Interest at 8% for Land Dues Payment Delay by Developers Revoked in Noida, Greater Noida
The Supreme Court on November 7 recalled its June 2020 order that had directed the authorities to cap the rate of interest at 8 percent for the delay in payment of land dues by real estate firms to authorities. The earlier SC orders had capped the interest rate at 8 percent. The Supreme Court also made it clear that the Authorities would have to recalculate the dues of all the builders except that of the Amrapali case. The apex court had capped the rate of interest for delayed payment by builders to the authority at 8 percent and linked it to the SBI MCLR (Marginal Cost of Funds based Lending Rate) in June 2020 but according to the terms of agreements between the builder and the Authority, the rate of interest for delayed payment was pegged at 15-23 percent. Following this order, the authorities will have to rework in terms of the communication dated June 9, 2020. The June order had said that prospectively the authority will charge 1 percent more than the MCLR rate and in case of any default an additional 3 percent penal interest every six months. This means that if a builder’s liability stood at Rs 14 crore considering that the 2020 orders continued, the same will now go up to Rs 25 crore after the November 7 order. Ritu Maheshwari, CEO, of Noida Authority who also holds the additional portfolio of Greater Noida CEO, said, “Almost Rs 10,000 crore is due from developers if we exclude matters in the Supreme Court and around Rs 19,000 crore if we include Amrapali and Unitech cases. These would have been lost had the review been rejected,” she added. The authorities were awaiting this order for the last two years and could not ask for dues as per their calculation. “We have the authority to cancel their lease. Registries were not stopped per se, they are linked to the payment of dues and construction and adherence to norms. Wherever total dues or flatwise dues are being paid, registries are taking place. If the developer still does not pay, we can reschedule, we can ask them to pay in instalments within two years. All these schemes are available. A builder can also pay dues flat wise against which proportionate occupancy certificates can be issued. Builders were not coming forward for the past two years saying that the dues cited by us were incorrect but now they have to pay up,” she added.” More than 2 lakh apartments in Noida, Greater Noida and the Yamuna Expressway regions have been handed over to homebuyers but are yet to be registered on account of this issue.
Tags : Supreme Court june payment land dues builders Amrapali case Ritu Maheshwari CEO Noida Authority