Top Court Asks Noida To Conduct Fresh Auction Of Plots Given Before CWG

The Supreme Court Tuesday came out with a solution to end "stalemate" between Noida and private firms over execution of lease deeds for plots on which five-star and three-star hotels were to come up before Commonwealth Games, 2010, by ordering fresh e-auction of government land within three months.

The court approved a plan under which the plots, which are with the private companies for making hotels, would go back to NOIDA which, in turn, put them for fresh e-auction and out of the proceeds, the money deposited by the companies would be returned to them by NOIDA with interest.

"NOIDA (New Okhla Industrial Development Authority) shall... put up the plots in question for auction or invite E-bids within three months, in the same fashion as was done in connection with the property referred to in the communication dated 21.10.2019."

"It will be entirely up to NOIDA to put up the plots for sale collectively or individually or to sell them for any purpose which in the opinion of NOIDA would sub-serve public interest and devise the modalities for sale. From and out of the sale proceeds received in such sale, the amounts indicated above shall be paid to each of the Petitioners exercising such Second Option in accordance with the principles as stated above, within three months of the sale," a bench of justices U U Lalit, Indu Malhotra and Krishna Murari said.

The top court termed the present status as "nothing but a stalemate" in which valuable assets of a public authority are locked completely.

"The public interest is neither getting sub-served, nor is NOIDA getting instalments towards premium on time," the bench said in its 30-page judgement.

NOIDA in 2006 had launched "the Hotel Plot Allotment Scheme" to cater to the need of hotels at the time of the mega-sporting event in the national capital and at the request of the union sports ministry, it had decided to lease out plots for construction of 25 hotels, including 5 five-star hotels, at a reserve rate of Rs 7,400 per square meter.

Litigations, including PILs, were filed by various parties in the Allahabad High Court and later in the the top court on the issues seeking either cancellation or execution of the lease deeds on various grounds.

Initially, the Uttar Pradesh government, on being asked by the high court to take a re-look in regard to the allotments in view of the allegation that the reserve price was very low, re-considered the issue and found the allotments to be "irregular" and directed NOIDA to cancel the same.

Later on the plea of private firms, the high court set aside the state's decision of cancellation and asked it to reconsider the issue on the ground that allottees were not heard earlier.

The state government passed individual orders and stuck to its stand of cancellation of lease deeds leading to a fresh round of litigation in the court.

The top court, on July 5, 2011, found that the allotment of commercial plots to the allottees was valid and legal, but, held that the commercial plots could have fetched premium at a rate of Rs 70,000 per square metre at the relevant time.

"The allottees who were willing to pay the premium at Rs.70,000/- per square metre, with corresponding increase in yearly rent/one-time lease rent without any location benefit charges, could exercise an option whereafter an amendment to the lease deed had to be executed between NOIDA and the concerned allottee," the top court had held.

But those allottees, who were unwilling to continue the lease by paying the higher premium, were to be returned all amounts paid by them towards the allotment and the lease, it had said.

Seven companies, who did not opt out, filed the contempt plea against NOIDA alleging disobedience of the top court's decision on execution of lease deed on fulfillment of certain conditions.

The top court disposed of the contempt plea and rather came out with the modalities to resolve the impasse.

"Though the scope of the Contempt Petitions was restricted to see whether functionaries of NOIDA were guilty of disobedience of the directions issued by this Court, the matter was considered from the standpoint of enabling both sides to settle their disputes and get over the stalemate which has been obtaining for the last 10 years."

"The endeavour was to see that the interest of both sides is sufficiently taken care of and more than anything else, the public interest must stand subserved. It is with this solution in mind, that the directions as stated above have been issued by this Court," the judgement said.