Last week, when the promoters of NCR-based Unitech had to stay one night in jail, many developers reacted in horror. Some in the media also did news stories that were quite sympathetic to Unitech, with the general tone being that it was such a terrible thing such eminent people were being sent to jail. And yet, the details of that particular case suggest that the builders were given a very long rope. Indeed, it may even be said that they have been treated with kid gloves.
Consider the facts. The original buyer's agreements date back to 2006. The apartments were to be delivered in 30-36 months, that is by 2009. After this period, there has been an endlessly sliding series of delivery dates. When some flat owners went to a consumer court, Unitech came up with breathtaking variety of excuses as to why it was unable to construct the flats from 2006 to 2015. These include a general economic slowdown, the Commonwealth Games, and shortages of bricks, water, sand, and labour. In passing, it also laid some blame on the Mahatma Gandhi National Rural Employment Guarantee Scheme and the Jawaharlal Nehru Urban Renewal Mission. The developer's legal strategy was to try and convince the court that all these problems were unsurmountable for a decade and then pass them off as 'Force Majeure' factors, thus absolving it from any pressing need to deliver the apartments that the buyers had paid for, all the while holding on to those payments.
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Crime and Punishment for Real Estate Developers - Value Research
