NOIDA: Stalled for years, a decision on restarting Unitech‘s housing projects will boil down to what gets preference – a proposal that reduces the company’s legacy dues or one that lets it raise capital – when the Supreme Court hears this next in April.
Noida Authority has refused to approve revised layout maps for housing societies started but not completed by the real estate company, which was founded by the Chandras but was taken over by a govt-run board, at the behest of Supreme Court, after they were arrested.
Taking this stand in its submission before the Supreme Court, Noida Authority has instead proposed to ask the Unitech management to return project land that has not been used, which it will adjust against its dues.
Last Feb, Supreme Court had directed Noida Authority to approve revised maps without insisting on payment of dues that Unitech owes it. In the revised plan, Unitech, under its new management, proposed constructing new towers and independent houses in vacant project areas to generate funds to complete the projects. Unitech has 10 projects in Noida and its ability to leverage land is pivotal to its completion plan, not just for its projects in the city but also elsewhere.
So while dues may be out of the way, generation of funds will be a challenge for Unitech if the Noida Authority plan is followed. Unitech is one of the largest defaulters, with dues of around Rs 10,000 crore. The next hearing in the Supreme Court is slated to be held mid-April.
Noida CEO Lokesh M said on Monday, “After going through the revised layouts submitted by Unitech, we have decided to take back vacant land parcels that are lying unused. We are ready to allocate land proportionate to the number of homebuyers, but not more than that. From this unused land, Noida Authority will be able to recover its dues. We have submitted our reply before the Supreme Court.”
Officials said Noida Authority will regain 222 acres of prime land in sectors 96, 97 and 98 alone if the proposal to take back unused land from Unitech projects passes muster. It can then monetise this land by putting it up for re-allotment.
“Having regard to the contents of the convenience note submitted by the additional solicitor general, it is apparent that a substantial number of homebuyers have now expressed their confidence in the proposed construction in the above sectors. At this stage, it would be appropriate if Noida processes the applications for approval of revised layout plans, building plans, and ancillary approvals without insisting on upfront payment of dues. However, the board of Unitech shall pay the current application fees, scrutiny fees as payable in law,” read the Supreme Court order of Feb 1, 2023. The court had said a decision on dues would be decided in due course of time after hearing the views of Noida Authority and the Unitech board.
Unitech has three ongoing projects (Amber, Burgundy and Willow 1&2) under Unitech Golf and Country Club township over 347 acres in sectors 96, 97 and 98. The developer launched Amber in 2007, Willow in 2008 and Burgundy in 2010 with delivery dates from 2012 onwards. In these three projects, 1,091 units were launched, of which 958 were sold.
In 2008, Noida allotted land in sectors 113 and 117 to Unitech. There are six ongoing projects in Sector 117 and one in Sector 113. About 6,000 homebuyers have been waiting for their flats and villas for the past 10 years in these projects.
Following the Supreme Court order, the Unitech board in April 2023 uploaded applications for approval of revised layout plans. Noida Authority wasn’t, however, keen on these approvals if Unitech wasn’t clearing its dues. It also objected to Unitech’s claim that third-party rights had been established on vacant project areas (meaning Unitech had sub-leased them to other companies). It said several prime land parcels in Unitech project areas remain unclaimed by any third party and map clearances would be difficult till these issues were resolved.
On Nov 3, 2023, Supreme Court directed the counsels of Unitech and Noida to collaborate and come to a mutually agreeable roadmap to grant approval to revised layout plans. “It has been agreed that the additional solicitor general and senior counsel appearing on behalf of Noida Authority and Greater Noida shall sit together so that an agreed formulation can be tendered before this court for passing an order, which would sub-serve the interest of ensuring commencement of construction while protecting legitimate concerns of planning authorities,” the court stated in its order.
YS Malik, former IAS officer who was appointed chairman of the Unitech board in 2020, said they have finalised contractors against several batches of tenders worth Rs 11,000 crore to start construction work on all projects. “Construction will start only after we get approvals from Noida Authority and Supreme Court,” he added.
