Summary:
Withdrawing 79A approval is easy and viable. We have to send the builder a legal notice. The builder may file a case on us. Through the case, at best, builder can only get their costs reimbursement, and courts on such cases DO NOT GRANT any stay on the Society, so we can proceed unhindered, with some nominal or affordable costs.
Details:
On behalf of members, I investigated the procedure for withdrawing our 79A approval, by consulting legal professionals familiar with this subject, through my good-offices with them.
The procedure is as follows :
1. Have a general body resolution to withdraw the 79A approval granted to the builder, (which we have already minuted IMO).
2. In consultation with an independent legal counsel, (other than your current PMC-Lawyer-Builder team) arrive at all our costs that have been incurred by Society and its members, (AFTER WE OBTAINED CONVEYANCE) such as towards :
- tangible direct costs (tendering, etc)
- indirect costs apportioned for each members time at each meeting we have had regarding the redevelopment till date, (possible if our MC has clear records)
- opportunity-loss costs for past 2-3 years during which time we have been kept in limbo by our current (incredible) builder with various excuses and reasons.
- other related costs (members can suggest for this)
- more costs that an independent legal person can suggest (viz. stress, anxiety, etc)
3. Then under guidance of the independent legal counsel, we need to send a legal notice to the builder intimating them that our 79A approval is withdrawn due to the various delays and further reasons (wording to be finalised with the legal counsels advise), and further demanding compensation to us for the various costs identified in step 2 above.
4. The normal expected response from builders in such circumstances is to file a case on the society, as their normal "fear-creation" tactic.
The small bad news is that we (society) then will have to deal with that case, and eventually reimburse the builders "proven" costs till the date of the notice.
The good news has two parts :
the first good part is that the builder will have a valid claim on us only to the extent of reimbursements to them of the costs they have incurred till the date of the notice, and courts will reconcile between their claimed costs and our claimed costs, and arrive at a settlement amount, which of course can be positive or negative, and do remember we have their security deposit for now, and thus odds are in our favour in terms of cash flows.
the second good part is that under the court will NOT grant the builder any stay whatsoever on our proceeding with any kind of construction activity that we as a society choose to do after the notice - irrespective of whether it is repairs, self-development or another builder.
Conclusion:
Withdrawing 79A approval, and is very do-able, once we agree to proceed with necessary actions or have the political will to get it done.
Our task and case is much simpler at this stage as we do NOT have a valid registered reDevelopment Agreement (DA) in place yet.
The more time we take to send this notice, the more costs may be claimed by the builder.
Hope this information is useful to MC and to all members.
Thanks.
Release history:
02Jun19 - email to all members
09Nov19 - reminder email to all members
