LI Network
Published on: 10 August 2023 at 11:17 IST
The Bombay High Court has called for decisive measures to ensure that developers fulfill their obligation of paying transit rent to residents or tenants whose buildings are undergoing redevelopment.
In a recent writ petition concerning a property under redevelopment since 2012 without progress, a division bench comprising Justice GS Patel and Justice Neela Gokhale expressed their concern.
The Court asserted that residents should not be considered a hindrance in developers’ pursuit of profits and that the situation across the city requires the government to take severe steps to rein in errant builders who default on their commitments.
The Court also indicated that it will not hesitate to cancel no objection certificates (NOCs) for projects in the case of default.
The petition had been filed by 65 residents of the property who raised concerns about a builder’s failure to pay transit rent.
The petition named several respondents, including the State of Maharashtra, Maharashtra Housing and Area Development Authority (MHADA), and various developers.
The redevelopment responsibility was initially with Parekh Constructions and later involved Nishcon Realty Private Limited. The residents claimed that they were owed Rs. 11 crores as transit rent for the past decade. Nishcon Realty acknowledged being in arrears since 2020, amounting to a little over Rs. 7 crores.
The Court highlighted the distress faced by occupants who have been on transit rent since 2012. While the old structure has been demolished, no progress has been made on the site for the past decade, leading to community dislocation for the residents.
Expressing concern, the Court emphasized the due amount of transit rent, which without interest or penalty, totals approximately Rs. 11 crores.
The Court criticized the practice of prioritizing developer profits over the interests of affected residents, stressing that residents’ rights take precedence.
The Court ordered Nishcon Realty, Parekh Construction, and their joint partnership to deposit the first 50% of the due amount by August 11, 2023. Failure to comply would result in MHADA canceling necessary approvals.
The Court also proposed a structured program for redevelopment, including provisions for default events.
Developers were directed to pay August 2023’s transit rent to all occupants by August 25, 2023, and subsequent monthly payments before the 25th of each month.
The case is set for further hearing on August 11, 2023.