Developers cannot give additional benefits to select residents: HC

A developer appointed for the redevelopment of a building must treat all tenants and occupants at par without conferring additional benefits to a selected few, the Bombay high court has ruled.The court recently struck down a separate ‘deal’ agreed upon between the developer, SIA Developers LLP, and two tenants of a city building for extra monetary benefits, over and above the terms of agreement.It was hearing a plea filed by SIA Developers against 16 occupants of the Krishna Kunj building who postponed to hand over vacate possession of their flats owing to their children’s ongoing school term.

Justice Gautam Patel asked the developer to deposit the extra amount meant for the two tenants with the high court.

“It is not possible to have a development agreement which creates this kind of imbalance or lack of parity between others who are equally situated,” said Justice Patel.

The developer had agreed to provide the two tenants additional 20% and 10% of the carpet area. Similarly, it had decided to pay the two Rs 95 and Rs 80 per square foot for alternative accommodation for the period of redevelopment against Rs 70 per square foot for the other 14 occupants.

“I believe it is axiomatic that all tenants and occupants should be treated on parity,” said the judge, adding, “Each individual tenant or occupant cannot negotiate a one-sided deal for himself or herself.”

The judge said in such a situation not only the developer stands to lose, but more importantly, a majority of the tenants are forced either to accept poorer terms than those afforded to the select handful. “The inequity in this situation is self-evident.”

According to the terms of agreement, the occupants were supposed to handover vacant possession of their respective tenements to the developer within 45 days of obtaining the intimation of disapproval (IOD). Although the IOD was obtained by the developer on March 30, 2016, the 16 occupants did not vacate their premises within the stipulated time.

The court asked them to vacate the premises by February 28 for redevelopment.

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