Punjab and Haryana High Court halts fresh allotment of flats in Oberoi Realty's ultra-luxury project in Gurugram

The Punjab and Haryana High Court has restrained further allotment of flats to homebuyers in Oberoi Realty’s ‘Three Sixty North’ residential project in Gurugram till Director Town and Country Planning (DTCP) takes a decision on a complaint seeking cancellation of its license.

A Division Bench of Justice Jasgurpreet Singh Puri and Justice Sanjiv Berry directed the DTCP to decide the complaint moved by Advance India Projects Limited either on July 20 or within two weeks after giving adequate opportunity of hearing to all the stakeholders.

“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 the complaint/ Representation [(Annexure P-11(A)] is decided, no further allotment shall be made by the respondent Nos.3 to 14 [IREO Group and Oberoi] to any further prospective allotee nor shall any further third-party rights be created by them,” the Court directed on July 7.

The stay comes just days after an announcement regarding the launch  of the ultra-luxury project spread across 14.8 acres near Golf Course Extension Road in Gurugram's Sector 58. The estimated cost of the first phase of the project was about ₹8000-10,000 crores.

While staying further allotments at the residential project, the Court said that it cannot close its eyes to the fact that mega projects involve thousands of crores of rupees and rights of innocent allottees.

The order came on a petition moved by Advance India Projects Limited which alleged that IREO Group and Oberoi Realty had acted in contravention of the law.

As per the plea, the license was initially obtained in favour of the IREO Group entities and thereafter, the same was transferred to Oberoi Realty.

Advance India Projects alleged that IREO Group entered into a memorandum of understanding (MoU) with it when they received foreign direct investment (FDI) for the purchase of the land. However, the license was subsequently transferred to Oberoi Realty which has already allotted about 350 units to various allottees. 

The petitioner said that the allotments were taking place despite the pending dispute over transfer of license and a separate litigation before a commercial court. One of the major points raised before the Court was that the initial licensee, an associate company of the IREO Group, was not the owner of the land when the license was granted to it.

“The aforesaid grant of licence was totally illegal and was in violation of the provisions of the [ Haryana Development and Regulation of Urban Areas] Act of 1975, particularly Section 3 thereof, which provides that the licence can be granted only to the ‘owner’ of the land having clear title, who is desiring to convert his land into colony,” it was argued. 

In response, IREO Group and Oberoi Realty said Advance India Projects had failed to secure an interim injunction from the commercial court in relation to the terminated MoU. They also argued that the license was granted by a competent authority and the petitioner has no locus.

The State said that it will decide the complaint/representation seeking cancellation of the license in accordance with law. Considering the same, the Court called for an expeditious decision to settle the controversy.

Senior Advocates RS Rai, Chetan Mittal and Nalin Kohli appeared for the petitioners.

Additional Advocate General Sandeep Chhabra appeared for the State of Haryana.

Senior Advocates Gaurav Chopra, Akshay Bhan and Aashish Chopra represented the respondents.

[Read Order]