Noida: Will file for insolvency if forced to pay market rate interest on delayed dues, say developers

NOIDA: With the Supreme Court recalling its order of 8% interest cap on delayed dues by builders in Noida, many developers have pleaded helplessness in clearing the pending money at the current interest rate.
On Tuesday, builders' body Credai urged the UP government to bring in a one-time settlement (OTS) scheme to help these developers settle their dues and pave the way for registries of over 1.5 lakh flats in Noida and Greater Noida. Otherwise, Credai said, many builders would be compelled to file for insolvency.
In the wake of the Supreme Court's order earlier this month, the Noida Authority has already started issuing notices to builders asking them to clear their dues.
Manoj Gaur, president, Credai-NCR and the chairman-cum-MD of the Gaur Group, said, "After studying the SC order, and the authorities' response, the developers feel that the 15%-23% compound interest would raise the final amount substantially, much higher than the current market rate."
"In such a case, we might have to take recourse to the National Company Law Tribunal (NCLT). Moreover, since occupancy and completion certificates are linked to the clearance of the dues, the buyers would not be able to register their homes," he said.
An OTS scheme like in Haryana would help amicably settle the issue here, besides creating a win-win situation for the UP government, developers and homebuyers, Gaur added. Amit Modi, president, CREDAI (western UP), said, "Had there been financial stability, the developers would have cleared the dues years ago. The majority of these projects were launched between 2007 and 2011, while some of them were started in 2013-14. But due to several reasons outside the developers' control, delays were caused."
"The National Green Tribunal (NGT) order on Okhla Bird Sanctuary and settlement of the farmers' compensation issue hampered construction activities. Access to plots and development of basic infrastructure such as power, as promised by the authorities, did not materialise within the stipulated time. As a result, developers had to defer taking possession of the land," he added.
Modi further said that if the issue was not settled, they would take legal remedies, besides putting their perspective in front of Noida and Greater Noida authorities, UP government and the Supreme Court.