Synopsis

The Punjab and Haryana High Court has restricted Oberoi Realty from creating third-party rights. No further allotments can be made until AIPL's complaint is decided by DTCP. AIPL filed a complaint challenging the project's license and alleging FDI norm violations. Oberoi Realty stated that halting the project would cause irreparable loss to them. The court directed DTCP to decide the complaint by July 20.

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The Punjab and Haryana High Court has restrained Mumbai-based Oberoi Realty from making any fresh allotments or creating third-party rights in its recently launched Gurugram project until the Department of Town and Country Planning (DTCP) decides a complaint filed by NCR-based realty developer AIPL.

AIPL has challenged the validity of the project's licence before the DTCP and has also alleged violations of foreign direct investment (FDI) norms.

Sources said AIPL had signed a memorandum of understanding for the project in 2021 and that the dispute has been ongoing, with attempts made to resolve it.

"Considering the magnitude of the project and the fact that the rights of various allottees/prospective allottees are involved, it is further directed that till the complaint/representation is decided, no further allotment shall be made by the developer to any prospective allottee nor shall any further third-party rights be created by them," the court said in its order.

The court directed the DTCP to decide the complaint on the scheduled date of July 20 after hearing all stakeholders, including the petitioner.

"In case the aforesaid application for any reason cannot be decided on the aforesaid date, then the director, Town and Country Planning, will hear the application on a day-to-day basis and decide the same within a further period of two weeks strictly in accordance with law," the court said.

Oberoi Realty said it would pursue the legal remedies advised by its counsel.

"We wish to further clarify that the said order does not impact any existing sales already concluded. We would also like to clarify that there is no stay on the construction of the said project. Accordingly, we believe that the above-mentioned order does not have any adverse material impact on the business and operations of the company," Oberoi Realty said in a stock exchange filing.

The project spans about 14.8 acres on Golf Course Extension Road in Sector 58, Gurugram. Oberoi Realty recently launched the development and reported gross bookings of about Rs 8,109 crore for Three Sixty North, its first luxury residential project in the National Capital Region.

According to counsel for AIPL, foreign direct investments were made in the project under licences granted by the DTCP at different points in time.

Oberoi Realty told the court it has invested about Rs 500 crore in the project and that halting the allotment process would cause irreparable loss. It said about 350 allotments have already been made and collections have been received from buyers, while the project's estimated value is about Rs 8,000 crore-10,000 crore. The company also told the court there had been no violation of the FDI policy or any other law.

In the first phase, Oberoi Realty plans to develop about 3 million sq ft with a revenue potential of Rs 11,000 crore. The overall project has an estimated revenue potential of Rs 16,000 crore.

The company is demolishing the existing structures on the site and plans to develop seven towers and a boutique retail area. In the first phase, it has launched 3 BHK + Studio, 4 BHK + Studio, duplex and penthouse residences, with saleable areas ranging from about 5,500 sq ft to more than 13,000 sq ft. Prices start at Rs 18 crore, excluding applicable taxes.