Greater Noida Fiasco- A conflict between Farmers, Government, Builders and Consumers.

Real estate Industry, very recently, suffered a set back wherein the Hon’ble Supreme Court in the matter of Greater Noida Industrial Development Authority VsDevender Kumar set aside the acquisition of land situated in a village in Uttar Pradesh, which had been allotted by the State Government to certain builders for building residential flats. The most adverse effect of this Judgment is that a potential buyer of a flat cannot be sure of the fact of his title to the property, even if the land was bought by the builder from the government. In this Greater Noida episode, the builders had started the construction, flats were booked by the potential end users, and loans were disbursed by the Banks and Financial Institutions against the said flats. This Judgement of the Hon’ble Supreme Court has encouraged the farmers of other villages, to take recourse to the Court of law, whose lands were also acquired by the State Government. The situation at the time of writing this article is of complete chaos. Flat buyers, builders, farmers and the GNIDA are at logger heads, no one knows, how the situation will unfold in the coming months. The worst part of it is that the consumers may have to suffer for no fault of theirs. The factual matrix of the matter is that the Greater Noida Development Authority (GNIDA) acquired large tracts of the land from the farmers for the planned industrial development of Greater Noida. The land was acquired under an urgency clause, thereby depriving the farmers to lodge protest against the acquisition. The State government, however, changed the land use from industrial to residential and allotted the land to the builders for development of multi-storey residential houses. The Court held that invocation of urgency clause was not justified and on record it was established that Greater Noida Authority never intended to put the land for integrated planned industrial development but to develop a residential complex with multi storied houses to be given to the builders for profit. The Builders had accepted the bookings of the proposed flats from the intending buyers, who had deposited huge sums of money as advance/whole price of the flats. The effect of the Judgement is that allotment of land in favour of builders is cancelled. The money paid by the intending buyers is struck with the cash strapped builders. Those who had taken loans from the Bank have to pay the EMI in respect of the house, which is not likely to be constructed. The intending buyers have an option to either recover their money back from the builders or wait for some miracle to happen. The Supreme Court was apprised of the plight of the intending buyers in the above noted matter, however, the Court while balancing the equity between the farmers and intending buyers were inclined in favour of the farmers. All what was stated about the buyers was that their money should be refunded back along with interest. Unfortunately no time frame was prescribed for the refund of the money and the rate of interest was also not specified. The dispute before the Supreme Court was only of a particular village, however, encouraged by the response of the Courts, many more petitions have been filed before the Allhabad High Court. The parties have addressed arguments and the Judgement has been reserved by the High Court. All the intending buyers have to wait and watch. If a settlement is arrived at between the GNIDA and farmers, their dream houses may be protected, otherwise the intending buyers have to take recourse to seek refund of their money. The author of this Article is Anupam Srivastava who can be reached at anupam@tcl-india.net