Kochi: In a major relief to residents of Chanderkunj Army Towers, the Kerala High Court has modified certain directions of a single-bench judgement ordering demolition and reconstruction of Towers B and C. The judgment ensures higher rent for the residents, who will have to vacate their flats for demolition, and eases added financial strain for them, while pressing AWHO to complete rebuilding without further dispute. It also says that the residents are eligible for additional remedies.

Earlier, on February 3, a single bench had ordered demolition and rebuilding of the towers, with costs to be borne primarily by AWHO, after various structural study reports on the buildings, which are crumbling due to severe structural defects. The division bench of Justice Amit Rawal and Justice PV Balakrishnan, which heard 21 writ appeals filed by the Residents Welfare Association (RWA) and the Army Welfare Housing Organisation (AWHO), delivered its judgment on September 10. The order was published on Wednesday.

The court upheld the single bench's decision to increase the monthly rent for alternate accommodation to ₹30,000 for Tower B owners and ₹35,000 for Tower C owners. However, the court modified the single bench order to include a provision for a periodical rent increase, a common practice in lease deeds. The committee will fix this increase based on the lease deeds submitted by the residents.

“While increasing the rent of ₹30,000 and ₹35,000 for tower Nos. B and C, the learned Single Judge failed to notice that the increase clause kept in the lease deed by a lessor is a common practice while letting out the premises on rent, for the restoration of the flat and reconstruction would approximately take five years,” said the order.

The court set aside the exclusion of certain non-resident owners from receiving rent from AWHO. It reasoned that army personnel who rent out their flats to offset loan EMIs or who need to occupy the flats after retirement should not be denied this benefit. These individuals must provide proof of their loan payments or retirement to the committee. The court noted that AWHO has already deposited ₹2.97 crores in an escrow account with the District Collector for six months' rent for 152 flat owners.

The court modified the direction that capped the reconstruction cost at ₹175 crores. The AWHO's counsel stated that the organisation is not confined to this figure and is prepared to incur all necessary expenses, which are currently estimated at approximately ₹211.49 crores. “It is made clear that AWHO is bound to incur all the expenses, which during the period of construction and completion have/or may increase,” the order said.

The court dismissed the single bench's direction that the committee could collect an "extra amount" from owners for the new building, stating it would be an unnecessary burden on them. The single judge had earlier said that since the residents had been living in the building and earning rent since 2018, and now they are going to get a brand new building, the committee could decide if they should pay an extra amount. The Division Bench rejected this reasoning, calling it based on “surmises and conjectures”.

The court also set aside the permission granted to AWHO to construct additional floors while reconstructing, based on AWHO's statement that it had no intention of doing so. This was to prevent litigation over ownership issues. The court modified the direction that any extra amount received by AWHO from arbitration proceedings against the contractor be passed on to the residents. The court reasoned that AWHO has its own claims for rent and other costs in the arbitration.

The court affirmed that owners and occupiers can still pursue legal remedies for compensation and damages before the Kerala Real Estate Regulatory Authority (RERA) or other statutory bodies, as the High Court cannot determine such claims. The court also clarified that AWHO, as the promoter, is responsible for making all statutory applications for building reconstruction. The competent authorities are directed to process these applications without objection.

The court ordered that the occupancy certificate for Towers B and C be kept in abeyance until the towers are demolished and reconstructed and certified fit for occupation. This was to prevent the allottees from being burdened with municipal taxes for a building they could not occupy.

Meanwhile, the court dismissed the individual appeal filed by Colonel Ciby George (Retd.), one of the residents, regarding the low rent fixation, stating that as a member of the RWA, he could not raise this grievance independently. He was directed to vacate the premises within seven days, like the other residents.