New Delhi: The Supreme Court’s decision to raze two gigantic residential towers in Noida that were once peddled to buyers as India’s answer to the Petronas Towers of Malaysia has opened up a virtual Pandora’s box across the country, with builders scampering for cover.
These builders, who once worked with the Noida Development Authority (NDA)—a body overlooking construction of hundreds of homes in Noida that share a border with Delhi—were once managers with the NDA but now are worth anywhere between Rs 4,000-5,000 crore each.
The bulk of them sold dreams to millions of homebuyers without valid documents, often building homes on land meant for Noida’s green cover, an investigation by the Yogi Adityanath government has revealed.
Details of this investigation, shared by a senior official of the Uttar Pradesh government with this reporter, will form the basis of the probe to be conducted by a Special Investigation Team (SIT) formed by the UP CM Yogi Adityanath. The four-member SIT is likely to submit its report within a week.
The hunt for illegal builders has begun. There are approximately 20 such builders who were once lowly clerks with the Noida Development Authority who slowly inched their way up by manipulating the system and then left their jobs to turn realtors. And most of them have been found rampantly violating real estate guidelines.
One builder, Khushi Ram, was arrested this year for allegedly constructing around 50 flats illegally in Greater Noida’s Shahberi area. Ram, 50, owns Nidhi Residency, where residential towers with 18 and 32 flats, respectively, were constructed illegally on land belonging to the Greater Noida Authority.
Getting after these dubious realtors is the second part of the assignment for the SIT. The first part would be to get to the bottom of the Supertech case and find out why repeatedly the builders offered incorrect information about its rampant apparently unauthorised construction in alleged collusion with the planning authorities.
Interestingly, the apex court judgement came on the same day as the Videocon order by the National Company Law Tribunal (NCLT) to freeze assets of the Dhoot family, promoters of Videocon. The NCLT also asked Venugopal Dhoot for an affidavit listing the family’s movable and immovable property in India and abroad, and also directed depositories to freeze their shares. This is not all. The Tribunal also asked tax officials and banks to disclose and freeze the bank accounts, lockers, etc, of the family, including joint holdings.
But the million-crore rupee question is: will the order be implemented correctly? If that happens, it could potentially unlock hidden wealth and assets siphoned off from the company.
“Supertech will have to demolish the towers at its own cost within three months, refund homebuyers their booking amount with 12% interest and pay Rs 2 crore to the residents’ welfare association. That is a tall order,” says a senior official of the UP government
The official told this reporter the Supreme Court decision is interesting because the apex court upheld a seven-year-old order of the Allahabad High Court that had ordered the demolition way back in April 2014. Then, the Supreme Court had stayed the demolition.
“Efforts are being made to keep those officials of the Noida authority who once colluded with Supertech out of the demolition supervision process,” the official further said. The Yogi Adityanath government, it seems, is not taking any chances.
The official said the SIT has been asked to submit its report within a week primarily to checkmate any move from the builder, which is likely to hire top legal experts and slow the implementation through appeals to reconsider the severity of the order.
“This is a big case, not just for UP but for India as well,” said the official.
The official was referring to thousands of homeowners who have been left in the lurch by a spate of bankruptcies among realty companies. Worse, in most cases there are no solutions.
Consider the case of Supertech. Those who booked flats and paid the entire amount upfront have not been paid their monthly returns since 2014. Only now they have been asked to take shops in shopping malls, some told to take flats in other Supertech properties by paying some additional Rs 10-12 lakh per flats. As a result, the majority continued to pay equated monthly instalments (EMI) on loans with no answer from Supertech.
And when the group was booking the flats, the group described the property as a rival to the twin Petronas towers of Malaysia. Plot allotment and sanctioning of maps for the towers occurred between 2004 and 2012. The structural maps for the plot got sanctions in 2005, 2006, 2009 and 2012. And violations continued unabated.
The UP government wants to make it a classic case and punish the corrupt. CM Yogi Adityanath, it is learnt, has said justice must be delivered to those who were wronged and corrupt builders and officials must be punished.
In meetings with his top officials, Adityanath has made it clear that the Supertech case should not end up like previous real estate cases where the promoters left with cash.
There are countless examples like Supertech across India. Mumbai’s Pratibha Apartments—a 36-floor residential building—hit the headlines in 1984. It had to demolish nine of its floors illegally constructed by falsifying the area. The demolition eventually happened in 2019, more than three and a half decades later.
Similar was the case of the Coca Cola compound, where builders flouted all rules between 1984 and 1989 and constructed 35 illegal floors in collusion with municipal authorities. The scam was detected in 2009 but nothing happened.
Consider the case of the Adarsh Housing Society, which was built on land illegally acquired from the Indian Navy to build homes for war widows, but was eventually owned by politicians, defence personnel and bureaucrats. The scam triggered breaking headlines in 2010 but the building, ordered to be demolished, stands because of a Supreme Court stay in 2018.
“CM Adityanath does not want this case to drag through the legal process and eventually be diluted,” said the official. “Each and every official responsible for the irregularities should be brought to book,” Yogi stated, directing officers to adjust to the SC order.
“The matter was pending in court till now. Action will be initiated against officials after a thorough probe by the special inquiry committee. We will follow every point of the ruling by the apex court,” Noida CEO Ritu Maheshwari told reporters.
The SIT will find out whether or not the unique 15 buildings of Emerald Court and the next twin towers were handled as a single format or two separate initiatives, whereas granting three additional sanctions of the unique constructing plan that was accredited in June 2005.
Particular consideration is on motion of the file on the dual towers after October 2011 as that was the interval when the deliberate peak of the buildings was elevated from 66 metres to 121 metres by means of purchasable ground space ratio.
Heads have started rolling. An official shunted out of Noida Authority’s planning division was suspended by the state authorities early this week. The official, Mukesh Goyal, a supervisor with the Noida Authority, was reported to be misrepresenting the case of Supertech to his superiors. He is not the only one who called Supertech one of the finest real estate companies in north India. There were seven more officials of the Noida development authorities who were involved in Supertech, and all were stonewalling probes against the realtor.
The apex court also noted how the Authority helped the developer. “It’s a shocking exercise of power by the Noida Authority. When flat purchasers asked you to reveal the building plans for the two towers, Apex and Ceyane, you wrote to Supertech and refused to part with it after the company objected. Only after the Allahabad High Court order, you provided it. It is not that you are in league with Supertech, you are in cahoots with them,” said the bench
The Emerald Court Owners Resident Welfare Association, which secured relief from the high court in 2014, attributed the delay cited by the real estate firm and the authority to their attempts to collect information.
Senior advocate Jayant Bhushan, appearing for the homebuyers, said that, since 2009, residents were seeking information about the two under-construction towers that were coming up in the green area shown to us while purchasing flats. “I appealed through RTI for the building plan from the Noida Authority which they refused. That is when I decided to approach the high court.”
Bhushan said it was the relentless effort of four residents, who in 2009 went up against Supertech’s plan for the twin towers that were coming up in violation of building bylaws. “It is their victory,” said Bhushan of the four people who routinely travelled by train for hearings in the Allahabad High Court and raised donations to continue their legal battle against the builder.
Supertech MD, R.K. Arora, who is no stranger to criminal charges, has not said what his company plans to do after the momentous Supreme Court order.