Bombay High Court Cancels NOC

Bombay High Court Cancels NOC for Developer Over Unpaid Transit Rent, Orders Site Evacuation.

In a significant ruling, the Bombay High Court has revoked the No Objection Certificate (NOC) granted to Parekh Constructions LLP, the developer of a redevelopment project in South Mumbai. The court's decision came in response to the developer's default on payment of transit rent to the residents of a demolished building, highlighting the plight of numerous occupants, including senior citizens.

A division bench comprising Justice GS Patel and Justice Neela Gokhale issued the ruling, directing Parekh Constructions, Parekh Constructions LLP, and Nishcon Realty Pvt Ltd to completely vacate the site by Monday, August 14, 2023. The evacuation order extends to removing personnel, security guards, equipment, and machinery from the premises. This decision reflects the court's firm stance on upholding financial obligations and ensuring accountability.

The court, without granting the developers an opportunity for a hearing, ordered the Maharashtra Housing and Area Development Authority (MHADA) to formally cancel the NOC. Furthermore, the court empowered MHADA to explore legal proceedings for the appointment of an alternate developer. This move emphasizes the court's commitment to protecting the interests of the affected residents and ensuring the completion of the redevelopment project.

The legal proceedings were initiated through a batch of writ petitions that underscored the challenges faced by residents due to the developer's failure to fulfill their financial commitments, resulting in extensive hardships. The court's intervention followed its earlier order on August 7, 2023, wherein it mandated that developers must deposit Rs. 3.5 Crores, or 50 percent of the due amount, with the court by August 11, 2023. The developers failed to comply with this directive.

The court's observations drew attention to the fact that the demolition of the old buildings had taken place in 2016 and 2017, with the project and its intended beneficiaries left abandoned for seven years. This neglect further underscored the urgency for corrective action.

MHADA has been entrusted with the responsibility of overseeing the developers' evacuation from the site to ensure compliance by Independence Day. The court also addressed the issue of accumulated arrears of transit rent, directing MHADA to accurately determine the outstanding amount. Once certified, the developers are legally obligated to settle the debt within 30 days, along with a 6% annual interest until payment is made.

Despite granting developers an opportunity to partially deposit the admitted outstanding amount, they failed to do so. Therefore, the court's order emphasizes that the final amount, as determined by MHADA, will be executed as a court order if necessary.

The court's decision, which has been documented in Case No. Writ Petition (L) No. 20423 of 2023, has far-reaching implications for the real estate and construction sectors. It serves as a reminder of the judiciary's role in upholding contractual obligations and ensuring that development projects prioritize the welfare of all stakeholders. The writ petition titled "Sushila Gordhandas Parikh v. State of Maharashtra" stands as a testament to the court's commitment to justice and accountability in matters of public interest.