Home buyers question MahaRERA's disposal of complaint against HDIL
Firm had asked regulator to keep it in abeyance as it had gone into insolvency.
Satish Nandgaonkar
October 28, 2019, 08:38 IST
Home buyers of HDIL's stalled housing project Majestic Towers in Nahur are upset that the housing regulator Maharashtra Real Estate Regulatory Authority (MahaRERA) has disposed of their complaint seeking revocation of the developer's registration in view of the insolvency proceedings against Housing Development and Infrastructure Limited.
A year and half ago, 53 home buyers had approached MahaRERA seeking its intervention to complete the project. The buyers told MahaRERA that they are not seeking a withdrawal if the construction progresses swiftly. HDIL submitted that they will try to revive the project by April 2019. In its December 27, 2018 order, MahaRERA asked the developer to hand over a list of all allottees in the project to the home buyers so that if HDIL fails to revive the project by April 2019, they can form an Association of Allottees and use Section 7 provisions to remove the developer and take control of the project.
When HDIL failed to revive the project as per the deadline, the buyers approached MahaRERA again and they were told to get more members to join the group so that an Association of Allottees could be formed.
"We got 58 more members and the hearing [to revoke HDIL's registration] was scheduled for September 4. But, to our shock, on September 3, MahaRERA gave an order that on August 26 they received a letter from HDIL stating that the company has gone into insolvency and our complaint should be kept in abeyance. Based on the letter, they disposed of our case," said Chandrakishore Kolindewala, president of the Majestic Towers Flat Owners Association.
Bank of India had initiated insolvency proceedings against HDIL to recover its dues of Rs 522 crore and the National Company Law Tribunal had admitted the proceedings on August 20 and appointed an Insolvency Resolution Professional under the Insolvency Bankruptcy Code.
In the September 3 order, MahaRERA chairperson Gautam Chatterjee said that the complainants are entitled to reliefs under RERA provisions but the relief cannot be granted at this juncture.
"The present complaint is, therefore, disposed of with liberty to the complainant to file fresh complaint after finalisation of the said insolvency resolution process," Chatterjee said in the order.
Kolindewala questioned why MahaRERA disposed of their case when HDIL has requested the Authority to keep the complaint in abeyance. "The developer is telling MahaRERA to keep the complaint in abeyance, but MahaRERA disposed of our complaint. Home buyers like us are paying bank EMIs as well as rent due to the delayed project. 145 of us had filed individual complaints and paid Rs 5,200. This Rs 7.5 lakh is now wasted. A fresh complaint means we will have do the whole process including payment of fees again."
Kolindewala said the insolvency proceedings have now made home buyers in HDIL helpless. "I can understand people going before the National Company Law Appellate Tribunal (NCLAT) to recover their money, but why should home buyers who are waiting for their homes to be delivered have to go before NCLT. Can the courts demolish the buildings to recover the money?" Kolindewala asked. The Majestic Towers buyers had to incur more legal costs for intervention before the NCLAT in Delhi which is hearing HDIL's appeal against the insolvency proceedings.
When contacted by Mirror, Chatterjee said once the matter goes to NCLT, the moratorium process can go on for several months, and under the RERA mandate, he has to decide complaints within a 60-day time frame.
"I have to dispose it of. The Supreme Court has said that when a matter is there between RERA and NCLT, the former's decision will prevail. So I cannot keep them pending with us. The matter will now be taken up by the Insolvency Professional where every home buyer will be called and a decision will be taken whether the home buyers will actually take it forward, etc. So, I have kept it open subject to the final decision that is taken by NCLT," said Chatterjee.
Chatterjee said the home buyers could claim the cost of the complaint when they come back to MahaRERA. "Nothing prevents them from demanding the cost of the complaint if they have to return to MahaRERA, but that does not mean that MahaRERA should keep on burdening itself with pending cases. I don't agree that this is the correct way to look at this."
Advocate Tanuj Lodha of Lodha and Lodha Advocates which deals with cases at the intersection of RERA and Insolvency and Bankruptcy Code (IBC), said, "Section 14 of IBC pauses the ongoing proceedings in courts and does not end them. The proceedings are paused for the duration of the Corporate Insolvency Resolution Process (CIRP). Sec 14 (4) of IBC specifically states that the moratorium on court proceedings against corporate debtor shall only be for the duration of CIRP, which means the proceedings shall revive post that. Therefore as per law, the pending matters should be kept in abeyance instead of disposing them of."
Similar to Majestic Towers, home buyers from several other incomplete projects have approached MahaRERA for revoking the registration of the project concerned, and taking control of the project to complete it.
In fact, on October 22, MahaRERA took the first decision under Section 7 and 8 of RERA to revoke the registration of the project and hand over the control to the registered Association of Allottees (AOA). The AOA from DSK Sadaphuli project in Talegaon, Pune would now be completing the remaining 10% of the construction work in the project and give possession to its members.
MahaRERA appointed a designated resolution panel comprising Niranjan Hiranandani, president of National Real Estate Development Council (NAREDCO) and Mumbai Grahak Panchayat's Shirish Deshpande to supervise the completion of the project on its behalf. A panel of professionals comprising an architect, a chartered accountant, and a structural engineer will assist the DSK Sadaphule AOA, the project's financier Tata Capital Financial Services, and the resolution panel in completing the project. The architect was authorized to get the requisite permissions from the Pune Municipal Corporation and the AOA members were authorized to register agreements for sale of buyers.
In this case, MahaRERA considered the possibility that an operational creditor could initiate insolvency proceedings against DSK Worldman Projects and directed the AOA and Tata Capital to file a caveat application before the NCLT, Mumbai bench to ensure that NCLT hears them before admitting any insolvency proceedings.
National Real Estate Development Council
national company law appellate tribunal
naredco
Mumbai Grahak Panchayat
Majestic Towers Nahur
MahaRera
Maharashtra Real Estate Regulatory Authority
Association of Allottees (AoA)
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