NOIDA: The Allahabad high court has asked the Yamuna Expressway Industrial Development Authority (YEIDA) to return more than Rs 60 crore to Logix Infrabuild, saying the amount was deducted “illegally” despite the developer surrendering the land allotted to it for developing a township.
“The Authority failed to discharge its contractual obligations, blatantly ignoring the difficulties faced by the developer in arranging finances usually obtained from banking institutions, investors, and the market,” the division bench of then Chief Justice Pritinker Diwaker (who retired last month) and Justice Ashutosh Srivastava said in its order on November 16.
It added, “In the absence of possession of the land, the Authority has nothing to lose, but the petitioner loses everything – the project and, above all, its reputation in the market.”
The case dates back to 2011, when YEIDA invited bids for allocating 200 acres in Sector 22D.
Logix, which emerged as the highest bidder with a tender amount of Rs 308 crore, was allotted the land. It deposited 10% of the amount within a month in keeping with the terms and conditions.
By January next year, Logix had deposited Rs 83.6 crore in total and asked YEIDA to execute two land deeds of 100 acres each instead of one. YEIDA agreed 10 months later, admitting it didn’t have possession of the entire 200 acres. So, 100 acres were allotted to Logix, and the second tranche of land was given to its sister concern.
But of the 100 acres that Logix got, 23 acres were mired in a legal dispute. That patch of land was scattered too, creating a hurdle for the township project.
By then, Logix had spent around Rs 105 crore on the 77 acres in its possession. YEIDA assured the developer that the lease deed for the remaining 23 acres would be executed in a year.
But the Authority failed to do so because of protests by farmers. In 2013, Logix moved the high court to seek waivers under a ‘zero period’. But it withdrew the case in 2016, choosing to surrender the land instead.
In July 2017, Logix signed a surrender agreement with YEIDA as the authority failed to make the entire land available.
Of the Rs 105 crore that Logix had invested till then, the developer said YEIDA withheld Rs 43.2 crore and returned the remaining amount. Logix moved the high court again in 2019, challenging the deduction.
YEIDA justified its move, saying the project settlement policy allowed it to deduct 15% of the principal amount and any interest paid by the allottee.
The bench, however, observed that the policy concerned would apply to cases where the developer had failed to hand over possession despite creating third-party rights. But in this case, YEIDA was at fault because it couldn’t hand over the entire land to Logix.
It then asked YEIDA to hand over within two months the withheld amount to Logix along with interest.
“We find that not returning the entire money together with interest is unjust enrichment on the part of the YEIDA Authority. The respondent authority is directed to refund the balance amount of Rs 43.2 crore illegally deducted to the petitioner, along with 15% interest from the date of deposit (2011-12) until the date of return, to be paid within two months from the date of service of a certified copy of this order,” the court said in its order.
The same bench had granted ‘zero period’ waivers and other relief to builders in similar cases. Ace Infracity (Noida), Rudra Buildwell (Greater Noida) and Silverline Furnishings and Furniture (YEIDA) were granted relief after the respective authorities failed to make land available for projects.
