Campa Cola case: Lessons for the home buyer

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An aerial view of the Campa Cola Compound in Worli, Mumbai. Express An aerial view of the Campa Cola Compound in Worli, Mumbai. Express
SummaryIn absence of a regulator for real estate sector, the onus of due diligence lies with the buyer.

The case of the Campa Cola Compound in Mumbai is an eye opener for all stakeholders in the real estate sector and especially the prospective home buyer.

The Supreme Court, in its verdict delivered in February, has exposed the reality of civic regulation in the opening lines of its order: “In the last five decades, the provisions contained in various municipal laws for planned development… have been violated with impunity in all the cities… and those entrusted with the task of ensuring implementation of the master plan, etc., have miserably failed to perform their duties.”

Caught in this web are the residents of the illegal flats who have until May 31, 2014 to vacate. The court is set to take a view on the case again, after it stayed demolition on November 12 — the date it was set to take place — on humanitarian grounds.

This can happen to any home buyer if care is not taken at every step before buying a home. To see how, it would be instructive to revisit the Campa Cola case.

the case

The land in question is owned by the Brihanmumbai Municipal Corporation (BMC) and was leased to a company Pure Drinks Ltd, which manufactured the Campa Cola brand of beverage in the 1980s. This company sold development rights to the land to a group of three builders to construct homes on a part of the plot, now known as the Campa Cola Compound.

The builders, during the period from 1984 to 1989 constructed 35 more floors than what was approved by the BMC.

“The additional floors were in blatant violation of floor space index (FSI) applicable in Mumbai then. ‘Stop work notices’ were sent but the builders continued with the work assuming the violation will be ‘regularised’,” an officer of the BMC told The Indian Express on condition of anonymity.

The builders kept modifying plans but none of the plans with these floors were approved by BMC, which eventually did not issue the Occupation Certificate (OC) to the project.

Despite this hurdle, the builders went ahead and sold the illegally constructed flats to the home buyers. BMC did not give water connection in the absence of OC and the residents of this portion continued to manage water through tankers for almost a decade.

The case filed against the BMC by the residents for getting water connections exposed the illegality of the structure in court, and after the

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