Bombay HC says Govardhangiri society can self-develop or get a new builder – ET RealEstate

MUMBAI: In a relief to a housing society whose decade-old redevelopment project has been mired in delays, transit rent arrears, uncertainties and court battles, Bombay high court recently allowed it to either go for self-development or change the builder, pending arbitration.

In an interim order, HC has restrained the builder from selling or creating any third-party rights in free sale flats to be constructed on the property at Govardhangiri Cooperative Housing Society in Bangur Nagar, Goregaon (West).

If the society appoints another builder, it can seek HC’s nod to add its name to a special court-appointed committee for redevelopment, even if arbitration is still pending between the society and the builder.

“No developer can turn an open-eyed risk into an advantage in equity unless it shows that its risk has been caused or increased by a default by the society, but for which matters would not have come to this pass,” said Justice Gautam Patel. “If the developer wants equity, the developer must demonstrate that it has done equity,” he added.

In this case, HC said, “Clearly, at least at a prima facie stage, this appears to be far from correct” as “substantial work” still remains in redevelopment of the 91-member society with five dilapidated buildings.

The arrears of compensation till March 2020 touched nearly Rs 3 crore, HC noted. A bank guarantee of Rs 3 crore to cover the rent was not furnished. HC said the “condition of members of society’’ has to be the “primary concern of any court of enquiry”.

Senior counsel Raju Subramanian for the society portrayed before HC the “desperate plight of members left to fend for themselves for payment of compensation or rent while in transit’’ and “only being given repeated assurances with no real prospect of seeing their new promised homes ever becoming a reality”.

The society had filed a petition to invoke arbitration in its dispute against developers Bharat Infrastructure & Engineering Ltd and Taksha Spaces after issuing a termination notice in March on the latter.

In 2009, the society decided to go in for redevelopment and in 2012 a development agreement was signed. Both developers were jointly redeveloping.

Bharat Infrastructure exited the project after a 2017 court battle. Subramanian said since August 2016, the builders abruptly suspended payment of transit rents to original occupants. The society alleged other discrepancies in the use of FSI.

HC noted, “ There were breaches in regard to the bank guarantees. The construction was not proceeding according to schedule.” The society said the “situation has gone from bad to worse”.

HC said Taksha’s counsel Karl Tamboly “candidly accepted’’ it was in default on rent payment but said the builder had ploughed large amounts into the project. HC said it was not from “any altruistic motivation-…but to make a profit”. HC said there was “no evidence’’ that the builder has funds to complete the project. In its detailed order, HC said merely saying it is “on the verge of receiving financial support’’ is not good enough. HC said the “balance of convenience” lies firmly on the side of the society in this case since if relief is denied to them the prejudice caused will be “incalculable”.

“All that they are being offered today are more promises. Promises were made before, only to be broken, again and again and again,’’ said Justice Patel.

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