In our continuing spotlight on developer delays, we focus once again on Orbit Corporation. It’s been over a year since the management promised to complete work on their projects, yet nothing has been happening on the ground and now more of the company projects are getting seized for non-payment of dues.

Orbit Corp Leaves Its Customers Homeless

If you ever wondered why real estate developers in India aren’t trusted anymore, you only have to look at the experience of home buyers who invested in Orbit Corporation’s Orbit Residency Park in Andheri.

“My flat was supposed to have been given to me at the end of 2013 and now we are in 2016. The work stopped some 2 and half years ago and there has been no signs of any work going on until now. I have lost all hopes of the work restarting and getting my flat.” complains S. Gopalan, a buyer in Orbit Residency Park.

Making matters worse, Orbit Residency Park was seized by LIC Housing Finance in 2013 for non-payment of dues and then put up for auction. While this meant that a new developer could be brought in to finish the project, many home buyers claim LIC Housing Finance has not recognized the payments they made to Orbit Corporation – something that will negatively affect their rights to their homes.

“According to the National Housing Bank (NHB), which is the regulatory body for any housing finance company – the housing finance company should have notified flat buyers that they have lent money to the project and we should have then been asked to deposit all proceeds to an escrow account. However, LIC Housing finance did not notify us and we were in the dark. We made all payments to Orbit Corporation and now LIC Housing Finance says we haven’t made any payments.” claims Lalit Vazirani, another buyer in Orbit Residency Park.

Lenders Seize More Orbit Corp Projects

LIC Housing Finance told NDTV that the matter was ‘sub judice’ and refused to comment on the matter. But we may see the same scenario play out again, with another project, Orbit Terraces – being symbolically taken over by SBI and the Union Bank last month. Notices have already been posted, asking the public not to deal with the properties. If Orbit Corporation fails to pay up the nearly Rs 135 Crores it owes, these projects will be put up for auction too, affecting even more home buyers.

“It is a big problem for those people who have paid the monies, but don’t have registered agreements. We have no way of knowing if the new developer will honour whatever written documentation was there. What happens if there is no documentation? He might then play it whichever way he likes. If the market rates are going up, he might just say take back your money. Or vice versa, he will forcibly allot you something at a high price.” warns property expert Vinay Singh.

NDTV met with Orbit Corporation’s MD & CEO – Pujit Aggrawal, but he refused to come on camera and clarify how he intends to solve these problems. However, he said that his company was in talks with lenders to settle its debts and that he intends to restart construction in the next couple of months. Pujit also stated he had found an investor who was willing to buy the delayed units from customers who wanted to exit the project. But since this will happen at less than market rates, most customers are unwilling to take up the offer.

Buyers To File Suits Against Orbit Corp, Lenders

Several buyers have approached the consumer courts to get a favourable judgment. Legal experts say this is the most effective way to get Orbit to fulfill its promises.

“That is the beauty of the Consumer Protection Act. The buyer can go through Section 25, where he can auction Orbit Corporation’s properties and even the personal properties of the director through the collector. This is known as Execution Proceeding under the Consumer Protection Act. This case must be filed in the National Commission and the respective collector will attach and auction the properties and give the proceeds to the buyer.” advises property lawyer Uday Wavikar.

As things stand, many buyers are gathering to file a collective suit against Orbit Corporation and also the company’s lenders, if their rights to the property are denied. Serious questions are also being raised about Orbit Corporations ability to pay its debts, with even the company’s official website going down all of Tuesday morning. Something that is definitely going to send a negative message to home buyers and lenders alike.

Nikhil Narayan Sivadas, Assistant Editor, NDTV