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Builder defaults on loans. Bank attaches underlying project collateral. Where do owners go?

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Builder defaults on loans. Bank attaches underlying project collateral. Where do owners go?

Last updated: January 19 2015
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  • Builder defaults on loans. Bank attaches underlying project collateral. Where do owners go?

    I am starting this thread to gain from experience of fellow members who have been in similar situations. The developer in question here is Orbit Corporation while the financial institution is LIC Housing Finance. My question pertains to the remedy available to flat owners so as to secure their right on the apartment purchased. Members on this forum, especially the ones invested in HIRCO Panvel can advise on how they went about securing thier rights - writ petition, court cases, consumer forums? Here it goes -

    Orbit and LIC HF entered into a mortgage deed in September 2010. LIC disbursed 250 crores of which Orbit defaulted on about 96 crores. Collateral on the loan is lien on apartments at its three projects across Sakinaka and Lower Parel. LIC attached the projects sometime ago. Orbit secured a stay order and got access to the sites. The case is being heard at the DRT Mumbai. By way of background, LIC HF and Orbit were involved in a loan scam in 2009/2010 where one of the beneficiaries was alleged to be Orbit Corporation. LIC Housing sacked its CEO following an investigation. Back to the loan, there are several owners where their purchased apartments have been mortgaged by Orbit without their consent. In effect, Orbit has blatantly cheated them by selling the same apartment twice - first to the original flat owner and then to LIC HF (without the buyers consent) to secure their loan. LIC HF indicates that it does not reocgnise the rights of the flat owners and considers itself as the rightful owner of the apartment. The case is likely to decided soon, and LIC HF may choose to auction the underlying projects. Orbit is practically bankrupt with most of its land bank either entangled in legal complications or mortgaged to institutions to secure loans.

    As an owner, apart from filing a case at the consumer forum, what is the legal remedy available to flat owners to stop LIC HF from auctioning the project and securing their right to the apartment?
  • #2

    #2

    Re : Builder defaults on loans. Bank attaches underlying project collateral. Where do owners go?

    you need to see a lawyer, but i'm not sure if the house was registered in your name how it was sold to LIC subsequently

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    • #3

      #3

      Re : Builder defaults on loans. Bank attaches underlying project collateral. Where do owners go?

      If the.house was registered, then lic cannot claim their right; although land is theirs and.they can sell to other builder who can.proceed with further construction...
      You should try to.collect other buyers andbfile a group petition to protect your rights....
      Btw have heard some rumours that company was primarily funded in cash thru some baba, currently out of business, so they are sort of bankrupt....do make legal case to protect ur rights....it doesn't costs much, around 10k per head, especially if in group...it's nothing in comparison to lakhs each buyer have invested...

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