Over the last five years, despite several protests, thousands of buyers are wondering what years of struggle and court battles have led to.
New Delhi: From filing an FIR and staging demonstrations to approaching the National Consumer Disputes Redressal Commission (NCDRC) and the National Company Law Tribunal (NCLT), the situation of homebuyers of 3C Company’s Lotus brand projects is back to square one. Despite several protests, thousands of buyers are wondering what years of struggle and court battles have led to.
Floated by three promoters, Nirmal Singh, Supreet Singh Suri and Vidhur Bhardwaj, 3C Company with the Lotus brand project is another NCR-based real estate firm, which after Jaypee, Unitech and Amrapali, has found itself embroiled in insolvency proceedings. Granite Gate, the 3C subsidiary behind the Lotus projects, was dragged to the NCLT earlier this year. With a slew of residential projects with 10,000 flats in Noida, the company has around 7,000 flats to be delivered.
Breaking the builder-buyer agreement
Most builders take advantage of the fact that these luxury apartments are owned by NRIs who fail to keep track of what’s happening back home. Speaking to The Sunday Guardian, Surajit Ganguly, a buyer at Lotus Panache, said: “We were in the US when we booked a flat in Lotus Panache in 2010. We had come to India to settle down and had deposited around 95% of the money in 2014. It has been five to six years now and I have not yet received my flat. There are down payments on home loans and EMIs on us. We have registered complaints with the Economic Offences Wing (EOW), but there has been no police action.”
He said that the builder-buyer agreement (BBA) states that in the event of any willful delay in construction of the apartment for reasons attributable solely to the company, delay charges would be payable to the buyer. The charges are at Rs 5 per sq ft as penalty per month, if the period of delay is 1-3 months; Rs 7.50 per sq ft per month if the delay is for 4-6 months and Rs 19 per sq ft per month in case of a delay of 7 months and more. However, the builder did not pay any penalty for the delays in delivering these projects.
Jaya Dikshit, another Lotus homebuyer said, “My payment was delayed for some reason and they charged interest as penalty for that. But what about the builder’s penalty for delayed projects as per the BBA? I am still paying EMIs for the flat, but I don’t know when I am going to get it. Then, there is depreciation of property. I won’t get the same market rate if I want to resell my property.”
‘Fund diversion’ to sister companies
According to many, the builder has allegedly diverted hundreds of crores to sister concerns and dummy companies. Vijay Tahlani, another buyer at Panache, said, “I booked the flat in 2010. I have not yet received the possession of my property. The project comprised 30 towers, of which only 11 towers were delivered. While booking our flats, we were promised that they would be handed over to us within three years. The project has been delayed for almost seven years now.” “While the percentage of completion is 74%, the builder has taken 95% payment and has siphoned off around Rs 500 crore to sister companies,” he alleged.
“We have approached the Union Minister of Urban Development twice, but nothing positive has happened so far. Our project is owned by Nirmal Singh, Vidur Bhardwaj and Supreet Singh Suri. Earlier, Singh had committed that he would refund the homebuyers’ money if two other partners did the same. We are not concerned who is refunding our money as long as we get it. We paid the money to 3C.”
This correspondent tried to reach out to 3C, but received no response from them.
No forensic order
Many buyers alleged that the insolvency resolution professional (IRP) is hand in glove with the builder. Sumeet Saxena, Lotus Panache Welfare Association (LPWA) secretary, said: “With the corporate insolvency resolution process (CIRP) going on, the IRP cannot approve of any further construction without any Committee of Creditors’ (CoC) approval. He is delaying the process so that he keeps getting a lump sum amount. People have requested for his removal. Given the 330-day resolution period, the situation is very dicey as there has been no forensic audit or transactional audit.” “The Noida Authority’s share in the CoC is so huge that a resolution applicant will never come forward to complete the projects,” Saxena added.
Anu Khan, Noida Extension Flat Owner’s Main Association founder, said: “The Noida Authority should have monitored and supervised the construction of the project. Instead, it doled out land to the 3C promoters.”
Surajit Ganguly said, “If the case goes into liquidation, the builder wins. The policy of ‘pull and build’ is being followed; hence whatever is left, that too is being siphoned out.”
Homebuyers had demanded interest for delays in the projects and the court had also approved this in its order. Sunil Kant, a home buyer at Lotus Zing, said, “Real Estate (Regulation and Development) Act states that the builder should disclose all its projects and their status, which was not followed in the case of Lotus projects. UP RERA in its order on 6 March had asked for forensic audit reports from all the projects under the builder.” He also said that out of the 15, only six Lotus Zing buildings have been delivered.
Asked about what the buyers should keep in mind before buying a property, Aditya Parolia, a partner at PSP Legal, which is representing 3C Company buyers, said, “Buyers should be vigilant while the project is under construction and regularly check on the progress. They should also check if the RERA compliances and registrations are in place. It is always better to shift to ready-to-move properties.”
The Sunday Guardian reached out to Prabhjit Singh Soni, IRP appointed by the NCLT, but received no response from him.
Over the last five years, homebuyers in Lotus Panache, Boulevard, Espacia, Zing and Lotus 300 have knocked on every possible door to get their homes.