Thursday 23 September 2010

Penalty on Hiranandani Builder Slashed to 218 Cr from 2000 Crores by MMRDA

Speaking to PP, Niranjan Hiranandani on this issue said, “There is no violation hence the penalty has to be ZERO. There is nothing unauthorised done by us.”



Country’s leading builder, Hiranandani Group would soon be beneficiaries of a benevolent government which has decided to substantially reduce a penalty imposed on the firm for violations in the Powai land-development agreement.

As per knowledgeable sources in the Democratic Front (DF) revealed to a leading city tabloid,  that a decision has been taken to reduce the penalty of Rs 1,993 crore - which was recommended by the Mumbai Metropolitan Region Development Authority (MMRDA) - to Rs 218 crore.

This decision would soon be communicated - as part of the action-taken report - to the Bombay High Court where at least three petitions are pending against the builder.

The 230-acre land was leased to the group in 1986 to create “affordable housing” through a tripartite agreement between the Government of Maharashtra, MMRDA (who drafted the Powai Area Development Scheme) and the Hiranandani Group.

The developers - MMRDA says - have instead turned the land into a complex of high-end apartments. Citing a number of violations, the MMRDA had recommended immediate stoppage of construction work, and the withdrawal of all concessions given to the builders. It also demanded that the land be taken back as is.

The present ruling Maharashtra government, instead, directed the MMRDA to calculate the complete nature of the violations.

Therefore - after scrutinising all the records available with the BMC - the MMRDA submitted its report in January 2009, and recommended a penalty of Rs 1,993 crore on the builder.

This penalty calculated was based on three alleged violations: differential areas of the flats, construction of commercial complexes and the usage of TDR (Transfer of Development Rights).

While permission was granted for only 40 and 80 sq-metre flats, the developer had constructed apartments measuring 200 to 400 sq metres. The penalty proposed for this violation itself was worked out at Rs 946 crore.

A further penalty of Rs 597 crore was imposed on the developer for constructing commercial complexes when no such permission was given under the agreement. And finally, a 'penal premium' of Rs 448 crore was to be levied on the developers for the usage of TDR.

The Hiranandani Group, however, has always denied any violations and has adopted a stand that it was armed with all the necessary permissions by the government.

When contacted by the tabloid, T C Benjamin, principal secretary of the Urban Development Department, said: “The Hiranandani Group had made a representation to the government after MMRDA submitted its report, and requested that it take into consideration the various permissions that were subsequently given to it. The builder also pointed out the clause that allows for 15 per cent commercial use of the land, permissible under the government rules.”

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