Palais Royale: A 15-year saga of delays for India’s tallest residential tower in the making

A spectacular 84 storeys—the most of any residential building in India—with apartments ranging between 4,800 sq. ft and 45,000 sq. ft, located in the tony Worli area of India’s financial capital Mumbai, and with amenities rivalling five-star hotels, Palais Royale had everything needed to live up to its name, including a buyer list that featured the super-rich.

But the building, and the dreams of its buyers, are still work in progress 15 years after the ground was first broken. Mired in delays and embroiled in court cases with several buyers even today, the project missed yet another completion deadline in December 2024.

The deadline has been extended thrice under the project’s new promoter, Pune-based Honest Shelters Pvt. Ltd (two extensions happened during the covid-19 pandemic). Even under original promoter Shree Ram Urban Infrastructure Ltd (SRUIL), the project was delayed by several years due to litigation with a non-profit organisation. The project received regulatory nod for construction in 2005 and several buyers had purchased apartments as early as in 2010.

Palais Royale has so far received occupation certificate (OC) for 53 floors—for ground floor plus 27 levels in August 2022, and for another 26 levels in December 2024, as per reports.

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However, one homeowner told Mint that no apartments have been handed over yet. “We think they will finally hand it over by the end of this year (2025) at least,” said the homeowner, a fund manager who did not want to be identified as he was speaking about his private investments.

A site visit by Mint showed construction continues at the top levels of the building.

Honest Shelters and its advocates did not respond to requests for a comment.

Testing Rera

The building is a flagship case that is testing not just the patience of the homebuyers but also the robustness of the Real Estate (Regulation and Development) Act, 2016, which was enacted to protect them.

Legal experts say if a project misses its deadline without an approved extension, buyers can file a complaint with the state’s Real Estate Regulatory Authority (Rera) for compensation. Rera and consumer forums can also order refunds with added compensation and interest, according to legal experts.

“Rera has the jurisdiction not only to penalize the builder but can also cancel the certification,” said Alay Razvi, managing partner of law firm Accord Juris.

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Rera may also allow an extension of deadline for projects in specific cases, such as unforeseen events.

“Developers must get allottee consent and provide detailed documentation, including financial plans, for extensions,” said Ritesh Khare, advocate and managing partner at law firm Magnus Legal Services LLP.

Mint could not ascertain whether Honest Shelters would apply for another extension. The project’s proposed completion date remains 30 December 2024 on the Maharashtra Real Estate Regulatory Act (MahaRERA) website.

Delays and more delays

The building was originally envisaged to be completed by the mid-2010s, but a city-based non-profit organization Janhit Manch took SRUIL to court through a public interest litigation in 2012. The non-profit claimed that the developer built excess floor space in each apartment under the guise of refuge area. Refuge areas, where residents in high rises can gather in cases of emergencies like a fire for evacuation, are exempt from the floor space index (FSI) calculation, which governs how much habitable area a given residential project can have.

The building had a total refuge area equivalent to an alleged 70% of its total constructed area, which was abnormally higher than the norm, Janhit Morcha claimed, a per media reports from 2017. Regulations require developers to keep refuge area equivalent to about 4% of the total area.

After years of litigation, the Supreme Court in October 2019 cleared the project and dismissed the NGO’s appeal. But by then, SRUIL was insolvent and no longer in control of the project. Just months earlier, the project’s lender Indiabulls Housing Finance Ltd (IHFL) had auctioned the building to recover dues. It was purchased by Honest Shelters for ₹705 crore.

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The new developer was expected to complete the project by 30 December 2022. The deadline was extended to 30 December 2023 after Maharashtra Real Estate Regulatory Act (MahaRERA) gave two six-month extensions to all under-development projects in the state due to the covid-19 pandemic.

Thereafter, the builder sought another 12-month extension citing pending litigation and difficulty in necessary documents from the former promoter and house owners.

“Furthermore, we would also like to highlight that these pending litigation proceedings have major legal issues involved which has also significantly caused a delay in completing the said Project within stipulated timelines as well as sale of units in the said Project,” Honest Shelters said in its application for an extension to MahaRERA in November 2023.

Spate of litigations

The litigations include instances where Honest Shelters terminated the purchase agreements of homebuyers after they failed to provide proof of payment made to the erstwhile promoter of the project. MahaRERA and the Bombay High Court have so far ruled in favour of the homebuyers in such cases as long as they furnished proof of payments.

Meanwhile, many homeowners have also taken Honest Shelters to court seeking payment of interest on delays. They have sought interest since 2015 in some cases, arguing that the new developer has also acquired the liabilities of the erstwhile promoter when they took over the project.

The courts have so far sided with the developer in such cases, ruling that Honest Shelters is not liable to pay interest on delays caused by the erstwhile promoter. However, the authorities may rule differently in case of delays after Honest Shelters took over as the promoter, experts said.

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Shimpy Arman Sharma, partner at Anand Sharma & Associates, stated that buyers who choose to stay in a delayed project can claim “compensation including interest from the builder, for every month of delay, until the handover of possession to the buyer”. If they withdraw, “the builder or promoter must return the amount paid by the buyer along with interest or compensation for the delay”, he said.

The silver lining

To be sure, one thing that would bring smiles to homebuyers is the appreciation in value of the property—prices of the apartments have risen by 40% in less than a year as the project nears completion, as per publicly available information.

For instance, an apartment on the 62nd floor in the building was sold in May 2024 at a price of just under ₹76,000 per sq. ft as per data from Zapkey, a property registration data aggregator. But in December the same year, the promoters of Metro Brands Ltd bought five apartments on the 61st and 62nd floors at a price of ₹1.05 lakh per sq. ft, as per reports.

In a world of its own

The massive Palais Royale, about as tall as the Eiffel Tower in Paris, was conceived as an ultra-luxurious skyscraper. The promise was simple: buyers get to live in large apartments with panoramic views of the sea and the city with amenities that could put many five-star hotels to shame.

Belying its vertical span of 84 floors, the building has only 162 apartments, with several lower floors dedicated to parking and amenities. The smallest apartment in the building has a carpet area of around 4,800 sq. ft– nearly a magnitude higher than the average home in the city. At 44,500 sq. ft, the largest apartment is more expansive than three Olympic-size pools.

Despite the heavy construction activity, Palais Royale is a different world from the busy market just 100 metres away. Manicured plants adorn the driveway from the street to the building, standing in sharp contrast to the crowded footpath outside that often doesn’t have enough room for people to walk.

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Once inside the compound, one can only see the other high rises coming up alongside Palais Royale. The rustic working-class neighbourhood has been strategically blocked from view with tall trees and metal sheets ringfencing the property.

Now it’s a question of when this promise translates into reality.