GNIDA has conditionally approved Gaursons Group's proposal to mortgage part of Gaur City Mall to secure farmer compensation dues. This move aims to enable the execution of approximately 2,100 pending sub-lease deeds across three housing projects, offering relief to residents awaiting legal ownership. An independent valuation will assess the mall's security value before registries can proceed.
Gaursons Group has been granted in-principle approval to mortgage a portion of its Gaur City Mall in Greater Noida West as security against additional farmer compensation dues. This move will allow for the execution of nearly 2,100 long-pending sub-lease deeds in three of the developer's housing projects, bringing relief for residents who have possession of their flats but have been unable to secure legal ownership.
Without sub-lease deeds, residents remain in legal limbo despite having paid for and taken possession of their flats in these three projects. In the case of Gaursons Promoters' plot in Sector 16C, in Gaur City 2, out of 11,354 sanctioned units whose completion was obtained, sub-leases were executed for only 9,655 units, leaving 1,699 pending. In the Gaursons Realty project in Tech Zone-IV, Gaur Saundaryam, 2,068 units were sanctioned and completed, with 1,881 sub-leases executed and 187 still pending. For Gaursons Hi-Tech Infrastructure's project in Sector 4, Gaur City 1, 11,742 units were sanctioned, of which 7,412 are complete and 7,209 have been registered, while 203 sub-leases remain pending.
In July this year, the GNIDA board gave its in-principle nod to the proposal after reviewing the affidavit and supporting documents. However, additional CEO Saumya Srivastava further clarified that before any sub-leases are executed, an independent valuation of the mall property will be carried out to confirm that its security value is adequate to cover the disputed dues. Once the mortgage is formally created, the registries will be allowed to proceed.
An independent valuation exercise will be conducted in the coming weeks, after which GNIDA is expected to clear the way for registration of around 2,100 flats across the three projects. For many homebuyers who have waited years, this could finally deliver the ownership documents that have remained out of reach.
The approval follows Allahabad High Court directions and an application by Gaursons Hi-Tech Infrastructure, which built the mall, in July, through which the company sought GNIDA's permission to mortgage up to the fifth floor of Gaur City Mall to cover outstanding liabilities arising from additional farmer compensation. This issue has been the subject of litigation between GNIDA and several Gaursons entities before the Allahabad High Court.
The cases pertaining to farmer compensations date as far back as 2018. GNIDA raised farmers' compensation demands totalling Rs315 crore against three Gaursons companies: Gaursons Hi-Tech Infrastructure (Rs186 crore), Gaursons Promoters (Rs110 crore), and Gaursons Realty (Rs19 crore). These demands were challenged through separate writ petitions filed in the High Court.
In September 2024, the court passed interim orders in two of the petitions filed that year, pertaining to Gaursons Hi-Tech Infrastructure and Gaursons Promoters, directing the companies to deposit the amount proposed by the developer towards the farmers' compensation and secure the remaining 25% of the total compensation amount through a charge on immovable assets. The High Court stated that in compliance with the government’s order for the rehabilitation of stalled projects, the developer would be able to avail the benefits of the policy and obtain completion certificates for the two projects. GNIDA was directed to issue the completion certificates and allow the execution of tripartite sub-lease deeds in favour of the allottees once the developer deposited the required amount.
In response, Gaursons deposited Rs37 crore with GNIDA. In the third petition, related to Gaursons Realty, whose petition was filed in 2018, the High Court restrained GNIDA from taking coercive action while the matter is pending final adjudication. The developer deposited over Rs9 crore with the Authority in this case.
In total, the developer has deposited Rs46 crore against the demand of Rs315 crore raised by the Authority, while the balance liability of Rs269 crore remains sub-judice. To cover this, the companies offered to mortgage a portion of Gaur City Mall. In its July affidavit, Gaursons stated that the mall's leasable area up to the fifth floor, covering around 8.26 lakh square feet, would be mortgaged.
Notably, while over 95% of this space has already been leased to commercial brands, the company confirmed that no third-party rights exist up to the fifth floor, making it available to be offered as security. The mall was valued at Rs1,276 crore by a registered valuer with the Insolvency and Bankruptcy Board of India. However, the property does carry an existing charge of Rs549 crore in favour of ICICI Bank. But even after accounting for this encumbrance, the net unencumbered value remains Rs727 crore, which is nearly three times higher than the outstanding dues claimed by GNIDA.
