MUMBAI: Nearly 500 families languishing in alternative accommodation for eight years due to disputes over their society's redevelopment will finally see a ray of hope. A single bench of the Bombay high court has cleared the way for Rustomjee Realty to execute redevelopment of New D N Nagar Society in Andheri (W).
The five-acre plot, which houses 480 families in eight buildings, was built by the Maharashtra Housing and Area Development Authority (Mhada) some decades back. The society appointed Vaidehi Akash Housing Ltd to redevelop their Mhada leased plot in 2005.
Residents vacated their homes in 2006 but the developer failed to construct new homes. The society then entered into a tripartite agreement with Rustomjee for redevelopment and terminated its deal with Vaidehi.
Vaidehi and many people who had booked flats in the free sale component of the project then moved court against the society and Rustomjee. Vaidehi said the project was delayed due to many impediments. The Brihanmumbai Municipal Corporation (BMC), it said, refused to issue building permission beyond FSI 1.2 due to coastal regulation zone restrictions. The developer said there was an enormous increase in project cost and decided to involve investors and other developers.
Vaidehi entered into an agreement with Rustomjee in 2007, giving the latter the right to exploit about 2.53 lakh sq ft of FSI of the total 5.22 lakh sq ft for Rs 112 crore. The balance 2.68 lakh sq ft was retained by Vaidehi to build rehab houses for society members.
The society and the two developers signed a tripartite agreement in 2010 but disputes arose between the parties over their rights. The society then terminated its agreement with Vaidehi. A year later, the society executed a fresh agreement with Rustomjee, allowing the developer to sell 57,050 sq ft of FSI in the market and reimburse its cost of construction of the rehab portion. Rustomjee said it paid Rs 70 crore to Vaidehi and spent Rs 48 crore on construction permission. It also said it paid for temporary accommodation of the 480 families.
Vaidehi then challenged the termination of its agreement, stating that the society had done it illegally. People who booked flats with Vaidehi in the free sale component in 2010 also challenged Rustomjee for terminating their agreements with Vaidehi. But the court noted that Vaidehi had allotted area far in excess of its entitlement. Besides, only few of the individual transactions were registered agreements.
The court said these flat purchasers have no right to claim anything from the society and Rustomjee. It ruled that Vaidehi committed breaches of the society development agreement and its termination was "legal and proper''.