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Mumbai: Promoters of X BKC project invokes force majeure clause

MUMBAI: Invoking the force majeure clause in view of the Covid-19 lockdown, the promoters of X BKC project in Kala Nagar, Bandra have asked the original tenants of MIG Colony not to deposit their rent cheques for May-June period.

Citing financial difficulties and bad market conditions, the MIG (Bandra) Realtors and Builders Pvt Ltd, a part of DB Realty group, had given post-dated cheques to pay the hardship compensation or transit rent for a six- month period in three instalments.

The last of the three cheques dated April 7 was to be distributed to the tenants this week by the managing committee to cover the rent dues for May and June 2020.

However, on April 6, MIG (Bandra) Realtors and Builders Pvt Ltd wrote a letter to the MIG Society stating that the Covid-19 pandemic and the lockdown ordered by the government had seriously impacted its business, and hampered its ability to fulfil obligations.

The letter also recounted how the Brihanmumbai Municipal Corporation had gradually enforced a lockdown from March 16 to March 24 invoking Section 144, followed by the Epidemic Diseases Act, and then the Disaster Management Act.

“As you are aware that the construction has come to a standstill and so have the sales and collections. Post lifting of lockdown, we will require at least 60 days to remobilise the contractors and workforce for construction to recommence,” said the letter signed by Pankaj Rajmachikar, one of the directors of the company.

The Society Treasurer DP Somani wrote back to the promoters, accusing the developer of using force majeure clause allegedly to delay the payment of rent or hardship compensation.

A spokesperson for DB Realty said, “Since March 16, we are unable to carry out constructions and sales. As per the development agreement, this constitutes a force majeure event.”

April 14, 2020

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