Noida cancels allotment of two realtors over commercial land dues of ₹1,384 crore
The Noida authority on Wednesday said it has started taking ‘stern action’ against those realtors and individual financial defaulters who failed to make payments despite repeated notices. The authority has issued recovery notices to several such defaulters and cancelled the allotment of commercial plots in the past one month, including that of a commercial plot in Sector 105 and another in Sector 124.
According to the authority, the developer in Sector 124 has ₹796 crore dues, while the developer in Sector 105 has dues amounting to ₹588 crore.
“We cancelled the allotment of these two developers because they defaulted on land cost payments and also ignored our repeated notices. We have issued recovery notices against four other realtors, who failed to pay land cost dues, but we did not cancel the commercial land allotment of these four, as these projects are operational and third party rights are in place. Now recovery proceedings will take place as per rules to collect our dues,” said Kumar Sanjay, officer on special duty, Noida authority.
The authority has issued recovery notices against a realtor of a commercial project in Sector 98, which owed ₹350 crore to the authority. Notices have also been issued to a realtor in Sector 52 with ₹869 crore dues, developer in Sector 16 with ₹63 crore dues and another one in Sector 61 with dues of over ₹26 crore.
“Only one project -- a commercial shopping mall in Sector 61 is operational; the rest are in the construction stage as the developers failed to finish the projects on time,” said Sanjay.
Apart from these, the authority also issued seven recovery notices to small defaulters to recover ₹4.26 crore dues and also cancelled allotment of individual allottees of four commercial plots, owing ₹54 crore in dues.
“We have taken action against these 17 allottees in the past two months, after following the due notice procedure,” said Sanjay.
From January 2020 to March 2021, the Noida authority cancelled allotment of nine allottees that failed to pay a total dues of ₹4,905.68 crore and it also issued recovery notices against one individual plot owner for failing to pay ₹94.35 lakh.
As the realty sector is witnessing a slump, with dip in sales of commercial space, industry analysts said most realtors are unable to pay land dues to the authority.
“There are two key reasons why a few commercial projects in Noida could not become a success and repay dues. One is that banks always remain reluctant to finance a commercial project unlike residential ones. The second reason is that the Noida authority or the state government is yet to reduce the interest rate imposed on commercial plots. Without the government reducing the interest rates, a commercial project cannot become financially viable,” said Sunny Katyal, director, Investors Clinic, a consultancy firm.