Moneycontrol PRO

Earth Towne: Some died waiting, others chasing an elusive ray of hope

Launched in 2010 by Earth Infrastructure, the Earth Towne project promised to give buyers their homes within three years.

Earth Towne is one of the eight projects that Earth Infra has in Greater Noida, Noida and Gurugram, including Earth Techone, Earth Titanium and Earth Sapphire.

Earth Towne is one of the eight projects that Earth Infra has in Greater Noida, Noida and Gurugram, including Earth Techone, Earth Titanium and Earth Sapphire.


The real estate sector in Greater Noida West is on the mend but still can’t get rid of the baggage. The landscape is littered with delayed projects, with hundreds of buyers waiting for years to move into their homes, losing money and hope.

Launched in 2010 by Earth Infrastructure, the Earth Towne project promised to give buyers their homes within three years.

The company collected crores of rupees from prospective buyers, who invested their hard-earned money and also took loans, the EMIs of which they continue to pay though not one flat has been handed over. For around 3,000 buyers, the wait is long and agonizing.

Earth Towne is one of the eight projects that Earth Infra has in Greater Noida, Noida and Gurugram, including Earth Techone, Earth Titanium and Earth Sapphire.

In 2016, the work on the project was stopped for unknown reasons. With apartment blocks left incomplete, buyers lodged several FIRs against Earth Infra owners. The project doesn’t have electricity or water connection.

Close

The Noida Police, which investigated the case on buyers’ complaints, said company officials floated several shell companies to divert funds meant for housing projects.

Earth Infra’s managing director and some other officials are behind bars on charges of fraud but homebuyers are yet to get their money.

A senior official of the Sector 20 police station in Noida told Moneycontrol on the condition of anonymity that the charge sheet had already been filed in the case. He said that there were allegations against the company owners that they transferred the money to over 100 front companies run in the names of their relatives.

Legal route for buyers

Around 1,800 buyers formed an association in 2016 and are fighting legally to get their flats. Buyers first approached the Supreme Court in 2016 but were told to move an appropriate authority. They took their case to the National Consumer Disputes Redressal Commission in 2017.

The same year, an investor, Deepak Khanna, moved the National Company Law Tribunal (NCLT) against Earth Infra. The NCLT in 2021 gave its nod to the resolution plan of the Roma Unicon Designex Consortium.

The Roma Unicon Designex consortium proposes to complete the project in five years with an investment of Rs 31 crore to give apartments first to all existing homebuyers and then remaining inventory will be up for sale.

"The total working capital infusion is estimated at Rs 31 crores approximately for the execution of the project over a period of five years," reads the resolution plan reviewed by Moneycontrol. This will ensure that all claimants get their flats.

"Further in case RUD (Roma Unicon Designex) is required to accommodate any additional unitholders for which claims have not been filed up to 12.8.2019, then RUD will charge additional Rs 1,500 per sq ft for residential units and Rs 5,000 per sq ft for commercial units in addition to due amount, as increased cost of the project from such additional claims to be admitted by RUD after 12.08.2019," reads the resolution plan.

After getting NCLT’s approval, Roma asked for the transfer of the land in its favour to carry out the construction. While the NCLT’s order was in favour of buyers and investors, the Greater Noida Industrial Development Authority (GNIDA) objected to it, alleging non-payment of land-lease dues.

The GNIDA has challenged the order in National Company Law Appellate Tribunal (NCLAT) and also approached the NCLT to quash its order.

The NCLAT was to hear the buyer's plea on July 11 but the case was adjourned to August 10.

Earth Towne Roma1

Waking up late

The buyers' association has accused GNIDA of sleeping on its claim and waking up only after the court's verdict.

"The GNIDA did not take any step for recovery of its payments from Earth Towne. The 10 percent rule was a complete fraud. You are approving the map to complete the project within three years and a maximum of five years. Say if the project was delivered to the buyers on time, how could the GNIDA wait for 10 years for recovery of the land cost? The builder would flee by then,” said Sunil Varma, an advocate representing the flat buyers' association.

GNIDA leased the land to Earth Towne at 10 percent of the cost of the land in 2010, while the rest of the amount was payable in EMIs over 10 years. As per the due diligence carried out by Roma, GNIDA's land dues stand at around Rs 144 crore.

Earth Towne did not pay after 2011. “GNIDA had the right to cancel the lease but they did not do so. Why were they sleeping for 10 years and objected to the NCLT order?" asked Varma.

An email sent to GNIDA's CEO Surendra Singh about the case has remained unanswered. Advocate UN Singh, who is representing GNIDA in NCLAT, refused to comment.

Buyers' plight

"We gave Rs 28 lakh in hope of having our home. We sacrificed our children's careers. We have been agitating for the past several years to get what was ours,” said Satya Mitra, who heads the Earth Towne Flat Buyers Welfare Association and is one of the early investors.

A retired soldier, who is living in rented accommodation, and did not wish to be named, blamed the lack of political will in resolving the issue.

"I have lost all hopes. I invested all my savings but am forced to live on rent....We have been reduced to mere spectators," he said.

Buyers filed a case in NCLT in 2018 (this was after Deepak Khanna’s case; both cases were clubbed but the COVID outbreak in 2020 and 2021 brought the case to almost a standstill. Some of the buyers, who were senior citizens, passed away, Mitra said.

Many people who had invested in the project in 2010 are now retired.

"My father invested in the project when he was working. He has retired but since we took a loan for it, we are still paying EMIs. We did not get any moratorium from the banks during the COVID and continue to live on rent. After last year's court clearance, at least three towers would have been readied by now and many of us standing here today would have got possession as well. But Greater Noida Authority objected and is not allowing any construction to happen," said Sunaina Sharma, another buyer.

Mitra alleged that the project was announced with 26 towers (2,600 flats) on around 73,942 sq meters (around 18.3 acres) in 2010.

The Earth Towne Pvt Ltd, however, changed the plan next year and increased the number of towers to 29 to accommodate 2,900 flats.

A second revision was done to the Master Plan in 2014, increasing the apartment blocks to 34 and the number of flats to 3,400.

"So, while they had to give possession in three years, the constant change in the master plan allowed them an extension in the deadline as well," he said.

What remains to be done?

In the resolution plan, the consortium said around 1,668 people had filed claims about advances given by them to Earth Infrastructures.

Since 12 towers are there, the new builder will have to construct at least five more towers. They will also have to complete work on the 12 blocks to ensure that all flat buyers get their units.

If the land is not transferred to Roma, it can delay construction.

"We had received the order from the NCLT to start work. GNIDA challenged that order in NCLAT. The hearing is going on in NCLAT. The NCLT had written off the dues of GNIDA but the authority challenged it in the appellate authority,” said Aakash Deep, Managing Director, Roma Builders, which leads the Roma Unicon Designex consortium.

“Our legal team is working to take the case to a conclusion...It's a court-monitored project. The project will be delivered in phases. We will start delivery in two years and complete it in five years," Deep said.

Experts said that as the matter is sub judice, an early resolution can only be achieved after taking all stakeholders on board. This includes the flat buyers, the Greater Noida authority, the resolution applicant (Roma) and the investors. The NCLAT order, when it comes, can be challenged before the Supreme Court, prolonging the legal battle and delaying the implementation of the resolution plan.

Project timeline:
1.9.2010: Earth Towne is conceptualised. A lease agreement between GNIDA and Earth Towne is signed. Flat buyers start investing.
2011-2015: Multiple revisions in Master Plan by Earth Towne, construction of 12 towers and foundation of five towers is laid.
2016: Construction stops; FIRs lodged by buyers against Earth Infra owners
12.08.2017: Earth Towne is registered with UP-RERA.
2017: Around 300 buyers move National Consumer Disputes Redressal Commission, seek refund and possession.
2017: Deepak Khanna, an investor, files a case in NCLT. Notices issued and buyers are asked to file claims.
2017-18: Four directors of Earth Iconic Infrastructures Limited Atul Gupta, Vikas Gupta, Avdhesh Goel and Rajneesh Mittal are arrested.
Amit Satija, the senior vice president of Earth Iconic, also arrested in the Earth Titanium case
2018: NCLT admits Khanna's plea. Notices issued and buyers asked to file their claims. A committee of creditors is formed.
2019: Aditya Goyal, son of AvdheshGoyal, one of the directors of Earth Infrastructure, is arrested.
2019: Roma builders awarded the Earth Towne project after the COC meeting and the appointment of a resolution professional. COC approves the resolution proposal.
2021: Roma builder's resolution proposal cleared by NCLT. The proposal seeks the transfer of land from the GNIDA, which objects to the plan terming it illegal and demands payment of dues. NCLT dismissed the authority's objection. GNIDA moves NCLAT.2022: Case continues to be in the NCLT/NCLAT
Akash Sinha
first published: Aug 4, 2022 04:23 pm
Sections
ISO 27001 - BSI Assurance Mark