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Earlier this month the Supreme Court took a decision to revoke its 10 June 2020 order which had a set a fixed 8 per cent rate of interest in debts for land supplied on lease to various builders. With the new order, builders will now have to pay up pending dues related to their land allotments. Builders believe this decision is likely to result in the many filling for bankruptcy and the postponement of registration of over 1.6 lac properties in Noida and Greater Noida as issuance of occupancy and completion certificates is directly dependent on payment of debts.
Earlier this month the Supreme Court took a decision to revoke its 10 June 2020 order which had a set a fixed 8 per cent rate of interest in debts for land supplied on lease to various builders. With the new order, builders will now have to pay up pending dues related to their land allotments. Builders’ associations such as CREDAI-NCR urged the Supreme Court to take a sympathetic stand and offer a one-time penalty to defaulters rather than the proposed fines as the latter is likely to push many to file for bankruptcy.
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In a conference hosted by CREDAI-NCR in Noida recently, over 100 builders and developers gathered to discuss their fears and grievances regarding the Supreme Court's decision on penalty for non-payment on land dues. The hefty penalties now levied on the builders has caused a conundrum, to say the least. Builders believe this decision is likely to result in the postponement of registration of over 1.6 lac properties in Noida and Greater Noida as issuance of occupancy and completion certificates is directly dependent on payment of debts.
Several delays in debt payments have been attributed to reasons beyond the control of the builders such as the COVID pandemic. Many plots assigned to them lacked descriptive titles and construction activity was temporarily prohibited by the NGT order in corelation to the endangerment of the Okhla Bird Sanctuary. The state took a long time to announce a resolution to the farmers’ compensation which is said to have caused more delays. Lastly, in the installation of essential infrastructure such as power and road access were not created within the stipulated time frame by the concerned authorities which delayed the handing over of plots to the builders.
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