Personal Finance

End of the road for Noida Extension?

Moumita Bakshi Chatterjee | Updated on July 23, 2011 Published on July 23, 2011

With the fate of over one lakh buyers in a limbo, the mood in the area is grim.

“Sample flat ready. Check out your dream space,” promises a roadside billboard touting Patel's Neo Town project.

Beyond the hoarding, however, one look at the Noida extension skyline will tell you just how distant that dream must seem now, for thousands of buyers. The project, like many others in Patwari village, has run aground following Allahabad High Court order. The order quashed the acquisition of about 590 hectares of land in the village, hitting almost another dozen housing projects that were coming up in the area. Construction has, of course, come to a standstill overnight and earth movers and cranes stand in a comatose state, much to the horror of nearly 30,000 buyers who had booked their flats in the vicinity.

A handful of marketing representatives hang around the sales offices at the affected project sites to answer umpteen calls or to pacify irate buyers who walk in. Over endless cups of chai, they discuss the nuances of impasse, exchange local updates, and speculate endlessly on the roadblocks ahead.

Second blow

This is the second crippling blow to what was once a bustling hub of affordable housing projects. In early May, the Allahabad High Court had struck down acquisition of over 150 hectares of land in Chak-Sahberi village at Greater Noida (dubbed Noida Extension by builders).

More farmers on the warpath means more petitions have bunched up. Other villages have moved the court against the 2007 land acquisition by Greater Noida Authority — these petitions are now slated for hearing on July 26.

The fate of nearly one lakh buyers who have booked their apartments at Noida Extension, hangs in balance. Further, the farmers' agitation threatens to engulf other projects on Noida-Greater Noida Expressway – a few kms away.

“Our situation is pathetic. Between 10-90 per cent of the money has already been paid to the builders. Many buyers took bank loans, some have even sold their smaller flats or jewellery to make payments,” says Mr R.P. Tyagi, President of Noida Extension Flat Buyers' Welfare Association (NEFBWA).

buyers' move

Stung by the High Court order, NEFBWA was formed swiftly to protect the interest of consumers who had booked their flats at Noida extension; its membership count of 6,000 is swelling each passing hour. The association, on behalf of the flat-buyers, has decided to implead itself in all writ petitions pending before the Allahabad High Court.

“Our hard earned money is invested here and it is the buyer who will face the maximum brunt…We want the (Greater Noida) authority to intervene and resolve this issue,” says Mr Rahul Sharma, Treasurer of NEFBWA. The association Web site implores farmers, GNIDA, builders and flat-buyers to come together to find a solution.

An official fix is, however, easier said than done. A compromise with farmers on a higher compensation could take months, and getting each one of them on board may prove to be tough.

Relocating buyers to another project in the vicinity was an alternative when the Chak-Sahberi judgement came in — that option has been nixed as additional projects got scrapped.

So what about refund by builders? “Refund is not a solution. Who will refund the money and that has been spent on building roads and infrastructure,” quips Mr Mohit Arora, Director of Supertech Ltd.

“The builders have not duped anyone. They are themselves an aggrieved party,” says industry body CREDAI's Vice-President, Mr Geetambar Anand. Refunds, he asserts, can only happen when GNIDA refunds money to the builders. “That will then flow to the buyer,” he says.

Quite surprisingly, even NEFBWA says refund is the second option; the first is to resolve the matter through a “workable solution”.

Hard lessons

Clearly the lessons learnt from the Noida Extension imbroglio will not be forgotten in a hurry. Mr Shobhit Agarwal, Director of Protiviti Consulting, says going forward the Noida Extension issue will prompt residential property buyers to ask developers for more documents, including those pertaining to land acquisition and other approvals.

“A mechanism for acquisition of farmland will have to be worked out, with clear fall-back options and defined time period for redress. If irregularities are found in the acquisition process (of local authorities), there has to be a mechanism to protect the builders,” he says.

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