In a major setback, the Supreme Court on Tuesday refused to rescind its November 7 order refusing to recall an earlier decision that had capped the rate of interest at eight percent on dues for land given on lease to different builders in Noida and Greater Noida. A bench of justices Ajay Rastogi and Bela M Trivedi conveyed this. They said that we have examined the interim applications which have now been filed by various groups of companies for recalling of the order dated November 7, 2022, pursuant to which we consciously recalled our orders dated June 10, 2020, August 19, 2020 and August 25, 2020 and in the present facts and circumstances, we find no reason or justification to recall our order dated 7th November 7, 2022. Therefore, the interim applications are without substance and deserve to be dismissed.Supreme Courts reviewThe Supreme Court issued a number of orders, including one on June 10, 2020, during the COVID-19 pandemic, by which it set a cap on interest rates at 8 percent for payments for land that was leased to numerous builders to help them out.The bench observed that the beginning of the Amrapali cases initial legal proceedings is among the uncontested facts that have been recorded. Interim application was filed by the Ace Group of companies and later few other groups of companies also intervened in the proceedings.It had granted Noida and Greater Noidas request to have the 2020 order recalled on the grounds that both authorities had been incurring significant losses and that their operations had all but ceased. Noida and Greater Noida both the authorities said that if the June, 2020 order is not cancelled, they will incur the loss of Rs 7,500 crore.Senior advocate Ravindra Kumar, appearing for both Noida and Greater Noida, had told the court that the state government had directed a reduction in the interest being charged by the authority on June 9, 2020, taking into account the cash flow issues caused by the COVID pandemic and its aftermath. However, this reduction in interest rates was only applied prospectively there was no discussion of refunding any interest already recovered or reducing past demands for interest.The interest rate was fixed at eight percentIn that order, a maximum interest rate of eight percent was fixed for the outstanding amount on the builders. Builders in Noida and Greater Noida owe thousands of crores of rupees to the authority. The Authority has stopped the registry of projects of real estate companies for non-payment of dues. Lakhs of flat buyers are upset due to non-registration and continuously keep demanding to get the registry done.Buyers will be affectedIf the balance payment is not made, builders are required to pay more than eight percent interest. There can be delays in the registration of the property also. According to him, the industry is going through a bad phase following the Corona pandemic. In this scenario if the builder will rise the price, only buyers will get affected. Hence, the prices of the property can go high.Builders during the rulingAdditionally, only Ace Group was in court at the time of the ruling, while Panchsheel Builders and Supertech Group were before the court at a later period, proving that there were not many builders interested in the affair.The Noida authority had additionally argued that the Ace Group concealed information regarding land interest rates, lease premium defaults while charging customers 18 percent compound interest, and the fact that they had previously completed a number of projects prior to the Amrapali case in 2017.
