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2020 (6) TMI 220 - SC - Indian LawsDirection for refund of unused FAR - directions in respect of the sale of balance FAR available within the sanctioned plan, unused FAR up to the permissible limit of 2.75 or more and FAR beyond 2.75 up to 3.5 under the purchasable scheme and other FAR which may be available due to metro projects, etc. - HELD THAT - The rates of SBI MCLR is reduced to 7.45 % in the year 2020 from 8.95% in the year 2016. It is clear that the Noida and Greater Noida Authorities, on the outstanding dues, are realizing the dues from all such projects, interest at exorbitant rate such as 15% per annum with half-yearly compounding and in addition are also realizing penal interest on the amount as fixed from time to time. The Noida and Greater Noida Authorities are not issuing completion certificates to such projects and they are not able to realize their outstanding dues. For various reasons, constructions have not been completed, including due to diversion of funds. There is a failure to comply with the obligation to the home buyers whose money has been invested in the partially constructed structure and partial dues have been paid to the Noida and Greater Noida Authorities. It cannot be disputed that the rate of interest, on which agreements were entered into, has gone down by now. The present lending rate is much below and the RBI has taken several steps to revive the economy. In such a scenario, it would never be possible to make payment of interest at the rate fixed by authorities and also a penal interest to be realized by concerned authorities. The home buyers are not able to obtain fruits of the investment and are deprived of legal title of the flats. Considering the current state of real estate, the projects are standstill, and in order to give impetus to such housing projects and mainly considering plight of home buyers and as pointed out by Noida and Greater Noida Authorities that 114 plots were allotted from 2005 onwards, most of projects are incomplete; we direct that rate of interest on the outstanding premium and other dues to be realized in all such cases at the rate of 8% per annum and let the Noida and Greater Noida Authorities do a restructuring of the repayment schedule so that amount is paid and Noida and Greater Noida Authorities are able to realize the same - In case of failure to pay, the concession granted shall stand withdrawn.
Issues Involved:
1. Immunity of NBCC from legal actions. 2. Modification of repayment order for Royalgolf Link City Projects Private Limited. 3. Release of FAR to Noida and Greater Noida Authorities. 4. Deletion of Vansh Consultants Private Limited from Forensic Audit Report. 5. Financing of home buyers by banks. 6. Interest to be realized on outstanding dues by Noida and Greater Noida Authorities. Issue-wise Detailed Analysis: 1. Immunity of NBCC from Legal Actions: NBCC, appointed as a Project Management Consultant, sought immunity from being held responsible for any disputes or liabilities related to the projects they are completing. The Supreme Court granted NBCC immunity from legal actions by other courts, tribunals, or authorities, emphasizing that NBCC is answerable only to the Supreme Court in the pending proceedings. The Court also directed that NBCC is not responsible for attending to queries from home buyers and should report progress to the learned Receiver, who will then update the blog/website. 2. Modification of Repayment Order for Royalgolf Link City Projects Private Limited: Royalgolf Link City Projects Private Limited requested a modification of the order requiring them to repay ?48.52 crores with 12% interest. The Court noted the hardships faced by the company but emphasized the need for a reasonable interest rate due to the diversion of home buyers' money. The Court dismissed the application, stating that the company must repay the amount with interest to avoid unjust enrichment and ordered the interest to be deposited within six weeks. 3. Release of FAR to Noida and Greater Noida Authorities: Noida and Greater Noida Authorities requested the return of unused FAR to recover outstanding dues. The Court rejected the request, noting that the FAR was made available due to home buyers' investments and should be used to complete the projects. The Court authorized the learned Receiver to sell the balance FAR to generate funds for project completion. The sale and transfer of FAR were to be facilitated by Noida and Greater Noida Authorities without considering any previous dues of the Amrapali Group. 4. Deletion of Vansh Consultants Private Limited from Forensic Audit Report: Vansh Consultants Private Limited sought deletion from the Forensic Audit Report, claiming an error in being listed as a debtor. The Court, after examining the Forensic Auditor's findings, found no merit in the application. The Court noted that the transactions did not inspire confidence and were designed to divert home buyers' money. The Court dismissed the application, upholding the Forensic Auditor's report. 5. Financing of Home Buyers by Banks: The learned Receiver requested directions for banks to disburse balance loan amounts to home buyers, including those with NPA accounts. The Court directed banks and financial institutions to release loans to home buyers, notwithstanding their NPA status, and to restructure the loans to facilitate project completion. The Court emphasized the need for long-term restructuring to ensure home buyers can repay the loans and enjoy the fruits of their investment. 6. Interest to be Realized on Outstanding Dues by Noida and Greater Noida Authorities: The Court addressed the issue of high interest rates and penalties imposed by Noida and Greater Noida Authorities on outstanding dues. The Court directed that the interest rate on outstanding premiums and other dues be reduced to 8% per annum, with a restructuring of the repayment schedule. The Court emphasized the need to balance the interests of home buyers, developers, and authorities to facilitate project completion and financial recovery. Conclusion: The Supreme Court provided comprehensive directions to ensure project completion, protect home buyers' interests, and facilitate financial recovery for developers and authorities. The Court emphasized the need for reasonable interest rates, restructuring of loans, and the sale of FAR to generate funds for project completion. The judgment aimed to address the complex issues arising from the stalled projects and ensure a balanced approach for all stakeholders involved.
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