Mumbai | 19 Jun, 2017 (3 years, 3 months ago)

Other

Redevelopment stopped of Mhada society by old and new builder. How to terminate

This is regarding a redevelopment of a mhada registers C.H.S in mumbai. Where an agreement was done with a renowned builder Mr.A in 2009. He gave Rent regularly till 2015 there after he stopped. Fyi in the agreement there is no specific time period for redevelopment process. It only states both party will agree MUTUALLY if project has a problem. In 2016 he declared us verbally that he is no money to process our redevelopment plan. In NOV 2016 Mr.A builder introduced a 2nd builder Mr.B under a new agreement which stated Mr. A is incapable and henceforth Mr.B builder is now responsible for Project redevelopment process and Rent. FYI.. this new agreement is not yet officially registered. Only 1st Rent provided by Mr. B, next rent was suppose to be issued by new builder last month. Which we did not get. But we got to know he is hiding from our society and not responding. My question is that how can we terminate both builder who are not willing or capable to redevelop our building. We as a society need a solution for the same. Plz suggest.
Answers
26 Mar, 2018 | 13:31

Hi. I am assuming that the society members have vacated their respective flats and the society has handed over the possession of the society building and land to the 1st builder and all the society members have been temporarily shifted to alternate premises pending completion of the redevelopment project. My first question to you is whether the builder has demolished the society building? Whether any construction work has begun on society land? If the first builder has demolished the society building and commenced construction and left it midway or has not don any construction altogether, then you can legally terminate the contract with the first builder. But this will not achieve any purpose for the society and its members since the members have already left their premises and are residing in alternate transit premises for which monthly rent will have to be paid. So if the first builder's service is terminated then all the society members will be left in a lurch and will be rendered homeless. So I suggest the only option for the society is to file a suit in High Court for specific performance of contract to compel the builder to comply with his obligations under the redevelopment agreement and on failure to compensate the society with damages and compensation for the hardships caused to society members. The first builder will definitely come up with the defence that he is bankrupt and does not have the money to continue the project and pay rent to the society members in which event the court has power to attach his properties and assets and get them liquidated and sold for making provision for rent payable to society members. You can also make the 2nd builder a party to the suit. If he is willing to take over the project then the society can sign a development agreement with him. If things go well then the society can sign consent terms in which the 1st builder will exit the project on mutually agreeable terms and the second builder can take over the project. The draft of the development agreement to b signed with the second builder can be finalised beforehand between the parties and attached to the consent terms so that when the court passes order on the consent terms, the draft development agreement becomes a part of court order. This will ensure that the second builder complies with his obligations and if he fails to do so then he will invite contempt of court proceedings against him.


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