News: Uttar Pradesh RERA deregisters two projects of Ansal API-11-02-2021
RERA has found that in the project there have been severe financial irregularities, diversion & siphoning of funds amounting to Rs 606 crore which was diverted from the project for other purposes.
NEW DELHI: The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) has deregistered two projects i.e. Sector-P and Sector-J Pocket-2, Ansal API situated in Sushant Golf City, Lucknow under Section 7 of the RERA Act.
For the two deregistered projects, the process after deregistration will commence in consultation with the state government. The decision has been taken after the promoter could not provide a satisfactory response to the deregistration notices before the Authority.
Rajive Kumar, chairman, UP-RERA said, “Deregistration order was served based upon the information collected, site inspections made, complaints registered in RERA and non-compliance of the provision of RERA Act. While the Authority had already given strict warnings, this decision was taken after we gave them ample amount of time to respond after repeated notices were issued to them. This step should be seen as a warning to others".
RERA has found that in the project there have been severe financial irregularities, diversion & siphoning of funds amounting to Rs 606 crore which was diverted from the project for other purposes.
A large number of complaints have been made by the allottees of the projects registered by the promoter with the authority, including non-possession of the units, non-refund of the amount deposited by the allottees, violating the terms and conditions of the sales contract/allotment letter.
The authority also instructed the promoter to complete any remaining development work of the project Sector-A, Pocket-3, Ansal API and upload the completion certificate by March 20, 2021 on the website.
The promoter has been ordered to deposit a sum of Rs 9.4 crore in a separate account of the project in respect of the funds received from the allottees within three months to complete the other projects registered with the authority.
The promoter has also been charged with a penalty of Rs 161.65 lakh, which is 5% of the total cost of the project in violation of Section 4, 11, and 14 of the RERA Act, read with Section 38 and 61.
When a forensic auditor, M/s Currie & Brown, audited the three projects it was discovered that there were breaches of RERA compliance by the developer in managing escrow accounts and the half-yearly project account audit. The developer should have developed and delivered the project phase-wise contrary to which the developer expanded hugely which resulted in mismanagement of resources & funds.
Currently, a large parcel of land in phase-1 and phase-2 is mortgaged to various banks through the process of equitable mortgage. Repayment of the availed loan has posed a challenge in project completion. In few loan agreements, the developer has not only mortgaged the project land but hypothecated the project receivables. This has eventually led to mismanagement of the escrow accounts as per RERA guidelines.
The auditor also found out that there was surplus money in the project, which should have been utilized towards project completion.
The complainants have made serious allegations of mismanagement by the promoter. In certain cases, the promoter does not have the project land. He made allotment to them without having the required land and thus gross negligence on them, complainants said.
