Noida realty firm proposes selling land to pay dues, YEIDA raises objections

Jai Prakash Associates Limited (JAL), a real estate firm, intends to sell 150 acres of land to raise 2,755 crore to pay the Yamuna Expressway Industrial Development Authority’s (YEIDA) financial obligations, the developer said in the Allahabad high court recently.

YEIDA, on the other hand, has objected to the plan because Jal has already mortgaged 80 out of 150 acres in banks and thus cannot sell the same to raise funds, said officials aware of the matter on Sunday.

In a hearing in the Allahabad high court on May 25, JALs lawyer, Jayant Bhushan, argued that JAL should be given more time to settle the case because it may free 150 acres of land from encumbrances that existed in this land parcel part of the ‘core area’ of the sports city project located along the expressway. “Through its lawyer, JAL has stated in the high court that it will free 150 acres of land from all encumbrances. However, at least 80 acres of the 150-acre sports city site have already been pledged to banks. Therefore, the high court will now decide on the future course of action in this case,” said Arun Vir Singh, chief executive officer of YIEDA.

On December 21, 2019, YEIDA cancelled the allotment of 1,000 hectares to JAL, which had failed to pay financial dues totaling 3,621 crore. JAL, on the other hand, said that the total amount owed is 1,483 crore. In 2020, Jal filed a writ seeking more time to pay the dues. Since then, the case has been heard in the high court. According to Jal’s proposal, the outstanding amount will be secured against 61.41 acres of housing land, 81.75 acres of commercial land, and 5.21 acres of institutional land, totaling 150 acres in the “core area.” The value of this land is 2,755 crore, as opposed to the 1,483 crore dues amount claimed by JAL. JAL said that it plans to sell or sublease the land within a year of the court’s order and deposit the proceeds in an escrow account. As a result, YEIDA will be able to withdraw up to 1,483 crore from the escrow account, with the remainder remaining deposited until the court proceedings are completed. A spokesperson for Jal’s declined to comment on the matter.

Buddh International Circuit (BIC), the country’s first Formula One track, was built and opened by Jal in October 2011. From 2011 to 2013, the Formula One Indian Grand Prix was held at Bic, which German architect and racetrack designer Hermann Tilke designed. In 2014, the venue was dropped from the Formula One calendar. Jal built several other sports facilities on the plot, including a cricket stadium and other associated buildings for F1 races. The company’s infrastructure projects have been controversial, with approximately 6,000 homebuyers and investors unable to take possession of their units for several years. Since 2017, Jaypee Infratech Limited, the group’s infrastructure company, has been in corporate insolvency proceedings.