Amrapali Case: Setback For Noida & Greater Noida Builders, SC Dismisses Plea To Set Interest Rate

The Supreme Court recently dismissed the intervention applications (IAs) submitted by realtors against its November 7 order that recalled the 2020 order that instructed the authorities to cap the rate of interest at 8% for real estate firms’ failure to pay land dues to authorities.

This implies that the builders will have to pay higher dues rate set by the authorities.

The earlier top court orders had set the interest rate at 8 percent.

A Bench of Justices Ajay Rastogi and Bela M Trivedi dismissed multiple petitions filed by builders from Noida and Greater Noida seeking interest rate parity with the Amrapali developments.

In the Amrapali case, the Supreme Court instructed the two authorities to charge the MCLR rate rather than the standard 18 percent, citing the exceptional circumstances and hardship of over 42,000 house purchasers and syphoning off cash worth more than Rs. 11,000 crore. Following that, other builders petitioned the Supreme Court, seeking that their past-due interest rates be cut to the MCLR rate.

“The IAs were filed by various group of companies, including Ace Group of Companies, but they are not in any manner concerned with the plight of home buyers of Amrapali Group of Companies, of which judicial cognizance was taken by this court and merely filing of IAs by other group of companies who are stranger to the cognizance taken by this court in reference to Amrapali Group of Companies, do not deserve any indulgence at least in the instant proceedings…Consequently, the IAs are dismissed,” the order stated.

The order stated that in the Amrapali case, the Court stepped in and took cognizance to secure the interests of homebuyers, obviously within the four corners of the law, and proceeded to consider what relief could be extended to homebuyers who booked their flats in various projects of the Amrapali Group of Companies.

The order noted that the company’s statement that came on record is dated November 7 and is “indeed alarming that all its projects were completed much before the cognizance was taken by this Court and it was unable to pay the demand as raised by the Noida/Greater Noida authorities in terms of the conditions of the lease deed executed with open eyes between the parties.”

The order observed that the developer had submitted an IA before the court “which was not even closely related with the reason of which judicial notice was taken by this Court with an intent to safeguard interests of the homeowners of Amrapali Group of Companies”.

It was noted that CREDAI, NAREDCO, and other developers had not filed any IA prior to the passing of the order dated November 7, 2022, and as far as the other IAs are concerned, all came into the pool after the order of August 25, 2020, which came to be passed by the Court at a later stage, and admittedly neither of the promoters/builders was even remotely concerned, directly or indirectly, in reference to the projects of the Amrapali Group of Companies over which judicial cognizance was taken by the court.

Homebuyers said that they want registration of their homes to commence.