Lotus Zing land dispute – NCLT & NCLAT refuses to intervene with HC orders, raps NOIDA

Lotus Zing, the 3rd residential project in a row of beleaguered developers “The 3C Company” was launched with much fanfare in the summers of 2010. Ten years on, the home buyers of all 3C projects are struggling to have a roof on their heads. Almost every project of the 3C Company is facing insolvency with CIRP proceedings initiated. Following an application under section 7 of IBC, Mr. Manish Kumar Gupta was appointed as the Resolution Professional of Three C Project Pvt. Ltd., the company that was developing Lotus Zing.

Background of Land Dispute

Plot GH-01/A measuring 69998 was allocated to Three C Project via ‘Conveyance Deed’ dated 1st September 2010 for the development of a residential project styled as “Lotus Zing” in the year 2010-11. CWP No. 73850 of 2010 came to be filed before the Hon’ble High Court of Allahabad wherein writ petitioners claimed to be the owners of Khasra No. 87 admeasuring 0.847 hetc. situated in village Chhaprauli Bangar, District Gautam Budh Nagar. The Hon’ble High Court observed that the Noida Authority did not acquire land admeasuring 0.4873 (approx 3600 mtrs in UP units). In 2015, the Hon’ble High Court of Allahabad directed that the land be handed over to the framers, and the Corporate Debtor (Three C Projects, Lotus Zing) can no stake claim to being a lessee/owner of such land. The Noida and Farmers continue to dispute the actual location of the land parcels and the matter is sub judice in Allahbad High Court.

Proceedings in NCLT

The RP, Mr. Manish Kumar Gupta filed an application with the NCLT, New Delhi. The RP sought following relief against Noida Authority:

  • Direct Noida to settle disputes of landowners and handover the possession of land.
  • Noida to pay damage to the tune of 500 Cr

In order dated 05/02/2020, the NCLT observed that since the AHC has already directed the Noida Authority to hand over the land to the landowners, nothing has been left in the hands of Noida to settle the matter with landowners. No direction can be passed in this matter. Further, NCLT also demised the prayer seeking relief of 500 Cr from Noida.

In order date 18/08/2020, the NCLT also dismissed the plea filed by one Lotus Zing Flat Owners Welfare Association on the same grounds. The RP himself claimed that the said association has no locus to represent the grievance of Corporate Debtor and thus application be dismissed and only RP be allowed to deal with the matter.

Appeal in NCLAT

Following the dismissal in NCLT, the RP and the Association (representing 100 homebuyers) filed an appeal in NCLAT in August 2020. The court observed that the relief claimed in the petition is in conflict with the judicial finding order of the Hon’ble High Court of Allahabad and the same has been rightly dismissed. In an order dated 28/08/2020, the NCLAT dismissed the appeal of RP with no merits in the arguments.

Observation on callous attitude of Noida

in view of the judicial verdict given by Allahabad High Court, the NOIDA Authority would have done better by doing a bit of introspection and take appropriate steps to mitigate the hardship of the allottees of the residential project in question who claimed to have been promised possession of flats within 33 months i.e. by 2013. If there was any flaw in the land acquisition proceedings, steps should have been taken to rectify the same.

Homebuyers in Allahabad HC

We have learned that certain home buyers had filed a WRIT in AHC. However, on 03/09/2020, the AHC dismissed the petition and once again directed Gautam Budh Nagar admin to handover the land to farmers. Ashish K, a homebuyer from Lotus Zing project told us that with no option left for homebuyers, they are now planning to approach the Honorable Supreme Court.

Conclusion

Homebuyers of the Lotus Zing project have been on the receiving end of the unending saga. The callous attitude of the Noida officials coupled with the inefficiency of the developer to timely inform the homebuyers of the issue has resulted in a tricky situation. It is astonishing to know that even though the Noida and Developer knew about the land dispute since 2010, they continued to sell the apartments to gullible homebuyers.

Further, it is questionable why the RP took so long to take up the matter with authorities concerned. For a successful resolution of Corporate Debtor, matters like this should be the topmost priority of any resolution professional. What is to be seen is, can a resolution plan be passed without a solution to this land dispute?

One thought on “Lotus Zing land dispute – NCLT & NCLAT refuses to intervene with HC orders, raps NOIDA

  • September 4, 2020 at 11:45 am
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    VERY SAD!! THE HOMEBUYERS ARE SUFFERING FOR NO FAULT OF THEIRS…

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