[Resolved]  Puravankara Projects Limited — Puravankara: A Case of Tall Storeys or Tall Stories?

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Chennai, Tamil Nadu

To the most casual newspaper reader, Puravankara’s splashy advertisements luring middle class buyers to invest in luxurious high-rise apartments is nothing new. Their most recent project in Chennai, the ambitious Swanlake Purva Apartments in Kelambakkam, has been in the lurch and has failed to meet its completion date of April 2010. With several hundred buyers in the doldrums due to the project still pending completion, Puravankara has a lot of questions to answer to its current and prospective buyers and is currently dodging a clear and direct response.

It all began in 2007, when Purvankara attracted a wave of buyers for their Swanlake Apartments, at an exorbitant price of nearly Rs.600 per square foot over its competitors who all are constructing on the famous Old Mahabalipuram Road (OMR) corridor

Construction began in full earnest but is currently under a stalemate. Because the plan approval given by Town and Country Planning Authority to Purvankara in March 2007 was suspended in July 2007 as Purvankara did not comply with the the Open Space Regulation (OSR) that stipulates a certain portion of the current land under construction to be handed over to the Mamallapuram town panchayat, in addition to land that is part of a planned 12 metre wide road.

“This vital piece of information was not made known to any of the buyers,” notes Mr.Venakatasubramanyan, president of the now active Purva Swanlake Buyers Association (PSBA). PSBA is a self-organised group of over 40 buyers that came together in February this year. They represent buyers who have stopped patiently waiting for their luck to turn and instead are probing into why there has been endless construction delays and failed promises from an otherwise established company that is known for successful construction projects in Bengaluru. They are also trying to not just hold Puravankara accountable but are also encouraging some of the more reticent buyers, many of them away abroad in other countries and unaware of Puravankara’s shenanigans to find out more about the issues at hand.

In March, PSBA found out through the Right to Information Act (RTI), that the approval obtained by Puravankarafor the construction was suspended by the relevant Town and Country Planning Authority , and also, more seriously, proactively failed to inform its buyers about the suspension of permission to construct. “This makes it a very serious act of omission on Puravankara’s part,” notes Mr.Venkatasubramanyan.

This issue is indeed “very serious” because it implies that all the sales agreements between the buyers and the company have effectively lost their sanctity in view of the suspension of approval by the Town and Country Planning Authority.

Furthermore, the original building plan was supposed to have a maximum of eight floors but Purvankara has undertaken construction of 9th floor in one of the buildings. “It is truly ironic that at a time when the company is still trying to secure permission to complete construction, it is going ahead and adding to its list of violations. And ultimately, all this will affect only the hapless buyers,” notes Mr.Ravi one of the buyers.

Also disturbingly, when buyers signed on to this project, they signed away many of their rights to negotiate such ethical transgressions on the company’s part, although there is plenty of legal violations Purvankara stands to be accused of, for failing to inform their buyers about the plan suspension.

The current manner in which Purvankara has openly scorned its buyers is evident that as markets and capital become increasingly fluid and unaccountable, they tend to protect only the powerful corporations. Many of the buyers have already paid between 75 to 90 percent of the payments towards the already overpriced investments but are yet are a long way off from being handed over the keys to their promised shiny apartments that are Chennai’s answer to the gated communities of the west.

More than five months behind schedule, the buyers stand to lose several lakhs of rupees each if Purvankara doesn’t get its act together and have a plan B of action to complete construction, which it right now clearly does not. Many buyers are hoping that this is still an aberration on Puravankara’s reputation in the industry and that it will get its act together and offer a revised and a reliable timeline for completion of the project. “We have already suffered considerable financial losses in all the protracted delays by Puravankara, not to mention the enormous emotional and mental agony,” note a number of buyers in response to how this has really impacted them. PSBA today represents a lot of buyers who are keen to not lose a bulk of their savings that they have sunk into these dream gated homes, enamoured by Puravankara’s colourful advertisements and tall storeys. Or is it more a case of tall stories?

Given that PSBA’s appeals to the company have been only met with plain denials and factless counter-accusations, all reasonably documented in the investigative history of this project, it remains to be seen whether buyers will get the keys to the completed apartments and be financially compensated for any of their losses, that are growing with each passing day.