Thane-based builder wants to convert part of mall into corporate park

The Siddhi Group—that developed Lake City Mall in Thane—is asking shop owners to sign a no-objection certificate so that it can lease the space to corporates

Thane-based developer Siddhi Group Developers (earlier known as Shree Balaji Builders and Developers) is in the process of scrapping part of its ambitious mall project and wants to convert this space into a corporate park. The developer is asking all people who had bought space in that particular section of the mall to sign a no-objection certificate (NOC) allowing it to lease the space to corporates.

Balaji Builders opened booking for its Lake City Mall in 2004. The mall has a total area of 5.5 lakh square feet (sq ft). Many people with a dream to own a shop in a big mall invested huge amounts and even paid as much as 90% of the total amount at the time of booking. The mall was planned to be built in two parts, block A and block B. It was expected to be ready in two to three years. However, the project was delayed beyond that due to slow construction activities.

Big brands such as Big Bazaar and McDonalds were the first to receive possession and open their shops at the Lake City Mall. However, due to delay in completion of the rest of the mall, no other big brand was interested in opening shop there. In the meantime, the developer also changed its name to Siddhi Group from Shree Balaji Builders and Developers.

Now, after taking about six years to complete the project, the developer wants to convert the remaining part of the mall into a corporate park citing slowdown in the retail industry as a reason. The Siddhi Group has been asking people who had booked shops in block B to sign NOCs so that it can lease the space to corporates. It is promising to give a minimum of Rs50 per sq ft on carpet area as rental income to shop owners. This is unacceptable to shop owners who had invested money in the property. They feel that the builder may earn more than Rs100 per sq ft as rental income from corporates but will give only Rs50 to the shop owners.

At present, the area around the mall attracts an average rate of Rs70 per sq ft for commercial office space. In addition, there is no mention of any timeframe in the NOC, which may make it difficult for the shop owner to take back possession of his property. The developer has also kept mum on matters like who will sign the lease agreement and what would be the period.

One such person Ram Mohan (name changed) had bought two shops on the ground floor of block B by paying about 90% amount of the agreed price. He is eager to open his shop in the mall. However, the Siddhi Group wants to divide block B into two parts, with about 25% area converted into a business centre and remaining 75% as a retail section.

According to sources, the builder has already started booking of the business park space without informing the shop owners. It has also blocked the 25% area. Unfortunately, Mr Mohan's shop falls in this section. He is not happy with the promised returns from the builder. He says, firstly the rate of return on his investment comes to just 0.5% per month or 6% per annum that too after a 'lock-in' period of six years. This is when he would have earned more money as pure interest income from his investment, deposited in a bank.

However, with the Siddhi Group forcing shop owners to sign the NOC, is there any option left for Mr Mohan? We asked some legal experts. According to Vinod Sampat, advocate and founder, Vinod C Sampat and Co, "If the builder does not keep up to his commitments, the owners of the properties have various methods to get the place—like issuing a legal notice, approaching a consumer court, criminal court and also police authorities.”

The claim of a slowdown in the retail industry by the Siddhi Group is also doubtful, especially looking at the higher number of footfalls in Big Bazaar and McDonalds. Even the change in infrastructure and the competing market of Thane has caught the interest of other big players like the Raheja Group and the Runwal Group. Both of them have launched KORUM and R-Mall, respectively in the city.

Officials from the Siddhi Group were not immediately available for comments. Despite calling their office several times throughout the day, we were told that the concerned officials “were in a meeting.”




7 years ago

i have my shop in mall A on second florr, now on this very date i have heard that builder kapil sharma or jaywndra gala are selling B mals shops at rate of 15000per sqft, i have just heard i dont knw its true or no, but here in A mall he hasnt look anything all shops are been converted to offices,
builder took AC money also which he promised to be centrally and now AC has been removed, so what is that money taken for,
how will we get that repay of our investment, i tried to mail many media person to make shooting, and make it publically in tv about this cheater builder
what action can we take now, i have my shop running and no footfalls, he has just been interested in making money from the rent he gets from offices now,
3rd floor was for food court when we booked but now 3rd floor is been on rent to future genrali insurance cmpany, nice he is eating the rent
how can we book case againt the builder
no media person has called or even took step to check in and show to whole mumbai how this builder is working
u can call me 9820173739

Hitesh P

7 years ago

I have purchased several shops in the adjoining building and would like to appreciate the Builders effort for completing the work so far. It should be noted that the Builder had started the Project in 2004 and subsequently there was a Notification from MPCB to get the clearance of project from the Environmental committee... along with this project there are several other projects which were stuck unnecessarily for the environment clearance. I would appreciate the Fact that after getting the Environment clearance in 2007 ( yes the work was stopped for almost 2 and a half years and no one but the central government is to be blamed) the builder is almost on the verge of completing the project. during this period the builder has hardly troubled any one for regular payments as per the schedule initially mentioned. I have received payment reminders almost after the gap of 8 - 10 months and was never pushed to make payments. I would humbly request all the investors to make their investment successful you should cooperate and try to make this project a successful in interest of investment made by all of us



In Reply to Hitesh P 7 years ago

Dear Hiteshji,

You seem to be favoring the builder, which is good and should be appreciated, if this is correct.

This has to be proved by the possession date and feelings of all the investors !

Mrs Rakhi Gupta

7 years ago

I am also an owner of a shop on ground floor of B Block. Builder is not ready to give any commitment on pocession date - but is sending me threatning letters mentioning that the agreement (I have done stamp duty and regesteration) stands cancelled because I have not paid the rest of the 10% that is pending. I would request all Shop owners to come together and fight the builder. Pls contact me at 9971215060.



In Reply to Mrs Rakhi Gupta 7 years ago

hi mrs rakhi,
sorry for that day couldnt talk much and dint call back, after diwali i will visit at my shop and if we can meet at mall than fine
but i dont think now fighting with builder is possible cause all owners now have gave their shops on rents and some have sold, now whole shopping mall is been converted to offices, if we meet than we can see what happens
now i have heard that builder is taking 1500 rs per sq ft rate for transfer charges, is that leagl, i have heard this from other estate agents who are in the mall,


In Reply to Mrs Rakhi Gupta 7 years ago

Rakhiji, I am also the owner of a shop. Tried to contact you, but your mobile was switched off. Please reply by email.

Mrs Rakhi Gupta

In Reply to Sunil 7 years ago

I would request all shop owners to please come together - we have suffered huge losses due to B Block being under construction for over last 4 years. I am receiveing letters informing me my shop is cancelled - when I am asking for how the payment should be made there is no response


In Reply to Mrs Rakhi Gupta 7 years ago

check this site out

ASCI upholds only one complaint during this season

Summer is seeing a decline in the number of misleading advertisements. ASCI has forbidden airing of one commercial out of ten complaints in March

The Consumer Complaints Council (CCC) of the Advertising Standards Council of India (ASCI) has upheld only one complaint out of the ten complaints filed by consumers against advertisers. Nine other advertisers successfully justified claims made in the advertisements or were within defined parameters and hence were given permission to go ahead with their ads.

Kimberly-Clark Lever Private Limited’s ‘Huggies Dry Comfort’ advertisement claims that they possess the best diaper leading to ‘88% of parents in India going gaga over their product’. However, the claim is based on their internal survey, which is insignificant. CCC believes that the claims in the advertisement are false, misleading, and attempt to confer an artificial advantage on Huggies by citing a non-independent source which is neither reliable nor authentic in respect of rating or grading of diapers in India. Kimberly-Clark Lever Private Limited has agreed upon complying with the decision by discontinuing the ad.

According to ASCI’s secretary-general, Alan Collaco, “Involvement from consumers is on the rise and hence this month we received over 120 complaints. However, on further inspection, we only found one brand contravening the defined norms.”

Brands whose complaints were not upheld are Sugar Free Natura–Diet Sugar, Pampers Active Baby Diapers, Gillette India Ltd, T.I.M.E., Godrej Hair Dye, Sensodyne Toothpaste, Castrol Lubricants, Listerine Mouthwash, Reliance Big TV Limited, and Set Wet Zatak Deodrants.


A view of the insurance business from a veteran’s eye

Fali Poncha’s views on the insurance industry and how insurance shapes your world

On Saturday, 22nd May, Moneylife Foundation witnessed Mr Fali A Poncha, a veteran of the insurance industry, speaking about the various topics and issues relating to the insurance sector. Mr Poncha, who has been in the insurance industry both pre- and post-nationalisation, was also a director and special advisor at Tata Risk Management Services for nearly 15 years and is currently executive chairman, International Reinsurance and Insurance Consultancy & Broking Services Ltd. He spoke to an interactive audience regarding consumer issues and the insurance industry as a whole. He expressed his view on a number of topics.

History of the Industry

The penetration of insurance is low because traditionally awareness in the area of non life insurance has been low. For nearly 30 years post-nationalisation and pre-opening of the insurance sector, the focus was selling to corporates.  Individuals were not on the radar of insurers’ field forces as the cost of sale was disproportionate to the premium. The situation has changed with the deployment by the four State-owned and 15 private insurers of agents, corporate agents, brokers and bancassurance.

Importance of policy wordings

To the main topic. “Is insurance a safety net”, Mr Poncha’s opinion was “it definitely is, but that would depend on how well one understands what is covered and what is excluded, for unlike other contracts the insurance policy is a printed embedded contract. Unless you know what questions should be asked, you will not know what coverage you as an insured have bought.”

Insurance contracts (policies) are lengthy, using verbose legal language, time consuming to read and exhausting to comprehend.

For instance, a Personal Accident cover is the simplest policy but states that the coverage is in respect of death or disability following an accident by physical, external, violent and visible means. Would a claim be payable if you have ingested gas from a leak of gas which is invisible? Travel by private aircraft is normally excluded. Is the ordinary individual in a position to zero in on what the coverage is? This is further compounded by the fact that insurers will not offer interpretation of the policy at the time insurance is bought and which at the time of a claim, will be left to the Loss Adjustor appointed by the insurer to interpret the policy terms and determine the validity of the claim.

Why to negotiate terms of cover

Every cover needs to be properly negotiated so that the essence of any contract is met which is that both parties understand “the same thing in the same sense.”  At present there are insurance policies where regulations do not permit alteration of one word and there are others where alteration can be made. The scope of cover can be increased or it can be voluntarily reduced depending on the perception of the risk by the insured. Premiums also are subject to negotiations.  No doubt, to be able to do so the insured would have to be guided by an independent professional

Efficiency rating of the functioning of the industry

The public sector insurers are burdened with a legacy of the past and the private insurers have been in business anywhere from 2 to 10 years and have a long way to go. Post de-tariffing insurers are facing serious problems in that market forces are at odds with sustainable premium levels. Availability of trained
manpower is far short of the industry’s requirements. All this has resulted in a serious deficiency in service and addressing this deficiency is not being accorded the top priority it merits.

The other serious problem is that insurers are functioning in isolation of the needs of the consumer as the demand side is not involved in the industry’s plans and development of products.

The Insurance Ombudsman

Mr Poncha said that this channel of grievance redressal is, unfortunately, available only to individuals insured and in regard to claims where a claim is less than Rs20 lakh. The period for settlement of a dispute before the Ombudsman normally takes about six months. The process is, therefore, not lengthy nor is it expensive. Additionally, the insured has the advantage of not being bound by the order of the Ombudsman and can seek other forums for redressal. On the other hand, the insurer is bound by the order of the Ombudsman. The Ombudsman’s scope should be widened to include other entities whose recourse at Court is lengthy and very expensive.

Feedback from the audience said that the insurance Ombudsman scheme is not well known or as widely publicised as the banking Ombudsman. Also, nobody even answers the telephone numbers in the insurance Ombudsman’s office.

IRDA Regulations/Code of Conduct

In life insurance, if a claim is not settled within a certain period after the claim is made and all documents submitted, then interest starts. In non-life insurance, if the claim is not settled within 10 days after the final offer of claim is made, then only interest starts which is grossly unfair as there is no penalty on an insurer for unduly delaying making a final offer.

Mr Poncha said that a Code of Conduct for insurers was supposed to come out in 2002, however, till date there is no code of conduct in place. Yet in the pre-nationalisation days when there were 107 insurers, there was a voluntary code of conduct that was subscribed to by all.

Who can insure?

Only if you have an insurable interest, i.e., you stand to suffer a pecuniary loss if something happens can you insure. If you do not have any exposure then you cannot insure,” said Mr Poncha. However, one can have an exposure and, therefore, insurable interest even as a creditor, as an employer, as a bailee, etc.  It is not restricted to ownership.

How much insurance is enough?

“An insurance policy is based on the principle of indemnity, i.e., you 
should be put back in exactly the same position as you were before the happening of the occurrence which led to the loss. The principle of indemnity is an absolute principle, so you should not insure for more than the maximum you stand to lose,” Mr Poncha said. He added that it means that one should not seek to make a profit out of a misfortune. “However, there are exceptions to the rule— life insurance is one of them, because there is no value one can put on a life,” he said. There are other exceptions too such as personal accident insurance, objects of art, marine insurance etc. which can be “Agreed Value” policies.

How should you insure?

Unlike every other contract that is governed by the principle of “buyer beware”, the insurance contract is based on the principle of “utmost good faith.”   “Everything and anything which is within your knowledge and which could influence the insurer deciding on whether he will grant or not grant or impose certain terms and conditions, must be stated and declared by an insured to the insurer,” said Mr Poncha.

So you are required to declare material fact to the insurer. Failure to do so could render your contract voidable, as it would constitute a misrepresentation under the Law of Contracts; a simple example would be if you are a smoker you must mention that in your life insurance proposal.

Take on Personal Accident Insurance

“We have the cheapest personal accident cover in the world. The same cover overseas would cost more than 20 times. The maximum one would pay for a personal accident insurance in India for someone engaged in sedentary work would be Rs110 for a Rs1 lakh cover,” said Mr Poncha. He says people in India are on to a very good thing in the personal accident cover, adding that it is a necessary and essential policy for people.

It covers you for accidental death, permanent total disablement, which is the loss of any two limbs, eyes, hands and legs. Mere loss of use of a limb is not recognised. It has to be amputation at the wrist or ankle or going blind, not just impaired vision. It can be a combination of any two in an accident and the compensation can equal the death benefit. If in an accident you survive, but both your arms are gone then you get sum insurance covered, this is because you are permanently disabled. If it is only one limb, then you get half of the cover.

He added that it is a very good comprehensive cover. It will cover you even for the loss of a thumb, loss of a first phalange of your finger, etc., all clearly defined in the policy. Mr Poncha stressed that no one should be without personal accident cover.

Issues with the two-wheeler sector

People having motor vehicles must have third party motor insurance, as per the Motor Vehicles Act. However, nearly 50% of people who are owners of
two-wheelers are reportedly only insured for the first year as they do not insure themselves for the next year onwards.

“There is a constant debate as to why not make it a life-time or a 15-year policy and instead of doing that insurers are saying that they might want to review the contract from year to year. The true sufferer is the innocent victim on the road,” Mr Poncha said, “as he has to pursue the uninsured owner of the vehicle” and not the financially solvent insurer if there is no insurance.

How is insured declared value of a motor vehicle calculated?

The insurance is split into Insured’s Value (IDV) and premium. “Even your brand-new car cannot be 100% insured,” said Mr Poncha. The IDV has a very strict formula and is fixed. For instance, a new car will be insured for 95% in the first year, reduced in the 2nd year by 15% and then 10% each year up to 5 years.  You can negotiate a discount ranging from 30% to 50% from insurance companies.

Treatment of Senior Citizens

Mr Poncha said that the experience of senior citizens with insurance companies is appalling. As one grows older, one’s health deteriorates and that is the time one requires health insurance the most but one is unable to secure full meaningful cover. In India most companies are reluctant to provide insurance for mediclaim coverage after the age of 65.

Mr Poncha said the senior citizens can opt for an insurance cover that provides a limited coverage for health insurance. However, something is better than nothing.

How does mediclaim work?

Mr Poncha said that people are getting a pretty good mediclaim insurance package. Insurers are losing money on mediclaim because against Rs7,000 crore of premium in India, the claims are around Rs9,700 crore. Besides this, there are acquisition costs, intermediary costs, etc.

Hospitalisation expenses in metros go up by 18% to 22% per annum. For the same plan, for which employees are insured with us in Mumbai and employees insured in Tier 2 or Tier 3 cities, the hospitalisation cost is 40% lower.

He said that at one time there was an idea that there should be higher premium in metros than in other cities. Mediclaim, as it exists today, is a damn good deal for the insured because one pays a lower premium than what one should pay and still get significantly good coverage.

View on third party administrators

Mr Poncha said that third party administrators (TPAs) were appointed by insurers to administer claims in a fair and expeditious manner. In actual fact this has not been the case and despite the authorities being aware of this, no remedy has been put in place and his views on TPAs’ functioning were not favourable. He said, “I have a contract with the insurance company and not the TPA. So, there is a privity of contract between the insured and insurers. Personally, I am allergic to TPAs functioning and insurers keeping arms length from claims.” 

The illusion of cashless

“Cashless is an illusionary advantage,” Mr Poncha said. In order to receive cashless facilities, you have to get an authorisation by the insurance company or a TPA before you go into a hospital and regrettably no differentiation is made by TPAs between emergency and planned hospitalisation. 

Insurance cost/inflation

In response to a question that should not claims be index-linked and should not benefits offered be greater, Mr Poncha said, “Everything is possible, but are people ready to pay? So, let us look at it from an insurer’s angle.” He added that any business transaction is a good transaction if both parties have a reasonable chance to benefit from the same. He said on a like-to-like basis in the UK and the US, the premium is 25 times that in India. Besides, the claim cost, insurers have to look at other costs like acquisition costs and administration costs.

Credit Cards

He also said that insurance offered by credit card companies cannot be relied upon, as they do not provide you with the policy details. He gave instances of claims for PA cover linked to credit cards having been rejected on the ground that terrorism was not covered. Several families of victims of the July 2006 train blasts were traumatised at finding that they were not eligible to make a claim. 



Venkat Aiyer

7 years ago

A very good article that gives various untold facts of insurance policies both life and nonlife.

Rajesh Sethi

7 years ago

What is Insurance and why was it introduced ,what is the need for insurance and whats its base made of vis a vis yesteryears and today has the insurance industry adopted changes or is still functioning on the age old theories.Need based insurance is a must.The word Insurance means future and not urgent need.Is insurance meant for all or only for thsoe who can afford it.How can insurance help the economy and economic situation of a person.Can there be a insurance product that serves all purspose.There is no end to insurance

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