The Noida Authority has filed a review petition in the Allahabad High Court against an order directing it to register 330 flats in the Lotus 300 housing project. The earlier order came in February 2024, asking the Authority to grant occupancy certificates and complete registrations within a month. It also ordered an ED investigation against the builders for allegedly siphoning homebuyer funds. In its petition, the Authority argues it cannot register flats due to outstanding builder dues of INR 166 crore. This could set an undesirable precedent for other defaulters under the Authority. The project's developer, Hacienda Project Private Limited, is facing insolvency proceedings.
The Noida Authority has filed a review petition in the Allahabad High Court challenging an earlier order regarding the execution of registries for 330 flats in Lotus 300, a condominium project in Noida Sector 107.
On Feb 29, an HC bench had directed the Authority to grant an occupancy certificate and complete the registries in favour of the homebuyers of Lotus 300 within a month. It also ordered the Enforcement Directorate (ED) to investigate the builders for alleged misappropriation of homebuyer funds.
In its petition, the Authority said it cannot execute the registry due to outstanding dues of INR 166 crores owed by the builders. Allowing registration without settling these dues could set a precedent resulting in significant losses to the exchequer, it argued. The Authority wants permission to take action as per rules when builders default.
In 2010, a consortium including Hacienda Project Private Limited (HPPL) was allotted 17 acres of land in Sector 107 for developing the residential project. At the time, Nirmal Singh, Surpreet Singh Suri and Vidur Bhardwaj were HPPL directors.
In 2022, IndusInd Bank moved NCLT for insolvency proceedings against HPPL. An insolvency resolution professional (IRP) was appointed, imposing a moratorium barring creditors from recovering dues. The Court said the Noida Authority must submit its claims to the IRP.
The HC also clarified the effect of the moratorium under the IB Code was confined only to the debtor company, HPPL, therefore, the promoters would be liable to be prosecuted.
The court observed the promoters had conned homebuyers by launching the project, collecting INR 636 crore, syphoning off almost INR 190 crore, and selling a portion of land to a third company while pocketing the entire sale proceeds of INR 236 crore. It also noted the developers had defrauded hundreds of other homebuyers in various other projects.
The apartment owners' association president said they have reminded the Authority four times since February to issue the occupancy certificate and register flats as ordered by the Court.
The case highlights the legal complexities that arise when real estate developers default on projects. While homebuyers seek possession and ownership of their homes in a timely manner, authorities also need to balance this with recovering dues owed to the exchequer. The outcome of this review petition could influence how such situations are handled in the future.
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