Non-payment of lease arrears: Allahabad HC directs NOIDA not to grant occupation certificates for Omaxe flats

In a significant order, the Allahabad High Court has directed New Ohkla Industrial Development Authority (NOIDA) not to grant any further occupation/completion certificates in respect of flats currently being developed by Omaxe in NOIDA, for non-payment of arrears of lease premium..The order was passed on March 23 by the Bench of Chief Justice Dilip B Bhosle and Justice Suneet Kumar. .The decision of NOIDA to grant repeated extensions for the payment of dues owed by builder/promotor Omaxe Ltd. came under the scanner of the High Court after thirty flat owners moved the Court. The flat owners contended that the continued non-recovery of land dues owed by Omaxe to NOIDA has prejudiced their rights to have their flats (built by Omaxe) registered..The petitioners were represented by advocates Satyavikram and Nipun Singh, whereas advocate Kaushelendra Nath Singh appeared for NOIDA..By way of background, in 2006, Omaxe was allotted land for developing a Group Housing Scheme on lease basis in Sector 93B, Gautam Budh Nagar. As per the original lease deed, Omaxe was to complete the payment of its land dues in installments by October 3, 2010. In the event of default, NOIDA was empowered to cancel the allotment..However, when Omaxe defaulted in payments, NOIDA granted an extension for payment of dues in 2009. In 2011, Omaxe was granted completion certificates for 22 towers and 1320 flats. However, the flats could not be registered due to the payments due from Omaxe to NOIDA..About 1000 flats were eventually registered in 2013, after Omaxe cleared partial dues. Over 300 flats remained unregistered..From 2014 onwards, the petitioners purchased their flats, on payment of full consideration. The stamp duty and requisite documents were also submitted for the registration of their flats. However, the flats continued to remain unregistered, owing to the outstanding dues owed by Omaxe..As per the petition, NOIDA did not take any steps to alleviate the situation despite repeated representations made by the petitioners. Rather, the development authority granted further extension of time to Omaxe till April 2018..The petitioners contend that these extensions were given despite the fact that there was no provision for extension of time in the original lease deed..The petitioners have approached the Court to allay apprehensions that NOIDA may grant further time extensions for the payment of dues, thus prolonging the registration of their flats..Their petition prays that NOIDA be directed to give an undertaking/proposal to recover the land dues required to allow registration of the petitioners’ flats within three months. It has been prayed that no further reschedulement be allowed in respect of the same beyond this period of three months..Another concern raised by the petitioners is that holding charges and further stamp duty may be demanded for flat registration during the pendency of the case. Therefore, it has been prayed that the Court direct that no such added stamp duty, holding charges or any other extraneous and illegal demand be recovered from the petitioners, in the event that the flats are registered during the pendency of the case..Following initial submissions, the Court observed that Omaxe was on date liable to pay Rs. 250 crores to NOIDA. At the same time, it was noted that Omaxe has further projects being developed, in respect of which occupation/completion certificates were pending..While restraining the grant of any further occupation/completion certificates, the Court instructed NOIDA to ensure that Omaxe does not part with possession of any apartment or project until the next date of hearing..“In the meanwhile, we direct respondents-Development Authority not to issue occupation/completion certificates in respect of remaining towers, if any, in the project in question and also in other projects within their jurisdiction. TheDevelopment Authority shall not allow respondent no.3 to part with possession of any apartment either in this project or in any other projects within their jurisdiction till the next date.”.However, if the due amounts are paid off by Omaxe, NOIDA may deal with the occupation/completion applications on merits..“It is, however, made clear that if respondent no.3 deposits the entire arrears of lease premium with interest, if any, it would be open to the Development Authority to deal with their application for completion/occupation certificates in respect of other projects within their jurisdiction before the next date on merits in accordance with law.”.The Court also issued notice to Omaxe. The case will be taken up next on April 20, 2018..Read the order below.