noida news: Representatives of realtors’ bodies CREDAI and NAREDCO met Ritu Maheshwari, CEO of Noida and Greater Noida Development Authorities, and demanded a one-time settlement plan to clear their land dues, citing lack of liquidity.
Last month, the Supreme Court recalled its June 10, 2020 order, which fixed the rate of interest at 8 per cent on land dues leased to various builders. The apex court order is a blow to the builders of Noida and Greater Noida in Uttar Pradesh (UP).
In a meeting yesterday with Ritu Maheshwari, CEO of Noida and Greater Noida authorities, real estate developers from NAREDCO and CREDAI urged the authorities to bring out a One Time Settlement (OTS) scheme similar to the one adopted by the Haryana government. situation arising out of the recent order,” the association said in a statement.
After the withdrawal of the Supreme Court orders, the land payment liability on the developers has increased manifold. Developers have started receiving huge amount of demand letters from the authorities owing to the calculation of compound interest every six months.
“With the severe liquidity crunch the developers are finding it impossible to meet the demands and there is apprehension of cancellation of allotment of plots unless the payments as demanded are made,” the statement said.
NAREDCO-Uttar Pradesh President RK Arora said that the developers have been able to convince the authorities that in the absence of an effective solution to the problem, possession of flats to about 1.5 lakh home buyers, land dues of the authorities and a significant amount of investment will be huge. Numbers of banks and financial institutions are all at stake.
“More and more developer companies are being placed under CIRP (Corporate Insolvency Resolution Professional) by NCLAT, by which home buyers will not get their flats and the land payment due to the authority will become nil as the authorities are treating it as an operational Creditors,” he said.
Therefore, Arora said that it is in the interest of all the stakeholders that the authorities enter into an agreement with the developers to keep the projects running and deliver the flats to the home buyers while recovering the dues of the authorities in installments as per the OTS. The associations also submitted representations suggesting proposals for a solution package in the shape of the OTS.
National Real Estate Development Council (NAREDCO) was established in 1998 as an autonomous self-regulatory body under the aegis of Ministry of Urban Affairs, Government of India. NAREDCO Uttar Pradesh in a representation has pointed out that the real estate sector has been sick for quite some time now due to the stay orders of various courts, NGT and unprecedented developments like the lockdown due to COVID-19.
Arora said, “As a result of the same, land premium payment due to Noida and Greater Noida authorities from developers has tripled taking into account other demands like lease rent, farmer compensation etc apart from land premium, interest and penal interest ” in the letter.
(With PTI inputs)
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