Just imagine a situation wherein you have done away with your savings accumulated over a decade to fulfill your lifelong dream of an owned house and when you are preparing to move into your house but the Government’s intervention at the juncture prevents you from doing so. This isn’t a reel life story but a real life one which played out in Noida in the last 3-4 years as certain regulations led the Government of the day question the legality of property development at Noida. The developers of several impacted properties held the approvals obtained from the authorities in their defense. The realtor is then in no state to return your payment and we all know how the Government procedures in India work, they can take forever and the buyer is left in a utter state of helplessness and self pity wondering what his mistake was. Such a scenario actually transpired in Noida leaving ~50000-70000 land and apartment owners and 45 developers in a complete wreckage for over three years.
Lets take a closer look at the turn of events –
- The developers had the requisite approvals from the Noida Authority with regards to the construction of the projects. However, there was a petition from Mr Amit Kumar, a Noida resident, claiming that the developers were carrying illegal construction activities within 10 kms of the Okhla Bird Sanctuary without obtaining the required approval from the National Board of Wildlife (NBWL). Subject to the petition, the National Green Tribunal (NGT) considered the case (July, 2013) (Read more about NGT).
- In August 2013, the NGT directed the Noida Authority to identify the builders who had undertaken construction within 10 km radius of the Okhla Bird Sanctuary. As per the preliminary inspection reports submitted by the Noida Authority it was seen only that only six out of 55 projects were outside the 10 km radius. The report also added that even the rest 49 had the necessary clearances and, therefore, there was no hindrance towards them proceeding with the construction. However, NGT asked for detailed report and ordered restraint on any construction activities with respect to the 49 projects and also restricted grant of completion certificates to these projects. This came in as a major blow to all the stakeholders as ~15 projects had been completed and were due for possession. As many as 50000-70000 buyers were stranded and had no recourse. As per our internal sources, some buyers had also taken the possession resigning themselves to their fate. These occupiers knew pretty well that in case the Government would ask them to vacate the flat they would have no other choice. The ruling was heavily criticized by industry experts as the 10 km ruling would also impact some well established areas in Delhi and surrounding regions. In fact the entire city of Noida which is industrialised and inhabited falls within the circumference.
- The builders contended that the sanctuary had no notified eco-sensitive zone and was outside the purview of protected area and hence they were not liable to seek approvals from the National Board of Wild Life (NBWL). In addition, there were claims that the Supreme Court in 2010-2011 had allowed the projects a green signal. The NGT hence directed Uttar Pradesh Government to bring forth the order proving Okhla Bird Sanctuary a notified sanctuary under the Indian Wildlife Protection Act, as claimed by the state and environment ministry. Uttar Pradesh government was asked to its proposal regarding the eco-sensitive zone around Okhla bird sanctuary, to the Ministry of Environment and Forests (MOEF) which would then be forwarded to NBWL. The UP Government submitted a fresh proposal in early 2014 reducing the eco sensitive zone to 100 metres. The NGT however reiterated denial of permission towards the projects within 10 km radius of the Okhla sanctuary in Noida.
- The entire episode had already costed a fortune for the developers in Noida. According to Amit Modi, Vice President CREDAI Western UP, the local economy had lost about Rs 2000 crore in several months of the ruling, with developers bearing the loss of paying compensations and fixed costs associated with the projects. Projects of 45 developers including Jaypee, Amrapali, ATS, Logix, Ajnara etc were impacted. The situation in Noida was getting from bad to worse with unsold inventory of units rising at the end of March 2014 (Source : Liases Foras), stretching the Balance Sheets of the builders.
- In a further development a three-member committee comprising of forest officials from Delhi and Uttar Pradesh governments and the environment ministry was constituted on June 11, 2014. They visited the site to determine the eco-sensitive zone on June 27. A report was submitted by the committee which recommended a 1.2 km area between the northern boundary of the bird sanctuary and the DND flyover and 100 metres on the other sides as the eco-sensitive zone.
The ESZ as defined in the report:
Source : The Indian Express
After a series of discussions and conversations between various regulatory bodies involved, first set of completion certificates was finally granted in September 2015, as the Government gave a notification accepting the committee’s ESZ definition. This came in as a cheer for the thousands of buyers and even the developers. Consequently, real estate projects that had been stuck in limbo finally heaved a sigh of relief.
The news would have been sweeter but for the State Government stance of levying the stamp duty as per the current rates versus the rates when the projects were completed, putting an additional burden of ~RS 200 crore on the buyers. However environmentalists continue to criticize the decision, there clearly can be only one winner.
The Noida case served as a catalyst towards the recent development wherein the Supreme Court supported the NGT’s stand mandating builders to obtain all the necessary approvals for their projects before the commencement of the construction work. The NGT had in July 2015 struck down an environment ministry memo permitting post facto approvals. The Okhla Bird Sanctuary case came in as learning for all the stakeholders wherein the construction was almost complete much against the environment and as the buyers had already made the payments having no idea about the legal situation of the projects. Such a mandate by the court will affect all builders big and small and prevent them from constructing and selling illegal projects to innocent buyers and then washing their hands off them.