Sector 107, Noida – System that failed the Home Buyers

Guest Article, contributed by Avinash Murarka and Sector 107 buyers.

Buying a home is often the biggest purchase a person will make. Most of the time the focus of homebuyers is on details like Floor Plan, Costing, Vastu, Amenities etc. Some of them travel the extra mile and research about the approval, layout plans and other clearance. But what could they do when the very system meant to protect the innocent buyers ensured they are trapped forever. Nobody could have imagined how an inefficient system would turn against homebuyers and would kill their only dream, “A small house for their Family”.

Prime Minister Mr. Narendra Modi recently said , “In our country, wittingly or unwittingly, the image of builder lobby is bad”. Why shouldn’t it be? Indian real estate is among the most unregulated industry in the world. The authorities are working for the developers day and night. Noida Authority does not even have the word “Buyers” in their books. Every time it is the innocent homebuyer whose dreams are crushed.

One such horrific story is of Homebuyer of Sector 107, Noida, Uttar Pradesh. Sector 107 is home to 5000+ residential apartments spread across many group housing societies of prominent developers. Construction of all these apartments has come to a standstill due to irregularities in the land acquisition process. Flat buyers have paid up to 70-95% of the consideration amount to the builders and there is no clarity from on the future of these apartments. NOIDA Authority, Developers and Government are keeping the home buyers in complete dark from long time. The irony is, despite the ongoing court cases, developers continues to trap new buyers without informing them about the ongoing litigation. 

Here is what happened 

1) NOIDA Authority acquired the land in the year 2008 & 2009 from farmers. This resulted in disputes on the title of land with some farmers who, later on, went in to courts.

2) Builders in Sec 107 purchased the land on lease from NOIDA Authority and got the approvals for development of land. Various Group Housing projects were launched in 2010 -2011. It is very interesting to note that the developers and Banks financing these projects did  know about the pending court cases on the title of the land in Sec 107. It is surprising to note that  builders have been given land that has some or many un-acquired land parcels).

3) Further the cases were between farmers and NOIDA Authority (The buyers and the builders were not a party to these cases) were fought from Allahabad High Court till the Supreme Court and finally on 5th August 2013, in one case, the Hon’ble Supreme Court ruled the land’s title in favor of farmers and, not only to this extent, the Supreme Court even went a step further to cancel the entire notification of land acquisition of 500 acres.

4) It seems judiciary was seemingly not made aware of the significant amount of construction by (the builders), which led to this decision. The judiciary was also not aware of the fact that third party rights had been created .The farmers disputing the acquisition have only 2.5 acres which is not in Sector 107 but belongs to Salarpur village.

5) In another case in May 2015, the Supreme Court upheld the Allahabad High Court decision, and granted enhanced compensation to the farmers on whose land construction had already started or was at an advanced stage. The Supreme court further ruled that where third party rights had been created and construction was in an advanced stage the land will not be returned but the farmers to be given enhanced compensation.

6) Post the Supreme Court’s 5th Aug 2013 order of quashing the land, the builders still continued construction for almost a year and continued extracting money from the innocent buyers. On this builders astonishingly claim their ignorance about the Supreme Court’s order of quashing the land. Noida authority made no effort to inform the buyers when they were fully aware of the Supreme Court orders. Noida authority also knew fully well that this land has been allotted by them to builders for group housing projects for which it received money. The map of Noida shows this area as high density residential area.  More astonishing is the fact is that even fresh loans were approved and disbursed by financial institutions even after this order was passed. It was not until June 2014 when buyers got to know about this case via another Allahabad High Court order, upholding the Supreme Court decision, which was reported in the newspapers.

7) In June 2014 the Allahabad High Court directed NOIDA Authority to issue advertisements/notification informing about the Supreme Court’s quashing of the land builders wise. It took the authority almost a year to issue a notification to this effect. Additionally, the stay orders are followed differently by the builders in Sec 107 adding to much of the confusions among the homebuyers.

Noida Sector 107 Public Notice
Noida Sector 107 Public Notice

8) In 2014 builders filed petitions in the Supreme Court asking for a review of the 5th August 2013 order, stating that large scale construction has been done and third party rights of homebuyers have been created on the land. The Supreme Court accepts the review petition and it also further agrees to hear the builders in an open court.

9) It is almost one and half years since the review petitions were filed by the builders. Now homebuyers individually and with their associations have become a party in the cases in the Allahabad High Court, and in the Supreme Court.

10) On 24th August 2015, the Supreme Court passed an order, and gave the Allahabad High Court two months to decide on the cases, but even after three months there has not been a proper hearing of the matter in the Allahabad High Court. The Supreme Court now has now further given the Allahabad High Court two more months to decide the cases.

11) So homebuyers fate has become like a football between Allahabad HIGH COURT & the Supreme Court  dates on one side and on the other side between the NOIDA Authority & Builders, who keep changing their statements from time to time, and always indicate that the issue will be definitely resolved in the next hearing.

12) Home buyers are protesting to get a fair deal from the system which at the moment is not able to protect their interests. As homebuyers cannot move into their flats which are ready since 2013 (Great Value Sharnam), while even if they can move in they may not get registry (SunWorld Vanalika), also those which are nearing possession since 2014 can not be finished on a/c of stay (Amrapali Heart Beat City & Lotus 300).

13 The structures are weathering since a year and a half as no maintenance is done on account of status quo orders and homebuyers are forced to pay huge EMIs + Rents with status of their home being in complete dark. Home buyers are paying hefty interests to banks on a property which is getting weathered and which legally, as of now, is standing on a quashed land with its technical status be no more than of an encroachers. There is additional burden of taxes, and as the possession has not been given within three years of loan disbursement in most cases, then as per the Income Tax laws homebuyers will also lose almost 80% of the tax benefit on the interest component of their home loans.

14)  “Nobody thinks of the buyers’ plight when such decisions are taken. When the order was passed in 2013, most projects were close to completion. The buyers had almost paid up anything between 75-90 percent of project prices. Now for the last 1.5 years, the projects have been stalled and the buildings are slowly getting damaged due to weather exposure,” a buyer says.

15) “The Supreme Court in August 2013, declared the land acquisition illegal. However it was only brought to public attention when the Allahabad High Court passed a judgment in June, 2014. Construction in the housing project first slowed down and then completely stopped. Owners were kept in the dark about these developments with no notice given by either NOIDA Authority or the builders. RTIs filed were ignored and those answered were diverted to different departments the buyer says.

The buyers are now hoping for a positive resolution of the issue. “We need clarity. Either we get our houses, or we get our full money with interest back, because the buyers had nothing to do with the acquisition, a buyer added. The fault is either of Noida Authority or that of the developers but no one taking the responsibility. It is only the helpless buyer who has to bear the burden of rent, EMIs, uncertainty of losing their hard earned money, and the apathy of Govt machinery.  In a recent protest, the buyers sent up a hydrogen balloon in the sky with a message to draw attention to the problem of Sector 107 buyers.

The Government and Noida Authority are of no help in resolving the issue quickly. While the Government makes tall claims of “Housing for all by 2020” in reality it does not even pay any attention to some of these existing problems, where a lot of homes have already been built, but are empty. Is India such a rich country which can afford such situations where millions are homeless? From an economist’s point of view, if these 5000 homes are available for possession, it will increase the supply in the market, and ultimately provide housing to 5000 families who do not have a roof over their heads.

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