On February 10, when the Delhi Development Authority received Emaar-MGF’s request for a bailout, the authority weighed its options including taking Emaar-MGF to court over failure to live up to its contract. Emaar-MGF wanted the DDA to either extend financial help through a loan or purchase flats in the Commonwealth Games Village.

In a brief prepared by the DDA, for perusal during its recently-held authority meeting with the Lieutenant Governor on June 3, the DDA said it considered five options before deciding to purchase 333 flats from Emaar-MGF. “The DDA weighed the pros and cons in the event of the project developer failing to sustain the pace of work,” the brief said. Two of the options it lists are, “To file a legal suit for specific performance against the project developer,” and “to revoke the Project Development Agreement, forfeit the upfront fee of Rs 321 crore given by the Project Developer, invoke the performance guarantee of Rs 300 crore and find a new developer to complete the project.”

Both options were quickly shelved by the DDA because it was felt that “the chances of getting the project completed on time were remote.”

If taken to court, Emaar-MGF could have pleaded that due to ongoing cases in the Supreme Court on the environmental concerns over the project, they were finding it difficult to attract prospective buyers.

The DDA said that when the project was granted, only two developers had submitted their bids - Emaar-MGF and DLF.

Emaar-MGF was the only developer that qualified and hence the possibility of finding another developer with barely a year-and-a-half left for the Games was a difficult task.

... contd.