Noida should have properly verified land acquisition process of builder before allowing it: NCLAT

The National Company Law Appellate Tribunal (NCLAT) in an order held that the New Okhla Industrial Development Authority (Noida) should have properly verified the land acquisition process of a builder before allowing it to go ahead with the construction.

Noida Authority had leased some land to the Builder (Corporate Debtor) for development of residential project. The plan was approved by NOIDA Authority for development of the residential project styled in the year 2010-11. The Corporate Debtor launched the project for construction of 2454 flats of different categories and sizes. While the project was under execution, it was found out that the land acquired by Noida Authority actually belonged to certain farmers.

The High Court of Allahabad had directed the Corporate Debtor to hand over the land to the framers as the Corporate Debtor could not claim to be a lessee of such land.

The NCLAT held that since NOIDA Authority held no title or interest in such remaining land which was not acquired by it, it would not be in a position to resolve and settle the dispute with the land owners. In the backdrop of this factual position, application of ‘Resolution Professional’ seeking relief against NOIDA Authority to settle the dispute with the land owners and hand over the entire land to the Corporate Debtor for execution of the residential project in question would not be maintainable.

The NCLAT observed that the NOIDA Authority holding no title or interest in such remaining land which was not acquired by it, would not be in a position to resolve and settle the dispute with the land owners.

The NCLAT bench headed by Acting Chairperson Justice Bansi Lal Bhat and comprising of Justice Anant Bijay Singh - Member (Judicial) and V.P. Singh - Member (Technical) held that, “The NOIDA Authority would have done better by doing a bit of introspection and take appropriate steps to mitigate the hardship of the allottees of the residential project in question who claimed to have been promised possession of flats within 33 months i.e. by 2013. If there was any flaw in the land acquisition proceedings, steps should have been taken to rectify the same.”