The debt recovery tribunal (DRT) has restrained the Noida authority from taking any legal action against realty firm Unitech, which has not paid Rs 2,500 crore in land dues, authority officials said on Tuesday.
The authority had decided to take strict action against Unitech, including cancellation of plot allotment, for non-payment of land dues.
DRT, a government agency that helps in quick recovery of bad debts, also stopped the Life Insurance Corporation (LIC) of India from auctioning Unitech’s group housing land measuring 14 lakh square metres in sectors 96, 97 and 98. The LIC had on April 5 announced an e-auction of the land on May 6 to recover its Rs198 crore loan, an authority official said.
After the announcement of the auction, the authority had on April 12, 2016 issued notices to LIC and Unitech. It had told LIC that it had no legal right to auction the land and had also planned to cancel the land’s allotment.
After the authority’s notice, Unitech went to DRT for relief.
“We have also become a party in this case and filed our replies informing about how much the realty firm needs to pay the Noida authority. The DRT did not pass any order in its hearing on May 9,” said Vipin Gaur, general manager, group housing department, Noida authority.
The authority is waiting for DRT’s final verdict on the issue on the next hearing, the date for which is yet to be decided.
The Unitech spokesperson was unavailable for comment despite repeated attempts.
The authority had issued a notice to LIC as the corporation had given a Rs 198-crore loan to Unitech without demanding a mortgage permission, which is mandatory before approving such loans.
“As per terms and conditions of the lease deed, the Noida authority can issue mortgage permission (allow a property to be mortgaged for loan) only after the land owner pays 100% of the land cost. However, Unitech kept defaulting immediately after the land was allotted to them. So, the authority did not issue mortgage permission,” said an authority official.
The Noida authority had allotted the 14 lakh sqm land to Unitech for development of Express City Group Housing project. It had executed a lease deed of this property on December 28, 2006, after Unitech paid Rs 483.74 crore. As per the lease deed conditions, Unitech was supposed to pay the remaining land cost, amounting to Rs1,139 crore, in 10 equal instalments.
A lease deed gives a buyer the ownership of a property for 99 years. Unitech failed to pay an instalment on November 30, 2006, the first time. Since then, the firm has not paid any instalment or interest levied on the default.