NOIDA: A draft policy for standardising allocation of land for group housing projects across three industrial development authorities proposes to bar developers listed as defaulters by either of the three development authorities or companies that are helmed by a promoter who has defaulted on a previous project from bidding.
The draft, currently being reviewed by the three development authorities, could help the three development authorities cumulatively facing Rs 40,000 crore in land dues turn the corner.
A need for a unified approach was felt a decade and a half ago as the three authorities flagged varied policies were causing inconsistencies and causing operational inefficiencies and confusion among businesses and investors. In 2010, Greater Noida Authority hired a chartered accountancy firm, Sarc & Associates, to draft a standardised approach involving land allotments but the policy could not be drawn up over logistical reasons.
With renewed efforts to bring in a unified land allotment policy, the firm has drawn up a 140-page draft that proposes to streamline eligibility criteria, lease terms, rent structures and procedural formalities for allotting land under various categories — industrial, institutional, group housing, and commercial — across the three development authorities.
For allotting plots for group housing projects — a set of criteria that will extend to proprietorships, partnerships, limited liability partnerships (LLPs) and private or public limited companies —applicants listed as defaulters by the three authorities, or with defaulting directors or promoters, will be barred. A wholly owned subsidiary, it proposes, can be eligible to participate jointly with the parent company retaining full ownership.
Consortiums with up to five firms — one of them holding at least 51% equity and each consortium member with 10% stake — are eligible to bid for 10,000 sqm and bigger plots for group housing projects. The draft states such consortiums must draw up a memorandum of agreement (MOA), outlining the roles, funding responsibilities, and commitments of each member. If shortlisted, they have to create a special purpose company to execute the lease.
The policy proposes strict financial eligibility criteria to safeguard investments and ensure viability of projects. For plots up to 1 lakh sqm, it proposes that applicants must have a net worth of Rs 30 crore, which in turn, has to be certified by a statutory auditor. To apply for plots above 1 lakh sqm, developers must have a minimum net worth of Rs 60 crore.
With several group housing projects across the district facing insolvency, the proposed financial safeguards will ensure only financially viable entities take large projects, the draft states.
For mega, super mega or ultra-mega industrial projects, the draft allows the state govt to reserve the right to allow direct allotment to expedite investments. But proposes that industrial plots above 8,000 sqm should be allotted only after an interview to ensure that applicants are thoroughly vetted by a screening committee.
It states applicants must secure at least 60% of the total marks based on predefined objective parameters to qualify. Qualified applicants are to be subsequently invited for project presentations, and allotment is granted to those who score the highest. If an applicant fails to make payment within the stipulated or extended period, the allotment and registration fee will be forfeited.
The draft policy proposes e-auction for industrial, institutional, IT/ITeS, group housing and commercial plots up to 8,000 sqm, after a screening committee vets technical proposals, and shortlist applicants who meet 60% threshold.
It also outlines a process to allow two extensions, with each extension lasting seven days, in cases where there are fewer than three eligible bidders. But if still bidders are below three, the highest bidder is to be awarded the plot.
The policy also introduces a dynamic e-auction mechanism allowing eligible bidders to bid on multiple plots they qualify for, instead of limiting them to only those they initially apply for. It will allow investors, who qualify to bid for larger plots, to also bid for smaller plots, provided they meet the requirements.
To maintain competitive pressure, each new bid must exceed the previous by an incremental value, and all bids must meet at least the reserve price. The process is expected to promote transparency.
The policy also standardises land transfer policies. It states that transfers will be allowed once a functional or completion certificate is obtained from the authority. It also has a plot surrender policy that will allow an allottee to give up a plot before receiving a show-cause notice.
The draft states that if developers fail to surrender or settle dues, the authorities will reserve the right to cancel the unused portion of the land, excluding penalties and lease rent.
Cancellations of allotments are enforced under strict criteria, including misrepresentation, legal violations, or non-compliance with the scheme or lease conditions. In cases of fraud, all deposits are forfeited; otherwise, the authority retains only 30% of the deposit, returning the balance to the applicant. Plot restoration is allowed within 90 days of cancellation if the applicant settles dues and adheres to project timelines.
The draft incorporates a ‘zero-period’ clause that will suspend financial obligations — premium and interest payments — during times when legal or administrative issues delay a project’s possession or development. This provision ensures developers are not unfairly penalised and can resume payments as soon as conditions normalise, with no interest added for the duration of the delay.
