Supreme Court Swat Noida Bodies For Ignoring Homebuyers

                The Supreme Court on Friday issued a stern 
rebuke to land-owning and development 
authorities in Noida, castigating them for their 
indifference for the suffering endured by 
thousands of homebuyers who have been 
waiting for years to receive their apartments. 
These homebuyers, the top court lamented, 
have found themselves trapped between real 
estate developers’ inability to complete 
construction and the authorities’ relentless 
pursuit of recovering dues owed by such 
developers.
“Most of the projects under the IBC (Insolvency 
and Bankruptcy Code) are in Noida, and Noida 
authorities are largely to blame for this. The 
scheme they framed, they never bothered 
about flat buyers. They are least concerned 
about flat buyers,” remarked a bench led by 
justice Sanjiv Khanna the bench, highlighting 
the systemic neglect of homebuyers’ rights.
Coming down hard on the Yamuna Expressway 
Industrial Development Authority (YEIDA) for 
assailing a resolution plan for the debt-ridden 
Jaypee Infratech Limited (JIL) over 
compensation claims, the court rued that the 
authorities in Noida prioritised the recovery of 
dues from developers over the interests of 
those who had invested in homes.
The bench, also comprising justices Sanjay 
Kumar and R Mahadevan, directed YEIDA to 
submit records of schemes and regulations it 
has framed and implemented to ensure the 
protection of homebuyers’ interests when 
entering concession agreements with private 
developers.
Asserting that the authority must act in a way 
to protect the flat buyers, the bench added: 
“You can’t say I’m concerned only about my 
money and that I have nothing to do with the 
flat 
buyers. That won’t be acceptable to this court.”
The directive came during the court’s hearing 
of YEIDA’s appeal against a May 24 order of 
the National Company Law Appellate Tribunal 
(NCLAT), which had approved the Suraksha 
Group’s resolution plan for JIL, which has 
failed to deliver nearly 20,000 apartments in its 
“Wish Town” housing project in Noida and 
Greater Noida.
The Supreme Court’s insistence on protecting 
homebuyers’ interests offers a glimmer of 
hope for tens of thousands of homebuyers, 
who have been caught in the crossfire of the 
prolonged real estate and financial dispute. For 
nearly a decade, these homebuyers have faced 
uncertainty and financial strain as real estate 
developers failed to deliver promised 
apartments, while development authorities 
focussed primarily on recovering their dues.
As soon as the matter came up on Friday, the 
court, however, was clear in its stance that the 
authority could not focus solely on recovering 
its dues at the expense of the homebuyers.
“Even if you want a concessionaire to pay, they 
will not pay from their own pocket. They will 
shift the burden on the home buyers... Ultimate 
sufferers are the flat buyers,” it told solicitor 
general Tushar Mehta, who appeared for 
YEIDA.
While SG pointed out that the authority was not 
against the rehabilitation of the projects, but 
was acting in a public duty to collect dues that 
will eventually be used for public amenities, 
the bench countered by demanding evidence 
of what YEIDA had done so far to assist the 
distressed homebuyers.
“You told NCLAT that you want to extend a 
helping hand to the home buyers. Now, you 
show us what you have done... Let us tell you 
that if you are not concerned about the home 
buyers, this court will step in,” the bench 
remarked.
In its order, the court directed YEIDA to submit 
a detailed affidavit outlining the monetary and 
other concessions granted to homebuyers, as 
well as the status of projects delayed due 
to IBC proceedings. The authority was also 
instructed to provide specific clauses in its 
agreement with Jaypee Infratech that were 
meant to protect the interests of flat buyers.
“You gave it (land) to Jaypee, and you cannot 
now say I am not responsible for anything. You 
must tell us what you have done,” the bench 
told SG while scheduling the next hearing in 
October.
The court also refrained from interfering with 
separate proceedings initiated by YEIDA, which 
challenged an arbitral award favoring Jaypee 
against the authority’s demand for 
additional compensation from the lessees of 
land, including corporate debtors.
NCLAT’s May 24 order had set aside a previous 
decision by the National Company Law 
Tribunal (NCLT) that had asked Suraksha 
Group to pay only ₹10 lakh towards farmers’ 
increased land compensation. YEIDA had 
sought ₹1,689 crore in compensation, but 
NCLAT ultimately ruled that Suraksha Group 
could pay 79% of this amount – ₹1,334.3 crore 
– 
over four years.
“The impugned order passed by adjudicating 
authority (NCLT) insofar as it deals with the 
claim of the appellant of ₹1,689 crore of 
additional farmers’ compensation is set aside. 
The 
rest of the impugned order approving the 
resolution plan is upheld,” stated the NCLAT 
order, delivered by chairperson justice Ashok 
Bhushan and member (technical) Barun Mitra.
NCLAT directed Suraksha Group to implement 
its modified resolution plan, emphasising the 
need for swift action to benefit all 
stakeholders, including 20,000 homebuyers 
and 10,000 
farmers.
NCLAT order revived hopes of homebuyers, 
who have been waiting nearly a decade to 
receive their homes – many of whom have 
paid over 50% of the total flat cost.
In addition, YEIDA had also raised a demand in 
April 2024 for Suraksha Group to pay ₹1,500 
crore as external development charges (EDC) 
for the development of common area 
facilities in the Wish Town project. However, 
NCLAT’s order did not address the EDC 
demand, leaving the issue unresolved.

Source : The Economic Time