EXCELSIOR Owners Welfare Association

EXCELSIOR Owners Welfare Association

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Content Promise Vs Performance…………………………………………………… 3 Introduction……………………………………………………………………… 4 The Core Issue…………………………………………………………………… 6 Vox Pop…………………………………………………………………………….. 7 HC Ruling and CBI Report…………………………………………………. 10

Chronology of Development as it unfolded………………………. 11

Conclusion………………………………………………………………………… 17

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Introduction“It was the best of times, it was the worst of times, it was the age of wisdom, itwas the age of foolishness, it was the epoch of belief, it was the epoch ofincredulity, it was the season of Light, it was the season of Darkness, it was thespring of hope, it was the winter of despair, we had everything before us, wehad nothing before us….”

- A tale of two Cities, Charles Dickens

Dear Friends from the Media,

This dichotomy fits us so aptly - we, the owners ofExcelsior, who today face a true Dickens situation ofbeing caught in a crossfire between the Builder and theGovernment causing us hardships and immeasurable agony.

As you know, Excelsior is a joint project between the APGovernment and Emaar MGF. It was promised to be a world-class community of 350 apartments overlooking achampionship golf course. The bookings for apartments started in 2008 and thepromised delivery was slated for June 2011.

The Current State

Now, seven years from the initial bookings and four yearspast the planned completion date, the project continues tobe mired in controversy owing to conflict between thedevelopers and the state government leaving the owners ofapartments high and dry. There doesn't seem to be anyclarity on the completion or delivery schedule.

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EXCELSIOR Owners Welfare AssociationThe project seems to have slipped into a state of limbowith the owners having been left in the lurchnotwithstanding the fact that the AP High Court and theCBI inquiry has given a largely clean chit to theExcelsior part of the project. It, therefore, defies thelogic as to why Excelsior owners are being made to suffer.

Billed as the most reliable, modern and happening projectthat would add value to Brand Hyderabad and attractinvestments, Excelsior predominantly attractedprofessionals and NRIs (and many of them secured bankloans) to invest in this ‘safe’ project. Many have paid100% of the apartment cost, but now, four years past thedue date they are left with decaying skeletal structures.

NRI investors saw this project as a great "return-to-India" opportunity. But now they are left in disbelief asboth the government and the builder seem to be apatheticto their situation. Today, NRI's are asking "why should weinvest Hyderabad"? As a result, Brand Hyderabad too istaking a big hit.

What we demand

We demand that the 14 acres that represent the ExcelsiorApartments be given to the rightful owners. The 14 acresare situated on the edge of the 535 acre Boulder Hillsproject and therefore, can be easily carved out. Even aseparate entrance is available from a street adjacent tothe Brahma Kumaris Institute in Gachibowli.

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We are asking theresponsible parties (thegovernment and the builder)to step forward and workwith the apartment ownersto complete and deliverthis 14 acres property aspromised.

The Excelsior projectrepresents only 2.6% of thetotal Boulder Hillsproject. 200 innocentbuyers have been suffering for five years for no fault oftheirs! The CBI has also reported that the 2.6%represented by the Excelsior apartments, were purchasedtransparently and with no wrong doing.

So we demand that those responsible relieve us of this suffering and unjust agony.

Representation by: Excelsior Owners Welfare Association

The Core Issue: Sandwiching of rightful owners

The apartments block, known as Excelsior, sits on 14 acreswithin the 532 acre Boulder Hills project. There are about206 apartments sold out of a total of 350 apartments thatEmaar MGF was planning to build in phase 1. The apartmentowners have largely paid up but the building complex,

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EXCELSIOR Owners Welfare Associationwhich was supposed to have been completed and handed overin 2011, has not been fully constructed except the basicbuilding edifice which is now lying in a state of neglect.

Since April 2010, the project has been a subject of legaltussle between APIIC and Emaar MGF. The issue is aroundthe villas that were supposedly sold below-par value onpaper and the introduction of Emaar MGF into the project.The government claims lost revenue due to underhanddealings between the builder and the villa owners and dueto a restructuring of ownership with the introduction ofEmaar MGF. There was a CBI inquiry instituted at theHonorable HC’s instance into the whole matter. The Enquiryfinally concluded in October 2012. With respect to theExcelsior part, the CBI gave a clear chit having observednothing wrong in 206 apartments’ deals except one - whichbelongs to the builder’s MD.

Meantime, the government has put a ban on the registrationof all properties in Boulder Hills including theapartments through its GO. As a result, even though theapartments are in no way connected with the villas inquestion, the Excelsior apartment owners are jammed interms of registration. On top of this, the builder refusesto continue building the apartments claiming force majeure(until the registration ban is lifted).

The fact, on the contrary, is that nothing restricts thebuilder from completing the construction. But consideringuncertainty and issues with their partnership with theGovernment , Excelsior owners suspect, the Builderprobably does not want to risk any more capitaldeployment, no matter how grave the suffering of theapartments owners!

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EXCELSIOR Owners Welfare AssociationVOX POP - Excelsior Owners

We chose Excelsior in Hyderabad to retire. We were then convinced that thePrivate- Public Partnership of the project would mean safe investment, andnever realized that the Government would end up creating all this mess alongwith the builder! I have lost faith in our India systems.

- Manmeet Bedi, Dubai

As a US citizen, I always dreamt of owning a property in India. Given APIIC’sinvolvement, I felt safe to invest in Excelsior and took a loan from HDFC. All myhopes and dreams are dashed now and all the money has been stuck in thisproperty since 2008. I paid the EMI’s for over 3 years, and then used mysavings to pay off the loan. This has definitely soured my appetite forinvestments in India, especially Telangana.

-Satish Chandrasekaran,USA

My plans of retirement and love for the city, where I grew up has changed. Ithas made such a big difference in our thought process, I do not want to investa single penny in India. I thought things have changed since I left Hyderabadfor US when I was 17. But I guess not. It is still a sad story of all unjustactivities. We started paying the initial payments in 2008. Now 7 years laterstill no outcome.

-Rashid AliKhan, USA

I bought a flat to live in retirement at Excelsior. I am close to retiring now and have no place to live on retirement. I bought the flat since the government was a partner and Emaar Dubai has a great reputation. If we can't trust the government whom can we trust?

-M. Sudhakar Reddy, Muscat

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EXCELSIOR Owners Welfare AssociationWas thinking of retiring in Hyderabad as we have family there. My brother-in-law from the UK also purchased an apartment with us at Excelsior. He and myhusband had made grandiose retirement plans. Our hopes and plans havebeen shattered now and we live in a constant state of worry about the future.

- Gitanjali Bharath Reddy, Chennai

This was my life time saving and hard earned money. Was very happy to owna decent place in my homeland. Now you cannot trust any builder howeverreliable they may appear and will never invest in Hyderabad.

- Mohammed Khalid, Riyadh

I invested in this project because my wife belongs to Hyderabad and we alsofelt that this is a good community living happening in Hyderabad and we canbe part of it. Now we will think twice before investing in Hyderabad as thisproject has given lots of emotional trauma.

- Vedapuri Thachampattu, Saudi Arabia

Used all my savings to buy this apartment to use for my retirement. Totalcolossal failure. Lost faith in the system. Never invest anything that's involvinggovernment who is supporting all criminals.

- Dr. SrinivasKoneru, USA

Am Telugu speaking and wanted to participate in community living sopurchased a flat in Excelsior. I am shocked that this sort of neglect can bemeted out to genuine investors like us. Will surely not consider Hyderabadonce again for investments due to the misery, agony and helplessness, I hadto go thru with this project.

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- NVSS Sarma, Dubai

We thought this would be a safe investment keeping in mind the brand nameEmaar.....but now so disappointed. Now will think twice before investing inHyderabad.

- Divya &Vikram, Dubai

After having such a horrible experience with this purchase, there is no chanceto even think of buying any other property in Hyderabad. The Indianauthorities always want to welcome NRI investment and then forget to careabout them!!

- Ishu Rupani, Dubai

Even though I am from Tamilnadu, I chose Hyderabad because it has betterinfrastructure and quality of life than Chennai and Bangalore . Given EMMAR’sreputation and Govt’s involvement, we thought the project can't go wrong.Even now we have hope on Hyderabad's future.

- Dr. Lakshmi & Dr. Issac, TN

The investment was made for quality life based on solid integrity of thepromoters which turned out to be a big humbug. Discouraged for any futurecommitments even with public sector participation.

- Mohamed Banafa,Riyadh

I had taken a huge loan from a bank at a high interest rate. Irrespective of thesituation, the Bank took all their money back with full interest. Indianauthorities should really worry with their existing systems which provide no

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EXCELSIOR Owners Welfare Associationprotection to the overseas investors. I wonder whether any one would ever doanything to resolve this issue. It's clearly visible to all BUT vested interestsseem to rule!!!

- Sudhakar Murthy, USA

Lived in US for 15 years and returned with family to Hyderabad.Invested in Boulder Hills with our hard earned white money, after paying alltaxes in US and India. Shocked and really disappointed at the turn of events.

-Sitaram Raju, Hyderabad

I am 76 years old, I came to India to establish an Investment Banking Subsidiary of our US based company about 15 years ago. I met several fellow Ex-Pats like me wanting to do something good and invest something back in the country of our origin. In spite of many obstacles we have been able to contribute positively to the State and Country. I decided to retire in Hyderabadto continue various civic activities.

I purchased a flat in Excelsior in Boulder Hills because it was in a good location and though it was higher priced, one could purchase the flat with "WHITE" money only. Also it was being developed by Emaar, which had a goodreputation. I have paid the total amount. I am outraged to find that either dueto corruption or incompetence, neither the bureaucracy, government nor Judiciary are able to do right by the people who invested in good faith in Hyderabad. This has taken more than 5 years and there seems to be no resolution to the situation.

How can the State and the Country expect more foreign investment to come when good investors are cheated like this? I for one will have to warn foreign investors who frequently solicit my advise to be extremely vigilant, i.e. Caveat Emptor.

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- Sundar K. Sundaresan,USA

HC Ruling and CBI Report Show the Owners as Innocent

As shown below, the Honourable AP High Court’sobservations and that of the CBI report clearly establishthe fact that the Excelsior owners are sandwiched in theconflict between the Developers and the state Government,and are made to suffer for no faults of theirs. Hence,their simple demand is completion of their part of projectand handing over of the premises to them for which theyhave paid for and are the rightful owners.

HC Ruling

The AP High Court, on March 13, 2012, in the matter between Boulder Hills Villa Owners Association & Others (Petitioners) and Govt. of AP & Others (Respondents), observed:

“The principal argument advanced on behalf of the Government in support of the impugned G.O. is that the plots were sold at a highly unrealistic prices, …The CBI is investigating into certain aspects of the matter on the directions issued by this Court. The ultimate result of the same would tell upon the complicityor otherwise of some of the persons and agencies associated with the project, at certain stages…….. In case of the flats almost the entire consideration was paid. In the counter-affidavit it is not even mentioned that the considerations received for the flats is inadequate. It is only in respect of plots that doubt is expressed as to the adequacy of consideration, or allotment.”

The CBI Report

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EXCELSIOR Owners Welfare Association“Investigation also revealed that M/s EHTPL and M/s EmaarMGF Land Ltd sold the following apartments during theperiod 2008 -2010……

During the course of investigation, 14 apartment buyers or theirrepresentatives were examined and they have confirmed the rate mentionedin the document i.e. agreement to sell and construction agreement. All ofthem were found to be genuine buyers. However, it is pertinent to note thatShri Srikant Joshi, the then CEO of Emaar MGF Land Pvt. Ltd purchased anapartment in his name at Rs.3268 per sft whereas apartments were sold toother buyers between Rs. 4800 – Rs.9000 per sft.”

Chronological EventsHere is chronological detail of how the issue built up over the years resulting in the current state.

The Project AnnouncementThe A.P Industrial Infrastructure Corporation (APIIC)through its GO no 359 of September 4, 2002 approved theproposal to set up an Integrated Township Projectincluding Golf Course and multi-use land development atManikonda, Ranga Reddy District in favour of EmaarProperties PJSC (“Emaar PJSC”) and conveyed the free holdto M/s. Emaar Hills Township Pvt. Ltd (JV between EmaarPJSC and APIIC)

The Development AgreementThe Owner executed a Development Agreement cum GPA dt.23-7-2007, in favour of M/s. Emaar MGF Land Ltd., theDeveloper Cum GPA, granting rights to develop the Project

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EXCELSIOR Owners Welfare AssociationLand, for the Integrated Township “Boulder Hills”(Project) consisting of Information Technology SpecialEconomic Zone, Multi-story Residential Apartments, Semi-Independent Houses, Villas, Hotels, Retail Malls, Golf andCountry Club, Parks, Play Grounds, Open Spaces, and otherPublic Utilities, etc,.

The ExcelsiorA part of the Project Land admeasuring about 14.01 acres or thereabouts has been earmarked for the construction of Multistoried Apartments called Excelsior, Boulder Hills. Excelsior was started under the umbrella of “BOULDER HILLSGOLF AND COUNTRY CLUB which was advertised as “one of the ten most photographed golf courses in the world, you can count on it”.

The publicity materials claim: Boulder Hills Golf andCountry Club is a world-class leisure and residentialcommunity spread out over approximately 531 sprawlingacres (258.36 is outright owned by Emaar, the remaining272 acres are a on a 99 year lease.). It has beenenvisioned as a complete, self-contained township spreadaround an 18 – hole championship golf course where everyhome is designed to the most demanding internationalstandards. The estate is one of the most picturesque inthe country with tree-lined streets and water bodies.

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EXCELSIOR Owners Welfare AssociationKey Features of Excelsior (As advertised):

Located in the Gachibowli area, next to Nehru outer

ring road.

30 minutes to the Rajiv Gandhi International

Airport (Shamshabad)

Easy access to schools, restaurants, work areas,

ATMs, supermarkets and many leisure facilities.

Fully operational 18 – Hole Championship Golf

Course.

Choice of 3 and 4 bedroom apartments.

Golf view/Green view premium apartments with views

on 3 sides.

Premium amenities and finishes.

Good internal infrastructure – power generator

back-up and sufficient water supply.

Clubhouse with swimming pool and well-equipped gym.

Conveniences including restaurant and supermarket Clubhouse with Fitness Centre, Games Rooms and a

swimming pool

Looking at the advertisement and brochure a number ofpeople have purchased independent flats in Towers A to Dand the number of flats for each tower are Tower “A” 52Apartments, Tower “B” 101 apartments, Tower “C” 101apartments and Tower “D” 101 apartments and the total

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EXCELSIOR Owners Welfare Associationnumber of flats that is 355 which have been categorized as22 DIFFERENT flats depending on the size of eachflat/apartment.

The Delivery PromiseBetween 2008 and 2010 numerous Construction Agreements andAlso Agreements of Sales and for some registered saledeeds have been executed by in favour individual membersby M/S.EMAAR HILLS TOWNSHIP PVT.LTD and M/S.EMAAR MGF LANDLTD.

The Promises made in the agreement“Commencement Date” is the 2nd day of July 2008 or thedate on which the purchaser’s first installment ofconstruction payment

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EXCELSIOR Owners Welfare AssociationArticle 4 –Construction Schedule

4.1. The developer cum GPA shall complete the constructionof the Apartment within a period of thirty six (36) monthsfrom the Commencement Date with a grace period of six (6)months and subject to Clause 28.2 ‘Force Majeure’ of thisConstruction Agreement.

Article 11 – Developer Cum GPA Default

11.1 The Developer cum GPA undertakes that if they fail tocomply with any rules and / or terms of license grantedfor development, or due to any act of omission orcommission, any loss or harm is caused to the Purchaserthen the Developer cum GPA shall be fully liable to bearsuch losses and / or damages. The Developer cum GPA shallkeep the Purchaser fully indemnified in respect thereof.However, if as a result of nay legislative order orregulation or directions of the Government or any PublicAuthority, the Owner and / or Development cum GPA isunable to complete the construction of the Apartment, theonly responsibility of the Owner and / or Developer cumGPA will be to return to the Purchaser the amount receivedfrom the Purchaser.

11.2. In the event of any delay in handing over possessionbeyond the time[including the grace period] stipulated inArticle 4.1 hereinabove the Developer cum GPA shall pay the Purchaser as amount of Rs.5/- [Rupees Five Only]per square feet on total Built –Up area of the Apartment,for every month of delay or part thereof, subject to thePurchaser having paid without any default the Payments asper Article 5, and Exhibit III and Article 8 of thisAgreement. The Purchaser agrees that the aforesaid amountshall be the only compensation payable to the Purchaser in

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EXCELSIOR Owners Welfare Associationthe event of delay in handover of possession by theDeveloper cum GPA.

Article 18 – Completion Certificate and hand Over of

Possession.

18.1. The developer cum GPA undertakes to provide thePurchaser physical possession along with CompletionCertificate issued by the appropriate authority subject tothe Purchaser having completed the payments as per Article5, Exhibit III and Article 9 of this Agreement.

Article 19- Warranty and Defect Liability Period.

19.1. The Developer cum GPA and the Owner expressly agreeto keep the Purchaser harmless and indemnified against allclaims, litigation, courts decree, demands for damages,losses, costs and expenses which the Purchaser may sustainor incur by reason of any cause or causes whatsoever onaccount of the Developer cum GPA’s default under thisConstruction Agreement. The developer cum GPA shall carryout the construction of the Apartment with the same careand diligence they use in other similar projects and asper industry accepted standards.19.2. The defect liability period for the Apartment is aperiod of 12 [twelve] months from the date of issue of theOccupancy Certificate/ Completion Certificate by theCompetent Authority. The Purchaser is required to givewritten intimation to the Developer cum GPA of any defects in the Apartment. TheDeveloper shall rectify such defects, provided that thesame has occurred or is due to defective workmanship ordefective materials and the same is discovered andintimated within the Defect Liability Period.

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EXCELSIOR Owners Welfare AssociationThe Reassurance

On 17-9-2010 the Developers sent a letter to one of the customers wherein it has been specifically stated that “we would like to reassure you that Emaar andEmaar MGF have all necessary approvals from relevant government authorities for development of the Integrated Project. The Development Agreement with Emaar MGF was also approved by APIIC, through its nominee Directors, about four years back. Parallely, we would like to apprise you on the development activity at the Boulder Hills Golf and Country Club. Gearing towards the committed possession in Mid 2011 we are in the process ofcompleting the Sample apartments. These apartments would be ready for your visit in next 30 days.”

The Turning Point

In view of allegations flying thick about Villa pricing (nothing to do with Excelsior), On 8-10-2010 the Government of A.P has issued G.O.Ms.1279 dt.8-10-2010 wherein the Government of A.P hereby prohibit theRegistration of the documents relating to the following properties allotted by the Andhra Pradesh Industrial Infrastructure Corporation Ltd, Hyderabad to M/s.Emaar Hills Townships Pvt.Ltd and Boulder Hills Leisure Pvt.Ltd. in the interest of the State Government.

The Excelsior Owners come together

On 21-5-2011 the Excelsior Owners Welfare Association got their association registered in the Office of the Registrar of Societies, Ranga Reddy District.

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EXCELSIOR Owners Welfare AssociationThe HC Stay & Reassurance by the developersOn 14-7-2011 e-mail was sent to one of the owners who isalso the president of the Excelsior Owners WelfareAssociation wherein in the mail it has been stated that“we are glad to announce that the Hon’ble High Court ofA.P, vide order dt.4-7-2011 has ordered stay on theoperation of GOMs.1279 dt.8-10-2010 thereby enabling theregistration of flats constructed i.e. your apartment. Wesincerely appreciate your patience and support duringthese trying times. Construction at Excelsior in BoulderHills will recommence shortly.” This stay actually cameabout because of a legal representation made by the ownersassociation.

The Excelsior Owners Notice to the DevelopersOn 14-3-2012, as there was no proper response from theDevelopers with regard to the construction of their flatswith no option left the owners got legal notice issued tothe developers wherein it has been stated that the legalnotice is being issued on behalf of Raghu Bathina andfifty six others.

That, under the agreements mentioned above, developerswere to complete the construction of the flats by June,2011 and deliver possession. That, in the event of yourfailure to complete construction, developers were to begiven a further grace period of 6 months which expired on31-12-2011. That, no construction activity has beencarried out for these flats in the past one year. That,developers have failed to complete the construction anddeliver the flats either by end of June, 2011 or under thefurther grace period ending on 31-11-2011. However,developers have wrongly invoked the force majeure clause tocover up your deficiencies and shortcomings.

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EXCELSIOR Owners Welfare AssociationThat, in view of the above situation, owners hereby callupon developers to furnish the dates on which the saidflats would be completed and the compensation that wouldbe paid by you for the delay in completion of the flatswithin 7 days from the receipt of this notice, failingwhich owners would be forced to initiate appropriateaction under the appropriate provisions of law includingfiling of suits for specific performance of theagreements, filing of suits for compensation for thebreach of contract and / or filing suits for recovery ofpayments made till now under the said agreements alongwith interest @ 24% per annum apart from claiming damages.

The Developers ResponseOn 30-3-2102 the developers sent their reply notice to thepetitioners notice dt.14-3-2012 wherein it has been statedthat “your clients (owners) are aware that the date ofcompletion of construction of the flats was interaliasubject to the fulfillment of other requirements of theagreements including time bound payments by your clients.The various incidents in the recent past involving variouslitigations with APIIC and the ramifications ofG.O.Ms.No.1279 dt.8-10-2010 passed by the State Governmentprohibiting registration of documents relating to theproperties in issue, in exercise of the powers conferredunder Sec.22 A of the Registration Act,1908, has in effecttriggered force majeure clause in regard to the project. Allthese facts are in public domain and your clients are wellaware of the same. Further, all the files in the Company’sHyderabad office pertaining to the project including thefiles of your client have been seized by CBI as a part ofthe ongoing investigation. Therefore, our client at thispoint in time would not be in a position to respond toyour legal notice in details due to absence of records.Once our client’s records are restored, it would only be

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EXCELSIOR Owners Welfare Associationthen and upon further instructions that we would be ableto send a suitable reply to your legal notice. At thisstage we are instructed to state that most of your clientshave defaulted towards making payments in regard to theirflat and the payments remain outstanding as of date andthe annexure sent along with your notice evidence the samehowever, our client reserve their right to demand theoutstanding amounts at appropriate time. Further, ourclient needs to address the notice sent by you on behalfof 57 clients individually and independently keeping inview that these 57 clients do not stand on the samefooting on account of distinct facts and circumstances.We are instructed to bring to your notice and as your

clients are aware that theArticles of the Agreement and Construction Agreement state

thus:

Article 7.1 of Article 7 of Agreement:

“The owner and / or Developer cum GPA shall not incur any liability for failureto comply with this Agreement if the delay is due to reason of any forcemajeure condition viz by reason of any Act of God or Act of Government or anyother reasons beyond the reasonable control of the Owner and / or Developercum GPA”.

Article 28.2.4. of Article 28 of Construction

Agreement:

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EXCELSIOR Owners Welfare Association“During the operation of force majeure events, the obligations of Owner andDeveloper cum GPA hereunder shall be suspended until the termination ofsuch force majeure events.”

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EXCELSIOR Owners Welfare AssociationThe Owners Estimation for Completion

On 12-3-2013 the owners got a valuation done for theunfinished work in all the four blocks (that is Blocks Ato D). In summary the valuer found that the work could becompleted in 9-10 months at a total cost of approximatelyRs. 200cr.

In Conclusion

We call upon the new Government of Telanganaand our visionary CM to take the initiative, work with thebuilder and owners to complete Excelsior and hand over theproject and thereby also protect Brand Hyderabad.

Our appeal is that you carve out the 2.6% that isExcelsior and give immediate relief to 200 innocent buyerswho are suffering for believing in Hyderabad.

For more information:1. Raghu Bathina (owners association) - [email protected]. Orion PR- [email protected]

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mailto:[email protected]

mailto:[email protected]

EXCELSIOR Owners Welfare Association

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