According to the authorities, the 2020 order by the apex court had directed that interest on various liabilities would be levied based on SBI's Marginal Cost Lending rates on the first day of 2010 rather than the rates specified in the lease documents. (File)The Supreme Court, in an order on Monday, recalled its 2020 order prescribing a lower interest rate for builders in cases of payment owed to the Noida and Greater Noida authorities. A statement from officials said this would help the authorities potentially recover thousands of crores owed to them.
According to the authorities, the 2020 order by the apex court had directed that interest on various liabilities would be levied based on SBI’s Marginal Cost Lending rates on the first day of 2010 rather than the rates specified in the lease documents. Owing to the financial implications, a recall application had been filed regarding the same in 2010, which was accepted on Monday.
A statement from officials said the initial order might have caused a loss of Rs 12,776 crore for the Noida Authority and Rs 6,525 crore for the Greater Noida Authority, with regard to group housing.
They estimated that after the current order, both authorities have secured Rs 19,301 crore. After deducting the liabilities still pending in court from that total – some of it is separately under litigation – officials said the authorities would have secured Rs 5,860 crore for the Noida Authority and Rs 3,838 for the GNIDA.
The statement also noted that the demands of other builders who were citing the 2020 order might have had an adverse effect on project developments in Noida, causing considerable losses to the Authority. Officials also said that it had affected the sub-lease documents of 40,000 flat buyers, who would now benefit from the new order.