Bengaluru: Mumbai’s Lodha Developers Ltd's maiden Bengaluru project has run into a legal tussle with a group of residents over the development of high-end residential towers.
In June 2022, Lodha entered the Bengaluru market and signed its first joint development agreement, acquiring a 100% equity stake in G Corp Homes Pvt Ltd for a residential project. On a part of these 20 acres, G Corp had built a project named Icon North with six towers. The Mumbai-based realty firm is developing its new project, Lodha Mirabelle, on the remaining land.
In 2023, Icon residents filed a complaint with the Karnataka Real Estate Regulatory Authority, accusing Lodha of changing the approved plan without their consent. The changes included building seven towers instead of six under the original plan, with some reaching up to 40 storeys.
However, in May 2024, RERA ruled in Lodha's favour. The Icon petitioners then approached the Karnataka Real Estate Appellate Tribunal (K-REAT), which, on 18 December, passed an order stating that the developer largely abandoned the originally sanctioned plan and adopted and registered a new one. It directed to de-register 'Mirabelle' and asked the developer to obtain consent from two-thirds of Icon North home owners who have registered sale deeds and apply for fresh registration.
Mint has reviewed a copy of the tribunal's order.
“Home buyers did not sign up for a project of this scale; it was supposed to be a premium society. The sharp increase in the number of flats, residents, vehicles and building heights has direct implications on amenities, common spaces, undivided land share and infrastructure capacity such as water, internal movements,” said Deepa Jayaraman, an apartment owner in Icon North. “Our expectation has always been that approvals and construction adhere strictly to the original master plan, due process and applicable law."
Lodha challenged the tribunal's December order in the Karnataka High Court, which ordered that Lodha Mirabelle's registration will not not revoked. But the court also said that only interior work can continue in the three towers where construction is almost complete as per the original sanctioned plan. The court also held that no new construction can be started in the other towers without the consent of two-thirds of the Icon residents .
The next hearing in the high court is expected later this month.
The Lodha group launched the project “after obtaining all the necessary approvals” from all the authorities concerned, said a Lodha spokesperson in an emailed response.
“In 2023, some of the residents from the older development approached the court against the new development, the spokesperson said, adding that the “court ruled in our favour and found no merit in any of the claims”.
A handful of residents with “ulterior motives” went to the appellate authority, which accepted their plea, the spokesperson said. The group challenged the order in the high court, which stayed the order, the spokesperson said. “The matter will be heard in detail by High Court in coming days. Our construction goes on in phased manner.”
Meanwhile, the Lodha Group is trying to obtain consent from Icon North residents by offering them compensation.
Project crucial for Bengaluru prospects
Lodha is one of the country's top four bestselling developers today, along with Godrej Properties Ltd, DLF Ltd and Prestige Estates Projects Ltd. It mainly operates in the Mumbai Metropolitan Region (MMR) but also has projects in Pune and Bengaluru.
Since Mirabelle's launch, Lodha has launched multiple projects in Bengaluru, making the southern market a key city of operations for the developer. However, as per property experts, the success of Lodha Mirabelle is crucial for the developer to set a precedent in a new market such as Bengaluru.
“Lodha paid for 12 lakh sq. ft of construction, and obtained permission to build an additional 8 lakh sq. ft later. Any change in the project master plan needs two-thirds consent from the existing residents. The project has seen very good sales at a significant premium to the market. But this regulatory and legal matter has slowed down the project," said a property expert, asking not to be named.
In a somewhat similar case, the Competition Commission of India (CCI) in 2011 had levied a fine of ₹630 crore on DLF after finding it guilty of starting work on a project in Gurugram without approvals, increasing the number of floors mid-way and delays. After paying the fine, DLF challenged it in the Supreme Court, where the matter is still pending.
The Lodha spokesperson said that work is continuing as per schedule. “We are confident of delivering homes as per our commitment,” the spokesperson added. We are committed to preserving the trust of our home buyers and delivering the very best.”