Supreme Court slams Noida authorities for ignoring homebuyers

The Supreme Court on Friday issued a stern rebuke to land-owning and development authorities in Noida, castigating them for their indifference for the suffering endured by thousands of homebuyers who have been waiting for years to receive their apartments. These homebuyers, the top court lamented, have found themselves trapped between real estate developers’ inability to complete construction and the authorities’ relentless pursuit of recovering dues owed by such developers.
“Most of the projects under the IBC (Insolvency and Bankruptcy Code) are in Noida, and Noida authorities are largely to blame for this. The scheme they framed, they never bothered about flat buyers. They are least concerned about flat buyers,” remarked a bench led by justice Sanjiv Khanna the bench, highlighting the systemic neglect of homebuyers’ rights.
Coming down hard on the Yamuna Expressway Industrial Development Authority (YEIDA) for assailing a resolution plan for the debt-ridden Jaypee Infratech Limited (JIL) over compensation claims, the court rued that the authorities in Noida prioritised the recovery of dues from developers over the interests of those who had invested in homes.
The bench, also comprising justices Sanjay Kumar and R Mahadevan, directed YEIDA to submit records of schemes and regulations it has framed and implemented to ensure the protection of homebuyers’ interests when entering concession agreements with private developers.
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Asserting that the authority must act in a way to protect the flat buyers, the bench added: “You can’t say I’m concerned only about my money and that I have nothing to do with the flat buyers. That won’t be acceptable to this court.”
The directive came during the court’s hearing of YEIDA’s appeal against a May 24 order of the National Company Law Appellate Tribunal (NCLAT), which had approved the Suraksha Group’s resolution plan for JIL, which has failed to deliver nearly 20,000 apartments in its “Wish Town” housing project in Noida and Greater Noida.
The Supreme Court’s insistence on protecting homebuyers’ interests offers a glimmer of hope for tens of thousands of homebuyers, who have been caught in the crossfire of the prolonged real estate and financial dispute. For nearly a decade, these homebuyers have faced uncertainty and financial strain as real estate developers failed to deliver promised apartments, while development authorities focussed primarily on recovering their dues.
As soon as the matter came up on Friday, the court, however, was clear in its stance that the authority could not focus solely on recovering its dues at the expense of the homebuyers.
“Even if you want a concessionaire to pay, they will not pay from their own pocket. They will shift the burden on the home buyers… Ultimate sufferers are the flat buyers,” it told solicitor general Tushar Mehta, who appeared for YEIDA.
While SG pointed out that the authority was not against the rehabilitation of the projects, but was acting in a public duty to collect dues that will eventually be used for public amenities, the bench countered by demanding evidence of what YEIDA had done so far to assist the distressed homebuyers.
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“You told NCLAT that you want to extend a helping hand to the home buyers. Now, you show us what you have done… Let us tell you that if you are not concerned about the home buyers, this court will step in,” the bench remarked.
In its order, the court directed YEIDA to submit a detailed affidavit outlining the monetary and other concessions granted to homebuyers, as well as the status of projects delayed due to IBC proceedings. The authority was also instructed to provide specific clauses in its agreement with Jaypee Infratech that were meant to protect the interests of flat buyers.
“You gave it (land) to Jaypee, and you cannot now say I am not responsible for anything. You must tell us what you have done,” the bench told SG while scheduling the next hearing in October.
The court also refrained from interfering with separate proceedings initiated by YEIDA, which challenged an arbitral award favoring Jaypee against the authority’s demand for additional compensation from the lessees of land, including corporate debtors.
NCLAT’s May 24 order had set aside a previous decision by the National Company Law Tribunal (NCLT) that had asked Suraksha Group to pay only ₹10 lakh towards farmers’ increased land compensation. YEIDA had sought ₹1,689 crore in compensation, but NCLAT ultimately ruled that Suraksha Group could pay 79% of this amount – ₹1,334.3 crore – over four years.
“The impugned order passed by adjudicating authority (NCLT) insofar as it deals with the claim of the appellant of ₹1,689 crore of additional farmers’ compensation is set aside. The rest of the impugned order approving the resolution plan is upheld,” stated the NCLAT order, delivered by chairperson justice Ashok Bhushan and member (technical) Barun Mitra.
NCLAT directed Suraksha Group to implement its modified resolution plan, emphasising the need for swift action to benefit all stakeholders, including 20,000 homebuyers and 10,000 farmers.
NCLAT order revived hopes of homebuyers, who have been waiting nearly a decade to receive their homes – many of whom have paid over 50% of the total flat cost.
In addition, YEIDA had also raised a demand in April 2024 for Suraksha Group to pay ₹1,500 crore as external development charges (EDC) for the development of common area facilities in the Wish Town project. However, NCLAT’s order did not address the EDC demand, leaving the issue unresolved.
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