Greater Noida to waive interest on land dues of builders stuck in litigation
The move is aimed at helping builders who are going through a financial crisis. The interest waiver will help revive stuck housing projects and deliver flats without further delay.noida Updated: May 31, 2017 12:51 IST
The Greater Noida authority chief executive officer Debasish Panda has decided to give an interest waiver to builders whose realty projects are delayed owing to litigations.
The move is aimed at helping builders who are going through a financial crisis. The interest waiver will help revive stuck housing projects and deliver flats without further delay.
The Greater Noida authority had allotted group housing land to builders in 2008-09 on an instalment basis. Builders deposited 10% of total land cost at the time of the allotment. The remaining 90% was supposed to be paid in instalments. If a builder defaults on paying the instalments, then the authority charges a 12% interest on the principal amount. When the land disputes began, builders started defaulting on payments. Now they have sought a waiver for the period affected by litigation.
However, officials said some builders are making false litigation claims to avail of the waiver.
Many Greater Noida West builders have been demanding an interest waiver for the period during which they could not carry out construction because of court cases between farmers and the Greater Noida authority.
“We will declare ‘Zero Period’ for the time when construction was disrupted due to litigation. For the Zero Period, a builder will not need to pay interest on the defaulted principal amount. But the interest waiver for the Zero Period will be given only to genuine cases,” Panda said.
To identify genuine projects that faced court cases in the Allahabad high court and the Supreme Court, the authority will conduct a survey.
“I have ordered for a fresh survey to identify those projects, which were affected due to court cases. There are many builders seeking an interest waiver. We cannot give a waiver to everyone as the authority will go bankrupt. Those who faced problems due to litigation will be given an interest waiver,” Panda said.
The Confederation of Real Estate Developers Association of India (CREDAI) has been for long demanding an interest waiver from the authority in Noida and Greater Noida.
Farmers in Greater Noida West had in April 2011 challenged the forceful land acquisition in the Allahabad high court. Dispute in some cases between the authority and farmers were settled in 2012. Others are pending in the high court and the Supreme Court even today.
“I have asked my staff to look into the specific period when the construction in a particular project was affected due to litigation,” Panda said.
There are around 20 realty projects in Greater Noida West which are seeking an interest waiver.
The Amrapali Group, which is developing 28,000 flats in the area, has also sought a waiver on interest.
“Our work was affected from April 2011 to May 2015 due to litigation. We demand a waiver for the four years. If the authority agrees, will get a waiver of Rs 1,000 crore for the four years. This will put us out of the defaulter’s list and then banks will help us deliver flats on time,” said Shiv Priya, director, Amrapali Group.
The Amrapali Group has 12 lakh square metres of land on which it is developing five housing projects.