SC junks pleas by Noida/Greater Noida builders for restoring 8% interest rate

New Delhi, Feb 28 In a major setback to builders in Noida and Greater Noida, the Supreme Court on Tuesday dismissed the intervention applications (IAs) against its November 7 order, where the court had recalled its 2020 order, capping the interest rate at 8 per cent for delay in payment of land cost by builders to the authorities.

A bench of Justices Ajay Rastogi and Bela M. Trivedi said: "The IAs were filed by various group of companies, including Ace Group of Companies, but they are not in any manner concerned with the plight of home buyers of Amrapali Group of Companies, of which judicial cognisance was taken by this court and merely filing of IAs by other group of companies who are stranger to the cognisance taken by this court in reference to Amrapali Group of Companies, do not deserve any indulgence at least in the instant proceedings."

It noted that Ace Group of Companies approached it by filing IA on its own behalf and not being authorised by the builders who have entered into their respective lease deeds with the Noida/Greater Noida authorities, neither the applicant (Ace Group of Companies) was holding power of attorney on behalf of others nor authorised by other developers/project proponents working with Noida/Greater Noida authorities, or that it was in a representative capacity.

The Supreme Court on November 7, 2022, had recalled its 2020 order, capping the interest rate at 8 per cent, for delay in payment of land cost by builders to the Noida and Greater Noida authorities.

Senior advocate Ravindra Kumar, representing Noida and Greater Noida authorities, contended that there was no material available on record, even placed by Ace Group of Companies, and other builders, to claim parity with the Amrapali Group.

He contended that that the order dated June 10, 2020, was the foundational order and at that stage the only application filed, of which this court took cognisance, was of the Ace Group of Companies and no such application has been filed by Ace Group of Companies for recall of the order dated November 7, 2022.

Kumar submitted that so far as the Prateek Group of Companies is concerned, the statement which has come on record and noticed by this court in its order, dated November 7, 2022, is indeed alarming in that all its projects were completed much before the cognisance was taken by this court and it was unable to pay the demand as raised by the Noida/Greater Noida authorities in terms of the conditions of the lease deed executed with open eyes between the parties.

"It also moved an IA before this court which was not even remotely concerned with the cause of which judicial notice was taken by this court with an object to secure interests of the homebuyers of Amrapali Group of Companies," he said.

Senior advocate A.M. Singhvi represented CREDAI & NAREDCO and senior advocate Ranjit Kumar represented the builders.

The top court judgement came on batch of IAs filed by various promoters/ developers/builders working in Noida/Greater Noida for recalling of the order dated November 7, 2022, pursuant to which the interim orders passed by the apex court dated June 10, 2020, August 19, 2020, and August 25, 2020, stood recalled by the court.

In its June 2020 order amid the pandemic, the top court had interfered with the contractual rate of interest provided in the lease deed. "We direct that rate of interest on the outstanding premium and other dues to be realised in all such cases at the rate of 8 per cent per annum and let the Noida and Greater Noida authorities do a restructuring of the repayment schedule so that amount is paid and Noida and Greater Noida authorities are able to realise the same," said the top court, in its June 2020 order.