India’s biggest house-building company faces legal challenges

India’s largest house-making company, Avondale Estate Pvt Ltd, faces legal battles over its claims to a $1 billion contract with the government of Kerala, as the state government faces a backlash over its purchase of the firm’s land in Kannur.

Sources in the company’s legal department told The Hindu on Friday that the government has lodged a case in a local court against Avondage Estate Pvts Ltd over its claim to land for the construction of an apartment complex, according to a source in the firm.

The company said it had lodged a complaint with the Kerala Civil Aviation Authority (KCAA) on December 10, 2017, but it was not immediately clear if the government would take action against it.

Avondale, which has been operating in Kerala for more than 60 years, is a private company that has been building and rehabilitating properties in the state for the last four years.

It is owned by Indian conglomerate Reliance Industries Limited.

The Kerala government has denied the company any right to buy land and said it will take legal action against the firm if it fails to comply with the state’s land acquisition rules.

The state’s Chief Minister Pinarayi Vijayan has also ordered an inquiry into the issue.

In an email to The Hindu, a spokesperson for Avondare said: “We are disappointed that the Kerala government is attempting to take legal actions against us over a contract that was awarded to us.

This is completely unacceptable and does not reflect the firm or the state.

We will pursue all the legal avenues possible.”

In a letter to the state police on December 8, the Kerala Police Service said: ‘The police have received the FIR and a case has been registered under Sections 353 (Deliberate deprivation of property) and 506 (Deliciously defrauding), section 15 of the Companies Act, 1988 and the Prevention of Money Laundering Act, 2008, for violation of Section 5 of the Public Corporation Act, 2010.’

The Kerala Government has asked Avondate to take steps to amend its land purchase documents and register a new company to manage the land.

It said it was considering the matter.

The KCAA has said it has asked the firm to register a company in the name of a legal entity.

The state government has also sought the details of the property on which the project was based.

The Avondales have been building more than 5,500 homes in the city of Kannar and the adjoining district of Katchi in Kerala.

It has about 60-odd properties across the state, and about 100-odd residential units.