Lodha’s maiden Bengaluru project runs into legal hurdle

In June 2022, Lodha entered the Bengaluru market and signed its first joint development agreement, acquiring 100% equity stake in G Corp Homes Pvt Ltd for a residential project. G Corp had built a six-tower project called Icon North on part of this 20-acre land. The Mumbai-based real estate firm is developing its new project Lodha Mirabelle on the remaining land.

In 2023, residents of Icon filed a complaint with the Karnataka Real Estate Regulatory Authority, accusing Lodha of changing the approved plan without their consent. The changes included building seven towers instead of six in the original plan; Some were up to 40 stories high.

However, in May 2024, RERA ruled in Lodha’s favor. The Icon petitioners then approached the Karnataka Real Estate Appellate Tribunal (K-REAT); The court issued a ruling on December 18 stating that the developer had largely abandoned the originally approved plan and accepted and registered a new plan. It directed that ‘Mirabelle’ be deregistered and asked the developer to obtain consent from two-thirds of Icon North homeowners who had registered the sale deed and applied for the new registration.

Mint reviewed a copy of the court decision.

“Home buyers did not sign up for a project of this scale; it was supposed to be a world-class society. The sharp increase in the number of flats, residents, vehicles and building heights has direct impacts on amenities, common areas, undivided land share and infrastructure capacity like water, internal movements,” said Deepa Jayaraman, a flat owner at Icon North. “Our expectation was always that approvals and construction would strictly adhere to the original master plan, due process and applicable law.”

Lodha challenged the Karnataka High Court order, which the court passed in December, which held that Lodha Mirabelle’s registration would not be cancelled. However, the court also said that only interior work could continue on the three towers, where construction was almost completed according to the original approved plan. The court also ruled that no new construction could start on other towers without the approval of two-thirds of Icon residents.

The next hearing in the high court is expected to be held later this month.

The Lodha group launched the project “after obtaining all necessary approvals” from all relevant authorities, a Lodha spokesperson said in an emailed response.

The spokesperson stated that “in 2023, some of the residents of the old site applied to the court against the new project” and added that “the court ruled in our favor and did not find any of the claims justified.”

A handful of residents approached the appeals authority for “ulterior motives” and it accepted their pleas, the spokesman said. The spokesman said the group appealed the decision in the high court, but the decision was stayed. “The issue will be discussed in detail at the Supreme Court in the coming days. Our construction continues in stages.”

Meanwhile, the Lodha Group is trying to gain the consent of Icon North residents by offering them compensation.

The project is very important for Bengaluru hopes

Lodha, along with Godrej Properties Ltd, is one of the top four best-selling developers in the country today. DLF Ltd and Prestige Estates Projects Ltd. It operates mainly in the Mumbai Metropolitan Region (MMR) but also has projects in Pune and Bengaluru.

Since the launch of Mirabelle, Lodha has launched multiple projects in Bengaluru, making the southern market a key city of operations for the developer. However, according to real estate experts, the success of Lodha Mirabelle is crucial for the developer to set a precedent in a new market like Bengaluru.

“Lodha paid for the construction of 12 lakh square feet and later received permission for additional construction of 8 lakh square feet. Any change in the project master plan requires the approval of two-thirds of the existing residents. The project has seen very good sales, adding a significant premium to the market. However, these regulatory and legal issues have slowed down the project,” said a real estate expert, who wished to remain anonymous.

In a somewhat similar situation, Competition Commission of India (CCI) in 2011 ₹630 crore in DLF After being found guilty of starting work on a project in Gurugram without approval, increasing the number of floors midway and causing delays. After paying the penalty, DLF appealed to the Supreme Court and the case is still ongoing.

A Lodha spokesman said the work was continuing as per schedule. “We are confident that we will deliver the homes as per our commitment,” the spokesman added. “We are committed to maintaining the trust of our home buyers and delivering the best.”