The bench, which included Justices Sanjay Kumar and R. Mahadevan, directed YEIDA to provide records of schemes and regulations aimed at safeguarding homebuyers when entering agreements with private developers. They emphasized that the authority must act in the interest of homebuyers, rejecting any excuses of focusing solely on financial recovery.
NEW DELHI: On Friday (August 23): The Supreme Court issued a stern reprimand to land-owning and development authorities in Noida for their disregard of the plight faced by thousands of homebuyers awaiting their apartments for years.
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The court criticized the authorities for prioritizing the recovery of dues from developers over addressing the needs of homebuyers caught in delays due to the developers’ failures.
A bench led by Justice Sanjiv Khanna pointed out that many projects under the Insolvency and Bankruptcy Code (IBC) are in Noida, and the local authorities are largely to blame. They criticized the authorities for their lack of concern for flat buyers, highlighting a systemic neglect of their rights.
The court also condemned the Yamuna Expressway Industrial Development Authority (YEIDA) for opposing a resolution plan for Jaypee Infratech Limited (JIL) over compensation claims, noting that the authorities have focused more on recovering dues from developers than on protecting homebuyers’ interests.
The bench, which included Justices Sanjay Kumar and R. Mahadevan, directed YEIDA to provide records of schemes and regulations aimed at safeguarding homebuyers when entering agreements with private developers. They emphasized that the authority must act in the interest of homebuyers, rejecting any excuses of focusing solely on financial recovery.
The bench insisted that YEIDA must protect flat buyers, stating,
“You can’t focus only on your financial interests and disregard the flat buyers. That will not be acceptable to this court.” They warned that any attempts to shift the financial burden onto homebuyers would ultimately harm them.
This directive came during YEIDA’s appeal against a May 24 order by the National Company Law Appellate Tribunal (NCLAT), which had approved the Suraksha Group’s resolution plan for JIL. The plan addresses JIL’s failure to deliver nearly 20,000 apartments in its “Wish Town” project in Noida and Greater Noida.
Solicitor General Tushar Mehta, representing YEIDA, argued that the authority’s actions were meant to collect dues for public amenities and not against homebuyers.
The bench demanded evidence of what YEIDA has done to help distressed homebuyers, stating,
“You claimed to want to assist homebuyers; now show us what you’ve done. If you don’t show concern for them, this court will intervene.”
The court also told SG that YEIDA cannot disclaim responsibility for the land given to Jaypee Infratech and must explain their actions.
The next hearing is scheduled for October.
Additionally, the court decided not to interfere with YEIDA’s separate proceedings challenging an arbitral award that favored Jaypee Infratech regarding additional compensation demands.
The NCLAT’s May 24 order set aside a previous National Company Law Tribunal (NCLT) decision that required Suraksha Group to pay only Rs 10 lakh for increased land compensation. YEIDA had sought Rs 1,689 crore, but NCLAT ruled that Suraksha Group could pay 79% of this amount Rs 1,334.3 crore over four years.
The NCLAT also directed Suraksha Group to implement its revised resolution plan quickly, benefiting both homebuyers and farmers. Despite this, YEIDA’s demand for ₹1,500 crore in external development charges for the Wish Town project remains unresolved.
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The NCLAT’s order confirmed the resolution plan while rejecting the additional compensation claim, with the statement:
“The NCLT’s decision on the Rs 1,689 crore farmers’ compensation is set aside; the rest of the resolution plan is upheld,” as delivered by NCLAT Chairperson Justice Ashok Bhushan and Member (Technical) Barun Mitra.
The Supreme Court’s decision offers hope to thousands of homebuyers who have faced financial and emotional strain due to prolonged delays. The court insisted that YEIDA could not focus only on recovering its dues at the expense of homebuyers.
The court also requested YEIDA to submit a detailed affidavit outlining concessions granted to homebuyers and the status of projects delayed due to IBC proceedings. YEIDA was instructed to provide specifics on clauses in its agreement with Jaypee Infratech intended to protect homebuyers.
Additionally, the court refrained from interfering with YEIDA’s separate proceedings challenging an arbitral award in favor of Jaypee, which addressed additional compensation demands from land lessees.
