GMADA faces the heat over builders defaulting on dues

Gaurav Kanthwal

Mohali, April 14

A day after two major real estate companies developing an upscale residential and a commercial project defaulted on payments to the Greater Mohali Area Development Authority (GMADA) for site allotment, buyers and flat owners expressed heavy resentment against the government body for failing to safeguard their interest. The future of hundreds of flat owners and commercial space buyers is in jeopardy as their property registration and date of possession were likely to get procrastinated.

The Defaulters

• In 2015, MB Infra Build Pvt Ltd bought 7.123 acres in Sector 65 in auction for Rs 133.19 crore. It deposited 20% amount of bid price & defaulted on payment
• Same year, WTC Noida, WTC Chandigarh and Erika Fracon India bought eight acres on Aerocity road for Rs 131.33 crore. It also defaulted on payment.

GMADA has issued a public notice not to purchase any property in both these projects, but existing buyers said it was meaningless as already seven years had passed and people had invested their money.

Around Rs 80 crore is outstanding against the owner of Beverly Golf Avenue in Sector 65 and Rs 103 crore against owners of World Trade Center Chandigarh in Aerocity.

GMADA Chief Administrator Amandeep Bansal said, “We will report the matter to the Real Estate Regulatory Authority (RERA) in due course of time. Timely notices have been sent to the firms for not paying the dues. The case is not closed yet. Let the builders come and place before us their payment plan.”

According to the RERA record (2020), there are 1,265 units of offices and retail outlets in the World Trade Centre Chandigarh. The Beverly Golf Avenue has 424 luxury apartments.

Zirakpur realtor Sukhdev Choudhary said, “The government policy is such that you get land worth Rs 100 crores by paying just Rs 20 crores. After that, it is in the hands of builder what he wants to do. The terms and conditions are such that only a ‘big fish’ gets the advantage.”

Local real estate analysts criticised the GMADA’s offer of 20 percent payment after the auction, terming it a flawed concept and the real cause of builders defaulting on payment.

Officials said the rule was tweaked according to situation, adding that in an auction held last month, where e-auction of various properties of GMADA fetched Rs 1,935.88 crore, the companies were asked to deposit around 27 per cent amount of the bidding price after the auction.

“It’s the government that makes the rules, we only implement them,” said Bansal without commenting on the merits and demerits of the rule.

Punjab Against Corruption head Satnam Daun said, “This is not happening for the first time. The licence of M/s Sky Rock Welfare Society was cancelled by GMADA in 2018 after the promoters were booked in more than 80 cases of cheating buyers. The directors of RKM Housing Limited had 30 non-bailable warrants issued against them. GBP directors fled the country after defrauding hundreds of buyers. It was the Jandpur and Sihanpur villages land owners who woke up GMADA to Bajwa Developers Private Limited’s cheating in CLU application. It is high time the government brought these builders and corrupt government officials to the book.”