Mumbai realty unnerved by HC order on Cidco-Raheja deal

The realty market has been affected by the Bombay High Court ruling cancelling the allotment of a land by City Industrial Development Corporation Ltd (Cidco) to K Raheja Corp, where the Inorbit Mall and Four Points hotel stand in Vashi in the satellite township of Navi Mumbai.

The order is likely to be challenged in the Supreme Court. “The market sentiments have been affected, some builders are scared. The losses could be enormous,” said a prominent Mumbai-Navi Mumbai based builder.

Another senior real estate player from Navi Mumbai said if at all there has been a fault it has been from the part of Cidco but the developer is affected. “Cancellation of allotment is not at all viable. There could have been penalties,” he said, adding that the decision is yet to be challenged in the Supreme Court.

A bench of Justices Abhay Oak and A S Gadkari said the developer could, during this period, apply to Cidco for regularisation.

Calling the lease agreement between Cidco and the developer illegal and directing that the land be “restored”, the court rejected the developer’s plea to stay the order for 12 weeks.

It said that since it has given six months’ time to hand over “vacant possession”, the developer could use that time for appeal. No third-party interest should be created during this period, the court stated.

“The developer is facing the problem after 10 years,” a senior property consultant pointed out. “This may open floodgates and several Cidco allotments over the last couple of decades would be challenged,” he said.