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GDA may lose ₹250cr as HC terms its demand for extra fee from builders illegal
In a setback that may cost the Ghaziabad development authority (GDA) about ₹250 crore, the Allahabad high court (HC), on Tuesday, held illegal and without jurisdiction
In a setback that may cost the Ghaziabad development authority (GDA) about ₹250 crore, the Allahabad high court (HC), on Tuesday, held illegal and without jurisdiction its demand for development charges under various heads—elevated road cess, Metro station cess, additional fee for increasing floor area ratio (FAR) from 1.5 to 2.5, and security deposit for rain water harvesting (RWH) units—from Raj Nagar Extension Developer’s Association.
GDA chief architect & town planner Asheesh Shivpuri said the GDA would challenge the order in the Supreme Court. “The developers had come to the GDA and requested development of the elevated road and Metro station. The UP government’s proposal for increasing the FAR to 2.5 was not approved by the GDA board. We will challenge the order in a higher court. The scrapping of charges is likely to cost us to the tune of about ₹250 crore, which will also hamper other development works,” he said.
On Tuesday, the HC, in its order, dismissed the GDA’s demand from members of the petitioner society
In 2017, the petitioners—a registered society of realtors—had approached the court contending that levying additional charges as part of the external development charge (EDC) were against the provisions of the UP Urban Planning & Development Act, 1973, and rules framed.
The lawyers for the petitioners contended that individual developers or members of the petitioner society were not concerned with the construction of the elevated road or the Metro station. They also contended that FAR for group housing is admissible to the extent of 2.5 across state and, therefore, the demand of fee for increased FAR was illegal. They similarly contended that there was no provision (under the UP Urban Planning and Development (Assessment, Levy and Collection of Development Fee) Rules, 2014) for demand of security deposit of ₹2 lakh for RWH unit.
The court, in its order, held that development fee covers construction of roads, drains, sewer lines, water supply and electricity lines, etc. “The construction of elevated road or of the Metro station would not be covered within the definition of development fee, whether it happens to be internal or external, so as to authorise the development authority to demand and collect the same... A perusal of the aforesaid Rules (UP Urban Planning and Development (Assessment, Levy and Collection of Development Fee) Rules, 2014) would also reveal that there is no provision for demanding or collecting any development fee in context with elevated road or Metro station,” the bench, comprising Justice Pankaj Mithal and Justice VC Dixit, said.
“Accordingly, the demands for external development fee under the head elevated road and Metro station; fee for increased FAR from 1.5 to 2.5; and security (deposit) for rainwater harvesting are held to be illegal and without jurisdiction. The said demands are hereby quashed in so far as they relate to the members of the petitioner society,” the order stated.
“In 2012, the state government increased the FAR from 1.5 to 2.5 for developers subject to the condition that the revision would have to be approved by the board of the local authority. The GDA board did not approve the proposal. The scrapping of the charges by the court is likely to cost about ₹125 crore on account of FAR and about ₹70 crore on account of the elevated road and Metro cess,” said a GDA officer who did not wish to be identified.
“At present, we charge ₹3,209/sqm as EDC. Of this, ₹900 is cess for Metro station and elevated road from zone 1 (Raj Nagar Extension). Under the Act, the said charges can be realised to a maximum of about 25% of the EDC. On fixed deposit for RWH units, the deposit is always in name of the developer and the interest accrued also goes to the developer,” said a GDA officer who did not wish to be identified.
GDA officials said that the ₹150-crore river Hindon Metro station, as part of the 9.4km Metro route, and the Hindon elevated road were both constructed as per demands raised by developers of the Raj Nagar Extension developers to promote housing in the area.
“We are searching our records and all representation made by the developers will be produced before the Supreme Court,” Shivpuri said.
The developers’ society did not respond to request for comment on the matter despite repeated attempts.
