Caught in a crossfire between the Builder and the Government causing and facing hardships and immeasurable agony, over 200 owners of Excelsior today demanded that the wing be carved out as a separate society and handed over to the owners.
2. EXCELSIOR
Owners Welfare Association
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Content
Promise Vs Performance…………………………………………………… 3
Introduction……………………………………………………………………… 4
The Core Issue…………………………………………………………………… 6
Vox Pop…………………………………………………………………………….. 7
HC Ruling and CBI Report…………………………………………………. 10
Chronology of Development as it unfolded………………………. 11
Conclusion………………………………………………………………………… 17
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Owners Welfare Association
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Introduction
“It was the best of times, it was the worst of times, it was the age of wisdom, it was
the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it
was the season of Light, it was the season of Darkness, it was the spring of hope, it
was the winter of despair, we had everything before us, we had nothing before us….”
- A tale of two Cities, Charles Dickens
Dear Friends from the Media,
This dichotomy fits us so aptly - we, the owners of Excelsior, who today face a true
Dickens situation of being caught in a crossfire between the Builder and the
Government causing us hardships and immeasurable agony.
As you know, Excelsior is a joint project between the AP Government and Emaar
MGF. It was promised to be a world-class community of 350 apartments overlooking
a championship golf course.
The bookings for apartments started in 2008 and the promised delivery was slated
for June 2011.
The Current State
Now, seven years from the initial bookings and four years past the planned
completion date, the project continues to be mired in controversy owing to conflict
between the developers and the state government leaving the owners of apartments
high and dry. There doesn't seem to be any clarity on the completion or delivery
schedule.
The project seems to have slipped into a state of limbo with the owners having been
left in the lurch notwithstanding the fact that the AP High Court and the CBI inquiry
has given a largely clean chit to the Excelsior part of the project. It, therefore, defies
the logic as to why Excelsior owners are being made to suffer.
Billed as the most reliable, modern and happening project that would add value to
Brand Hyderabad and attract investments, Excelsior predominantly attracted
professionals and NRIs (and many of them secured bank loans) to invest in this ‘safe’
5. EXCELSIOR
Owners Welfare Association
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project. Many have paid 100% of the apartment cost, but now, four years past the
due date they are left with decaying skeletal structures.
NRI investors saw this project as a great "return-to-India" opportunity. But now they
are left in disbelief as both the government and the builder seem to be apathetic to
their situation. Today, NRI's are asking "why should we invest Hyderabad"? As a
result, Brand Hyderabad too is taking a big hit.
What we demand
We demand that the 14 acres that represent the Excelsior Apartments be given to
the rightful owners. The 14 acres are situated on the edge of the 535 acre Boulder
Hills project and therefore, can be easily carved out. Even a separate entrance is
available from a street adjacent to the Brahma Kumaris Institute in Gachibowli.
We are asking the responsible parties
(the government and the builder) to
step forward and work with the
apartment owners to complete and
deliver this 14 acres property as
promised.
The Excelsior project represents only
2.6% of the total Boulder Hills project.
200 innocent buyers have been
suffering for five years for no fault of
theirs! The CBI has also reported that
the 2.6% represented by the Excelsior
apartments, were purchased
transparently and with no wrong doing.
So we demand that those responsible relieve us of this suffering and unjust agony.
Representation by:
Excelsior Owners Welfare Association
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Owners Welfare Association
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The Core Issue: Sandwiching of rightful owners
The apartments block, known as Excelsior, sits on 14 acres within the 532 acre
Boulder Hills project. There are about 206 apartments sold out of a total of 350
apartments that Emaar MGF was planning to build in phase 1. The apartment owners
have largely paid up but the building complex, which was supposed to have been
completed and handed over in 2011, has not been fully constructed except the basic
building edifice which is now lying in a state of neglect.
Since April 2010, the project has been a subject of legal tussle between APIIC and
Emaar MGF. The issue is around the villas that were supposedly sold below-par value
on paper and the introduction of Emaar MGF into the project. The government
claims lost revenue due to underhand dealings between the builder and the villa
owners and due to a restructuring of ownership with the introduction of Emaar MGF.
There was a CBI inquiry instituted at the Honorable HC’s instance into the whole
matter. The Enquiry finally concluded in October 2012. With respect to the Excelsior
part, the CBI gave a clear chit having observed nothing wrong in 206 apartments’
deals except one - which belongs to the builder’s MD.
Meantime, the government has put a ban on the registration of all properties in
Boulder Hills including the apartments through its GO. As a result, even though the
apartments are in no way connected with the villas in question, the Excelsior
apartment owners are jammed in terms of registration. On top of this, the builder
refuses to continue building the apartments claiming force majeure (until the
registration ban is lifted).
The fact, on the contrary, is that nothing restricts the builder from completing the
construction. But considering uncertainty and issues with their partnership with the
Government , Excelsior owners suspect, the Builder probably does not want to risk
any more capital deployment, no matter how grave the suffering of the apartments
owners!
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Owners Welfare Association
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VOX POP - Excelsior Owners
We chose Excelsior in Hyderabad to retire. We were then convinced that the Private-
Public Partnership of the project would mean safe investment, and never realized that
the Government would end up creating all this mess along with the builder! I have
lost faith in our India systems.
- Manmeet Bedi, Dubai
As a US citizen, I always dreamt of owning a property in India. Given APIIC’s
involvement, I felt safe to invest in Excelsior and took a loan from HDFC. All my hopes
and dreams are dashed now and all the money has been stuck in this property since
2008. I paid the EMI’s for over 3 years, and then used my savings to pay off the loan.
This has definitely soured my appetite for investments in India, especially Telangana.
-Satish Chandrasekaran, USA
My plans of retirement and love for the city, where I grew up has changed. It has
made such a big difference in our thought process, I do not want to invest a single
penny in India. I thought things have changed since I left Hyderabad for US when I
was 17. But I guess not. It is still a sad story of all unjust activities. We started paying
the initial payments in 2008. Now 7 years later still no outcome.
-Rashid Ali Khan, USA
I bought a flat to live in retirement at Excelsior. I am close to retiring now and have
no place to live on retirement. I bought the flat since the government was a partner
and Emaar Dubai has a great reputation. If we can't trust the government whom can
we trust?
-M. Sudhakar Reddy, Muscat
Was thinking of retiring in Hyderabad as we have family there. My brother-in-law
from the UK also purchased an apartment with us at Excelsior. He and my husband
had made grandiose retirement plans. Our hopes and plans have been shattered now
and we live in a constant state of worry about the future.
- Gitanjali Bharath Reddy, Chennai
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This was my life time saving and hard earned money. Was very happy to own a
decent place in my homeland. Now you cannot trust any builder however reliable they
may appear and will never invest in Hyderabad.
- Mohammed Khalid, Riyadh
I invested in this project because my wife belongs to Hyderabad and we also felt that
this is a good community living happening in Hyderabad and we can be part of it.
Now we will think twice before investing in Hyderabad as this project has given lots of
emotional trauma.
- Vedapuri Thachampattu, Saudi Arabia
Used all my savings to buy this apartment to use for my retirement. Total colossal
failure. Lost faith in the system. Never invest anything that's involving government
who is supporting all criminals.
- Dr. Srinivas Koneru, USA
Am Telugu speaking and wanted to participate in community living so purchased a
flat in Excelsior. I am shocked that this sort of neglect can be meted out to genuine
investors like us. Will surely not consider Hyderabad once again for investments due
to the misery, agony and helplessness, I had to go thru with this project.
- NVSS Sarma, Dubai
We thought this would be a safe investment keeping in mind the brand name
Emaar.....but now so disappointed. Now will think twice before investing in
Hyderabad.
- Divya & Vikram, Dubai
After having such a horrible experience with this purchase, there is no chance to even
think of buying any other property in Hyderabad. The Indian authorities always want
to welcome NRI investment and then forget to care about them!!
- Ishu Rupani, Dubai
Even though I am from Tamilnadu, I chose Hyderabad because it has better
infrastructure and quality of life than Chennai and Bangalore . Given EMMAR’s
reputation and Govt’s involvement, we thought the project can't go wrong. Even now
we have hope on Hyderabad's future.
- Dr. Lakshmi & Dr. Issac, TN
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Owners Welfare Association
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The investment was made for quality life based on solid integrity of the promoters
which turned out to be a big humbug. Discouraged for any future commitments even
with public sector participation.
- Mohamed Banafa, Riyadh
I had taken a huge loan from a bank at a high interest rate. Irrespective of the
situation, the Bank took all their money back with full interest. Indian authorities
should really worry with their existing systems which provide no protection to the
overseas investors. I wonder whether any one would ever do anything to resolve this
issue. It's clearly visible to all BUT vested interests seem to rule!!!
- Sudhakar Murthy, USA
Lived in US for 15 years and returned with family to Hyderabad.
Invested in Boulder Hills with our hard earned white money, after paying all taxes in
US and India. Shocked and really disappointed at the turn of events.
-Sitaram Raju, Hyderabad
I am 76 years old, I came to India to establish an Investment Banking Subsidiary of
our US based company about 15 years ago. I met several fellow Ex-Pats like me
wanting to do something good and invest something back in the country of our origin.
In spite of many obstacles we have been able to contribute positively to the State and
Country. I decided to retire in Hyderabad to continue various civic activities.
I purchased a flat in Excelsior in Boulder Hills because it was in a good location and
though it was higher priced, one could purchase the flat with "WHITE" money only.
Also it was being developed by Emaar, which had a good reputation. I have paid the
total amount. I am outraged to find that either due to corruption or incompetence,
neither the bureaucracy, government nor Judiciary are able to do right by the people
who invested in good faith in Hyderabad. This has taken more than 5 years and there
seems to be no resolution to the situation.
How can the State and the Country expect more foreign investment to come when
good investors are cheated like this? I for one will have to warn foreign investors who
frequently solicit my advise to be extremely vigilant, i.e. Caveat Emptor.
- Sundar K. Sundaresan, USA
10. EXCELSIOR
Owners Welfare Association
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HC Ruling and CBI Report Show the Owners as Innocent
As shown below, the Honourable AP High Court’s observations and that of the CBI
report clearly establish the fact that the Excelsior owners are sandwiched in the
conflict between the Developers and the state Government, and are made to suffer
for no faults of theirs. Hence, their simple demand is completion of their part of
project and handing over of the premises to them for which they have paid for and
are the rightful owners.
HC Ruling
The AP High Court, on March 13, 2012, in the matter between Boulder Hills Villa
Owners Association & Others (Petitioners) and Govt. of AP & Others (Respondents),
observed:
“The principal argument advanced on behalf of the Government in support of the
impugned G.O. is that the plots were sold at a highly unrealistic prices, …
The CBI is investigating into certain aspects of the matter on the directions issued by
this Court. The ultimate result of the same would tell upon the complicity or
otherwise of some of the persons and agencies associated with the project, at certain
stages……..
In case of the flats almost the entire consideration was paid. In the counter-affidavit
it is not even mentioned that the considerations received for the flats is inadequate.
It is only in respect of plots that doubt is expressed as to the adequacy of
consideration, or allotment.”
The CBI Report
“Investigation also revealed that M/s EHTPL and M/s Emaar MGF Land Ltd sold the
following apartments during the period 2008 -2010……
During the course of investigation, 14 apartment buyers or their representatives were
examined and they have confirmed the rate mentioned in the document i.e.
agreement to sell and construction agreement. All of them were found to be genuine
buyers. However, it is pertinent to note that Shri Srikant Joshi, the then CEO of Emaar
MGF Land Pvt. Ltd purchased an apartment in his name at Rs.3268 per sft whereas
apartments were sold to other buyers between Rs. 4800 – Rs.9000 per sft.”
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Owners Welfare Association
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Chronological Events
Here is chronological detail of how the issue built up over the years resulting in the
current state.
The Project Announcement
The A.P Industrial Infrastructure Corporation (APIIC) through its GO no 359 of
September 4, 2002 approved the proposal to set up an Integrated Township Project
including Golf Course and multi-use land development at Manikonda, Ranga Reddy
District in favour of Emaar Properties PJSC (“Emaar PJSC”) and conveyed the free
hold to M/s. Emaar Hills Township Pvt. Ltd (JV between Emaar PJSC and APIIC)
The Development Agreement
The Owner executed a Development Agreement cum GPA dt.23-7-2007, in favour of
M/s. Emaar MGF Land Ltd., the Developer Cum GPA, granting rights to develop the
Project Land, for the Integrated Township “Boulder Hills” (Project) consisting of
Information Technology Special Economic Zone, Multi-story Residential Apartments,
Semi-Independent Houses, Villas, Hotels, Retail Malls, Golf and Country Club, Parks,
Play Grounds, Open Spaces, and other Public Utilities, etc,.
The Excelsior
A part of the Project Land admeasuring about 14.01 acres or thereabouts has been
earmarked for the construction of Multistoried Apartments called Excelsior, Boulder
Hills. Excelsior was started under the umbrella of “BOULDER HILLS GOLF AND
COUNTRY CLUB which was advertised as “one of the ten most photographed golf
courses in the world, you can count on it”.
The publicity materials claim: Boulder Hills Golf and Country Club is a world-class
leisure and residential community spread out over approximately 531 sprawling
acres (258.36 is outright owned by Emaar, the remaining 272 acres are a on a 99
year lease.). It has been envisioned as a complete, self-contained township spread
around an 18 – hole championship golf course where every home is designed to the
most demanding international standards. The estate is one of the most picturesque
in the country with tree-lined streets and water bodies.
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Owners Welfare Association
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Key Features of Excelsior (As advertised):
Located in the Gachibowli area, next to Nehru outer ring road.
30 minutes to the Rajiv Gandhi International Airport (Shamshabad)
Easy access to schools, restaurants, work areas, ATMs, supermarkets and
many leisure facilities.
Fully operational 18 – Hole Championship Golf Course.
Choice of 3 and 4 bedroom apartments.
Golf view/Green view premium apartments with views on 3 sides.
Premium amenities and finishes.
Good internal infrastructure – power generator back-up and sufficient
water supply.
Clubhouse with swimming pool and well-equipped gym.
Conveniences including restaurant and supermarket
Clubhouse with Fitness Centre, Games Rooms and a swimming pool
Looking at the advertisement and brochure a number of people have purchased
independent flats in Towers A to D and the number of flats for each tower are Tower
“A” 52 Apartments, Tower “B” 101 apartments, Tower “C” 101 apartments and
Tower “D” 101 apartments and the total number of flats that is 355 which have been
categorized as 22 DIFFERENT flats depending on the size of each flat/apartment.
The Delivery Promise
Between 2008 and 2010 numerous Construction Agreements and Also Agreements of
Sales and for some registered sale deeds have been executed by in favour individual
members by M/S.EMAAR HILLS TOWNSHIP PVT.LTD and M/S.EMAAR MGF LAND LTD.
The Promises made in the agreement
“Commencement Date” is the 2nd
day of July 2008 or the date on which the
purchaser’s first installment of construction payment
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Owners Welfare Association
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Article 4 –Construction Schedule
4.1. The developer cum GPA shall complete the construction of the Apartment within
a period of thirty six (36) months from the Commencement Date with a grace period
of six (6) months and subject to Clause 28.2 ‘Force Majeure’ of this Construction
Agreement.
Article 11 – Developer Cum GPA Default
11.1 The Developer cum GPA undertakes that if they fail to comply with any rules and
/ or terms of license granted for development, or due to any act of omission or
commission, any loss or harm is caused to the Purchaser then the Developer cum
GPA shall be fully liable to bear such losses and / or damages. The Developer cum
GPA shall keep the Purchaser fully indemnified in respect thereof. However, if as a
result of nay legislative order or regulation or directions of the Government or any
Public Authority, the Owner and / or Development cum GPA is unable to complete
the construction of the Apartment, the only responsibility of the Owner and / or
Developer cum GPA will be to return to the Purchaser the amount received from the
Purchaser.
11.2. In the event of any delay in handing over possession beyond the time[including
the grace period] stipulated in Article 4.1 hereinabove the Developer cum GPA shall
pay the Purchaser as amount of Rs.5/- [Rupees Five Only] per square feet on total
Built –Up area of the Apartment, for every month of delay or part thereof, subject to
the Purchaser having paid without any default the Payments as per Article 5, and
Exhibit III and Article 8 of this Agreement. The Purchaser agrees that the aforesaid
amount shall be the only compensation payable to the Purchaser in the event of
delay in handover of possession by the Developer cum GPA.
Article 18 – Completion Certificate and hand Over of Possession.
18.1. The developer cum GPA undertakes to provide the Purchaser physical
possession along with Completion Certificate issued by the appropriate authority
subject to the Purchaser having completed the payments as per Article 5, Exhibit III
and Article 9 of this Agreement.
Article 19- Warranty and Defect Liability Period.
19.1. The Developer cum GPA and the Owner expressly agree to keep the Purchaser
harmless and indemnified against all claims, litigation, courts decree, demands for
damages, losses, costs and expenses which the Purchaser may sustain or incur by
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reason of any cause or causes whatsoever on account of the Developer cum GPA’s
default under this Construction Agreement. The developer cum GPA shall carry out
the construction of the Apartment with the same care and diligence they use in other
similar projects and as per industry accepted standards.
19.2. The defect liability period for the Apartment is a period of 12 [twelve] months
from the date of issue of the Occupancy Certificate/ Completion Certificate by the
Competent Authority. The Purchaser is required to give written intimation to the
Developer cum GPA of any defects in the Apartment. The Developer shall rectify such
defects, provided that the same has occurred or is due to defective workmanship or
defective materials and the same is discovered and intimated within the Defect
Liability Period.
The Reassurance
On 17-9-2010 the Developers sent a letter to one of the customers wherein it has
been specifically stated that “we would like to reassure you that Emaar and Emaar
MGF have all necessary approvals from relevant government authorities for
development of the Integrated Project. The Development Agreement with Emaar
MGF was also approved by APIIC, through its nominee Directors, about four years
back. Parallely, we would like to apprise you on the development activity at the
Boulder Hills Golf and Country Club. Gearing towards the committed possession in
Mid 2011 we are in the process of completing the Sample apartments. These
apartments would be ready for your visit in next 30 days.”
The Turning Point
In view of allegations flying thick about Villa pricing (nothing to do with Excelsior),
On 8-10-2010 the Government of A.P has issued G.O.Ms.1279 dt.8-10-2010 wherein
the Government of A.P hereby prohibit the Registration of the documents relating
to the following properties allotted by the Andhra Pradesh Industrial Infrastructure
Corporation Ltd, Hyderabad to M/s.Emaar Hills Townships Pvt.Ltd and Boulder Hills
Leisure Pvt.Ltd. in the interest of the State Government.
The Excelsior Owners come together
On 21-5-2011 the Excelsior Owners Welfare Association got their association
registered in the Office of the Registrar of Societies, Ranga Reddy District.
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Owners Welfare Association
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The HC Stay & Reassurance by the developers
On 14-7-2011 e-mail was sent to one of the owners who is also the president of the
Excelsior Owners Welfare Association wherein in the mail it has been stated that “we
are glad to announce that the Hon’ble High Court of A.P, vide order dt.4-7-2011 has
ordered stay on the operation of GOMs.1279 dt.8-10-2010 thereby enabling the
registration of flats constructed i.e. your apartment. We sincerely appreciate your
patience and support during these trying times. Construction at Excelsior in Boulder
Hills will recommence shortly.” This stay actually came about because of a legal
representation made by the owners association.
The Excelsior Owners Notice to the Developers
On 14-3-2012, as there was no proper response from the Developers with regard to
the construction of their flats with no option left the owners got legal notice issued
to the developers wherein it has been stated that the legal notice is being issued on
behalf of Raghu Bathina and fifty six others.
That, under the agreements mentioned above, developers were to complete the
construction of the flats by June, 2011 and deliver possession. That, in the event of
your failure to complete construction, developers were to be given a further grace
period of 6 months which expired on 31-12-2011. That, no construction activity has
been carried out for these flats in the past one year. That, developers have failed to
complete the construction and deliver the flats either by end of June, 2011 or under
the further grace period ending on 31-11-2011. However, developers have wrongly
invoked the force majeure clause to cover up your deficiencies and shortcomings.
That, in view of the above situation, owners hereby call upon developers to furnish
the dates on which the said flats would be completed and the compensation that
would be paid by you for the delay in completion of the flats within 7 days from the
receipt of this notice, failing which owners would be forced to initiate appropriate
action under the appropriate provisions of law including filing of suits for specific
performance of the agreements, filing of suits for compensation for the breach of
contract and / or filing suits for recovery of payments made till now under the said
agreements along with interest @ 24% per annum apart from claiming damages.
The Developers Response
On 30-3-2102 the developers sent their reply notice to the petitioners notice dt.14-3-
2012 wherein it has been stated that “your clients (owners) are aware that the date
of completion of construction of the flats was interalia subject to the fulfillment of
other requirements of the agreements including time bound payments by your
clients. The various incidents in the recent past involving various litigations with APIIC
and the ramifications of G.O.Ms.No.1279 dt.8-10-2010 passed by the State
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Government prohibiting registration of documents relating to the properties in issue,
in exercise of the powers conferred under Sec.22 A of the Registration Act,1908, has
in effect triggered force majeure clause in regard to the project. All these facts are in
public domain and your clients are well aware of the same. Further, all the files in the
Company’s Hyderabad office pertaining to the project including the files of your
client have been seized by CBI as a part of the ongoing investigation. Therefore, our
client at this point in time would not be in a position to respond to your legal notice
in details due to absence of records. Once our client’s records are restored, it would
only be then and upon further instructions that we would be able to send a suitable
reply to your legal notice. At this stage we are instructed to state that most of your
clients have defaulted towards making payments in regard to their flat and the
payments remain outstanding as of date and the annexure sent along with your
notice evidence the same however, our client reserve their right to demand the
outstanding amounts at appropriate time. Further, our client needs to address the
notice sent by you on behalf of 57 clients individually and independently keeping in
view that these 57 clients do not stand on the same footing on account of distinct
facts and circumstances.
We are instructed to bring to your notice and as your clients are aware that the
Articles of the Agreement and Construction Agreement state thus:
Article 7.1 of Article 7 of Agreement:
“The owner and / or Developer cum GPA shall not incur any liability for failure to
comply with this Agreement if the delay is due to reason of any force majeure
condition viz by reason of any Act of God or Act of Government or any other reasons
beyond the reasonable control of the Owner and / or Developer cum GPA”.
Article 28.2.4. of Article 28 of Construction
Agreement:
“During the operation of force majeure events, the obligations of Owner and
Developer cum GPA hereunder shall be suspended until the termination of such force
majeure events.”
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Owners Welfare Association
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The Owners Estimation for Completion
On 12-3-2013 the owners got a valuation done for the unfinished work in all the four
blocks (that is Blocks A to D). In summary the valuer found that the work could be
completed in 9-10 months at a total cost of approximately Rs. 200cr.
In Conclusion
We call upon the new Government of Telangana and our visionary CM to take the
initiative, work with the builder and owners to complete Excelsior and hand over
the project and thereby also protect Brand Hyderabad.
Our appeal is that you carve out the 2.6% that is Excelsior and give immediate relief
to 200 innocent buyers who are suffering for believing in Hyderabad.
For more information:
1. Raghu Bathina (owners association) - raghu.bathina@gmail.com
2. Orion PR- kj@orionpr.in