• Redevelopment Rights Agreement of Society building

We had appointed a Developer on 18th May, 2013 after following the Directive / Guidelines of the Government of Maharashtra issued on 3rd January, 2009 under Section 79(A) of Maharashtra Co-operative Societies Act 1960 regarding Redevelopment of Buildings of Co-operative Housing Societies. The Society has engaged a PMC to assist us but there is no major contribution from them. The Developer has offered 35% extra carpet area to all the 16 members. We had executed Redevelopment Rights Agreement and Power of Attorney favouring the Developers and registered on 19th December, 2013. According to Redevelopment Rights Agreement, the Developers have to obtain IOD within 150 days of signing the Redevelopment Agreement. 

After lot of delay on the part of the Developer for preparation and modification of drawings to our requirements, the Developers had submitted the proposal on 5th January, 2015 to the Municipal Corporation of Greater Mumbai and the Developers have obtained two consequential approvals from Chief Fire Officer and the Police during February, 2015.

Our file was approved by the Municipal Commissioner for certain concessions on or around 4th December, 2015 and the file was received by the Kandivali Office of MCGM on 8th December, 2015 for issue of IOD. The Builder is not pursuing the issue of IOD and have expressed their disappointment that MCGM and the State Government has:
i)	increased the development charges by 100%
ii)	FSI premium has been increased by increasing the FSI from 33% to 50%
iii)	LUC of 1.97 has been increased 6 1/2 times
iv)	All increases are increased with retrospective effect
and said verbally that the project is unviable and submitted a statement of their profitability, which we are not concerned.

While we have sought justification from our PMC to the above issues, we have not found any justification for the Developers to abandon the project due to above reasons. There is no major impact on building industry due to BMC / GOM amending any of the regulations since the year 2013.We are aware that the prices of TDR have increased from Rs. 2000 in the year 2013 to Rs. 5,000 now. We are of the opinion that the Developers had assured us and ought to have procured the required TDR from the open market or from Government. 

We seek your assistance in locating any notification / regulation from BMC / GOM impacting the redevelopment activities in Mumbai as you are well versed with the DCR regulations in Mumbai.

What are the avenues available to us to revoke the Redevelopment Rights Agreement and the Power of Attorney executed on 19th December, 2013.
Asked 8 years ago in Property Law
Religion: Hindu

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2 Answers

1) if the builder has failed to fulfill his contractual obligations under the redevelopment agreement you can terminate the contract and sue the builder for damages

2) if any bank guarantee is provided by the builder you can encash the bank guarantee

3) you can also revoke the POA granted to the builder and issue public notice in this regard

4) inform the builder that POA has been revoked on account of his failure to complete contractual obligations

Ajay Sethi
Advocate, Mumbai
94513 Answers
7484 Consultations

5.0 on 5.0

You should file a suit under specific relief act for revocation of agreement and compensation. Time is the essential part of this contract. Builder caused delay and due to his delay prices increased. So in work contract contractor is bound to perform contract as par norms if any value rises due to his fault he is liable to bear it. section 37 & 38 of Contract act and u/s 10 & 14 Specific relief act.

Shivendra Pratap Singh
Advocate, Lucknow
5127 Answers
78 Consultations

4.9 on 5.0

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