Judgement Days for Builder-State

  • Abhishek Behl / FG
  • India
  • Sep 05, 2014


Ambience Lagoon
Justice – especially against ‘powerful interests’  - may seem to be perpetually delayed in India, but the good news is that it is starting to be delivered fairly constantly, and consistently, across the courts (specially the high and the supreme). The ‘all-powerful’ builders in Gurgaon, who seem to be able to manage or co-opt every organ of the State (allegedly using their money power and influence with the politicians) and are almost a law unto themselves, are starting to feel the heat. In the latest instance, a double bench of the Supreme Court has directed a Gurgaon-based developer to refund 70 per cent of the maintenance fees (collected over a decade plus) to the apartment owners, as the Company had failed to provide adequate facilities, which were promised when the project was launched – as also failed to maintain some (provided) facilities adequately. The Supreme Court bench of Justices V Gopala Gowda and Adarsh Kumar Goel have upheld a ruling of the National Consumer Disputes Redressal Commission (NCDRC), which had asked the builders of Ambience Lagoon Apartments to refund 70 per cent of the maintenance fees - along with 9 per cent interest – that had been collected from the buyers. “Three hundred and forty five apartment owners will benefit from the Supreme Court order,” says Dr SC Talwar, a resident of the Ambience Lagoon Apartments, who filed this case in 2004 and has almost single-handedly fought the legal battle with the builder. Talwar says that when they had moved into the complex, the quality of lifts was very poor, and there were several instances when people faced trouble due to these faults. Another important reason for filing the case was that the developer had promised four lifts for every ten flats in a block, but had delivered only two lifts. The specifications of the lifts and safety mechanisms were not of a high standard, and despite the residents paying charges regularly the maintenance was poor. The issue was also raised with the RWA, but no one was ready to take up the matter. Talwar then decided to reach out individually to flat owners, and get them to sign a complaint addressed to the National Consumer Disputes Redressal Commission. "I particularly went to flat owners of C, E, F, and H blocks, because they faced more problems. So poor was the condition of the lifts that in one instance a lift in Block A stopped between the floors and its door came apart," says Talwar. The fight in NCDRC was long; it took multiple years, and a lot of patience from Talwar. It was heard many times, saw regular delays and ‘other things’, which are known to happen in judicial cases. Finally, six months ago, NCDRC finally upheld the submission of the residents. It maintained that and since there had been no accounting of the maintenance charges, 70 per cent of these, along with 9 per cent, should be refunded to the flat owners. Secondly, if the lifts were not rectified within 90 days, the builder would be required to pay Rs 15,000 per lift per month, plus an award of Rs 5,000, to each of the 66 flat owners who had filed the case. The manufacturer of the lift was asked to pay a penalty of Rs 2,000 to each of the 66 flat owners - and many of them have got the money, says Talwar. 

 

The builder went on appeal to the Supreme Court. However, after some delays, now even the Supreme Court has upheld the contention of the residents, and the appeal has been dismissed. Talwar says that despite so many years gone in fighting the case, he is happy that his stand of approaching the judiciary has been vindicated. "It has been a long and tough journey. When I filed the case everyone opposed me, as they were intimidated by the reputation of the builder. Even the RWA members at that time did not support me. “I got no co-operation, despite my taking up the fight for something that affected all the residents, and the resolution of which would benefit them all," says Talwar. He adds that they are still not ready to take on the developer in several other cases that he is spearheading in the court. Talwar says that builders have ruled in Haryana for the last two decades, and have turned Gurgaon into their zamindari, which has been endorsed by the State - particularly in the last 10 years. In his view the new government (hopefully even at State level) will have to set up a regulatory body to check the inflated real estate market in the National Capital Region, and particularly Gurgaon. He says that there is a limit to which land can be allowed to be exploited, or farmers to be duped, or homebuyers shortchanged. What was bought in acres is being sold in square feet! Many who manage to buy at these rate rates suffer badly, because the promises made by the builders rarely materialise on the ground, and buyers are finally left with no option but to protest on the roads and in front of developers’ offices, or seek police and judicial help, for something that should have been naturally and lawfully theirs, says Talwar. He is hoping that there would be some drastic change in the system, as Modi has promised deliverance from corruption. Achhe din need to come soon from the govt., rather than people having to wait (for years) for deliverance from the courts.



Wazirabad

In what could be termed a major embarrassment for the Congress government in Haryana, the Punjab and Haryana High Court has set aside its decision of allotting about 350 acres of land to real estate major DLF in Wazirabad village in Gurgaon. The High Court decision is also being seen a setback for the Chief Minister Bhupinder Singh Hooda, who recently had claimed that if it is proven that even an inch of land has been illegally given to a coloniser, he will quit politics. While the complicity of his government is not proven in this case, the High Court decision has given timely ammunition to the opposition (just before elections), and his critics say that the Chief Minister should take personal responsibility. The Punjab and Haryana High Court quashed the transfer of this land, which was acquired basically for public welfare but was given to DLF for developing a residential society, commercial facilities, sports and a golf course. A division bench of Justice Surya Kant and Justice Amol Rattan Singh held that the allotment of the land to DLF, on February 9, 2010, was not fair, just and reasonable. While the High Court upheld the land acquisition, it has now asked the government to conduct a fresh auction, inviting international bids too. DLF would be allowed to also participate. 

The landowners and panchayats had filed six petitions in the Punjab and High Court, challenging the acquisition of land and its transfer to DLF. INLD leader Abhay Chautala has demanded that a criminal case be registered, and an investigation  conducted, on how land meant for public welfare was given to a private builder for developing residential and commercial projects. The Party is also pointing to the close relations between the Chief Minister and the developer, which had donated a huge sum for the construction of a college in memory of the CM’s grandfather. Chautala further alleges that the Congress government, under Sections 4 and 6 of the Land Acquisition Act, had issued notices for acquiring fourteen hundred acres of land, but only acquired seventy acres, and the rest was released, in collusion with the builders. INLD has included the above-mentioned violations in its chargesheet that was recently submitted to the Haryana Governor. The Chief Minister has threatened to file a defamation case against this chargesheet. The proposal to develop a leisure project in Wazirabad village was initiated during the government of Om Prakash Chautala, and HSIIDC was appointed as the government agency to develop the land after acquiring it. However, the arrival of the Congress government changed the scene, and it was decided to allot this land to a private developer, for commercial and residential projects, much to the chagrin of villagers, who were told that this land was being acquired for public purposes. At that time there was a precondition that the developer had to obtain clearances from the environment, pollution, defence and civil aviation ministries, but later these conditions were waived off. The tender for the sale of this land was also devised in such a way that only a developer with 10-years experience, and which had operated a golf course, could acquire this land. Opposition parties allege that all these waivers and changes in conditions were undertaken by the Congress government to favour one particular developer. There were three companies that had applied for the land, and the other two could not meet the particular conditions that were set. The opposition is also alleging that the allotment was made by the State cabinet when it was on the verge of dissolving the assembly; the decision was taken in the last week of the government. The Company (DLF) spokesperson has said, “DLF won this land in an international competitive bid conducted twice by the government of Haryana in 2009-10. As a copy of the order is awaited, we wish to clarify that it will have no bearing on any of our completed or ongoing projects. This land was to be developed in the future. After reading the order and taking legal advice, we will take appropriate steps.”

The Supreme Court had earlier rejected a DLF appeal to stay the order by the Competition Appellate Tribunal (CAT), which had imposed a penalty to the tune of Rs 630 crores on the builder. CCI & COMPAT had found the company guilty of abusing its market dominance and violating fair trade practices, in Gurgaon – the appellants had accused DLF of delay in the delivery of flats and changes in the original plan (by building more floors), and the one-sided nature of the buyer agreement. Real estate buyers and civil activists have welcomed the court decisions, and opined that such tough decisions were necessary and now needed to be implemented in letter and spirit. The general opinion in Gurgaon is that real estate developers often use the legal process and judicial delays to perpetuate the violations committed by them, and ensure that such a long time passes in court cases that the entire raison d’etre of reaching out to the courts gets lost. In many cases the developers are able to thwart individual efforts to get justice because they have a far higher financial and legal clout, and also use every tactic in the book or outside it to escape through ‘loopholes’. Where the RWAs are not that well off, or the residents are divided, they continue to suffer, says an activist. According to him, the people in Gurgaon should unite and put pressure on both the government and the builders to clean up their act…before its too late.




Administration dressing-up redressal

 

The Grievance Redressal Process started by the Gurgaon Administration to resolve the problems being faced by thousands of apartment and plot owners and residents, has started to give results – though mixed. The RWAs, which are representing the residents of the City in the Grievance Committee meetings chaired by the Deputy Commissioner, say that their problems are at least being heard by the government, and some of these are also getting resolved, as the officials have forced the errant builders to address the basic issues in their colonies. It is however being alleged that only a few symptoms are being resolved, and the District administration needs much more support from the State government in order to cure the underlying disease. In what is being termed as a major victory for the residents, the District Administration, through the Senior Town Planner, has issued a notice to DLF, one of the largest builders in Gurgaon, to remove encroachments in DLF Phases I to IV; this has been a bone of contention between the residents and the maintenance agency. Further, a survey of roads and other infrastructure, which was reported to have been carried out (by Town & Country Planning)  earlier, and which showed that things were almost perfect in the colonies, would have to be carried out once again - taking the RWA representatives into confidence. RS Rathee, President of the Gurgaon Citizens Council (GCC), who also represents the Qutab Enclave Residents Welfare Association (QERWA), says that there are a number of development and infrastructure works that have remained pending in the colonies. "The Senior Town Planner (STP), in a positive step, has directed for a meeting on September 10, to discuss the pending works, as well as community sites that are being used by the company (DLF) for its own benefit," says Rathee. Brijmohan Mehta, President, DLF Phase 4 RWA, says that problems exist in all the four phases, and it will take a lot of time and effort to resolve them. The RWA most importantly wants the builder to hand over the maintenance to MCG or any government agency, as stipulated by law. Secondly, it wants the club and community centre to be handed over to the RWA, as it belongs to the plot/apartment owners. At present commercial activities are being run by private individuals, which has been opposed by the RWA. GCC states that the community centres in Phase I and III are being run by the builder as its own properties, and no sports complex has been provided. The clubs are also being run as hotels in Phases II, IV and V. Religious sites have also not been provided in all areas. Referring to services, GCC alleges that the drainage and sewage systems are not adequate, and there is no sewage treatment plant. 



However, a number of other RWAs have termed this exercise (by the DC and STP) as a mere whitewash; they believe that this ‘grievance redressal mechanism’ is just meant to release the building up of steam in the City, which is threatening to burn the present government. R S Yadav, President of Uppal Southend, a posh private colony, opines that nothing is happening on the ground, and all decisions and actions are only seen on paper. He is critical of the government officials who have supposedly carried out a survey and reported something that is totally at variance with what is the actual situation in the colony. Yadav says that only the stiff opposition from the RWAs ensured that another survey was ordered (this time keeping RWAs in the loop). Uppal Southend faces multiple issues: the first pertains to the need to urgently set up of a 33 KVA power sub-station. While the concerned executive engineer has directed the builder to set up the same, nothing has happened, or even seems likely. Another important issue is of a 2 acre vacant plot of land in the colony, which has been earmarked for a community centre. For the last 10 years this plot has remained vacant. In January this year the RWA had signed an agreement with an external agency  to run a sports centre on this plot, but the builder has been opposing this set up. "We have an agreement that whenever the builder starts constructing the community centre, the plot will be vacated, but the builder just harasses us and accuses us of encroachment,” says Yadav. The RWA has also raised the problem of the maintenance of parks and the green belt, which has been neglected by the colonizer - but apart from directions and the issuing of notices, nothing has happened. The civil society activists who have been part of this process, and have seen the working of the Administration and the newly formed Redressal Committee, say that minor problems can be resolved through this mechanism, but issues related to gross violation of the Apartment Act by the builders, the control over common areas such as markets, schools and clubs within apartment complexes, the completion of infrastructure, and the completion of the deficient work, will require much more effort – and there will be a clear need to involve the State executive and politicians.  Col BK Dhawan, President, Federation of Apartment Owners Association (FAOA), says that he has seriously taken up the need to register apartments only under the Haryana Apartment Ownership Act. FAOA has also said that, as per law, only one RWA can be formed under the Apartment Act, but the District Registrar, Gurgaon has been allowing the formation of multiple RWAs, under the Societies Act 2012 - which is not the right Act under which to register an apartment. Dhawan says that while the DC, Gurgaon has called for a separate meeting on this issue, it is unlikely that it would be resolved soon - as there is a deliberate attempt by the builder lobby to somehow dilute the Haryana Apartment Ownership Act, 1983 (which is a complete law in itself, and takes care of the interests of apartment owners). Commander Dharambir Yadav, President of the Sheetal RWA, which is part of  Mayfield Gardens, a colony that has is devoid of basic amenities, opines that though this exercise has brought the Administration, builders and RWAs on a common platform, and given a chance to the apartment owners to ask questions, the resolution of problems is unlikely to happen under this mechanism. He wants a more empowered and powerful Real Estate Regulatory Body in Haryana (or at least Gurgaon), 
which could oversee the working of the builders and ensure that they follow the rules in letter and spirit. Yadav adds that though the STP has recommended that the licences of the errant builder will be revoked, as they have violated the rules, a similar process has also been carried out in the past. "The licences were cancelled, and then again revived, without any development or change having taken place in the colony," rues Yadav. Despite the STP having taken cognizance of the fact that roads in in Blocks N, J, E, F, part of Block-A, part of block-B, part of Block-C, part of service road in M-block along the 30 meters wide road, and the stretch of roads in block-M, were in bad condition, and despite instructions from the DC to the builder to improve the roads, nothing much has happened. Another major problem in the colony is the delay in the construction of a 66 KVA Electric Substation (ESS), despite even the power officials confirming to the DC that there is no stay granted on its construction. The earlier action initiated against the coloniser was allegedly withdrawn by the office of DG, TCP, subject to conditions - which inter-alia included the licencee constructing the 66 KV ESS within 12 months. The time period provided in the Order has already stand lapsed, and the coloniser has dared to take no action. Yadav rues  that, despite approaching the Lokayukt, the Gurgaon DC, the DTCP office and even the courts, the condition of basic infrastructure in the colony remains very bad. The builders clout rides clearly above all these authorities.

Thankfully, some RWAs have benefitted from the Administration's sudden interest in bringing some order to the chaos that has existed for the last decade in Gurgaon - where the colonisers have ruled the roost, the bureaucrats have looked the other way, and the monitoring agency has just decided to overlook the violations. Perhaps the coming elections, and some directions from the High Court, have jolted the political leadership out of its stupor - to ensure that at least some sanity should prevail in Gurgaon. Amit Jindal, President of Vipul Greens RWA (on Sohna Road), says that the grievance redressal process started by the DC has given results, although it may be a bit slow due to the multiple government agencies involved. "We had taken a water connection from HUDA for the supply of 8 lakh litres of water daily, but action on this had been pending for the last 2 years. It was only after raising the matter with the DC in the meeting that directions were issued for this connection to start working," says Jindal. Further, a building material supplier had occupied a stretch of land, which was causing problems to the residents; the intervention by the DC ensured that the supplier was evicted. A couple of problems that remain unresolved include the illegal parking of commercial taxis in the service lane of the complex, and the need for a traffic light in front of the apartment complex. Jindal says that the RWA primarily does not have pressing issues with the builder, and it is halfway in the process of taking over the maintenance, and this is going on smoothly. In Greenwoods City, adjoining South City 1, the issues are: there is no community centre and sports complex; the club is being run as a profit centre and the hospitals and school sites are being run by private parties; the power sub-station has not been constructed, there is no sewerage treatment plant and the sewage system capacity
is low. 

There were heated arguments between the representatives of DLF and GCC during the latest meeting. It was due to this that the DC has ordered a separate meeting on September 10, asking a top official from DLF to attend a meeting in the office of the Senior Town Planner, along with RWA representatives. It is on the basis of these developments that citizens of Gurgaon are hoping that some basic issues might get resolved in the Millennium City. We continue to live on hope…when actually we ought to make the builders feel that they are living on borrowed time.


 

 

 

Orders issued by Senior Town Planner to DLF in the Grievance Redressal Meeting: 

1. Order for immediate action on removal of encroachment: Vide Memo No. STP(G) 2014/2228 dated 01.09.2014 it is directed to DLF Ltd to remove all encroachments in the green belts/parks and unauthorised allowing of kiosks, stalls, vendors, panwalas in the entire licensed colony. However, Press Man (Dhobi) is exempted for the time being, as per DLF QERWA submission that a decision be taken and formulated and approved policy, as these are essentially required in the colony. 


2. Order for Consideration of development works and community sites, especially club, vide Memo No. STP(G), 2014/2222-2225 dated 01.09.2014. M/s DLF Ltd is directed that a responsible representative who can properly interact and take decision, who is fully conversant with the problems to discuss various development works, community centre & club, may be deputed for a meeting to be held on 10.09.2014 at 3:00 PM at Senior Town Planner’s office.  The meeting will be held with the President of Qutab Enclave RWA, R.S.Rathee, Superintending Engineer  HUDA, and Superintending Engineer DHBVNL.


3. Order for rechecking of survey reports on the roads, parks and other services vide Memo No. STP(G) 2014/2202-2203. Decision taken for re-survey of the report submitted by the Survey team headed by ATP Gurgaon. The President(s) RWA(s) are directed to submit their objections in writing after checking the present survey report to the ATP, and after taking a fixed time and date, re-survey will be conducted along with ATP in-charge.


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