LIC shelves project. House dream ends in nightmare

THIRUVANANTHAPURAM: Insurance giant Life Insurance Corporation of India has shelved a housing project here, leaving in the lurch over 50 people who had paid Rs.5,00,000 as booking amount and the first instalment for a flat.

The project has been shelved "due to unforeseen circumstances keeping in view the high escalation in the cost of construction materials", said Swaminathan, senior divisional manager of LIC.

The foundation stone for the project was laid in December 2006. Nearly 56 flats were allotted after the payment of Rs.50,000 as booking amount and the first instalment of Rs.450,000.

For the three-bedroom house, the price tag was Rs.2.5 million and for a two-bedroom house Rs.2 million.

LIC has now begun returning the amount to the allottees with 8.21 percent interest.
 
"I received a cheque on Friday for Rs.500,000 that I had paid and they have given me 8.21 percent interest. This is nothing but cheating people because we had availed a housing loan, which carried a higher interest than what LIC has given us now. We are going to approach the court for justice," an allottee said on condition of anonymity.
 
Swaminathan said he could not make any further comments as the decision to shelve the project was taken by LIC's central office in Mumbai.