A writ petition was filed by Amrapali Group in 2017 in the Supreme Court, seeking to decrease the return on investment (ROI) charged by Noida and Greater Noida authorities to calculate outstanding dues, including premium, from 15-23 per cent to 8 per cent.
In a relief to builders of Noida and Greater Noida, on June 10, 2020, in Bikram Chatterji vs Union of India and others, the Supreme Court ordered that the real estate industry needed to be given an impetus and the builders should be given relief because many of them were struggling to survive due to Covid-induced economic slowdown. The order was passed keeping in view the then situation of flat buyers in Noida and Greater Noida over delays in construction and delivery of projects and flats. The court had ruled that charging builders a reasonable ROI of 8 per cent from January 1, 2010, would allow them to finish incomplete projects. However, the court had not then considered the loss of ₹3,000-4,000 crore for the authorities.
The authorities asserted that a ceiling on lending rates would cause them to lose around ₹7,500 crore, leaving them “financially ruined”, and lead to “unjust enrichment” of builders.
The Supreme Court, on November 7, approved the applications from the authorities to recall the 2020 ruling on the grounds that they incurred losses and their operations had come to a halt. The two civic bodies also claimed that several builders had withheld information from the court, leading to the previous order that favoured the developers. The authorities emphasised the need for interest on land costs and argued that Noida City does not impose a home tax, yet maintains good infrastructure and metro services. They also claimed that no builder went to court after the allotment to complain about the high interest rate.
(The writers are Managing Partner and Partner, respectively, with SNG & Partners, a law firm)