Outstanding dues | Developers meet Noida and Greater Noida CEO, seek waiver of penal interest

The CREDAI meeting in progress.

Days after the Noida Authority sent notices to builders following a Supreme Court order asking them to pay their outstanding dues or face action, the real estate developer community on December 6 handed over a memorandum to the CEO of Noida and Greater Noida Authorities and sought a waiver of penal interest. The builders also urged authorities to avoid coercive action.

In the memorandum, the Confederation of Real Estate Developers' Associations of India (CREDAI) requested the Noida and Greater Noida authorities to take homebuyers’ interests into account and conduct a joint meeting of builders for mutual discussions on the issue.

The development comes weeks after the Noida Authority sent notices to over 70 developers asking them to clear their land dues following the Supreme Court order.

Manoj Gaur, President CREDAI NCR and CMD Gaur Group, said that the meeting was to seek solutions to pave the way for the execution of buyer’s registries by addressing the problems.

“CREDAI NCR met CEO of Noida and Greater NOIDA Authority Ritu Maheswari. The delegation handed over a memorandum seeking waiver of penal interest and rational consideration of the dues to respective authorities including interest in view of the core issues which are being faced by our members in NOIDA and GNIDA region,” Gaur said.

He added that the CEO has assured them to resolve the issues keeping in mind the problems which buyers are facing in their registries.

“It was a positive meeting with the CEO. She has assured us that the Noida Authority address administrative issues such as time extension and Kisan Pratikar. She also said that decisions on financial matters such as one-time settlement (OTS) scheme will be taken by the UP Cabinet,” Gaur said.

He also said that the CREDAI will also approach the state government and seek an amnesty scheme for the payment of dues.

There was no response from the Noida Authority on the matter. The total amount to be recovered by the authority is Rs 9,000 crore.

The real estate developer community has said that the move can delay the registry of 1.5 lakh homes in the two satellite cities of Delhi -- Noida and Greater Noida.

The apex court had on November 7 quashed its 2020 order and directed builders to pay land dues as per the terms and conditions agreed upon between them and the authorities.

The court in its previous order of June 2020 had directed the authorities to cap the rate of interest at 8 percent for the delay in payment of land dues.

According to the terms of the agreements between builders and the authorities, the rate of interest for delayed payment was pegged at 15-23 percent.

The CREDAI in its memorandum said: “Formulate an amnesty scheme or one-time settlement scheme akin to one applicable in Haryana and kindly reconsider the interest and waiver the penal interest on the outstanding dues of Authorities or in the alternative formulate the scheme for waiver of penal interest and calculate the dues by considering the dues with simple interest rate at SBI MCLR.”

The developer community also requested rational consideration of Time Extension Charges as the delay is caused in the ongoing projects due to various reasons.