NOIDA: The Noida Authority has filed a review petition in the Allahabad high court, challenging its earlier directive on the execution of the registries for the 330 flats in Lotus 300, a condominium in Sector 107.
On Feb 29, an HC bench of justices Mahesh Chandra Tripathi and Prashant Kumar directed the Authority to grant an occupancy certificate and complete the registries in favour of the homebuyers of Lotus 300 within a month. The court also directed the Enforcement Directorate to start an investigation against the builders of Lotus 300 for the alleged misappropriation of homebuyers’ money.
In its petition, the Authority expressed its inability to execute the registry over mounting dues of the builders. Allowing the execution of registries without settling the Rs 166 crore dues could set a precedent and result in significant losses to the exchequer, it said.
The Authority said it should be permitted to take action in accordance with established rules and by-laws when a builder or developer defaults or fails to fulfill their duties.
In March 2010, a consortium of Hacienda Project Private Limited (HPPL), with Pebbles Infosoftech as the lead member, was allotted 17 acres of land in Sector 107 for developing the residential project. At the time of signing the lease deed, Nirmal Singh, Surpreet Singh Suri and Vidur Bhardwaj were the directors of HPPL.
In 2022, IndusInd Bank moved an application before the NCLT and a corporate insolvency resolution was initiated. An insolvency resolution professional (IRP) was subsequently appointed.
The HC order stated since HPPL was facing insolvency proceedings, there was a moratorium under the Insolvency and Bankruptcy Code, 2016, and no proceedings could be initiated against the company by any creditors to recover their dues. It asked the Authority to submit its claims before the IRP.
The HC also clarified the effect of the moratorium under the IB Code was confined only to the debtor company, HPPL, therefore, the promoters would be liable to be prosecuted.
The court observed the promoters had conned homebuyers by launching the project, collecting Rs 636 crore, syphoning off almost Rs 190 crore, and selling a portion of land to a third company while pocketing the entire sale proceeds of Rs 236 crore. It also noted the developers had defrauded hundreds of other homebuyers in various other projects.
AOA president of Lotus 300 Bhuwan Chaturvedi told TOI that since Feb they had sent four reminders to the Noida Authority to issue the occupancy certificate and start registration of flats, as per the HC order.
“Now, we are told that the Authority filed a review application last week. The matter is yet to come up for hearing. We will also approach the HC and seek its directions for asking the Authority to execute registries. The HC’s order directs the ED to recover the amount from builders and give it to the Authority and other creditors. Why residents are being made to wait for the registry when they have already paid the amount? The Noida Authority should have at least issued the occupancy certificate,” Chaturvedi said.
Vidur Bhardwaj, one of the former promoters, has also submitted a review petition, seeking relief from the HC’s direction on the ED investigation against the builders. Bhardwaj stated all the flats in the project had been delivered and no homebuyers were left in the lurch, therefore, there was no ground for an ED investigation. He also stated that as an IRP has been appointed, the remaining dues should be presented before him for recovery.
Bhardwaj denied there was any diversion of funds. He claimed the promoters infused funds from their pockets to complete the project.
