Illegal constructions thrive in Panvel as officials pass the buck

NAVI MUMBAI: The civic body and town planning authority continue to pass the buck, even as illegal construction of residential buildings continues to flourish in Panvel, including the 23 villages that are part of Navi Mumbai Airport Influence Notified Area (Naina) land.

Officials from the revenue department had identified 35 illegal buildings in Panvel area and asked City and Industrial Development Corporation (Cidco) to demolish them. According to a report submitted by revenue officials to Cidco last week, 35 buildings have already come up without requisite permissions from the concerned departments.

They include Nine buildings in Vichumbe, 10 in Devad, two in Shivkar, Usaly Khurd, Chiple and Adai each, 3 in Akurli and Nere each and one each in Vihighar and Harigram. "We have sent the list to Cidco for further action. We will continue our search for illegal buildings," said a revenue official from Panvel circle office.

An official from the office of Chief Controller of Unauthorized Construction (CUC) confirmed the receipt of the report, but wondered why the revenue department officials had not demolished the buildings earlier by exercising the existing authority vested on them.

"Unless our draft plan is approved by the government, we cannot distinguish the legal and illegal buildings in question," added the CUC official.

After Cidco was appointed as the special planning authority for 270 villages under Naina in 2012, it prepared a draft plan for the interim development of the area, which is awaiting government approval. Cidco officials expect the government to okay the plan in January.

With land prices sky-rocketing in Panvel due to the Naina project, residents said many local builders have started illegal constructions without obtaining necessary NOCs and other permission from authorities.

"Some illegal structures have already three to four floors and flats have been sold to buyers. Corrupt officials are hand-in-glove with builders to cheat the buyers. It's time for the authorities to stop the illegal constructions," said Rajesh Chaudhari, resident.

Ohhh My God : Another Campa Cola ?

400 flat owners in Panvel could lose homes to illegal constructions

ANOTHER CAMPA COLA: HC orders status quo after PIL alleges four societies in Panvel have come up illegally.

Occupants of over 400 flats in four complexes in Panvel, Navi Mumbai, are in danger of losing their homes after the Bombay High Court on Tuesday directed the societies/builders to maintain status quo. 

The division bench of Justices A S Oka and A S Gadkari, while hearing a public interest litigation against the alleged illegal constructions in Panvel, directed that construction - wherever it was going on - should be stopped. 

The affected societies that have been constructed on the plot, near the State Transport bus stand, are Ambika Nagar CHS, Aspire CHS, Pushpadham CHS and Neelkanth Landmark. Of these, Neelkanth is a commercial complex and the construction is still on, while people have already taken possession of their houses in the other three societies. The court also directed that if the flats which are occupied or unsold are being sold, the purchaser should be specifically informed about the on-going litigation, and also told that the fate of the said flat will depend on the final outcome of the PIL. 

"A tragedy like Campa Cola should not happen again and the flat purchasers should not claim equity saying we are innocent purchasers," the court observed. 

The court also noted that there was prima facie illegality committed in granting permission to develop the said plots, where four societies comprising various buildings stand. Panvel resident Yashwant Bhagat, represented by advocate Rajendra Pai, had filed the PIL in 2009 after he noticed construction on the plots. On inquiry and with help of the Right to Information Act, he found that the land parcels belonged to the city planning authority CIDCO. 

The land on which these societies stand, constructed/under-construction on four different plots measuring a total of 18,500 sq mt, were originally acquired from local residents by the state government after it envisaged the scheme to develop a satellite city (Navi Mumbai). This particular area then fell under the limits of the Panvel Municipal Council (PMC). 

The CIDCO, represented by advocate Ashutosh Kulkarni, has been supporting the PIL and seeking that the land be returned to the body. Certain portions of the land are earmarked for railways for the Panvel-Diva railway line, while certain other is for Panvel-Matheran road and the balance for CIDCO. 

The PIL alleged that one Jitendra Timbadia got the land converted for non-agricultural use from the Collector, entered into agreements with four different builders/developers and the PMC granted development permissions, despite the fact that PMC had no such powers since the land had already been acquired by the state. 

During various hearings, the HC had directed Konkan's divisional commissioner to conduct an inquiry into the episode. The divisional commissioner, in an affidavit filed in March this year, along with the report, in a way ratified the contentions raised in the PIL. 

However, according to Timbadia, not only the development permissions but occupation certificate too has been obtained for the residential buildings, and hence there is no illegality on his part. 

The CIDCO too filed an affidavit saying that PMC did not have powers to grant development permission since it (CIDCO) was the planning authority. The CIDCO informed the court that the authority had been issuing stop work notices to the builders since February 2009 itself, but they carried on in blatant violation, ignoring its notices. According to CIDCO, it had informed other concerned authorities such as the PMC about the same, but it paid attention only after the HC came into picture. The case will now be heard in January, after court's Christmas vacation.

CIDCO DRAWS UP ACTION PLAN AGAINST ENCROACHMENTS

High profile violaters to be targeted first, criminal cases to be filed, WhatsApp service for info

G. Mohiuddin Jeddy, Navi Mumbai

Faced with large scale encroachments on CIDCO land in Navi Mumbai and the areas around the proposed airport, CIDCO has drawn up a detailed action plan to counter the menace. First on its radar are the `high profile’ violators who CIDCO plans to target to send out a strong message. It has also decided to file criminal cases against the vested interests involved in the illegal constructions and issued a stern warning to its own officials that they too will not be spared if found to be hand in glove with the encroachers. The nodal agency will also seek information from WhatsApp.

CIDCO has got in former Beed collector Sunil Kendrekar as the chief administrator (new towns), who now also heads the Controller of Unauthorised Constructions (CUC) department of CIDCO to take on the encorachers. Kendrekar is known as a no nonsense officer, whose transfer from Beed was opposed by the local residents.

Speaking at a press conference at CIDCO Bhavan, Kendrekar said, “We have decided to get tough and not spare anyone. I have asked my officers to not just start taking action against the encroachers but also lodge FIRs against them. Officers who do not take stern action against the violators will themselves face the music if they are found to be colluding.”

Added Kendrekar, “I have drawn up a list of 20 encroachments each in Navi Mumbai region and NAINA area around the proposed airport, which belong to the so called influential people of the area. Action has begun with notices being sent to these illegal structures as we want to send a very strong signal to all that nobody is above the law.”

Lamented Kendrekar, “I do not want to talk about the past, but I am certainly not satisfied with the work of the CUC so far. We need to set things right and gain the confidence of the people before things get out of hand.”

Stated Kendrekar, “There has been a problem of staff shortage. There was just one anti-encroachment squad for the entire region under CIDCO. Now I have asked for 4 squads in each region.”

Extending complete support to Kendrekar, CIDCO vice chairman and managing director Sanjay Bhatia who gave details of the action plan, said, “Residents will not be able to inform us through WhatsApp number 8767753114 of any violations. We are also monitoring changes on land through google maps. An MIS report on encroachment will also henceforth be generated detailing, the complaints and action taken.”

Added Bhatia, “To cut red tape, Kendrekar has been authorized to ask the CIDCO engineering department to fence the sites where demolition of illegal structures takes place to prevent the structures coming up again. We are also mapping our plots in the region to keep an eye on them.”

Informed Bhatia, “The administrators in the nodes under our jurisdiction have been provided with mobile squads to enable decentralized monitoring and stop new encroachments.”

Assured Bhatia, “No action will be taken against constructions within 200 metres of village land in the region as that matter is pending with the government for regularization. New constructions on such land will however not be allowed.”

Cidco revamps policy to take on encroachments on its land

NAVI MUMBAI: City Industrial Development Corporation (Cidco) has decided to take a tough stand on illegal encroachments. Under its revamped action plan, it is mandatory for anti-encroachment officers to register an FIR before demolition and procure a court order, if required. Also, there would be zero-tolerance policy towards any sort of external interference. 

MD Sanjay Bhatia introduced Sunil Kendrekar, who will be heading chief controller of unauthorized construction (CCUC) and the personnel department, at a media meet held on Tuesday. Kendrekar said demolition drives will not be conducted without filing an FIR and action will be taken against those officers who fail to do so. 

Residents can inform CUC about encroachments by posting pictures and details on Whatsapp (8767753114). The department will be monitoring all Cidco-owned plots and management information reports. 

Speaking against coercive tactics, Kendrekar said, " To reiterate the fact that the law is equal for all, 20 unauthorized constructions in Navi Mumbai airport influence notified area (NAINA) and 20 encroachments within Cidco area, reportedly belonging to influential people, are to be demolished soon ," he said. All new constructions within 200m radius of the gaothan area will also be demolished. 

All nodal administrators are authorized to prevent encroachments and will be provided with a squad as well. 

"Currently, there is only one demolition team which is insufficient, considering over 5,000-odd Maharashtra Regional and Town Planning (MRTP) notices have been issued. We are seeking four units of demolition squad for NAINA region and four more teams for Cidco areas," added Kendrekar. 

Misconceptions on cluster development scheme cleared by Cidco MD

Scheme not for non-PAPs in illegal village structures, approach govt., says MD

G. Mohiuddin Jeddy, CBD Belapur

The City Industrial Development Corporation of Maharashtra Limited (CIDCO) has said that there is a misconception amongst the project affected persons (PAPs) with respect to the cluster development scheme offered by the government in city villages.

 

Sanjay Bhatia, vice-chairman and managing director, CIDCO, speaking at a press conference at CIDCO Bhavan on Tuesday assured that no PAP house built before December 31, 2012 will be demolished and they will all be regularised as per the various schemes on offer. He has explained that the scheme will result in a well-planned, improved and economically beneficial living for the villagers.

Bhatia has however stated that the scheme will not benefit non-PAPs residing in the villages in illegal structures. This has been the bone of contention with the PAPs demanding that all the structures built by them for their livelihood be regularised. Several have built buildings and chawls that have been rented out or sold to outsiders.

Said Bhatia, “CIDCO is willing to extend all possible assistance and can implement the cluster development scheme in a village as a pilot project if the PAPs are willing to participate in the scheme.”

Elaborating on the cluster development scheme, Bhatia said on the basis of a policy drafted by CIDCO in 2010, the state government has now promulgated a government resolution in this respect.

The GR explains the process of cluster development and CIDCO has done elaborate consultations with all the stakeholders, he said. “CIDCO is still willing to hear out issues raised by PAPs and will try to resolve them”,

Bhatia said, “Only PAPs are eligible to avail the cluster development scheme. If there are objections, they can approach the government with their demands.”

Stating that the loss of the illegal structures occupied by non-PAPs will eventually not matter, V. Radha, joint managing director, CIDCO said, “There are immense economic benefits, besides making physical and social infrastructure available, if the haphazard construction is redeveloped in a planned manner. 

The property prices of the PAPs will zoom as they will be on par with the nodal rates.”

Explaining the scheme, Bhatia said eligible PAPs can avail additional FSI in the range of 1.25 to 4. He further added that there is a provision to sell TDR (transfer of development rights) if the PAPs are unwilling to absorb additional FSI. However, all other unauthorized constructions will be dealt with sternly, he added.

Speaking on allotment of plots under12.5 per cent scheme, Bhatia said so far 123 plots have been allotted and the entire process is being executed in a transparent manner. Due to vigilant process, allotment of 333 plots has been cancelled, he informed. “We have also requested the state government to set up special court to hear the heirship disputes”,

Mumbai’s resale property market headed for correction

Informed property buyers and investors decipher the trends governing the real estate market well before the general public perceives such patterns and movement. Such comprehension of market trends is essential for success, especially in a dynamic real estate market like Mumbai because the Indian real estate market, does not have the benefit of data-based clarity and transparency that forex, bullion, equities and the bond markets offer.

Primary residential market aggressively competitive

Over the last three quarters, there have been more than three dozen new launches by developers in the Mumbai Metropolitan Region.

Over 65 per cent of the stock has already been absorbed there is robust demand for newly-launched properties that score high on the three essential Ps -product, price and positioning regardless of where they are located.

This is significant because in a few cases, location has been a big compromise considering the lack of access to social infrastructure.

These launches have been well-received despite a multitude of challenges, primarily because they are the right product at the right price most of these projects have quoted rates that are between 15-35 per cent cheaper than the current resale properties being traded in the same areas. This is inevitable because Mumbai’s secondary or resale homes market, has always represented a real threat to the city’s developers. However, this scenario is now changing rapidly.

Resale residential market transaction volumes at a record low

Analysis of the registration data for the secondary residential sales in Mumbai, shows that transaction volumes have become increasingly stressed. If we examine this trend closely, we see that prices of resale homes in Mumbai have, in fact, stayed aggressively high, even though actual transaction volumes have failed to justify them.

It is a self-evident market truism that high prices cannot sustain in an environment wherein volumes do not support them. The prices in Mumbai’s secondary sales market will have to come down, so as to sustain buyer interest. Moreover, given the pricing war being waged by the primary sales market, the situation does not call for a mere softening of prices but a full-scale correction in the resale property prices.

Registration data over the last three quarters reveal that an increasing number of Mumbai’s homebuyers and investors, are moving towards new launches. Their objective is to capitalise on the significant price advantage that these projects offer. With discounts hitherto unheard of in Mumbai’s notoriously pricey residential market, the visible shift in the preferences of potential buyers from the resale to the primary market, presents no mystery. The lower pricing of new launches versus resale options, and the excellent response from buyers, is a clear signal to vigilant investors who have been scanning the Mumbai market for the right entry point.

In the first quarter of 2014, Mumbai’s western and central suburbs distinguished themselves with having the most new residential launches. Since demand is extremely high in these belts, absorption was robust in the primary market. In the same period, transaction volumes in the resale market of these precincts, were very minimal.

The scaling demand for new launches shows that price-conscious buyers and investors, are not willing to pay an extra premium for resale properties. The only exception to this phenomenon has been Thane, where both, resale properties and new launches matched momentum as the price difference was not sufficient for good arbitrage.

The flawed rationale behind premium resale property pricing

Resale properties in Mumbai that feature desirable amenities and good locations, are currently being quoted at a hefty premium over pre launches and new launches.

Sellers justify this premium by pointing out that their resale properties attract lower maintenance charges than units in new projects. This is a faulty rationale, at best. Keeping in mind the implementation of the new property tax formula, it is in fact more beneficial to opt for new launches instead of resale units in smaller projects. Also, the lower maintenance charges are often short-lived and wide open to future upward revision, in addition to the significant financial allocation one needs to make towards building repair costs.

Dwindling location premium

The justification behind Mumbai’s locality premium is now becoming illogical in the western suburbs. When we compare the prices of new launches in Parel, Lower Parel, Sewri and Wadala, (areas close to the business district) with resale properties in the Andheri-Goregaon belt, there is absolutely no margin left in terms of the price points. Employees who currently commute for over two hours daily from this belt to the business districts in Bandra-Kurla Complex, Lower Parel and Nariman Point, have begun moving to areas closer to their workplaces. This is because there is no extra stretch of property purchase budget involved any longer. With new infrastructure initiatives like freeways and flyovers being implemented, the stress of commuting has reduced. Also, as the price gap is substantial, now there is increased interest from homebuyers to move to the central suburbs.

In the recent past, fresh residential realty projects launches in areas like Mulund, Chembur, Bhandup, Ghatkopar and Kanjurmarg, have been very attractively priced. With property rates being quoted between 25-35 per cent cheaper than those of resale properties in these areas, the buyer/investor response to these projects is massive. A similar trend is also emerging in the western suburbs specifically the Andheri-Borivli belt. As a result of these dynamics, astute investors in Mumbai’s real estate market, are booking profits on resale properties, moving their investments into the primary sales market and taking advantage of the price arbitrage

बिल्डर हीरानंदानी ग्रुप पर सर्वे और छापा

मुंबई इनकम टैक्स विभाग का जानेमाने बिल्डर हीरानंदानी ग्रुप पर सर्वे और छापा आज सुबह से चल रहा है। सूत्रों से मिली एक्सक्लूसिव जानकारी के मुताबिक ये छापा हीरानंदानी के मुंबई, ठाणे, बंगलुरू और चेन्नई दफ्तरों पर चल रही है।

सूत्रों के मुताबिक हीरानंदानी ग्रुप के 30 दफ्तरों पर सर्वे और सर्च चल रहा है। हीरानंदानी ग्रुप कंपनियों पर 3 सालों से करोड़ों की टैक्स चोरी का शक है। इसके अलावा कई बड़े ट्रांजैक्शन रिकॉर्ड में शामिल नहीं करने का शक भी है।

सूत्रों कै कहना है कि आईटी विभाग हीरानंदानी के आने वाले प्रोजेक्ट के दस्तावेजों की जांच करेगा। हीरानंदानी ग्रुप ने करोड़ों मुंबई, ठाणे और दूसरे शहरों में जमीन की खरीद में निवेश किए हैं। माना जा रहा है कि सर्च ऑपरेशन 2 दिनों तक चल सकता है

Gurgaon, Noida land price may fall with fresh supply in Delhi

New Delhi: Land prices in Gurgaon and Noida could fall as over 70,000 acre is likely to come in the Delhi market because of DDA's new land pooling policy, property consultant CBRE said Thursday.

"The land pooling policy will prove to be positive for the National Capital Region (NCR) in the long-term, since land prices in the suburban markets of Gurgaon and Noida would eventually rationalise with fresh supply coming into the Delhi market," CBRE South Asia Chairman and Managing Director Anshuman Magazine said in a statement.

According to the Delhi Development Authority's (DDA's) recently passed land pooling policy, private developers may directly acquire land from farmers/landowners willing to participate in the land pooling scheme (LPS), where they will get back 40-60 percent of the developed land, instead of any compensation.

DDA would develop the necessary support infrastructure and mass/EWS housing projects on the land, while developers will receive a large portion of the same for further real estate development.

The consultant highlighted that DDA has identified about 200 villages along the outskirts of Delhi for this scheme. It intends to convert around 90 villages into 'development areas' and about another 90 into 'urban villages'.

"All such identified village areas are together likely to free up more than 70,000 acres of developable land in the NCR," CBRE said.

Magazine noted that certain peripheral locations of Delhi with large land parcels have been witnessing price rises to the tune of two to three times over the course of about six quarters.

These locations are land parcel along the NH-1, North Delhi (Akbarpur, Mazra), North-West Delhi (Rohini, Narela), West Delhi (Najafgarh, Dwarka) and areas of South Delhi (Masoodpur, Kishangarh, Chhatarpur etc.)

"Experts believe this to be a short-term trend, however, which is likely to rationalise once more supply of developable land comes into the realty market," he added.

Land acquisition is a contentious subject in India, Magazine said, adding that land pooling schemes will help solve issues related to the availability of land for necessary real estate development and infrastructure formation for the country's ever-increasing urban population.

Bad : Cidco matches private developers with 40% loading

Despite people flocking Cidco's Kharghar housing project – Valley Shilp – to catch a glimpse of the sample flat, the planning agency has received only over a 1,000 applications for the 1,244 flats being constructed for the middle income (MIG) and higher income groups (HIG) in sector 36 of the node. According to sources, the "high loading" factor is acting as a deterrent to buyers, who want to know the "difference between a private developer and Cidco."

The project has around 802 homes for MIG and 422 for HIG. The loading for MIG homes is 40% as these have a built-up area 1015.42 + 55.98 sq ft [dry balcony] and carpet area of 609 + 45.19 sq ft [dry balcony]. The cost of MIG homes falls in the range of Rs49 lakh to Rs60 lakh. While loading for HIG homes is around 30% with a built-up area of 1515.76 + 58.18 sq ft [dry balcony] and carpet area of 1024.56 + 58.18 sq ft [dry balcony]. The cost of HIG homes is in a range of Rs96 lakh to Rs1.07 crore.

"The Kharghar housing project has loading for both MIG and LIG homes. It is in a range of 30-40%, which is almost at par with private developers. The main reason why people are interested in purchasing homes from government authorities is they have less loading, but if it comes with such a big ratio, it is a cause of concern. There is no difference between a private developer and Cidco," said a source.

However, Cidco, while acknowledging that there is loading, has denied the ratio of 40% loading. "It is true that there is loading in Valley Shilp project. However, the figure is too exaggerated. The agreements are signed based on carpet value," said Cidco PRO Mohan Ninawe.

When asked what will be the exact ratio of loading, Ninawe said, "It will have to be calculated."
February 20 was the last day for submission of applications.

People wishing to purchase property in MIG segment have to shell out Rs5 lakh as deposit and those in HIG have to pay Rs10 lakh as deposit.

An official, said, "Though private builders are selling flats at exorbitant rates in the area, Cidco has managed to regulate the rates. And one also has to see at the kind of facilities that will be available at the project. Private builders charge high for all these facilities."

The planning agency will be providing state-of-the-art facilities at this housing project like AC club house, tennis court, lawn area of 3,500 sq m, six guest rooms, swimming pool, multi-purpose hall, yoga and meditation centres, gymnasium, cafeteria. The houses are well-furnished and are equipped with modern amenities like CCTV surveillance across the complex.

The draws will be held as per lottery system. Cidco plans to give possession of Valley Shilp project by May.

Man behind goa collapse finished 5-floor ulwe tower in 6 months - This is ther reason behind goa building collapse

The developer responsible for the Goa building that collapsed on Saturday is a Navi Mumbai-based businessman with a reputation for completing structures in quick time and making quick profits by selling the homes at prices cheaper than prevailing market rates.

Jugdeep Kumar Sehgal, 47, and his daughter Prerna, 24, were the promoters of the Canacona project along with two partners. Fourteen people were killed when the under-construction building collapsed on Saturday afternoon.

The residential project of 150 residences was being constructed by Ruby Constructions, a subsidiary of Bharat Developers and Realtors Pvt Ltd.

The Sehgals, along with Pardip Singh Birring and Vishwas Desai, were directors of the real estate construction company that owns resorts in Goa and is also constructing a handful of projects in Navi Mumbai.

People who have known Sehgal said he was real estate broker till 15 years ago when he moved to Goa to manage a resort.

When he came back to Navi Mumbai three years ago, he started to introduce himself as a developer. His company had just completed a five-storey residential project in Ulwe, which fellow developers say "came up too quickly and where houses are sold too cheap."

Father of three, Sehgal leads a lavish lifestyle. Other than a BMW 5 Series car, he owns a Mitsubishi Outlander SUV. Sources in the Goa police said Sehgal was at the project site when the building collapsed. Investigators said that on Saturday evening, he left his BMW on the site and fled on a two wheeler. The police are now looking for Sehgal, his daughter Prerna and Birring along with others. Dessai is a local engineer from Goa.

Till about 15 years ago, Sehgal used to be a small time real estate agent dealing in projects in Navi Mumbai. "I know him from those days when he used to be a broker and deal in my projects," said Surjit Ailsinghani, head of Baba Homes, who recently floated a real estate company in partnership with Sehgal and Birring. "We haven't done any business from this firm." He refused to say if he will continue with the venture.

Around a decade ago, Sehgal moved to Goa and started running a resort. When he returned to Navi Mumbai three years ago, he started introducing himself as a developer. With Birring, a UK-based businessman, Sehgal started Bharat Developers and Realtors Pvt Ltd in 2007. In 2012, Prerna Sehgal and Vishwas Dessai were inducted as directors in the company as well.

In October 2012, Sehgal bought a luxurious 3BHK in NRI Seawoods Complex in building number 52. Insiders say his growth from a small time broker to owner of a resort and also adeveloper with multiple projects in Goa was too sudden. Recently, he was also looking for a4BHK in Seawoods Complex.

His daughter Prerna studied in DY Patil Law School and joined her father's business in Goa in 2012.

"She had moved base to Goa to supervise the business," said a family friend. Birring, 39, on the other hand used to own aresort in Goa and headed Birring Luxury Resorts Pvt Ltd since 2006. Originally from United Kingdom, Birring moved to Goa in 2006. A person who had met Birring through Sehgal said, "Birring used to say he was in real estate business even when he was in UK. He spoke passionately about bringing European design to Goa.

Sehgal and Birring had acquired few projects in Navi Mumbai as well. "They are good at buying small plots, constructing buildings in record time and selling them at cheap prices," said a Navi Mumbai-based developer.

The company has just completed a project in Ulwe. A supervisor at the site said some flats are still left for sale. "Almost everything is over and only the elevator needs to be installed. We sell at much cheaper prices than the rest," said the supervisor.

The structure, according to developers in the know, was ready in just six months. "They started work on the plot in September 2012 and by May 2013, the structure was ready with a coat of paint. And at a time when neighbouring projects were asking for Rs 4,000-plus per sq feet, Sehgal was selling at mere Rs 3,300 per sq feet. Most of us found it weird but did not make much out of it back then," said another developer from Ulwe.

On Sunday, when Mumbai Mirror went to Sehgal's seventh floor residence in NRI Seawoods Complex, no one answered the door.

Guards revealed that since Saturday there was nobody in the house. His Outlander SUV was still in the parking lot.

Update On Hiranandani Panvel : Hirco Denies Responsibility For Defaulted Bank Loans

Thu, 19th Dec 2013 12:00

LONDON (Alliance News) - India-focused residential builder Hirco PLC rejected claims that it bears responsibility for defaulted loans for township projects in Panevl and Chennai.

Hirco was responding to recent comments made by a spokesman for former chairman Nirnjan Hiranandani regarding his responsibility for the insolvency of the projects and suggestion that the firm holds responsibility.

Hirco said it had no physical present in India and was created to invest in foreign direct investment compliant Indian real estate development projects to be sourced by Hiranandani, his wife Kamal Hiranandani and entities controlled by them.

"In 2007, Hirco paid approximately GBP350 million into accounts controlled by Mauritius legal entities that in turn were controlled by Hiranandani family interests," Hirco said.
"That money was largely used to purchase 588 acres of land in Panvel and 368 acres of land in Chennai from Hiranandani-controlled entities," it added.

The firm said the acquired land was held by several Indian companies including Hiranandani Palace Gardens and Sunny Vista Realtors, which is controlled by the Hiranandani family.
Hirco said it was these legal entities that obtained line of credit totalling INR1,490 and borrowed money totalling around INR 1,384 from various Indian lenders including Yes Bank, Tata Capital and Punjab National Bank (PNB).

The firm said it has been informed that Hiranandani Palace Gardens and Sunny Vista Realtors defaulted on their obligations and currently owe these lending institutions approximately USD160 million.

Earlier this week, PNB placed a notice that Sunny Vista Realtor would be sold at auction in January 2014 to satisfy unpaid obligations to various lenders.

Hirco said it is not involved in borrowing this money and had no control or involvement in any of the affairs of Hiranandani Palace Gardens or Sunny Vista Realtors.

It also said it has no involvement in the development of the Panvel and Chennai projects or the sale of collection of money from the people who bough units in these developments.

These activities were carried out by another Hiranandani/Vandrevala controlled entity, Hiranandani Developments Private Limited, Hirco said.

"Hirco will continue to pursue redress against Niranjan Hiranandani and Priya Hiranandani, for fraud and other wrongdoing through the ongoing litigation and arbitration proceedings," it said. The stock was trading at 20.00 pence Thursday morning, down 0.25 pence or 1.2%.

Biggest News in real estate..Loan default: Four lenders to auction Hirco's 1,000 crore Panvel township

MUMBAI: Lenders to real estate firm Hirco have put 588 acres of land and even buildings the debt-laden firm owns in Panvel, up for sale. About 380 flats have been sold in the project, which is worth about Rs 1,000 crore.

On October 18, TOI had reported that Hirco had defaulted on payments to LIC Housing Finance Ltd, Punjab National Bank (PNB), UCO and Andhra Bank, which had given a loan of over Rs 360 crore to Sunny Vista Realtors, an unit of Hirco.

The notice for the electronic auction of land on January 16, 2014, was issued by PNB after the three banks, led by PNB, initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. A reserve price of Rs 805 crore has been fixed.

The notice, a copy of which is with the TOI, says that the banks had accepted Hirco's request for the sale of the flats in Hiranandani Palace Gardens and granted a no-objection certificate on the grounds that the entire sale money would be put in an escrow account to be maintained by the banks. The company had failed to do this.

A spokesperson for Hiranandani Constructions said managing director Niranjan Hiranandani had dissociated with Hirco three years ago. "As the overseas investors have refused to recapitalize the project firms with the capital needed, the banks have taken this action to protect themselves and their customers. The buyers are protected in Panvel as is clear in the notice." The notice says that any claims on the flats will be settled by the auction purchaser. PNB officials refused to comment.

A Hiranandani Constructions spokesperson asserted that the notice has no bearing on the finances of the Hiranandani Group, though it has rung alarm bells in real estate circles. "If the oldest realty firm, Hiranandani, irrespective to its disclaimer about Hirco, is facing financial crisis, it's a sign that correction is inevitable," said a leading banker.

Work on Hirco's township projects in Panvel and Chennai, spread across 66 million sq ft, has been stalled for the past few months. HDFC, which had lent about Rs 500 crore to the Chennai project, had earlier warned of attaching the property.

Early this year, Tata Finance Capital Services had dragged Hirco to court for defaulting on a Rs 76-crore term loan and demanded its liquidation. A senior executive, who recently resigned from the company, had earlier told TOI that the firm is mismanaged. "A 1.75-million sq ft commercial building in the Panvel township is 75% complete. It could easily fetch Rs 500 crore," said the executive. Hirco, which is listed on the London Stock Exchange's Alternative Investment Market, was set up in 2006 to invest in residential and commercial complexes.

On June 27, chairman David Burton said in the company's half-yearly statement that progress on the developments appeared somewhat subdued with only moderate progress over the last six months. The firm had said in its annual financial statement in September 2012, that the completion of both the Chennai and Panvel projects remained at least a decade away.

Stop construction within 500 metres of Taloja jail: Bombay HC

December 12, 2013, 20:48

Mumbai: The Bombay High Court on Thursday directed the Maharashtra government to stop ongoing construction within 500 meters of the outer wall of Taloja jail in neighbouring Navi Mumbai in keeping with a new policy.

The court asked the superintendent of Taloja jail, Revenue Department and town planning authority CIDCO to survey under-construction buildings within 500 metres of the jail within three weeks, and submit a report to the government.

"State shall (then) proceed to stop the construction of buildings immediately," said the division bench headed by Justice P V Hardas, hearing a petition filed by prison inmate and former army officer Ramesh Upadhyay, an accused in the September 2008 Malegaon bomb blasts case.

Adjourning the matter to January 13, HC also asked the state government to file a compliance report. G S Hegde, CIDCO's lawyer, argued that the policy should be made prospective (not applicable to ongoing constructions), otherwise there would be a flood of petitions challenging the policy. However, the court said this issue could be considered later.

On December 4, the state home department came out with the policy that constructions within 500 metres of jails would be stopped. Earlier, the court had asked the government to inform what security measures it proposed to take inside and around Arthur Road jail in Mumbai and Taloja jail.

The court also asked the Principal Secretaries of Home, Urban Development and Law and Judiciary departments to devise plan for allowing real estate development around the jails in such a manner that safety of jail inmates was not compromised.

Upadhyay had written a letter to the court raising concerns about existing and under-construction high-rises near the jail. It was converted into a petition and advocate Shubdha Khot was appointed amicus curie (friend of the court) to assist in the matter.


The court had suggested earlier that experts should be roped in to help civic bodies with planning the development around the jails.

There should be buffer zones around the jails, the HC had suggested. The government then appointed a committee which recommended certain measures to ensure security in and around prisons, taking into account the security implications of high-rise constructions.