On August 31, 2021, the highest court of the land ordered the demolition of two towers by real estate company Supertech. The judgement was a consequence of construction violations being done by the developer in its project at Noida.
The sequence of events is a depressing read. In simple and short – the story of the project Emerald Court is of extra floors first being added in the plans of existing buildings and then extra buildings being added in the same plot of land.
Also Read: SC orders demolition of Supertech twin towers in Noida; observes construction was illegal
The area that was marketed as being open space for earlier home buyers was instead used for new construction. Unsurprisingly, home buyers weren’t happy. Surprisingly, they fought back with a vigour that should be an inspiration for hassled homebuyers across the nation.
It took me back to my recent trip to the city of Noida where I managed to see several housing projects by different players. The controversial Supertech offering was not on my itinerary but I managed to get a glimpse of the illegal towers (and a few legal towers) from a neighbouring project that almost everyone in Noida was recommending me to view: ATS Village. In its own right, the Supertech project may hold itself but in comparison to the ATS offering, it appeared inadequate. It wasn’t the only one.
The Noida market, in general, was largely disappointing. One of the bigger disappointments was in learning that the “super area” scam is still largely prevalent in that market.
In an uncanny way, the Supertech case is an appropriate symbol of the ‘super area’ circus that still prevails in Gurgaon and Noida. Apartments are sold with promises of large open space. The large open space gets accounted for in the ‘super area’ that is marketed to customers. Except – the large open space no longer remains large, as rules subsequently permit more construction of towers. The new construction happens in the once ‘promised open space.’
Unique case
On that parameter alone it is fair to say that Supertech is not the only builder that has resorted to such practices. Several others do it.
Also Read: Supreme Court order in Supertech Twin Towers case a reform in itself: homebuyers
A few of them are listed entities who often ramble, unconvincingly, on their corporate governance and ethical standards. Yet the Supertech case is unique in two ways.
1. The company was so confident on its connections that they got reckless. The Noida Authority was even more brazen in displaying the pocket it was owned by. The SC inferred “a nefarious complicity of the planning authority in the violation by the developer.” The legal arguments in court eventually had to rest on the definition of “building block” as well the Hindi version of select words.
2. Tough and spirited set of customers who fought the cases relentlessly over the years. In particular, four residents (I am deliberately naming them) – UBS Teotia, SK Sharma, Ravi Bajaj and MK Jain, who are credited with leading the charge.
The future
What happens next? For home buyers of the 15 towers, it is a win. But for homebuyers of the illegal two buildings, it is a loss.
Some of them have escaped by taking refunds from the developer. Few have taken a transfer to other projects of the developer. 252 home buyers have however remained with the illegal two towers. The Supreme Court has ordered a refund with interest to these buyers. Unfortunately, I suspect that it will be a long battle for these buyers to recover their investment.
For Supertech, it will be a monumental task to regain its earlier glory. Reputations in the real estate business are hard to build but are easily tarnished. With a debacle of this magnitude, it will take a miracle to rebound. The problem often lays with the intent. Nimish Gupta of Qonquests Technical Solutions bluntly points out that an “ambitious approach and system infested with corrupt practices and greed may provide buoyancy for some time. However, if the intent gets corrupted, the end result is what you see in this case.”
Shame on Noida authority
For the Noida authorities, it is yet another disgraceful moment after previous instances of its CEO being sent to jail. It is heartening to see the Chief Minister of Uttar Pradesh ordered an enquiry to fix accountability on the Noida officials. Justice will be served if suspensions and criminal prosecution are taken to their logical conclusion.
Also Read: Supertech case | UP sets up SIT to probe irregularities
For the Noida market, this is another big blow as customer sentiment gets hit further. The trend had anyway moved decisively in favour of ready-to-move inventory and ‘branded developers.’ This will get further reinforced creating a liquidity challenge for several builders outside the top-rung.
At the end of the day, this is an episode of triumph. Illegal towers will be demolished. That is only the beginning. Noida’s triumph will however be when the rotten nexus that allowed it to flourish in the first place will get demolished.
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