The Noida Authority has issued a show-cause notice to Three C Greens for not completing the Sports City project in sectors 78, 79 and 101 and violating the allotment lease terms of the project. The authority has also warned the builder that it could cancel its allotment.
Under the project, the builder had to develop sports facilities along with housing but even after a decade hardly any sports infrastructure has come up in these areas.
Three C Greens is currently under Corporate Insolvency Resolution Process (CIRP). Even as the Noida Authority warned the developer of cancelling the allotment, the builder’s resolution professional (RP) in a letter to the authority said that the notice issued against the builder is “misconceived and misplaced” and demanded withdrawal of the notice.
Registry of flats of thousands of homebuyers in these sectors are stuck due to the main developer not having completed sports facilities mandated under Noida’s Sports City scheme. Homebuyers say the move will not benefit them.
Also Read: Noida Sports City scheme led to losses worth Rs 9,000 crore: CAG
The issue
According to officials, in 2008 the board of the Noida Authority approved a masterplan for sports cities with an aim to provide the best sporting infrastructure along with housing. After approval of the masterplan, the authority in 2011 launched the Sports City scheme in sectors 78, 79 and 101 in which a concept of such a lifestyle was envisioned where housing was to be co-developed with world-class sports facilities.
Under the scheme, 70 percent of the area had to be reserved for recreational and sports facilities, commercial infrastructure was to be allowed on 10 percent area and 20 percent area was to be utilised for developing residential plots or group housing projects.
MC Explains
Land for sports cities was granted to real estate developers at a concessional rate in lieu of sports infrastructure that they had promised to construct.
A Noida Authority official said that as part of the scheme, land parcels measuring between 150 acres and 200 acres were allotted in sectors 78, 79 and 150, one in Sector 101 and one in Sector 152. These were to have academies for cricket, tennis and swimming along with a 9-hole golf course.
“Though the builders were given land primarily for developing sports facilities, they, over the years, sub-leased these land parcels to other private developers, leading to a number of group housing projects mushrooming in the area where sports facilities were expected to come up. Some also failed to pay up land premiums and dues accumulated, which are yet to be recovered,” the official said.
In January 2021, the authority banned land sales in the area and halted the process of issuance of occupation certificates to developers until the promised sports facilities were developed.
According to a Comptroller and Auditor General (CAG) report released in December 2021, none of the sports facilities in the Sports City has been completed even though the deadline for this varied from October 2016 and December 2019 across the sectors.
The scheme led to losses of Rs 9,000 crore to the exchequer and plots worth Rs 4,500 crore under the scheme were allotted to entities that did not meet the technical eligibility criteria of net worth, turnover or past experience, the CAG had said in its report.
It had said that the reserve price for the plots varied from Rs 11,500 per square metre to Rs 26,200 per square metre.
Also read: Only 16,800 homebuyers could get flats registered in Gautam Budh Nagar until February 2023: Data
Noida Authority’s actions
According to Noida Authority officials, nearly 180 acres was allotted to Three C Greens in 2011 in sectors 78, 79 and 101 for developing sports facilities in the area. As per the lease terms, the developer was to develop the facilities within five years of allotment and complete the entire project within seven years from allotment.
“We have issued show-cause notice to the developer because nearly 12 years have passed but sports facilities have not yet come up in the desired locations. According to the agreement, the developer has to spend Rs 410 crore on developing sports infrastructure but only a negligible amount has been spent so far. The builder also failed to clear dues,” Devendra Nigam, senior manager (planning), Noida Authority, told Moneycontrol.
The notice issued by the authority on March 17 said that the developer flouted the terms of the lease agreement.
“Please tell in 15 days as to why your allotment should not be cancelled for violating the terms of allotment (of Sports City project). If the developer did not provide a satisfactory answer within the given time-frame then it will be understood that they have nothing to say and cancellation proceedings will be initiated as per lease terms accordingly,” the notice read.
Nigam said that the future course of action will be decided after April 2.
The authority had last year appointed a consultant to assess the condition of sports facilities across sports cities in Noida. Nigam said that the consultant will make sure that sports facilities are built as per the norms and terms specified under the scheme. “The report of the consultant is yet to be submitted,” he said.
Developer’s take
The developer Three C Greens is currently being represented by resolution professional (RP) Gyan Chand Mishra.
“The Noida Authority has already lodged its claims in the CIRP of Three C Green Developers Private Limited on August 18, 2022, and is thus subject to the outcome of final decision which is being taken in the resolution process of the said corporate debtor. Thus, the letter under reference sent by your good office is mis-conceived and mis-placed and appears to be an attempt to over-reach the judicial process,” the RP said in his reply to the authority.
Mishra also pointed out that the land acquisition by the authority was faulty.
“It is further pertinent to point out that the issues with regard to the scheme of Sports City, Sector 78-79, Noida, has certain peculiar unresolved issues which are pending redressal on part of the Authority. You would be aware that concerning the faulty acquisition and its consequent effect on the scheme of Sports City, sector -79, writ petition (civil) of 2019 is pending before High Court at Allahabad titled in which Noida is also a party,” the RP said.
He said that the authority must be aware that it has granted “zero period” right from the launch of the scheme till 2017, which was primarily on account of “faulty acquisition”.
Mishra said that he has moved several applications for proper demarcation and handover of the land allotted to the corporate debtors to Three C Greens in Sector 79, which has various unresolved issues of clear possession and there being repeated obstruction and protests by local farmers in the builder’s attempt to take possession of the land and fence the same.
An application was also filed by the RP last year with the National Company Law Tribunal, New Delhi, in this connection and the RP has further sought the assistance of the court commissioner to supervise demarcation.
Responding to these claims, Nigam said that the work related to demarcation of land is going on and a survey is being conducted in this regard, which will be completed soon.
What homebuyers have to say
Homebuyers in these sectors are unable to get their flats registered due to the peculiar situation prevailing.
Namit Gautam, an affected homebuyer, said that the move of issuing notices to the developer seems unlikely to benefit homebuyers.
“I have invested in one of the Sports City projects in Sector 150 but I have been waiting for the registry of my flat for the last two years. The authority has stopped registry of flats and also halted the process of issuing OCs for the projects due to non-payment of dues by the builder and also for not developing sports facilities and now they have served notice to the builder. But all this is futile if homebuyers are unable to get possession and get their homes registered,” Gautam said.
He said that instead of cancelling the land allotment or issuing notice, the authority should blacklist such developers and think about the benefit of homebuyers. Registries of flats should be started as it will also bring revenue to the government, he said.
Also Read: Homebuyers of Noida Sports Cities projects have to wait longer to register units
Another homebuyer, Ashwani Pachauri, a resident of Sector 79, said that he had been waiting for the registry of his flat for the last one and a half years but there has been no relief.
“It is a stalemate between the builders and the Noida Authority but homebuyers are at the receiving end. Thousands of homebuyers are compelled to pay EMIs against their home loans along with the rent. The government should carve out a middle path in a way that it benefits the homebuyers and registries of their homes should begin,” Pachauri said.
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