Interest – Real Estate Project-Amrapali Group of companies – Reduction of interest on the outstanding dues to Noida and Greater Authorities – Relief granted to projects other than Amrapali Project – Pursuant thereto, I.As filed by the Noida Authority and Greater Noida Authority seeking to recall orders directing reduction of interest – Held: These directions (reducing interest) were passed in the peculiar facts and circumstances in Amrapali Projects – The dues payable to Noida or Greater Noida in respect of projects of Amrapali Group of Companies would otherwise have been liable to pay along with interest at certain rates – Since that would have put additional burden on the entire project, it was deemed appropriate to consider reduction in rate of interest – It is true that though it was completely beyond the scope of instant matters to consider the cases of other builders, Supreme Court did consider the case of builders such as ACE group of companies and the matter was dealt with in its order dated 10.06.2020 – However, at that juncture it was not known that huge amount (losses) running into more than Rs. 3000-4000 crores for Noida and Greater Noida Authorities, would be in issue – In every case, the concerned builder had opted for allocation of plot on the basis of brochure which had clearly indicated the rate of interest – The allotment letter and consequential lease deed carried the same intent – Thus, every builder was well aware and had entered into transaction with Noida and Greater Noida Authorities with open eyes – In cases where contractual terms were sought to be invalidated Supreme Court has repeatedly refrained from entering into such issues – The Court erred in granting relief to projects other than Amrapali Group of Companies vide its orders dated 10.06.2020, 19.08.2020 and 25.08.2020 – Therefore, the said orders are recalled.
Disposing of the IAs, the Court
HELD: 1.1. In these proceedings this Court is principally concerned with the plight of flat holders of Amrapali Group of Companies. In order to see that the projects do not remain stalled and the investment made by all the flat buyers comes out of cloud of uncertainty, certain measures were adopted by this Court in its order dated 23.07.2019. Those measures contemplated restriction on the Noida and Greater Noida Authorities to resume the properties in question, as well as, cancellation of lease deed granted in favour of Amrapali Group of Companies and vesting all the rights in favour of the Court Receiver and NBCC was appointed to complete various projects. These directions were passed in the peculiar facts and circumstances in Amrapali Projects. It was in light of these directions that one of the issues which came up for consideration before the Court related to reduction in rate of interest. The dues payable to Noida or Greater Noida in respect of projects of Amrapali Group of Companies would otherwise have been liable to pay along with interest at certain rates. Since that would have put additional burden on the entire project, it was deemed appropriate to consider reduction in rate of interest. At that juncture, an application filed on behalf of ACE group of companies was listed for the first time on 27.05.2020 by which time the note prepared by the learned Court Receiver seeking reduction in rate of interest for Amrapali Group of Companies was taken up on 25.05.2020 and the order was reserved. The order dated 27.05.2020, as extracted hereinabove noted the fact that similar matter was under consideration and therefore reserved order in that matter. The record indicates, no reply was filed by the concerned authorities nor were they may aware of the impact of such application preferred by ACE Group of Companies. [Paras 14 & 15][235-A-E]
1.2 The order dated 10.06.2020 did consider the case projected by ACE group of companies in its application dated 27.05.2020 but as indicated earlier, there was no response on behalf of the concerned authorities. It must be noted that this court in the present matter was not in any way concerned with the facts and circumstances pertaining to any of the flat buyers in projects of ACE Group of Companies. No grievance was raised by anybody that the individual flat buyers were put to prejudice as a result of rate of interest charged on the amounts due. What was under consideration before the court was the peculiar fact situation pertaining to Amrapali Group of Companies. Neither was there any general petition on behalf of any or all builders of Noida or Greater Noida in a manner known to law nor was the scope of the matter vide enough to consider any such plea advanced on behalf of ACE Group of Companies. Around this time a decision was taken by the State Government on 09.06.2020 giving reduction in interest rates generally to all builders pertaining to all projects. However, this court was not aware of the order dated 09.06.2020 when the order was pronounced on 10.06.2020 in the matter reserved earlier. It is true that though it was completely beyond the scope of instant matters to consider the cases of other builders, this Court did to consider the case of builders such as ACE group of companies and the matter was dealt with in its order dated 10.06.2020. However, at that juncture it was not known to this court that huge amount running into more than Rs. 3000 – 4000 crores for Noida and Greater Noida Authorities, would be in issue. [Paras 16 & 17][235-F-H; 236A-C]
1.3 As a result of the orders passed by this court the builders are now asking for adjustment of whatever they had paid earlier and in certain cases they are even demanding refund of the amount paid in excess. In every case, the concerned builder had opted for allocation of plot on the basis of brochure which had clearly indicated the rate of interest. The allotment letter and consequential lease deed carried the same intent. Thus, every builder was well aware and had entered into transaction with Noida and Greater Noida Authorities with open eyes. Whatever was the impact on account of that rate of interest must have been subsumed in the price which was arrived at and had to be paid by every flat holder. In cases where contractual terms were sought to be invalidated this court has repeatedly refrained from entering into such issues. [Paras 18 & 19][236-D-F]
1.4 If even in normal circumstances, the interference with contractual terms is not easily to be taken resort to, it does not stand to reason that in a matter with which this court was not even concerned, the benefit could be extended to the entire body of builders of Noida and Greater Noida. Reference made to a number of stalled projects including some of the projects of the builders who are presently before us, cannot be taken as an indication that the benefits which were to be extended to the flat buyers from Amrapali Group of Companies must also be extended to the flat buyers to the other projects from Noida or Greater Noida. Some of the orders, namely the order pertaining to IA No.74824 of 2020 allowing Supertech Group of Companies to withdraw their application as well as order dated 07.09.2020 in Contempt Petition Nos.52525, 52526, 52527 of 2020 stating that no contempt was made out, are an indication that this court was not concerned that the matter pertaining to projects other than Amrapali Group of Companies. [Paras 20 & 21][237-G-H; 238A-C]
1.5 In conclusion, we must say that this Court erred in granting relief to projects other than Amrapali Group of Companies vide its orders dated 10.06.2020, 19.08.2020 and 25.08.2020. Consequently, the instant applications are allowed and the orders dated 10.6.2020, 19.8.2020 and 25.8.2020 are recalled, as prayed. The Noida and Greater Noida Authorities are directed to calculate the amount due in respect of builders other than Amrapali Group of Companies after taking into consideration the effect of the order dated 09.06.2020 issued by the State Government. [Paras 23-24][238-E-F]
Central Inland Water Transport Corporation Limited and Another v. Brojo Nath Ganguly and Anr. (1986) 5 SCC 156; Jagdish Mandal v. State of Orissa (2007) 14 SCC 531 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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