As the wait for Noida flats registry gets longer, all eyes on Supreme Court for relief Real Estate News, ET Real Estate

Noida: The standoff between development authorities and builders over interest rates on which land dues should be calculated has kept home buyers in the city waiting for their flats to be registered for years. And they are not close to a solution.

Builders argue they will not pay dues till Supreme court, who is hearing the case, comes up with a decision. Homebuyers are worried because without the registry, they do not have legal rights over their flats and cannot sell the property.

number of flats in noida, Greater Noida And this Yamuna Expressway As per estimates by development authorities, the areas that were delivered to buyers but waiting to be registered are believed to be in the range of 2 lakh to 2.5 lakh.

Developers owe around Rs 35,000 crore to the three authorities. A major part of this, around Rs 20,000 crore, is due to the Noida Authority.

Ahead of the state elections earlier this year, all political parties had vowed to work on a solution to the registry impasse. Noida Extension Flat Owners Welfare Association (NEFOWA) had sought affidavits from the candidates about the promises made by them.

It mattered little. NEFOWA President Abhishek Kumar says, “Only the judiciary can move a resolution in this matter. A decision regarding the rate of land arrears is long-awaited. The builders have claimed that they will pay as per the SC order. Once delivered, we are hopeful that the builders will clear their dues and the registration of flats will finally start.”

But there is another scenario as well, he points out. “It could be another tactic to delay the matter on one pretext or the other,” he says. Over the years, the authorities have not been able to take any coercive action against the builders.

Residents ask whether the authorities can allot land to builders after taking 10% of the cost as an advance – a much-criticized policy that led to realtors’ dues due to large land parcels being received – they can buy flats by buyers. Why can’t the registry allow those who have paid all the dues.

Raj Kumar, a resident of Supertech Ecovillage 2, says, “For the last four years, I have been running after the builder and the Noida authority for the registry of my flat. The matter has become more complicated now as the developer has been announced. Insolvent. An IRP (Interim Resolution Professional) appointed by the National Company Law Tribunal is handling the project.

He said, “It is the fault of the developer that the home buyers are suffering. Without the registry, we are not even the legal owners of our flats. If there is any structural damage, we have no right to claim.”
Like other residents of the ‘Sports City’ projects, Sanvarjit Dassondi, a resident of Gaur Sports Wood in Sector 79 and chairman of 7X Sports City Foundation, does not know when he can finally register his flat. Sports cities are in a big mess because license terms require them to build sports facilities.

Dassondi says, “There have been 3,000 flats given in five group housing societies. People have already paid the stamp duty, but the registry is not happening.” “I checked the documents and found that our builder has paid all the residential dues. But keeping in mind the original layout, a Sports city cannot be developed on campus yet, registry cannot be done. Last year, the state government had promised to take action, but nothing has been done till now.”

There is an option to pay the due amount for one flat at a time and execute registries for them, but residents allege that most builders are not even ready for it, while people pay stamp duty.

Builders insist that the authorities have levied exorbitant fines, bringing the outstanding amount to unrealistic levels. “For example, if the current dues of a realtor is Rs 100 crore, it will come down to Rs 30-35 crore if penal interest is removed. That is a huge difference,” says a developer.

Supreme Court lawyer Kumar Mihir says, “In the Amrapali case, issues were raised regarding the amount to be paid to the authority. During the hearing, it was revealed that the authority has not only charged interest on the arrears but also penal interest. Meanwhile, Ace Group filed an application contending that the two authorities – Noida and Greater Noida – should not be allowed to levy penal interest as the total would exceed 23%.”

Mihir points out that in June 2020, the apex court had said that the authorities would not charge more than 8% from any builder. “This was implemented for some 114 projects in Noida and Greater Noida. The Noida authority filed a petition saying 8% was a random figure and opposed it,” he says. The court issued a revised order in July saying that all builders will have to pay dues as per SBI MCLR (marginal cost of loan) rate from January 2020.

“In November 2020, an application was filed by both the authorities, seeking withdrawal of all these orders. Hearing and arguments began in the Supreme Court in September 2021. The court reserved the order in November and is yet to pronounce. But at present, there is no clarity on how much builders should pay. Until the land is due, the authorities will not allow the registry,” says Mihir.

Noida Authority CEO Ritu Maheshwari, who holds the additional charge of Greater Noida, is firm on not allowing registries till the dues are cleared. “Allowing the registry without arrears of land would set a bad precedent,” she says.

Officials say that the stamp duty paid by homebuyers is crucial to the civic amenities provided by them. Says an official, “With this revenue, officers provide civic amenities and do development work. He cannot let this money go like this. Otherwise recovery from builders will be difficult.

Developers owe over Rs 35,000 crore to three authorities in GB Nagar. According to an estimate this figure is more than Rs 20000 crores in Noida Authority and around Rs 7000 crores each in GNIDA and YEIDA.