SC Tells Greater Noida Authority to Revive Housing Project
The Supreme Court has directed the Greater Noida Industrial Development Authority (GNIDA) to assist homebuyers in reviving a stalled housing project that has been abandoned for years. In a ruling aimed at protecting the interests of thousands of affected homebuyers, the Court has called for the Authority to provide key financial details that will aid in determining how the charges should be apportioned to homebuyers for completing the project. This includes calculating the costs that would have been imposed if the original builder had successfully finished the development.
The project, initially started in 2004, was abandoned after the cooperative housing society responsible for its construction failed to clear outstanding dues despite having collected funds from homebuyers. As the project faltered, many homebuyers found themselves unable to move into their promised homes and were left with significant financial liabilities, having often taken loans to pay for the flats.Greater Noida Authority for its lack of cooperation in helping to restart the stalled project. The Court expressed dissatisfaction with how the Authority had handled the revival efforts, noting that the homebuyers had been cheated by the builder, who had disappeared years ago, and that the current owners had come together to try and salvage what was left of the project.The Authority’s inaction has been a significant barrier for homebuyers hoping to recover their investments, and the Court’s order is a crucial step in holding the authority accountable. The Justices remarked that the homebuyers’ efforts to rebuild the project in parts were being hampered by the Authority’s failure to provide necessary assistance, highlighting the urgency of resolving the issue to benefit those who had been left stranded.
The Golf Course Sahakari Awas Samiti Ltd, which applied for the land allotment from the Greater Noida Authority in 2004, faced serious financial issues when it failed to pay its dues to the Authority, leading to the eventual cancellation of the land lease. Homebuyers allege that the society, in collusion with financial institutions, misled them and defrauded them by ceasing payments to the Authority. An FIR was registered against the directors of the society, but the legal battle has stretched over several years.In 2016, the Allahabad High Court upheld the decision of the Greater Noida Authority to cancel the lease, citing the society’s failure to meet its financial obligations. Homebuyers, however, dissatisfied with this ruling, approached the Supreme Court, seeking justice. In response to the grievances, the Court has ordered that a roadmap be presented by the Central Bureau of Investigation (CBI) for investigating the alleged “builder-bank nexus.” This scheme, under which banks disbursed large portions of home loans directly to builders, had left homebuyers financially vulnerable when the projects failed to meet deadlines.
The subvention schemes, which allowed developers to delay construction and push the burden of interest payments onto the buyers, have been a significant source of concern. In these arrangements, banks were responsible for disbursing up to 70% of the home loan amount directly to the builders, while developers were supposed to pay the EMIs until the homes were delivered. However, when builders failed to complete the projects, the burden shifted to the homebuyers, who were already caught in financial distress due to the delay.The Court’s intervention has shed light on the broader issue of accountability in the real estate sector, particularly concerning the lack of transparency in such schemes, which have affected thousands of homebuyers across the National Capital Region. In directing the Greater Noida Authority to cooperate, the Court is making a significant push for accountability and fairness, while also ensuring that the financial interests of those affected are safeguarded.
This case also serves as a critical reminder of the importance of transparency in real estate dealings, particularly for homebuyers who often find themselves at the mercy of builders and financial institutions. The Supreme Court’s directive aims to restore the faith of homebuyers in the system and hopes to set a precedent for similar cases in the future, where developers and authorities must be held accountable for their role in abandoning or delaying projects.
