Noida to issue notices to defaulter builders to recover Rs 11,000 crore dues
The Noida Authority, since 2007 onwards, allotted housing land on an instalment basis after accepting 10% of the total land cost. The builders were to pay the remaining 90% in instalments but they defaulted.Updated: Apr 16, 2019 16:59 IST
The Noida authority on Monday said it has decided to issue notices to builders, who have defaulted on payments of their land dues. The authority will first review each builder’s accounts and then issue notice for the defaulted amount.
The authority is struggling to recover Rs 11,000 crore in land dues from 94 builders. The authority, since 2007 onwards, allotted housing land on an instalment basis after accepting 10% of the total land cost. The builders were to pay the remaining 90% in instalments. The builders stopped the instalments, citing a dip in sales and an economic slowdown in the realty sector, officials said. Some of the builders have not made any payment against their dues in the last five years, officials added.
“We have started the review of accounts of defaulter builders. Once we ascertain the total outstanding against each builder, we will issue notices as per the law to recover the dues,” Inder Vikram Singh, additional chief executive officer, Noida authority, said.
As builders have stopped paying their land dues, the authority has started witnessing a financial crunch. In 2013, the authority had Rs 3,500 crore in fixed deposits with different banks and used to earn an interest on this money. Since the builders stopped paying land dues, the authority has been spending out of this Rs 3,500 crore on various accounts over the years.
If a builder starts defaulting the payment of land charges, the authority imposes 12% interest on the defaulted amount. If the builder repeatedly fails to pay up, then the authority increases the rate of interest. In some cases, the authority has imposed interest up to 17%. As a result, the defaulted amount keeps on increasing against the builder.
The authority has also decided to upload the defaulted amount on its website under its property management system.
“The defaulted amount will not be made public on website. Since we are on our way to upload all property details online, our allottees (builders and individual) can see the defaulted amount on our website after registering themselves by providing the required details,” Singh said.
The authority is putting all property details online and that includes information technology (IT) plots, group housing plots, residential, institutional and other categories of plots.
“Once all our details are made online, and the system starts functioning, allottees can pay dues or execute many jobs via the online system,” Singh explained.
First Published: Apr 16, 2019 16:59 IST