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MahaRera orders Lavasa to refund buyers
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MahaRera orders Lavasa to refund buyers' money
By Yogesh SadhwaniYogesh Sadhwani, Pune Mirror | Updated: Sep 14, 2018, 09:07 IST
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Citizens, who had flats in Lavasa but never got possession, can now heave a sigh of relief as real estate regulatory authority MahaRera has ruled that the developers need to pay back their money in full. The buyers had booked flats in the project between 2010 and 2014. They were assured flats in the next couple of years. Home buyers at the much-hyped Lavasa township have gone through a lot in the last few months.
First MahaRera ruled that complaints against Lavasa did not fall under their jurisdiction as the flats were not sold but given on lease for 999 years. Rera's tribunal, however, reversed the order. The developers, Lavasa Corporation, then approached Bombay High Court (HC), which too ordered that the cases did fall under the ambit of Rera. With clarity provided by HC, MahaRera heard several cases. In the first set of orders issued between August 29 and 31, the authority ordered the developers to pay the full cost taken by them from the home buyers.
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It also asked Lavasa to pay Rs 20,000 as litigation cost over and above 10.65 per cent interest on the amounts taken. The price of the flats for which customers had approached MahaRera ranged between Rs 21 lakh and Rs 45 lakh. They were promised possession for their houses between 2012 and 2016. When the cases were being heard by the authority, Lavasa said that their project spread over 23,014 acres and 18 villages had got stuck largely because of the status quo order issued by Ministry of Environment and Forests (MoEF) in 2010.
"The work had been undertaken since 2002-03, but due to the status quo order on construction by the MoEF in November 2010, they failed to complete the flats. Now they are facing difficulties in meeting the liabilities to complete the project due to swelling of loans and financial obligations. Furthermore it is contended that they have incurred heavy losses on account of manpower, materials and other resources due to price escalation," the MahaRera noted. Lavasa, which is jointly held by Hindustan Construction Company (68.7%), Avantha Group (17.18%), Venkateshwara Hatcheries (7.81%) and Vithal Maniar (6.29%), was meant to be 'India's first privately built smart city'.
The project has been in troubled waters for quite a few years now. First came the MoEF order. Eventually when the developers were able to get sanctions, they faced financial roadblocks. According to a recent note issued by the developers to the Bombay Stock Exchange, they tried raising funds through an approved joint lenders forum, which led to delay in construction of the project for 2.5 years. The lenders then invoked strategic debt restructuring (SDR), which was disbanded by Reserve Bank of India guidelines issued in February 2018.
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Following this, the company proposed 'sacrifice of HCC's majority shareholding and change of management' which did not go well with the lenders. While home buyers in Lavasa heaved a sigh of relief after MahaRERA orders, their joy was short lived. On August 30, National Company Law Tribunal (NCLT) admitted an insolvency plea against Lavasa filed by Raj Infrastructure Development (India) Pvt Ltd, who had executed construction work in the project. The developers owed the contractor Rs 2.95 crore for the work carried out over the past few years and had failed to pay up. The NCLT has appointed an interim resolution professional, to decide on future course of action.
The work had been undertaken since 2002-03, but due to the status quo order on construction by the MoEF in November 2010, they failed to complete the flats.
MahaRera order
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