For 12 years, the Lok Housing and Constructions Ltd. has enjoyed a rare privilege whereby all claims, rights, liabilities against it are suspended, claim four members of a co-operative housing society who have taken the state government to court for this order.
Laxmidas Thakkar, G Krishnan, KK Prabhu and Sundar Poojari, all members of Lok Everest at Mulund West, have challenged a May 26 notification issued by the Industries, Energy and Labour Department conferring "relief undertaking" status upon Lok Housing and Constructions Ltd.
The members have approached the Bombay high court challenging validity of the government's decision to confer this rare concession granted under the lesser-known Bombay Relief Undertakings (Special Provisions) Act of 1958.
As per their petition, by conferring "relief undertaking" status, the state government has not only suspended all claims, rights against and obligations or liabilities against by the company, but has also stayed all legal proceedings initiated for enforcement of such claims, rights and liabilities.
According to the notification, "Relief Undertaking" status has been conferred upon the construction company towards unemployment relief, considering the financial assistance of Rs1.44 crore availed by the developer from State Industrial and Investment Corporation.
The petitioners have objected to the notification contending the grounds for its issuance were flimsy as, according to them, audited annual accounts of the company show that its net worth has been more than sufficient as compared to amount required to clear salaries of its employees.
Contending that the state government had been issuing the notifications arbitrarily and on dubious grounds, the petition states, that this only facilitated the developer in misappropriating large amounts from flat purchasers.
The petition alleges that the company misappropriated amounts collected towards corpus fund and property tax payment (of Lok Everest). The petition also alleges that the company deliberately conceals the fact that it is a "Relief Undertaking" while advertising projects.
When contacted a spokesperson for Lok Housing and Constructions refused offer any comment on the litigation stating the matter is sub-judice. The petition is likely to come up for hearing before a division bench of justice PB Majmudar and justice Mridula Bhatkar on December 22.