Mumbai Mirror: Mumbai: Tuesday,
February 28, 2017.
Though the
banks, to whom Orbit owes money, rejected the offer, HC has said talks must
continue.
A group of
buyers, who invested their lives’ savings into a plush south Mumbai project
stalled since 2015, is showing the way to those stuck with such projects across
the city.
The buyers,
instead of waiting for Orbit Corporation, the developer of the stuck Orbit
Terraces at Lower Parel, have decided to raise money to take over the project.
Though the
nearly hundred buyers saw their first offer of Rs 45 crore made to two banks,
to whom Orbit owes the amount, rejected, the talks are still on.
On Monday,
the Bombay High Court directed the consortium, comprising the State Bank of
India and the Union Bank of India, to try and work out a solution for settling
Orbit’s loan dues with the flat purchasers. If the deal works out, it will be
the first of its kind in Mumbai and could offer new hope to buyers in stalled
projects.
Justice S J
Kathawalla said on Monday that a meeting ought to be convened at noon on
Saturday between the flat purchasers and the general managers of the banks.
The court was
hearing a suit filed by the aggrieved buyers, who want to take over the project
so that they can complete construction work. Their lawyer Vivek Shiralkar told
the court that they had proposed to pay Rs 45 crore as full and final
settlement, but all they got from the banks was a “one-line reply rejecting the
proposal.”
“They should
tell us if they expect a higher amount, there needs to be some conversation at
least,” Shiralkar told Justice Kathawalla after which he issued the order.
“Sit with
them and discuss the issue and at least give reasons if you have to reject the
offer,” Justice Kathawalla told the banks.
Orbit
Corporation had borrowed Rs 135 crore from the consortium of SBI and UBI by
creating a charge on the project in their favour. It has re-paid around Rs 76
crore and made an offer last year to cough up Rs 45 crore, the same figure that
has been quoted by the flat purchasers.
But the banks
maintain that they had rejected Orbit’s proposal last year to pay Rs 45 crore
as full and final settlement and therefore, an offer of the same amount from
the flat buyers was also not acceptable.
The movement
of sorts to take the builder head on started about three years back when
businessman Pravin Gandhi decided to file an application under the Right to
Information Act to get the details of flat purchasers who had registered their
agreement. He is now being called the anchor of this movement.
Gandhi got
addresses of about 20 buyers through an RTI application and wrote letters to
them. About seven to eight people responded and they had their first meeting at
Gandhi’s office in Mahalaxmi towards the end of 2014. “After that, it was just
about who knows whom and the number of people who became a part of this
movement just kept going up,” he said.
Though it’s a
high-end project with each flat costing more than Rs 4 crore, not all buyers
have pockets deep enough to be able to raise the extra money required to take
over the project.
Gandhi, who
has over 35-years of operational and entrepreneurial experience in Indian IT
and has been an active private equity investor in the technology sector for
more than 10 years, says most of the “active” purchasers have not raised that
concern yet. “But we know for a fact that not everyone would be able to bear
that kind of burden.”
“We will be
really happy if we can set an example for other such flat buyers whose projects
have been stuck in a limbo for years ,” he said.
According to
discussions held between the buyers, the additional cost for each flat is going
to be in the range of Rs 3000-4000 per sq ft. “We have right now raised Rs 50
per sq ft per flat. There is a general agreement amongst the members that we
would raise the money as and when the need arises. If banks agree for a
settlement, we will come together and raise the money yet again,” says Gandhi.
Sudhir Tanna,
a 63-year-old electrical engineer who runs his own company, says that they seem
to be on the right track. “We just have to remain united. It may still take
some time before we are able to move into our homes , but at least we are
working towards it now instead of just waiting for the builder to do
something.”
While Tanna
doesn’t have a problem with bearing the extra burden that taking over the
project will bring, he says he can’t afford to put money into a new flat in the
vicinity because of this. “I had bought the flat in this project at my son’s
insistence and we all feel really bad that we are not able to move into the
two-and-a-half bedroom flat from the current one-bedroom house.”
Vivek
Bajpayi, a 50-year-old banker, says he is not is a position to bear the extra
cost and he had opposed the move when Orbit had asked for extra money from the
flat purchasers. “Nobody trusted the builder who took about 60-70 per cent of
the cost and did not give us our houses. I am staying on rent and paying home
loan EMIs at the same time.”
When it was
launched in 2010, the property, which consists entirely of luxury duplexes, was
touted and sold as a potential SoBo landmark by Orbit Corporation. The
construction of the 55-storey building progressed steadily until 2014, but it
came to a grinding halt at the 40th floor in 2015.
The suit,
which was filed in December last year by the buyers, states that most of them
bought the flats between 2010 and 2014. Some of the deals were registered with
Registrar of Stamps and many buyers were issued allotment letters too. The
plaint further says that the buyers individually contacted office-bearers of
Orbit on multiple occasions, but did not get any response.
The case will
be again heard next week.