Homebuyers Can't Suffer Due To NOIDA Authority's Failure To Fully Implement Project: Allahabad HC On Withholding Of Occupancy Certificate

Thereafter, Special Purpose Company had submitted integrated plan for development of the entire Sports City Plot No. In a plea concerning the development of Noida Sports City, the Allahabad High Court said that the homebuyers–some of whom had booked apartments in completed towers but where the builders were not granted permanent completion certificate–cannot be penalised due to New Okhla Development Authority's failure to perform its statutory duty in "ensuring planned and systematic development" of the project. Thereafter there were allegations of bungling in the allotment of the Sports City and the implementation and development of the project pursuant to which the matter was referred to Controller and Auditor General of India for audit, wherein it was found that “various irregularities in the allotment and development of the Sports City, which resulted in a loss of almost Rs.9000/- crores to the State Exchequer.” As a reaction to this, NOIDA convened a meeting and decided that till State Government took a decision on the case, further sub division of the Sport City as well as the revalidation of Map were put on hold. Noting that the petitioner was a sub-lessee, the Court held that “the sub-division in favour of the subsidiary is fully binding on the subsidiary company and the subsidiary company is to perform the obligations as are contained in the original terms of the lease and to develop the Sports City Project and cannot claim any independent existence for an independent project.” It further held that the entire Sports City was to be developed by the consortium in proportion and so the sub lessee is also bound by the terms of the lease deed and the brochure therefore the part completion can only be issued once the recreational facilities/sport facilities are also developed in proportion. While observing that NOIDA authority had failed to fulfil its statutory obligations, the Court held that while it was is true that the development plan was sanctioned by the authority on June 16, 2014, wherein all the liabilities of developing the Sports facilities were fastened on two companies, and whereas all the cream of the project was kept in other smaller companies, "this division was nothing but a part of well thought design to cheat the Noida authority by not developing the sports facilities, and making a huge profit by selling the residential part".