Bombay HC dismisses condominium plea for business park in south Mumbai – ET RealEstate

MUMBAI: Bombay high court on Thursday dismissed petitions filed by CIPLA and others challenging the registration of Peninsula Business Park commercial complex cooperative society under the Maharashtra Cooperative Societies Act and denying a plea of its formation as ‘PBP condominium’ under the state apartment ownership law.

The commercial Towers at Lower Parel had its premises snapped up for offices by leading corporates like CIPLA, HDFC Bank, TATA AIA Life Insurance and Tata Capital, who filed petitions to say they had a deed of declaration from the developer submitting to the provision of Maharashtra Apartment Ownership (MAO) Act.

The bone of contention before the HC was a certificate issued in October 2019 by the Deputy Registrar, Co-op Societies in Mumbai to the PBP Commercial complex as a society. While some members preferred the condominium, majority wanted it to be a society. The difference between the two laws and the rights and obligations marked the basis for the battle. The two laws are the Co-operative societies Act of 1960 and the Apartment Ownership Act of 1970 and while both require buyers of premises in a building to come together to manage the building as either a cooperative society or a condominium—where they form an ‘association of apartment owners’.

While the main difference is that in a society land title and building is conveyed to the society while in a condominium, each apartment owner, also has a proportionate interest in land on which building stands and common areas, and also in a condo owners can let out apartments without a nod from the board of managers while in a society permission is needed.

The HC bench of Justices RD Dhanuka and VG Bisht said the society has been registered as a ‘general society’ and not as a ‘housing society’ and “no prejudice would be caused to the petitioners’’ as members would “also become owners of the immovable property of the general society.’’

CIPLA said it acquired the entire Tower C of ground plus five upper floors along with exclusive use of pantry and 45 car parking spaced for Rs 95 crore in 2012 and some more premises and 28 car parking spaces two years later. Two more years later, in 2016, the developer, Peninsula Land Ltd, formed a PBP Condominium, it’s senior counsel Vineet Naik said.

In April 2019, Cipla and others who collectively occupy half the premises wrote to the district deputy registrar in Mumbai city not to proceed with registering the PBP commercial complex as a cooperative society as it withdrew consent. But on October 22, 2019 the society as registered by the dy registrar, which was challenged then before the HC.

The HC after hearing counsel Vishal Kanade for HDFC Bank, Prateek Seksaria and Saket Mone for the PBP cooperative society and Mayur Khandeparkar for Peninsula Land Ltd, the developer, dismissed the petitions as being “devoid of merits’’. It said the by a “unilateral” DoD the property could not have become a condominium.

The HC held that the developer had not informed the registrar of opting for the condominium formation under MAO Act as mandated under law, and hence there was no impediment in registering a co-op society under provisions of the Maharashtra Ownership of Flats Act.

The HC said “when a statute provides that a particular act needs to be done in a particular manner, it has to be done in that manner and no other.’’

The HC also noted that several others who own commercial units in the Towers and were objecting to the condominium had later given their consent for formation of the PBP society and the court has to consider the “ground reality’’ and “ascertain desire of unit holders’’. A “majority’’ wanted the society formation, the HC noted.
The HC said that under the MAO Act, “an individual unit purchaser cannot claim any right to insist on the formation of a condominium… It has to be a combined action on the part of all the owners.’’

The law states that, under Section 10(1) of the MOFA, the promoter is required to submit an application to the Registrar for registration of the organization of persons who take the flats as a co-operative society or as a company failing which, the minimum number of persons required may apply to form either the society or company.

The Section 10(2) however, clarifies that if the promoter fails within the prescribed period to submit an application to the Registrar for registration of society as prescribed in the Maharashtra Co-operative Societies Act, 1960, the persons who have taken flats from the promoter may apply to the Competent Authority to direct the District Deputy Registrar to register the society.



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Former HDFC Bank MD Aditya Puri’s family buys Rs 50 crore flat in Malabar Hill – ET RealEstate

MUMBAI: Former HDFC Bank Managing Director Aditya Puri’s family has bought a Rs 50-crore apartment in South Mumbai’s plush Malabar Hill locality. Puri’s wife Anita Puri and daughter Amrita Puri have jointly purchased this nearly 5,000 sq ft sea-view luxury house next to Raj Bhavan on Walkeshwar Road.

The family has paid Rs 1 crore as the stamp duty for the property’s registration that was executed on November 25, showed documents accessed by ET.

Puri joined the US-based global investment firm the Carlyle Group as a senior advisor in November after retiring from HDFC Bank in October.

The family has bought the apartment on the 19th floor of Lodha Seamont and has got access to 7 car parks as part of the deal.

Aditya Puri could not be reached immediately for a response.

Luxury apartments in south and south-central Mumbai, an area that was saddled with supply, has been witnessing a sharp pickup in sales in the last few months, providing relief to developers who were struggling to offload inventory after Covid-19 pandemic disrupted the real estate market.

A reduction in stamp duty by the government of Maharashtra, festive offers, ready stock and minimal impact of Covid-19 on its target buyers helped boost sales in this upscale area.

The Maharashtra government had reduced stamp duty to 2% from 5% till December-end and 3% between January and March 2021 in a bid to encourage home sales.

According to property brokers, the pandemic’s impact on clientele for such properties has been limited and these prospective buyers are largely scouting for ready homes or those nearing completion.

These micro markets are known for their proximity to business hubs and traditional luxury pin codes of south Mumbai. These also house many high-profile names including industrialists, sports people, start-up founders and C-Suite professionals, and therefore the preference of this buyer segment continues to be in favour of the micro market.



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HDFC Bank provides Rs 500 crore funding to Jewar Airport project – ET RealEstate

HDFC Bank has entered into an agreement to provide Rs 500 crore funding to the upcoming Jewar airport in Greater Noida. The funds will be utilized for infrastructure development and land acquisition for the proposed airport that will be Asia’s largest. The funding will be provided at interest cost of Marginal cost of funds based lending rate (MCLR) plus 1%.

With this the Yamuna Expressway Authority that is developing the 5,000-acre airport in Gautam Budh Nagar district of western Uttar Pradesh has secured financial assistance worth over Rs 4,500 crore including a funding from Housing & Urban Development Corporation (HUDCO).

The tenure of HDFC’s loan is five years, and the funding amount can be increased later.

The project is estimated to cost over Rs 29,500 crore and the authority is looking to raise additional funds through issuance of infrastructure bonds soon.

“The HDFC funding is not linked to our future cash flows and that allows us more flexibility in terms of further fund raising. We are planning to raise between Rs 20,000 crore and Rs 25,000 crore through infrastructure bonds,” Arun Vir Singh, CEO, Yamuna Expressway Authority, told ET while confirming the story. “We have achieved the financial closure for the project’s first phase.”

The airport is billed to be the biggest in India with six runways upon completion. The first phase of the project will be spread over an area of 1,334 hectare and is expected to cost over Rs 4,500 crore. The construction work at the project is expected to start in 2021, while commencement of operations is scheduled for beginning of 2024.

ET’s email query to HDFC Bank remained unanswered until the time of going to press.

In July, the authority and HUDCO entered into a pact for financial assistance worth over Rs 4,000 crore for various projects adjoining the upcoming International Airport. These would include land acquisition and associated infrastructure development on both sides of the Yamuna expressway over the next three years. HUDCO has extended the financial support at the MCLR rate.

The Noida International Airport Ltd (NIAL), part of Yamuna Expressway Authority, has entered into an agreement with Swiss developer Zurich Airport International for the development of this airport. A concession agreement has also been inked between Uttar Pradesh government’s agency and the Yamuna International Airport Private Ltd, a special purpose vehicle floated by the Zurich Airport for the project.

The authority is planning to develop an Aerotropolis around the project including several industry-specific hubs such as pharmaceuticals, small and medium enterprises (SMEs), handcraft and a film city.



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HDFC, other banks want landlords to reduce rent – ET RealEstate

MUMBAI: Recently a landlord who has rented out his four-storeyed building to HDFC Bank’s regional office in Indore received a rent cheque from the bank which was 20 per cent less than the usual amount. The landlord had no choice but to accept this as he was not sure if he would be able to get another client who could occupy all four floors of the building.

According to market sources, HDFC Bank has written a letter to landlords, whose premises it occupies for branches and other offices, seeking a 20 per cent cut in the rent and otherwise it has expressed its inability to continue to occupy the premises. In 2019-20, the bank spent Rs 1,658.47 crore on rent, electricity and local taxes. This is Rs 176.37 crore more than the previous financial year. HDFC Bank has 5,416 branches across the country and 14,901 ATMs.

A banking sector analyst who did not wish to be named said, “Typically for banks, the third largest expenditure is on rentals after the expenditure on employee salaries and other benefits and IT infrastructure.” The analyst also said that HDFC Bank is not the only bank which is looking for reduction in rentals due to the Covid-19 pandemic and lockdown. Recently ICICI Bank also wrote to landlords asking for reduction of rent for the lockdown period. ICICI Bank has around 5,300 branches and 15,000 ATMs across the country and spent Rs 1,200 crore in financial year 2019-20 on rent, electricity and taxes.

According to Propstack, a real estate data analytics firm, the top seven private sector Indian banks – ICICI Bank, HDFC Bank, Axis Bank, IndusInd Bank, Kotak Mahindra Bank, RBL Bank and IDFC First Bank – paid rent of around Rs 4,000 crore in financial year 2019-20. And all these banks are looking at reducing their annual outgo towards rent by 15-20 per cent, said a banking sector analyst.

A senior HDFC Bank executive said, “We are in negotiations with landlords for reduction of rentals but denied that, the bank has unilaterally informed landlords that it is reducing their rent by 20% and it will walk out if they don’t agree. The rent agreement is a legal contract, no one can dictate terms unilaterally,” he said. However, an email sent to the HDFC Bank spokesperson for official comment remained unanswered till the time of going to press.

An industry source said that apart from up the rent cut, Yes Bank has also sought smaller office spaces for its branches, looking at the Covid-19 scenario and shifting emphasis on online banking transactions. “In most cases, the banks have been successful in negotiating this arrangement with individual landlords and getting 15 to 20 per cent discount in metro cities,” the official said.

From the landlord’s point of view, banks are good long-term customers who rent properties on 10, 15 or even 20-year leases, and have secure cashflows. The other option for these mostly ground floor properties is retailers, a segment that has been badly hit by the pandemic lockdowns.

“Bank branches are considered as a stable and long-term tenant, as they tend to occupy premises for a long duration thereby resulting in a steady and predictable rental income. By providing some rental discount in lieu of an extended tenure or lock-in commitment, property owners can avoid creating vacancy risk as well as lack of income in their portfolio,” said Karan Singh Sodi, regional managing director of property consultant firm JLL India.



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