order that we have made above”, the court observed in its order on August 11.
HC Directs MHADA To Issue Formal Letter In The Matter
The HC has also directed Maharashtra Housing and Area Development Authority (MHADA) to issue a formal letter for cancellation of NOC without giving any opportunity of hearing to the developers. The bench had also granted liberty to MHADA to appoint another developer in accordance with law.
The HC was hearing a petition by one Sushila Parikh and 64 others seeking payment of transit rent which the developers have defaulted on. Initially Parekh Constructions was appointed for the redevelopment purpose. Their building, Parvati in south Mumbai, was pulled down and the developer has failed to pay the rent since 2020.
The judges had earlier remarked that the situation across the city is 'now so dire' and that it would be necessary for the government to step in with “drastic steps to curb errant builders in default of their obligations" while undertaking redevelopment projects, which also include transit rent payment to tenants who vacated their premises for new permanent accommodations.
Court Had Ordered Developers To Deposit 50% Amount By August 11
The bench had also directed the developers, which took over from Parekh Constructions, to deposit initial 50% of arrears of Rs 3.5 crore by August 11, which it failed to do so. The judges noted that the old buildings were brought down in 2016 and 2017. The project and the residents entitled to benefit have been abandoned for the last seven years.
The court had asked MHADA to ascertain the exact amount of transit rent arrears. Once certified, the developers are obligated to pay the amount within 30 days, with further interest at 6% per annum until payment or realisation, the court added.
The judges added that they had given a chance to the developers to deposit a part of the transit rent arrears, which they themselves admitted, but failed to deposit. Hence, the amount as finally certified and found due by MHADA will be executable as an order of the court, it underlined.
Initially Parekh Constructions was appointed for the redevelopment purpose. It then entered into a joint venture with Nishcon Realty Private Limited and they apparently formed Parekh Constructions LLP. Later, the two entities had disputes.