UP RERA deregisters Rs 1,500-cr project over financial irregularities, fund diversion

The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) Friday said it has deregistered a private firm's project valued at Rs 1,500 crore here over severe financial irregularities, diversion and siphoning off funds besides double allotment.

In a first-of-its-kind order by RERA across states, the UP RERA on Thursday deregistered Unnati Fortune Holdings Ltd, project Aranya Phase 3, 4 and 5 in Sector 119, it said in a statement.

"The process after deregistration will commence in consultation with the state government," it said, adding the decision was taken after the promoter could not provide a satisfactory response to the deregistration notices before it.

"RERA has found that in the project there have been severe financial irregularities, diversion and siphoning off funds and double allotment," the authority said.

It said the project, valued at over Rs 1,500 crore, is spread over 72,594 sq metres and was started in 2007 but when an inspection team of RERA went to the site it found that only four of the eight towers were ready for completion, while major construction work is pending in others.

"Moreover, the construction of the villas has not begun at all according to the site inspection reports," it added.

UP RERA Chairman Rajive Kumar said deregistration order was served based upon the information collected, site inspections made, complaints registered in RERA and non-compliance of the provision of RERA Act.

"While the Authority had already given strict warnings almost three months ago, this decision was taken after we gave them ample amount of time to respond after repeated notices were issued to them. This step should be seen as a warning to others," he said.

Earlier, the Authority issued deregistration notices under Section 7 of the RERA Act to seven builders for failing to meet their commitments to buyers covering 14 projects and approximately 4,800 residential units, according to the statement.

The developers who were served notices include Primrose Infratech for Primrose Ryne project, PSA Impex for Sampada Livia, MSA Developer for Circuit Heights, Greenbay Infrastructure for Greenbay Golf Homes & Golf Village, Intellicity Business Park for Intellicity project, Mist Direct Sales for Festival City Phase 1,2,3 and Unnati Fortune Holdings Ltd for the Aranya Phase 3,4,5.

UP RERA Secretary Abrar Ahmed said, "After the deregistration, there are several options before the Authority, besides giving the first right of completion to buyers. If the buyers themselves are in a position to complete the project by pulling their finances together, the Authority will develop the mechanism to supervise that."