Mumbai: It was touted as the most expensive and exclusive residential block in south Mumbai’s Worli area, but it has been dogged by regulatory and legal issues from the start and a fresh twist could see its fate being decided by the country’s apex court.
The most important issue involves the ownership of the land with Mumbai’s local corporation, the BrihanMumbai Municipal Corporation (BMC), claiming that it has a right to the land. BMC also approves all real estate projects in the city.
I-Ven Realty Ltd, a joint venture between Mumbai’s Oberoi Constructions Pvt. Ltd and private equity firm ICICI Venture Funds Management Co. Ltd planned to develop 44 duplex apartments in twin 65-storeyed towers overlooking the Arabian sea. The development attracted buyers such as Future Group chief Kishore Biyani and 20 apartments were sold.
The current prices of the apartments are around Rs40,000 per sq. ft, or Rs32 crore for a 8,000 sq. ft flat.
V. Radha, joint commissioner, BMC said, “The land belonged to BMC and was given to Glaxo on lease.”
A GlaxoSmithkline Pharmaceuticals Ltd unit used to be located at the project site. Glaxo transferred this land to the developer, but Radha said there were “lapses in the transfer of land between Glaxo and the developer”. Even after the Glaxo unit was demolished, the developer could not begin construction as BMC refused to give the mandatory no-objection certificate and demanded Rs134 crore because the land had originally belonged to it.
Legal issues: The site for the proposed twin tower project. The municipal corporation says it will move the Supreme Court against the developer.
In August, after the developer moved Bombay high court against BMC’s demand, the latter was directed to either give the project a clean chit or appeal against it in a higher court. The project could have begun after the court's verdict, but BMC has now opted to file an appeal.
“We are going to appeal in the Supreme Court by this month-end,” said Radha.
“I am not giving up on the project. I have already paid Rs7.5 crore as transfer of land fee to the BMC and have got the required approvals for the project. I am answerable to my buyers for the delay” said Vikas Oberoi, managing director of Oberoi Constructions which bought the the 4-acre Glaxo property back in 2004 for Rs107 crore.
Radha added that BMC had “detected fraudulent measures in the developer’s usage of floor space index (FSI),” which decides how much development can be carried out on a plot of land.
However, Oberoi denied the charges. “How can they accuse us of FSI frauds when we haven’t even begun construction? Tampering with the permissible FSI limits occurs only when you start constructing,” he said.
Another twin-tower project being developed in Mumbai by Shapoorji Pallonji and Co. Ltd and builder Dilip Thakker faced several objections ranging from construction on space reserved for public road, obstructing ventilation and endangering the environment by bringing down a hill. While construction of one tower is complete and another tower is nearing completion, the developers have not publicly advertised the project. It is believed that some of the apartments have been sold by invitation.
Delays in housing projects can hurt developers, said Shailesh Kanani, an analyst with Angel Broking Ltd. “It causes problems in cash inflow for the developer because he can’t continue with bookings and even investors get stuck because the project has made no progress.”