Unitech shares slump over 2 per cent on compensation order

On a complaint filed by two home buyers—Diwakar Mishra and Vinay Kumar Singh—who had booked apartments in Unitech’s Noida luxury residential project in October 2010 and supposed to get possession by April 2012, NCDRC had asked the developer to offer possession of the flats on or before October 31, 2017 along with “compensation @ 12% per annum w.e.f. 16.04.2013 till the date on which possession is offered to them or till 31.10.2017, whichever is earlier.

The National Consumer Disputes Redressal Commission (NCDRC) had ruled in 2015 that Unitech will have to compensate the complainants on simple interest basis as they had already paid 95% of the amount for the property and the construction is still far from complete. Since the real estate company had failed to comply with the NCDRC order, the Supreme Court had earlier asked it to deposit a sum of Rs. 5 crore by June 10, 2016.

Upon petition from the builder for extension of time, the SC has now ruled that, “the sum of Rs. 5 crore be deposited with UCO Bank by August 5, 2016 failing which, the respondents are at liberty to move an application for contempt of this Court and in that event, the Directors of the petitioner-company may be sent to custody,” Justice Dipak Misra and C Nagappan said in their order.

The real estate firm Unitech is under the lens for extreme delay in completion of a high-end residential project Burgundy which was launched on the Noida-Greater Noida Expressway near New Delhi.

Social Media Tool

When Aditya Mishra, the CFO of one of the multinational firm in Gurgaon, checks for WhatsApp Group messages where more than 100 Unitech home buyers were waiting for the delivery for luxury villas however; deadline ends before three years. Now Group is planning to take the legal action after the protest at projects site which is Alder Grove at Nirvana Country 2 in Gurgaon. After many meetings with Unitech executives and mails communication, company promoters are not able to settle things up.
Approx. 20 buyers have filled the case with NCDRC (National Consumer Disputes Redressal Commission) and this group has Facebook fan page, WhatsApp Group, Group on Google and a presence on Twitter. Now angry buyers are taking the action against builders who is delaying the delivery of apartments and villas. However; the use of social networks are making the builders little panic as buyers are discussing the legal option and other ways to get compensations. Apart from that the spokesman from Unitech stated that there are several factors which are beyond the control of company and it resulted in the delays.
According to Liases Foras, which is property research firm, more than 8.5 lakh apartments launched between the period of 2008 and 2011ahve been delayed by more than one year whereas; in Delhi/NCR more than 1.7 lakh apartments are delayed by more than 48 months however; in Mumbai the number of flats are 82,000, which are delayed by more than 4 years. Apart from that builder are saying that there are various reasons for delaying the delivery such as; labour shortage, multiple approvals, lack of funds and more. In 2011, the Competition Commission of India was acting on the complaints against DLF filled by apartment owners and fined the company with Rs 630 crore for abusing its dominant reputation and position in the Gurgoan region. Before few weeks NCDRC asked Unitech to pay compensation to buyers at 12 per cent per annum for delays by overruling the agreement between builder-buyer which was offering 1.8 per cent.
Effect of Unity:
Now buyers are finding themselves in the comfort zone. When HDIL (Housing Development & Infrastructure Ltd) asked the buyers to pay more for Kurla project in Mumbai, so they fought back against developer and choose to go out of court settlement for low amount. In one of the project of Indiabulls Greens, which is in Panvel, buyer’s group state that the delivery of first phase was in 2012-13, but now it will be ready by 2017 and also there is change in project layout. Dev Purohit, who is 27-year-old textile exporter, stated that we are in process to register our group and after that we will move to CCI against Indiabulls Real Estate. Whereas; according to the official statement of Indiabulls Real Estate, we are delivering all the projects at time and for Panvel Greens project the scheduled delivery date is July 2016 as per agreement. Apart from that we have provided an option to buyers to exit with 12 per cent interest benefit.