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    What Supreme Court told Noida bodies on its move to cap interest rates for delayed builder payments

    Synopsis

    Noida and Greater Noida authorities could lose Rs 7500 crore if the Supreme Court's order on capping interest rates for delayed payments by builders were to go through.

    Supreme Court -- ANIANI
    The Supreme Court said that a balance must be maintained between builders and authorities.
    Noida and Greater Noida authorities stand to lose over Rs 7,500 crore if the Supreme Court's order on capping interest rates for delayed payments by builders were to go through.

    The authorities had asked the apex court to recall its order on capping interest rates for delayed payments at 8 per cent instead of between 15 and 23 per cent. This was done to boost the housing sector, keeping in mind the financial impact of Covid-19 on the sector. The authorities said they would lose around Rs 7,500 crore.

    The advocate who was contending with the authorities, Ravindra Kumar, said that they would be “ruined” financially. He added that this will lead to an “unjust enrichment” of builders, and that last year’s order was passed during the Amrapali case without examining all issues.

    Advocate Kumar said that Noida authorities would lose Rs 3,266 crores and Greater Noida authorities will have to give up Rs 4,279 crore as a result of the order.

    He also said that builders themselves demanded a 20 per cent interest rate, compounded monthly, from homebuyers. Aside from that, those who were given land for commercial projects or educational institutes were also demanding a similar reduction.

    Justice Rastogi then said, “let us go back three years back when the real estate sector was badly affected. My question is: Did authorities come forward to take case of them with some policy decision in those time as a gesture of support the real estate sector?”

    The bench, comprising Justices Rastogi and Lalit, added that a balance must be maintained in the sector as a whole. The bench also clarified that if the payments were not made on time, then the concession would no longer be applicable.


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