Supreme Court provides new window for commencing Mumbai realty projects


In a decision that has offered some major relief, albeit temporary, for the real estate developers in Mumbai, the Supreme Court has overruled the February 2016 order of the Bombay High Court which totally banned new realty projects in Mumbai on account of the growing levels of pollution. The Supreme Court has provided a new window of 6 months for starting new real estate projects in Mumbai. The order has given a major boost to the industry which has been combating factors like increasing costs and sluggishness in terms of overall demand.

However, projects launched during this window will only receive clearance once specific terms and conditions are met. The Supreme Court has stated that banning construction will have a huge impact on the entire housing sector and also directed stakeholders to ensure proper removal of debris. The Supreme Court has not disposed of or modified the order of the High Court. Clearing of debris during construction is one of the conditions mandated by the Supreme Court for clearing of new projects.

No construction debris will be transported to the dumping grounds in Mulund and Deonar as per the court’s directive. This was the reason why the Bombay High Court imposed the ban in the first place. The second condition is that there would be a specific manner of disposing these construction debris. Bank guarantees between Rs. 5 lakh and Rs. 50 lakh will have to be provided by the real estate developer based on the project size and development type only for the conditions related to dumping of debris. This guarantee will be valid till the Occupation Certificate is issued.

The BMC has also been directed by the Supreme Court to furnish its report on compliance with this order when 6 months are over. The BMC has already told the Court that 10 sites have been identified and inspections have taken place in collaboration with the monitoring committee appointed by the High Court. The site owners have already given the NOCs for debri dumping since these sites need land filling. The Court has directed that this should be one of the conditions required for any construction plan getting permission. BMC has been asked to supervise the plots for dumping debris and the construction sites of approved projects. Any breach of conditions will lead to building permission cancellation and work will be immediately stopped as a result.

This Supreme Court order will boost a minimum of 500 real estate projects that were in limbo in Mumbai for the last couple of years. The ban also affected projects like redevelopment of old structures. Projects were heavily impacted in the suburbs and the low-income and middle-income groups were also affected as per industry players.

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