Noida authorities to incur Rs 7,500 cr loss after Supreme Court order

22 Sep 2021 CW Team

The Noida and Greater Noida authorities will incur over Rs 7,500 crore loss due to Supreme Court's capping interest rate order, at around 8%, for the land cost payment delay by builders were to sustain.

In June 2020, the Supreme Court had ordered Noida and Greater Noida authorities to cap the interest rate at around 8% for land cost payment delay by builders instead of a steep 15-23%.

Representing the authorities, advocate Ravindra Kumar submitted before a bench of Justices Ajay Rastogi and U U Lalit that this order was not based on facts.

Kumar fought before the bench that this order would financially ruin the authorities, and over Rs 7,500 crore would be gone with a pen stroke. Builders will get unfair enrichment of over Rs 7,500 crore, he said.

For the builders, no reduction in the rate of interest would be passed on to the home buyers, he said.

Justice Rastogi asked Kumar that if there will be a bad phase for the realty sector three years down the line, will the authority come up with a policy decision to save the builder.

He also asked that when builders were going through a bad period, was there thought to find a way to decrease the interest rate.

On October 1, the top court has scheduled the matter for further hearing.

Counsel for home buyers, Kumar Mihir, said that the top court is trying to balance equities among authorities and the builders and to guarantee that no extra burden is given to buyers.

The authorities had asked the top court to recall its order on September 13, mentioning that the builders have not to deposit a single paisa to clear their dues.

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