.jpg)
On April 26, 2024, the Supreme Court bench led by Chief Justice DY Chandrachud, alongside Justices JB Pardiwala and Manoj Misra, modified its earlier order asking Noida Authority to approve revised layouts of Unitech across all allocated land, regardless of outstanding dues exceeding Rs 10,000 crore.
As the Authority raised concern about layouts on land where there were no buyers yet, the court divided it into two categories. The court segregated the land into two categories: those already allotted to buyers for flats and those yet to be launched.
Upon this, the Noida Authority must approve the first set of land parcels by May 31, 2024 for the construction of the Project. The remaining decision can be taken later as per the requirement. Lokesh M, CEO of Noida Authority, has stated ‘’We don’t have any problem approving building plans for existing home-buyers. But we need to study the order of its entirety before taking the necessary steps.’’
THE COURT ORDERS
The court’s order mandates industrial development authorities to grant all necessary approvals for revised layout plans and building plans by the specified date, con- tingent upon the deposit of any remaining balance due.
The court agreed with the plea of homebuyers that they should be handed over the possession of the flats. It said that the dues claimed by Noida and Greater Noida from SC asks Noida to grant sanction to start work on stalled Unitech projects that the dues claimed by Noida and Greater Noida from the company could be settled after the court passed the order after hearing both sides. In the meantime, the landowning authority should grant permission to start construction.
Noida Authority has expressed no objections to construction activities, to be overseen by a government-appointed board. “The industrial development authorities shall, on or before May 31, 2024, grant all sanctions and approvals for the revised layout plans, building plans,and ancillary permissions, subject to the deposit of the balance amount, if any, that is required on account of current scrutiny fees in terms of the order which was passed by this court on February 1, 2023,” the order read.
THE DEVELOPER’S SIDE
With Noida Authority expressing no objection to the proposed SC ruling for the construction supposed to be conducted by the board appointed by the government, the Chairperson of the Unitech Group Board, YS Malik has also stated their readiness. “We will write to the Authority in a couple of days. We are looking toward the Noida Authority now for their approval plan, and only then can we start the construction in line with the mandatory plan. We are ready with our contractors and will issue work orders as soon as we get the approvals for the plans.”
HOMEBUYERS WORRIES
In Noida, Unitech has three ongoing projects (Amber, Burgundy, and Willow 1 and 2) under Unitech Golf and Country Club township, which is spread across 347 acres in sectors 96, 97, and 98. The three projects have 1,091 units among them, of which 958 are sold. In 2008, Noida Authority allotted land for six projects in sectors 113 and 117 to Unitech. Altogether, 6,000 buyers have been waiting for their flats and villas for the past 10 years.
Thousands of individuals, some of whom invested close to 15 years ago, are awaiting the delivery of their flats as the company’s promoters, the Chandras, were unable to deliver the units after losing money in a telecom company and allegedly diverting funds.
While, the Centre has intervened to protect the interest of homebuyers and appointed a board which was handed over management of the company, the work is moving slowly with govt agencies too holding up the projects. Furthermore, the court had also appointed ex-SC judge A M Sapre to assist the board in monetizing the assets of the company to raise the money to complete the housing projects.
Homebuyers are, however, skeptical about the completion of their projects anytime soon, given the legal hurdles and funds shortage. “How will the Unitech board gen- erate funds from the sale of its inventories? Given Unitech’s current reputation, investor interest is also doubtful, are some of the concerns raised by the homebuyers.
Unitech’s proposed strategy involves delivering flats to existing buyers and also launching projects to generate revenue from them and fund the current construction. Noida Authority has, however, refused to accept the proposal. It has said that Rs 11,000 crore needed to finish the projects could be raised through payments from homebuyers and selling inventory in the existing projects itself.
With no end in sight to the legal matter and regarding the source of funding for construction, the homebuyers are in a state of lurch and closely monitoring the developments with hope of getting their homes someday.
According to the forensic audit report of the company ‘Unitech’, around Rs 14,270 crore was deposited by 29,800 homebuyers and Unitech borrowed Rs 1,806 crore from six financial institutions for construction of 74 housing projects. After examining the account books of Unitech Group and its subsidiaries, the auditor in its report said Rs 5,063 crore or 40% of the collections from home buyers were not used for the housing projects while outflows of Rs 2,389 crore were not ascertained.
The report said nearly 40% of the money raised from financial institutions, amounting to Rs 763 crore, had not been utilized for construction. Factoring that in, the court had barred the promoters from running the company and they were arrested for cheating the homebuyers.
