Noida Builders Seek One-Time Settlement For Land Dues, Fear Bankruptcy
NAREDCO's Uttar Pradesh has pointed out that the real estate sector has been ailing for some time due to unprecedented developments
Representatives of realtors' bodies Credai and Naredco met Ritu Maheshwari, the CEO of Noida and Greater Noida development authorities, and demanded a one-time settlement scheme to clear their land dues citing liquidity crunch.
Last month, the Supreme Court recalled its order of June 10, 2020, which had capped the rate of interest at 8 per cent on the dues for land given on lease to different builders. The apex court order is a setback for builders of Noida and Greater Noida in Uttar Pradesh.
"In a meeting with the CEO of Noida and Greater Noida Authorities Ritu Maheshwari yesterday, real estate developers from NAREDCO and CREDAI urged the Authorities to bring in One Time Settlement Scheme similar to the one adopted by the Haryana Government, to tide over the situation arising from the recent order of the Supreme Court," the association said in a statement.
After the recall of the Supreme Court orders, the land payment liability on developers has increased manifold. The developers have started getting demand letters of huge amounts due to calculating interest compounded every six months, from the authorities, it added.
"With the acute liquidity crisis the developers are finding it impossible to clear the demands and there is an apprehension of cancellation of allotment of plots unless payments are made as per the demands," the statement said.
NAREDCO-Uttar Pradesh President R K Arora said the developers have been able to convince the authorities that in the absence of an effective resolution to the problem, possession of flats to about 1.5 lakh home buyers, a significant amount of land dues of the authorities and investment of a large number of banks and financial institutions all are at stake.
"More and more developer companies are being placed under Corporate Insolvency Resolution Professional by the NCLAT by which the home buyers would not get their flats and the land payments due to the authority would become Zero as the authorities would be treated as an operational creditor," he said.
Therefore, Arora said it is in the interest of all stakeholders that the authorities settle with the developers to keep the projects going on and give delivery of flats to home buyers while recovering the authorities' dues in installments as per OTS. The associations also submitted representations suggesting proposals for a resolution package in the shape of OTS.
National Real Estate Development Council, was established as an autonomous self-regulatory body in 1998 under the aegis of the Ministry of Urban Affairs, Government of India.
In the representation, NAREDCO's Uttar Pradesh has pointed out that the real estate sector has been ailing for some time due to unprecedented developments like stay orders from various courts, NGT and lockdown due to Covid-19.
"As a result of the same, payment of land premium due to Noida and Greater Noida authorities from developers have since tripled taking into account the land premium, interest and penal interest apart from other demands like lease rent, farmer compensation etc," Arora said in the letter.