In order to be exempt from coercive recovery actions against builders, real estate developers in Noida and Greater Noida have petitioned the district magistrate of Gautam Budh Nagar, the district of which they are a part.
The dues are payable to the Industrial Development Authorities of Noida, Greater Noida, and the Yamuna Expressway.
In a letter, the Uttar Pradesh Chapter of the National Real Estate Development Council (NAREDCO) asked Gautam Budh Nagar District Magistrate (DM) Manish Kumar Verma not to begin coercive recovery action against builders and to wait for the findings and recommendations of the Amitabh Kant Committee on stuck projects.
Builders owe an estimated Rs 40,000 crore, including premium, interest, and penal interest, for allotted plots on which real estate projects are being completed at various stages.
To find the problems being faced by stalled real estate projects and to suggest ways to revamp them, the Union Ministry of Housing and Urban Affairs has set up a 14-member committee headed by former Niti Aayog CEO Amitabh Kant. The committee has six months to submit its report from the date of its first meeting.
Additionally, the developers requested that the DM call a joint meeting of the CEOs of the Greater Noida, Noida, and Yamuna Expressway Authorities and the Chairman of the Uttar Pradesh Real Estate Authority (UPRERA) to seek a cordial solution and suggest measures to the state government that would allow developers to deliver flats and plots to customers.
Builders also asked the DM to “impress upon” the authorities to permit sub-leasing of project implementation in proportion to the land payments already made by the developers.
They said that because the allotted land is typically not free of encumbrances, developers owe overdue land dues to the Noida, Greater Noida, and Yamuna Expressway Authorities.
According to UP NAREDCO, a large number of farmers filed petitions before the Allahabad High Court, which issued stay orders as a result, and construction was halted until the matter was resolved by the Supreme Court because the Authorities failed to obtain consent from farmers at the time of land acquisition.
Homebuyers were not willing to pay for the cost with interest, and the builders’ organization stated, thus the responsibility of additional farmer compensation at the rate of 64.7 percent had been transferred to developers as a result of court orders, which also contributed to the unpaid land dues.
The letter said that because of the delay, build developers had fallen behind on their land payment obligations due to a liquidity crisis. The Authorities have stopped accepting building plans, changes, and approval for subleasing in the interim and now demand a No Dues Certificate (NDC) as a prerequisite.
Due to the liquidity crisis, project loans that were taken on have become non-performing assets, and lenders are suing developers in the National Company Law Tribunal.
According to the developers’ body, any attempt by the district administration to start forceful land dues recovery would be detrimental to the interests of homebuyers, banks, and financial institutions. It would result in never-ending legal disputes.
UP NAREDCO said, “We are confident that the Committee will take into account the real challenges and will come up with a cordial solution that protects the interests of investors, authorities, and homebuyers. Since any coercive recovery would negatively affect the interests of approximately 2.50 lakh homebuyers, we request that the Noida, Greater Noida, and Yamuna Expressway Authorities as well as UPRERA refrain from taking the coercive recovery action and delay it at least until the resolution based on the findings and recommendations of the Amitabh Kant Committee”.
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