NOIDA: Around 200 homebuyers who have been waiting for years to get their flats at Lotus Boulevard Espacia registered could finally get relief, as the developer has paid a portion of its dues and said it is willing to settle court disputes to avail Uttar Pradesh‘s rehabilitation scheme.
The developer, Cloud 9 Projects, deposited Rs 21 crore with Noida Authority in April this year, and this amounts to 25% of its dues after accounting for relief during the Covid period. A month later, Cloud 9 said it was negotiating with IndusInd Bank, a financial creditor which had filed a petition to initiate insolvency proceedings against the developer.
The builder also said it aims to clear its recalculated dues by July.
Noida Authority officials, admitting that Cloud 9 had taken some steps, said on Monday it will include the project under the rehabilitation policy once all ongoing litigations are resolved – a decision approved by its Board at a meeting conducted on June 14.
UP govt’s rehabilitation package gave several concessions to developers, including a two-year waiver from paying interests and penalties imposed during the pandemic, if the builders deposited 25% of their revised dues.
Projects under insolvency or under litigation could also avail the policy if all cases were withdrawn. Launched in 2009, the Espacia project has remained incomplete as the builder defaulted on paying its dues to the Noida Authority, embroiling it in several legal cases.
The society, built on 10 acres of land in Sector 100, was supposed to be completed by 2016. Partial occupancy was granted for five towers in March 2016, but 320 out of 366 flats got their registries. The remaining two towers, which have another 168 flats, did not get registered either.
“If Cloud 9 Projects follows through on its assurances and formally withdraws or settles the cases, the Noida Authority may finally classify the project as a legacy stalled project, allowing it to unlock registrations and occupancy for 214 remaining flats,” a senior Noida Authority official said.
Because of pending registries and occupancy certificates, homebuyers had approached the Allahabad HC, which in Feb 2024 directed the Noida Authority to issue the mandatory certificates without insisting on clearance of dues from the builder.
The court also directed the ED to investigate the developer for alleged misuse of homebuyers’ funds and allowed the Authority to recover pending dues from unsold inventory in one of the towers.
But this HC judgment triggered a slew of cases.
Noida Authority filed a review petition, which was rejected in May 2024, prompting it to approach the Supreme Court. The special leave petition before SC is pending.
The society’s AOA also filed a contempt petition in the HC, alleging that the Noida Authority did not comply with the court’s order even after the review plea was rejected. The contempt petition is pending too.
Separately, Cloud 9 co-director Ashish Gupta filed a special leave petition before Supreme Court, challenging the high court’s decision to fix personal liability on directors. The apex court in Oct 2024 issued a stay and restrained Enforcement Directoratefor taking any coercive action against Gupta. This petition will be taken up by the top court on July 22. Other than these cases, insolvency proceedings have been pending before the National Company Law Tribunal (NCLT) since IndusInd Bank filed a petition against the developer in 2022.
The developer said an insolvency resolution profession )IRP) has not been appointed till now and it is already in talks with the bank to settle the case — a step critical to avoid the project from entering insolvency proceedings, which would disqualify it from availing the rehabilitation package.
“The company is waiting for recalculated dues from the Noida Authority. We want to settle the matter and complete the project,” said Ashish Gupta, Cloud 9 director.
