Noida authority to act tough against defaulting realtors

NOIDA: Two days after the Supreme Court rejected realtors’ plea to reduce interest rates on financial dues, the Noida authority on Thursday decided to take stern steps to recover dues from realtors who have defaulted, officials said.

The Noida authority needs to recover 9,000 crore from around 60 realtors who have defaulted on their respective land cost payments. Some of these developers are Amrapali, Jaypee, Unitech and Supertech, who are facing court cases, officials added.

Earlier, the smaller developers were delaying payments by citing pending court cases over the interest rate. But with the apex court’s verdict, the Noida authority will now recover the dues by taking over the assets of these developers, officials said.

The Supreme Court while rejecting Prateek Group’s plea, allowed the Noida authority to levy penal interest on the principal amount to recover the financial dues. The realtor was demanding that only simple interest of 8.5% on the principal amount should be recovered. Right after the order, the authority cancelled the allotment and sealed a tower of 3C Group in Sector 100 as the realtor failed to pay 81 crore dues.

“The group housing department has proposed the cancellation of at least six housing projects because the developers defaulted despite repeated notices,” said Prasoon Dwivedi, officer on special duty, Noida authority.

According to the data provided by the authority, there are at least 33 housing projects in which realtors have defaulted around 5,000 crore.

Realtors, however, feel that most of them are not in a position to pay their dues in the present circumstances. “The realtors may not be able to clear the dues if the Uttar Pradesh government does not come up with a scheme and reduce the penal interest on the principal amount in view of the financial crisis in the real estate sector,” said RK Arora, chairman of Supertech Limited and president of National Real Estate Development Council (UP chapter).