Real estate developers in Noida and Greater Noida have approached the district magistrate of Gautam Budh Nagar, the district of which they are a part, seeking relief from coercive recovery action against builders.
The dues are payable to Noida, Greater Noida and Yamuna Expressway Industrial Development Authorities.
In a letter to Gautam Budh Nagar District Magistrate (DM) Manish Kumar Verma, the Uttar Pradesh Chapter of the National Real Estate Development Council (NAREDCO) requested Verma not to initiate coercive recovery action against builders and to await 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 against allotted plots on which real estate projects are in different stages of execution.
The Union Ministry of Housing and Urban Affairs has set up a 14-member committee headed by former Niti Aayog CEO Amitabh Kant to study the problems being faced by stalled real estate projects and to suggest ways and means to revamp them. The Committee is to submit its report within 'six months from the date of its first meeting'.
The developers also urged the DM to arrange a joint meeting with CEOs of Noida, Greater Noida and Yamuna Expressway Authorities along with the Chairman of the Uttar Pradesh Real Estate Authority (UPRERA) to seek an amicable solution and recommend to the state government measures to enable builders to deliver flats and plots to buyers.
Builders also requested the DM to “impress upon” the Authorities to allow sub-lease of project execution in proportion to the land payments already made by the developers.
They said that outstanding of land dues payable to Noida, Greater Noida and Yamuna Expressway Authorities by developers are on account of reasons attributable to these Authorities as well because the allotted land was mostly not free of encumbrances.
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UP NAREDCO said that since the Authorities did not obtain consent from farmers at the time of land acquisition, a large number of farmers had filed petitions before the Allahabad High Court, which issued stay orders, due to which construction had been suspended until the matter was cleared by the Supreme Court.
As a result of court orders, the liability of additional farmer compensation at the rate of 64.7 percent had been shifted to developers, which also contributed to the outstanding land dues; homebuyers were not ready to bear the cost with interest, the builders’ body noted.
The letter said the delay had caused a liquidity crisis, prompting build developers to default on land payment installments. The Authorities have meanwhile stopped approving construction plans, revisions and sub-lease permission, demanding No Dues Certificate (NDC) as a pre- condition.
Project loans taken turned Non-Performing Assets because of the liquidity crisis, for which the lenders are dragging developers to the National Company Law Tribunal.
The developers body said that in these circumstances, any action by the district administration to initiate coercive recovery of land dues would hurt the interests of homebuyers, banks and financial institutions. This would lead to unending litigation.
“We are quite sure the genuine issues will be considered by the Committee and it would come out with a practical and effective solution securing the interests of the homebuyers, authorities and the investors. We, therefore, request not to initiate coercive recovery action prompted by the Noida, Greater Noida and Yamuna Expressway Authorities as also by UPRERA, and keep the same in abeyance at least till the resolution on the basis of the findings and recommendations of the Amitabh Kant Committee, as any coercive recovery would adversely impact the interests of approximately 2.50 lakh homebuyers,” UP NAREDCO said.