Luxury housing project under Delhi HC lens
A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw last week ordered status quo on the land in Okhla Industrial Area Phase I, saying the "matter requires deeper consideration".
Jun 01, 2015
Source : Times Of India


NEW DELHI: A proposed high-end luxury residential project on a five-acre land in prime area of south Delhi is under lens of the Delhi high court over the issue of possession rights.

A bench of Chief Justice G Rohini and Justice Rajiv Sahai Endlaw last week ordered status quo on the land in Okhla Industrial Area Phase I, saying the "matter requires deeper consideration".

The project, estimated at more than Rs 1,000 crore, envisages sale to public of over 200 high-end luxury apartments.

In its order, the court directed parties "to maintain status quo obtaining as on today with regard to property in question in all respects till next date of hearing". HC further made it clear that its order "shall not preclude developmental activity, if any, on property in question. However, the same shall be subject to outcome of the appeal".

The case came in appeal before the Chief Justice's bench, after a single judge exercising contempt jurisdiction passed an unprecedented order modifying four "status quo" orders passed by three separate judges on the disputed land.

Justice V K Shali in December last year recalled/vacated orders passed by justices S K Mishra, Rajiv Shakdher, and S Muralidhar since 2012 in connection with the land prohibiting its sale, transfer or creation of third party rights.

The property was dragged into court over a dispute between a finance firm and a developer. In his order in April 2012, Justice S Muralidhar first barred the then owners, Southend Infrastructure, from selling, transferring or creating third party rights on the property, on a plea filed by a finance firm VLS Finance, embroiled in a dispute over recovery of dues from the promoters of a company called BMS IT.

Justice Muralidhar ordered status quo after being convinced that BMS siphoned off the money invested by VLS Finance in it which was allegedly used by the promoters of BMS to create other properties, including the one at Okhla through a firm called Southend Properties.

The court then barred both BMS and Southend from sale/transfer of their respective properties in Noida and Okhla, leaving it to the Arbitration Tribunal (hearing the main dispute between VLS and BMS) to take a call if the stay order needs to be modified.

While the tribunal confirmed the stay, the landowner, Southend, created third party rights by entering into a collaboration agreement with a company called Wonder Space Properties (A Godrej subsidiary) in June 2013, prompting VLS Finance to seek contempt of court.

In the first hearing Justice S K Mishra not only reiterated "status quo" but even extended its ambit to Wonder Space Properties, the new collaborator who pleaded innocence. On its part, Wonder Space argued it was never a party to the main dispute and conducted all required due diligence before entering into the agreement. Wonder Space also argued in court that the 2012 orders were not applicable to them since these orders were valid only till September 2013.

The Chief Justice's bench is likely to examine in July if the residential project can be cleared for sale of flats to public.



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