SC slaps Rs 105 crore fine on Pune’s real estate company for environmental damage

Posted on by KNBT

NEW DELHI: The Supreme Court on Friday came down heavily on Pune-based real estate company Goel Ganga Developers for causing environmental damage and building residential towers in violation of law and slapped a fine of Rs 105 crore but refused to order demolition of the buildings as possession of flats had already been given to the homebuyers.

A bench of justices Madan B Lokur and Deepak Gupta granted the company six months time to deposit the money before its registry and said that all the assets of the company as well as its directors shall be attached if it failed to comply with the order.

The court said that the construction done by the company was in violation of environment clearance given to the project and the company had also expanded the built up area without permission. The company had built 738 flats and 115 shops at its Ganga Bhagyodaya, Amrut Ganga and Ganga Towers projects on Sinhagad road in Pune. The construction of 69 flats and 2 shops were at the final stages. The bench noted that approval was given to the company for construction of built up area 57,658.42 sq mtrs but it illegally expanded the built up area to 1,00,002.25 sq mtrs in utter violation of law.

Observing that most of the homebuyers in the projects belonged to middle class family and would suffer huge monetary loss if buildings were demolished, the court said that it was left with no option but to legalise those construction.

“As pointed out there are 807 flats and 117 shops which are either constructed or under construction. These flats are 1, 1.5 and 2 BHK flats and small shops and offices. The developer has already taken money from these people and a large number of flats and shops have already been occupied. The remaining flats and shops which are not occupied, have been bought by people belonging to the middle class who have invested their life’s earnings in this project. Keeping in view the interest of these third parties, we are of the view that in the peculiar facts and circumstances of the case, demolition is not the answer,” the bench said.

The court upheld National Green Tribunal order which had came to the conclusion that the developer had violated law and slapped the fine. It said the company shall not be allowed to build the two buildings in which it was to construct 454 flats and directed it to return the money with interest at the rate of 9% per annum to buyers.

“Having held so, we are definitely of the view that the project proponent who has violated law with impunity cannot be allowed to go scot-free. This court has in a number of cases awarded 5% of the project cost as damages. This is the general law. However, in the present case we feel that damages should be higher keeping in view the totally intransigent and unapologetic behaviour of the developer. He has manoeuvered and manipulated officials and authorities. Instead of 12 buildings, he has constructed 18; from 552 flats the number of flats has gone upto 807 and now two more buildings having 454 flats are proposed,” it said.

“Therefore, in the present case, we are clearly of the view that the developer should be and is directed to pay damages of Rs 100 crore or 10% of the project cost whichever is more … The developer shall also pay a sum of Rs 5 crore as damages, in addition to the above for contravening mandatory provisions of environmental laws,” it said.

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