INDIA BUSINESS WORLD - MAY - JUNE 2007
The Month that was ...

SAHARA HOUSING FACES PROBE FOR NOT KEEPING AD PROMISE

The department of consumer affairs is learnt to be investigating complaints against Sahara Infrastructure & Housing (SIH) for issuing misleading advertisements. The company had issued advertisements in December 2004 announcing plans for developing 217 townships in various parts of the country. Of this, 102 cities were supposed to be developed in the first phase, and, according to the advertisement, possession was to be handed over by 2007.

The company, however, launched the first project in the series, in Lucknow, only recently, for which the possession can not be handed over before 2009. According to sources in the department, of the 102 cities where Sahara City Homes were supposed to be rolled out in the first phase, in some places, such as Ghaziabad, the company has not even been able to complete land acquisition.

Following these advertisements, the company has already taken application money in the first phase from hundreds of wannabe residents for the townships.

Sahara City Homes spokesperson was not available for comment. An email sent to the company did not elicit a response. A representative of the company said, "These issues keep surfacing. There isn't anything major in this."

The department of consumer affairs had decided to take punitive action against misleading advertisements last year, following several complaints against advertisements making tall claims, which could not be validated. The need for a separate policy to deal with misleading advertisements originated from the failure of consumer courts in addressing these issues.

Subsequently, notices were issued to a Gurgaon based health & wellness chain, which was asked to explain the basis of the claims it was making in its advertisements. The case against Sahara City Homes is the department's first major initiative against misleading real estate advertisements. "However, real estate is emerging as an area of concern, and 2 3 more such matters are in active consideration," an official in the department said.

Lucknow based SIH, part of the Sahara Group, plans to develop around 11,000 hectares for 217 townships across the country. The projects would be spread over 100 300 acres each and together they would have 30.3 lakh sq mtr of built up commercial area and 1008.4 lakh sq mtr of built up residential area.