Nagpur News.
Though series of projects in Mihan are advancing at snail’s pace crippling the ambitious plan of elevating Nagpur on the global map of development, a project named First City being controversial since its launch has once again surfaced to voice the woes of over 500 buyers who have put their hard-earned money in the project for the sake of getting dream homes in Mihan.
Today’s Rate
Saturday 05 Oct. 2024
More than three years have passed since the buyers booked their flats in First City – earlier owned by Reatox Builders and Developers Pvt. Ltd and later transformed into M/s Chaurangi Builders and Developers Pvt. Ltd (CBDPL) – the construction has not even reached half way, much to the distress of the investors.
Frustrated over the alarming delay in the completion of project, about 25 buyers whose money has been blocked have formed an organization named Bharatiya Udhami Avam Upbhokta Sangh to fight back for the cause of them and all other buyers awaiting the possession of their flats.
Raksh Pal Abrol, President of Bharatiya Udhami Avam Upbhokta Sangh, has on June 14 written to the Director General of Police, Maharashtra state, DGP (Anti-Corruption Bureau), CP Mumbai and Joint Commissioner of Police, Mumbai and Senior Inspector of Police, Cuff Parade police station in Mumbai, seeking an FIR against the Chairman of Maharashtra Airport Development Company Ltd., also the Chief Minister of State, Prithiviraj Chavan for the breach of agreement they made with the Developer who allegedly delayed the work due to the same.
In his letter Abrol said that over 500 people, of which 400 are from Vidarbha including Nagpur, have booked the flats in First City – claimed to be the first township at Mihan, after the development agreement was inked between Maharashtra Airport Development Corporation, the agency responsible for development of Mihan, and the Developer on July 24, 2010.
The real estate firm paid Rs 26.83 crore to MADC for development of the project along with the investment of Rs 213 crore incurred on the construction of the township. All went smooth initially till the developer approached MADC, seeking counter guarantee of transfer of their loan of Rs 105 crore from Vijaya Bank to a private financing firm named Indiabulls Financial Services Limited. Indiabulls even sanctioned the loans of Rs 155 crore to take over the loan of Rs 105 crore from Vijaya Bank with an additional working capital of Rs 50 crore.
However MADC failed to follow the contract obligation in sharp breach of the development agreement in which it had agreed to provide counter guarantee to CBDPL as per clause 3.7 of the said agreement. When one of the aggrieved buyers sought clarification from MADC under Right to Information, the corporation replied that since CBDPL wanted to avail higher loan amount for longer period of repayment from Indiabulls, the said request was not beneficial for MADC and hence rejected. However it was later surfaced that though the loan transfer amount was higher, the developer has sought the transfer of counter guarantee of only Rs 105 crore, the initial amount borrowed from Vijaya Bank and not more, alleged Abrol in his letter. He said that the Chairman of MADC (Maharashtra’s Chief Minister) and VCMD, U.P.S. Madan defrauded the innocent people and the State by misleading about the amount of counter guarantee and also violating the contract.
Negative publicity hampered project
Meanwhile, a large number of media stories questioning the legality of First City cropped up in Nagpur for allowing the buyers from outside SEZ to book the properties and also for the delay followed in the aftermath of MADC’s refusal to provide counter guarantee for the transfer of loan. Later, the land of First City was de-notified from SEZ on Nov 28, 2011, paving the way for the general people to book flats in the project. Following the media outburst and MADC’s non-clarification over the issue, the project suffered a major setback. Instead of coming up with justification since the project was being brought up under public-private partnership, MADC had issued termination notice to the developer who challenged the orders in the High Court. On the basis of High Court orders, the developer has invoked arbitration clause and commenced with the proceedings. MADC sought to terminate the contract of CBDPL by citing non-commencement of work in time whereas it ignored majority of the companies in Mihan who have been allocated a total of 889.65 acres of land but the work has not yet started even after six years, he said.
Abrol alleged that both the Chairman and VCMD of MADC tried to hamper the proceedings by threatening the Ld. Arbitrator R C Sinha of dire consequences. The call was allegedly made on Sinha’s cell on May 30, 2013.
Developer at the mercy of MADC
Atul Shirodkar of CBDPL clarified his stand saying that the project has been delayed due to non-cooperation from MADC and deliberate ignorance for the finer things underlined in the agreement clause. He said that his company has already invested over Rs 250 crore in the project so far.
As of now, all the buyers who have invested in First City, going by the future scope of development in Mihan felt cheated as their money is jammed with the progress of the project nowhere in sight.
Abrol has sought FIR against MADC’s Chairman Prithviraj Chavan and VCMD UPS Madan for breaching of contract with the developer, issuing misleading financial information and misusing public funds for its own benefits.
It is learnt the delegation of aggrieved buyers would also meet Chief Minister in Mumbai on Tuesday to seek his intervention in the matter.
