Mumbai, 14th February, 2017: Horizon Green, the prestigious new Borivali East project, has huge issues. No real drainage system – that’s a serious problem we have written articles about. But there’s a more serious worry for flat-purchasers, namely, not getting proper title to the purchased flat at Horizon Green. The confusion on who’s legally the builder of Horizon Green — Raheja, Bhoomi or Prashasti — is like three men claiming to have fathered one child. On the municipal corporation’s records, K Raheja is the builder. But Prashasti Enterprise is claiming to prospective flat-purchasers that it is the builder. And in between Raheja and Prashasti, there’s the ghost of Bhoomi Constructions, a partnership that has been dissolved.
On paper, Bhoomi Constructions got the development rights in 2003 from K Raheja for building Horizon Green, and in turn assigned these development rights to Prashasti Enterprise in 2008. But that’s only on paper; in real life, neither Bhoomi nor Prashasti exercised the said development rights, and Horizon Green was entirely built by the efforts of K Raheja through their company Tropicana Properties Pvt. Ltd. which was later changed to Palm Grove Beach Hotels Pvt. Ltd.
So, if you buy a flat in Horizon Green, it’s like buying something from Chor Bazaar; pay the money, take the goods and don’t ask uncomfortable questions!You get no warranties, no guarantees and no consumer rights. Between Raheja, Bhoomi and Prashasti, there is a defective and broken chain of title; then how can Prashasti transfer good title to a flat purchaser? Clearly, it can’t! So, the flat-buyers cannot get clear title over their flats.
The whole realty market is giving conflicting versions on who is the developer. Home Realty says Horizon Green is a Bhoomi project. Mumbai Property Exchange lists it as a Prashasti project. Housing.com is promoting it as a K Raheja project.
The IOD, CC and OC were issued to K Raheja. MCGM’s Occcupation Certificate was issued to Palm Grove Beach Hotels Pvt. Ltd. (a Raheja Group company) in April 2015. The stop-work notice and FIR filed in 2016 were also filed against Palm Grove. So, in the eyes of civic authorities, Palm Grove i.e. K Raheja is the builder.
But a flat-buyer is forced to enter into the flat-purchase agreement with Prashasti Enterprise, which is completely unrelated to K Raheja.
Prashati came into the picture by virtue of a doubtful and possibly illegal unregistered Agreement made in March 2008, which was reinforced by a Supplementary Agreement signed in June 2015, three months after the Occupation Certificate was issued to K Raheja. Bhoomi Constructions claims to got development rights from K Raheja vide an agreement made in January 2003, and transferred the same to Prashasti Enterprise.
The agreement between Bhoomi Constructions and Prashasti Enterprise is illegal and invalid. Why? Here are some reasons:
1) Can a dissolved partnership firm transfer any title or development rights formerly held by the firm? NO. When Bhoomi Constructions transferred the rights to Prashasti Enterprises by a stamped and registered supplementary agreement, the former had already been dissolved. How can the individual partners of a partnership firm that is no longer in existence, enter into (or ratify, confirm, stamp and register) any agreement and to transfer the development rights i.e. title that was held by the firm? This transfer is bad in law.
2) If development rights are not exercised by the entity holding it, can it claim to be the “developer”? NO. Development rights were never exercised by Bhoomi and Prashasti. Neither Bhoomi nor Prashasti exercised their development rights for building Horizon Green. From beginning to end of construction, the development rights were exercised by Palm Grove i.e. K Raheja. There isn’t even one paper on record showing that Bhoomi Constructions or Prashasti Enterprise exercised the development rights.
3) Can an Association Of Persons act like a corporate entity? NO. Prashasti Enterprise is only an Association Of Persons (AOP), not a proper corporate or firm. It is neither a company nor a partnership firm, but an odd kind of association – a conglomerate of two natural persons (Mr Jayesh J Doshi and Mr Nirav B Mehta, apparently relatives of the owners of Bhoomi Constructions) and a corporate entity (M/s Prashasti Developers Pvt. Ltd.). In India, there is no special law applicable to an AOP, and therefore, there is no transparency in their dealings with the public or with government authorities. AOP is an entity under Income Tax Act, but it is generally unregulated, unaccountable, and difficult to hold legally liable.
Telling MCGM that Palm Grove is the builder and telling the flat purchaser that Prashasti is the builder — that is itself cheating. Yeh 420 wala kaam hai! The three builder groups have deliberately colluded to create grey areas for everybody, in order to evade being held responsible by various law-enforcement agencies and judicial forums. (More details of this will be disclosed in future articles.)
WARNING TO POTENTIAL HOME BUYERS
If you are thinking of buying a flat at Horizon Green, ask yourself the question: if you have to go to consumer court for some reason, against whom will your make you claim for compensation — K Raheja’s Palm Grove Beach Hotels, Bhoomi Construction’s individual partners or the Association of Persons called Prashasti Enterprise? Consult some chartered accountants and lawyers, and they will tell you that this is a grey area. Our courts take decades to decide even clear-cut cases where everything is black-and-white. If there are grey areas, you will have to run from pillar to post for many decades in search of justice.
Mr & Mrs Home Buyer, a flat in Horizon Green is like quicksand. So keep a safe distance, and don’t get stuck in it.
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