Allahabad HC: Can't limit zero-period relief once state accepts delay in land handover

Time of India

2 days ago

Noida: The Allahabad High Court has upheld that 'zero-period' waivers extended to real estate developers for delays in delivering projects for reasons beyond their control must be granted in full.
In its July 25 order, the court quashed a Greater Noida Authority's order that denied zero-period benefit to developer Empire E-Parks. The court directed the development authority to ensure the company received a 'zero-period' waiver on interest and penal interest accrued by the developer for the 18 years during which the construction was stalled, as it could not take possession of the allotted land.
The ruling, which draws parallels to an earlier Gaurasons India Ltd case, is expected to have far-reaching implications for several ongoing disputes in Noida, Greater Noida and Yamuna Expressway areas where builders and allottees could not get timely possession of land over encroachment by farmers, litigation or delay in development of infrastructure.
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Empire E-Parks was allotted 80,941 square metres (sqm) under IT/ITES category in Knowledge Park V by the Greater Noida Authority on Sept 27, 2007. A 90-year lease was executed on Sept 12, 2008. The premium for the plot was Rs 13 crore, of which about Rs 4 crore was paid upfront, and the balance Rs 9 crore was to be paid in 12 half-yearly instalments with 11% interest.
Between 2007 and 2019, the company claimed to have paid Rs 17.6 crore, Rs 32 lakh as lease rent, and Rs 1.5 crore in stamp duty.
Despite payments, the company claimed the Authority failed to develop external infrastructure, like roads and sewer lines. In Oct 2008, it wrote to GNIDA stating that even after paying Rs 4.6 crore and another Rs 50 lakh in interest, there was no basic development on the plot.
An RTI response from the Authority in Jan 2009 admitted that roads were still under construction.
Farmers had also encroached on a portion of the land, reportedly because they were not compensated for the acquisition, making construction work impossible.
The company filed a petition in the high court in 2012 seeking completion of infrastructure. It also demanded that Authority extend them a zero-period waiver from Nov 2007—the date of allotment money deposit—until the date full possession was given.
In 2018, it again applied to GNIDA for zero-period benefits, but its application was rejected on March 13, 2020, based on the Authority's 107th board meeting resolution that restricted zero-period benefits only to cases involving court stay orders or unexecuted lease deeds due to govt orders.
The petitioner challenged this order by filing another petition in 2020, which was disposed of with directions to approach the state govt.
In its revision petition before the state govt, the company argued that it had already deposited around Rs 18 crore against the total premium of Rs 13 crore and that the Authority failed to hand over unencumbered land or complete infrastructure.
It said farmers were still occupying parts of the land with electricity connections in their names.
A letter dated July 27, 2017, from GNIDA's senior manager confirmed encroachment by farmers.
On Feb 28, 2023, the state govt directed GNIDA to reconsider the case and determine the extent of encroachment and the duration construction was obstructed, but stopped short of granting full zero-period benefit.
The high court, however, noted that the Authority's counter-affidavit filed in Aug 2024 admitted that full possession of the land was still not handed over and that farmers' encroachment continued even in 2024.
Referring to its previous decision in the Gaurasons India case, where full zero-period benefit was granted for the entire duration of encroachment, the court held that once the state itself accepts that encroachment delayed construction, it cannot limit the relief.
The bench of Justice Prakash Padia quashed the order dated March 13, 2020, and modified the order dated Feb 28, 2023, to remove any restriction on zero period. It directed GNIDA and UP govt to grant Empire E-Parks zero-period benefit from the date of allotment on Sept 27, 2007, until "full, peaceful, and uninterrupted physical possession" of the entire plot was handed over.