Noida Extension Case: Builders Promise to Protect Buyers’ interests House for Rent Real Estate Today

Noida Extension Case: Builders Promise to Protect Buyers’ interests

July 14th, 2011 | by Lucinda Dodd |

The recent ruling of the Supreme Court, which upheld the quashing of the land acquisition of 156 hectares of land in Sahbari village in Greater Noida by the Allahabad High Court, has led to the loss of Rs 500-600 crore to the builders involved in the project. This was claimed at a press meet of CREDAI Western UP held in Noida, on Thursday. However, it was asserted that this loss would not be transferred to home buyers as they will be given the option of getting their entire invested money refunded with interest.

Besides the stalled real estate projects in Sahberi village, there are a plethora of ongoing residential real estate projects in Noida Extension, which is a part of Greater Noida. According to Anil Kumar Sharma, Amrapali Group chairman and managing director, and vice-chairman, CREDAI Western UP, which is one of the major stakeholders of the controversial real estate projects in the Shahbari village, “However, only a miniscule proportion of the residential real estate buyers in the Sahberi village are evincing interest to claim refund of their money; they want to be shifted to other projects.” He said that his company has already started refunding money to interested customers.

Supertech Limited, whose project named Eco Village II falls in Sahberi, has also offered to return the money of the buyers with interest. Supertech is also providing the alternative option to shift its buyers in Eco Village II to Eco Village I or Eco Village III. Mahugun and Gulshan Homz, two of the other affected builders who have their projects stalled in Sahberi village, have also come out with similar offers for buyers. Ashok Choudhary, chairman and managing director, Panchsheel Group, said, “We are taking proper care of our affected customers and we have given them options of either giving their money back or of shifting to our other project named Panchsheel Hynish, which is also located in Noida Extension.” He informed that 12 towers being constructed as part of his Panchsheel Greens-I project have been affected by the SC ruling.

The builders, however, clarified that the special refund offer was only open to buyers whose projects were in Sahberi village, whereas customers looking for refund of money in projects outside the village will have to adhere to the normal contractual procedure in which a part of the money is deducted and no interest is paid. Though the judgment applies to the real estate projects in only 156 hectares of land which is under the ambit of Sahberi village, there is a perception in the market that real estate buyers in the whole of Noida Extension may suffer a setback. At the CREDAI meet, the builders tried their best to dispel all such apprehensions. According to them, banks are interested to finance other real estate projects in the villages of Noida Extension area, though they are seeking assurances that such a legal problem would not emerge in the future.

“A total of 6,000 apartments are affected under the Shahberi village, which include 700 apartments of Supertech, 150 of Panchsheel and 300 of Gulshan Homz,” informed R K Arora, chairman and managing director of Supertech Limited. RK Arora brushed aside the prevalence of negative sentiments and said that the buyers of real estate options in the Noida Extension area have not shown any indication of developing cold feet. “Besides the projects in Sahberi village, the ongoing real estate projects in other areas of Noida Extension are not facing, and are unlikely to face, any legal impediments,” asserted Arora. “We have taken a lesson from this episode and thus have decided to create a fully equipped wing in our company, which will be looking after land acquisitions in future,” pointed out Dhiraj Jain, director, Mahagun (India) Pvt Ltd. Anil Kumar Sharma also told media persons that the ”developers will take measures to prevent the emergence and the consequent mushrooming of any unauthorised colony in the Noida Extension area, through mafia patronage.”

The archaic Land Acquisition Act of 1894 also came under criticism at the meet, which many believe is the root cause of this fiasco. “Amendments to the Act are urgently required. Thankfully, this bill is already under discussion in Parliament,” said Arora. On being asked as to who is responsible for this problem, Manoj Gaur, MD, Gaursons India and President CREDAI Western UP stated that the problem lies with the procedural aspects of the land acquisition process. “The Authority officials should now ensure that this kind of problem does not arise in future,” he said. Mohit Arora, director, Supertech Ltd, said, “We would meet the Authority officials to air our view that they should refund our investments in buying the land.”

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