BIKRAM CHATTERJI & ORS versus UNION OF INDIA & ORS on 7 November 2022

[2022] 9 S.C.R. 207

BIKRAM CHATTERJI & ORS.

v.

UNION OF INDIA & ORS.

[I.A. Nos.108696, 108703, 108670 and 108681 of 2020]

In

(Writ Petition (Civil) No. 940 of 2017)

NOVEMBER 07, 2022

[UDAY UMESH LALIT, CJI AND AJAY RASTOGI, J.]

Interest – Real Estate Project-Amrapali Group of companies– Reduction of interest on the outstanding dues to Noida and GreaterAuthorities – Relief granted to projects other than Amrapali Project– Pursuant thereto, I.As filed by the Noida Authority and GreaterNoida Authority seeking to recall orders directing reduction ofinterest – Held: These directions (reducing interest) were passed inthe peculiar facts and circumstances in Amrapali Projects – Thedues payable to Noida or Greater Noida in respect of projects ofAmrapali Group of Companies would otherwise have been liable topay along with interest at certain rates – Since that would have putadditional burden on the entire project, it was deemed appropriateto consider reduction in rate of interest – It is true that though itwas completely beyond the scope of instant matters to consider thecases of other builders, Supreme Court did consider the case ofbuilders such as ACE group of companies and the matter was dealtwith in its order dated 10.06.2020 – However, at that juncture itwas not known that huge amount (losses) running into more thanRs. 3000-4000 crores for Noida and Greater Noida Authorities,would be in issue – In every case, the concerned builder had optedfor allocation of plot on the basis of brochure which had clearlyindicated the rate of interest – The allotment letter and consequentiallease deed carried the same intent – Thus, every builder was wellaware and had entered into transaction with Noida and GreaterNoida Authorities with open eyes – In cases where contractual termswere sought to be invalidated Supreme Court has repeatedlyrefrained from entering into such issues – The Court erred in grantingrelief to projects other than Amrapali Group of Companies vide its

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[2022] 9 S.C.R.

Aorders 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 principallyconcerned with the plight of flat holders of Amrapali Group ofBCompanies. In order to see that the projects do not remain stalledand the investment made by all the flat buyers comes out of cloudof uncertainty, certain measures were adopted by this Court inits order dated 23.07.2019. Those measures contemplatedrestriction on the Noida and Greater Noida Authorities to resumeCthe properties in question, as well as, cancellation of lease deedgranted in favour of Amrapali Group of Companies and vestingall the rights in favour of the Court Receiver and NBCC wasappointed to complete various projects. These directions werepassed in the peculiar facts and circumstances in AmrapaliProjects. It was in light of these directions that one of the issuesDwhich came up for consideration before the Court related toreduction in rate of interest. The dues payable to Noida or GreaterNoida in respect of projects of Amrapali Group of Companieswould otherwise have been liable to pay along with interest atcertain rates. Since that would have put additional burden on theEentire project, it was deemed appropriate to consider reductionin rate of interest. At that juncture, an application filed on behalfof ACE group of companies was listed for the first time on27.05.2020 by which time the note prepared by the learned CourtReceiver seeking reduction in rate of interest for Amrapali Groupof Companies was taken up on 25.05.2020 and the order wasFreserved. The order dated 27.05.2020, as extracted hereinabovenoted the fact that similar matter was under consideration andtherefore reserved order in that matter. The record indicates, noreply was filed by the concerned authorities nor were they mayaware of the impact of such application preferred by ACE GroupGof Companies. [Paras 14 & 15][235-A-E]

1.2 The order dated 10.06.2020 did consider the caseprojected by ACE group of companies in its application dated27.05.2020 but as indicated earlier, there was no response onbehalf of the concerned authorities. It must be noted that this H

court in the present matter was not in any way concerned withthe facts and circumstances pertaining to any of the flat buyers inprojects of ACE Group of Companies. No grievance was raisedby anybody that the individual flat buyers were put to prejudiceas a result of rate of interest charged on the amounts due. Whatwas under consideration before the court was the peculiar factsituation pertaining to Amrapali Group of Companies. Neitherwas there any general petition on behalf of any or all builders ofNoida or Greater Noida in a manner known to law nor was thescope of the matter vide enough to consider any such pleaadvanced on behalf of ACE Group of Companies. Around thistime a decision was taken by the State Government on 09.06.2020giving reduction in interest rates generally to all builderspertaining to all projects. However, this court was not aware ofthe order dated 09.06.2020 when the order was pronounced on10.06.2020 in the matter reserved earlier. It is true that though itwas completely beyond the scope of instant matters to considerthe cases of other builders, this Court did to consider the caseof builders such as ACE group of companies and the matter wasdealt with in its order dated 10.06.2020. However, at that junctureit was not known to this court that huge amount running intomore than Rs. 3000 – 4000 crores for Noida and Greater NoidaAuthorities, would be in issue. [Paras 16 & 17][235-F-H; 236-A-C]

1.3 As a result of the orders passed by this court the buildersare now asking for adjustment of whatever they had paid earlierand in certain cases they are even demanding refund of the amountpaid in excess. In every case, the concerned builder had optedfor allocation of plot on the basis of brochure which had clearlyindicated the rate of interest. The allotment letter andconsequential lease deed carried the same intent. Thus, everybuilder was well aware and had entered into transaction with Noidaand Greater Noida Authorities with open eyes. Whatever wasthe impact on account of that rate of interest must have beensubsumed in the price which was arrived at and had to be paid byevery flat holder. In cases where contractual terms were soughtto be invalidated this court has repeatedly refrained from enteringinto such issues. [Paras 18 & 19][236-D-F]

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A1.4 If even in normal circumstances, the interference withcontractual terms is not easily to be taken resort to, it does notstand to reason that in a matter with which this court was noteven concerned, the benefit could be extended to the entire bodyof builders of Noida and Greater Noida. Reference made to anumber of stalled projects including some of the projects of theBbuilders who are presently before us, cannot be taken as anindication that the benefits which were to be extended to the flatbuyers from Amrapali Group of Companies must also be extendedto the flat buyers to the other projects from Noida or GreaterNoida. Some of the orders, namely the order pertaining to IACNo.74824 of 2020 allowing Supertech Group of Companies towithdraw their application as well as order dated 07.09.2020 inContempt Petition Nos.52525, 52526, 52527 of 2020 stating thatno contempt was made out, are an indication that this court wasnot concerned that the matter pertaining to projects other thanAmrapali Group of Companies. [Paras 20 & 21][237-G-H; 238-DA-C]

1.5 In conclusion, we must say that this Court erred ingranting relief to projects other than Amrapali Group ofCompanies vide its orders dated 10.06.2020, 19.08.2020 and25.08.2020. Consequently, the instant applications are allowedEand the orders dated 10.6.2020, 19.8.2020 and 25.8.2020 arerecalled, as prayed. The Noida and Greater Noida Authoritiesare directed to calculate the amount due in respect of buildersother than Amrapali Group of Companies after taking intoconsideration the effect of the order dated 09.06.2020 issued byFthe State Government. [Paras 23-24][238-E-F]

Central Inland Water Transport Corporation Limitedand Another v. Brojo Nath Ganguly and Anr. (1986) 5SCC 156; Jagdish Mandal v. State of Orissa (2007) 14SCC 531 – referred to.

GCIVIL ORIGINAL JURISDICTION: Writ Petition (Civil) No.940 of 2017.

I.A. Nos. 8259 of 2019, 74385, 90985, 90986, 108696, 108703,108670 and 108681 of 2020.

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Under Article 32 of The Constitution of India Sanjay Jain, Ms. Aishwarya Bhati, ASGs, Ms. Garima Prasad,AAG, Ravindra Kumar, Siddhartha Dave, Ms. V. Mohana, P.N. Mishra,Rakesh K. Khanna, Kavin Gulati, S.K. Gangele, Ms. Garima Prashad,Brijender Chahar, Surendra Kumar, Vijay Kumar, Sr. Advs., AvinashKumar, Rajeev Gupta, M. L. Lahoty, Paban K. Sharma, Anchit Sripat,Himanshu Shekhar, Pranab Kumar Nayak, Kumar Mihir, Binay KumarDas, Ms. Priyanka Das, Ms. Neha Das, Ms. Saloni Sharan, Gudipati G.Kashyap, Ms. Apoorva Pandey, Ms. T. Archana, Manoj Singh, SanjayKumar Visen, Ms. Ritu Rastogi, Ms. Mohini Kumari, Sunil Kumar Ojha,Gurmeet Singh, Aman, Arkaj Kumar, Madhav Singhal, Mukesh KumarMaroria, Mukul Singh, Ms. Preeti Rani, Mohd. Akhil, Prashant Singh,Sughosh Subramnyam, Vikrant Yadav, R.R. Rajesh, Raj Bahadur Yadav,Gurmeet Singh Makker, Nachiketa Joshi, Arvind Kumar Sharma, NirajGupta, Ms. Anshu Gupta, Fuzail Khan, Ashutosh Srivastava, Ms. RamyaKhanna, Ashish J., Alok Kr. Aggarwal, Ms. Anushruti, Ms. Simran Arora,Ms. Anubha Agrawal, A. P. Mohanty, Prathvi Raj Chauhan, Ms. PriyaSharma, Ms. Ruchira Goel, Abhitosh Pratap Singh, Ms. Rita Bhandari,Rajeev Kumar Dubey, Ashiwan Mishra, Ms. Vaidruti Mishra, KamlendraMishra, Ms. Jyoti Chahar, Karan Chahar, Ms. Pooja Chahar, ShashiBhushan, Vinay Garg, M. T. George, Ms. Susy Abrahm, Johns George,Rajiv Kumar, Kishlay Shukla, Ms. Purnima Jain, Sanjeev Gupta, RishiK. Awasthi, Prashant Kumar, Ms. Ritu Arora, Piyush Vatsa, SantoshKumar-I, H.S. Parihar, Kuldeep S. Parihar, Ms. Ikshita Parihar, Dr.Sumant Bharadwaj, Vedant Bharadwaj, Ms. Mridula Ray Bharadwaj,Rakesh Kailash Sharma, Ajay Bansal, Gaurav Yadava, Ms. BeenaBansal, Saurav Jindal, Kuldip Singh, G. N. Reddy, Alok Kumar, Ms.Garima Soni, Ms. Neetu Rashi, Rohit Pandit, Ms. Nandita Jha, VivekKumar Pandey, Krishna Kant Dubey, Ms. Shuchi Singh, Sanjay KumarDubey, Jainendra Kumar, Aman Kumar, Binod Kumar Singh, KirshnaVani Sharma, Hitesh Kumar Sharma, S.K. Rajora, Akhileshwar Jha,Ms. Yamini Sharma, Narendra Pal Sharma, Ms. Sandhya Sharma, RanjitKumar Sharma, Ms. Richa Kapoor, Kunal Anand, Ms. Shivani Sharma,Sanjay Kapur, Ms. Megha Karnwal, Arjun Bhatia, Ms. Akshata Joshi,Ms. Shubhra Kapur, Pradeep Misra, Daleep Dhyani, Manoj KumarSharma, Suraj Singh, Saket Singh, Ms. Sangeeta Singh, Ms. NiranjanaSingh, Ashok Kumar Singh, Shantwanu Singh, Ms. Pragya Singh,Ms. Akshay Singh, Dr. Ritu Bhardwaj, Sachin Mittal, Rachit Mittal, Parish B

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AKumar, Ms. Pooja Kapur, Sudhir Naagar, Pai Amit, Ms. Komal Mundhra,Saurabh Agrawal, Shantanu Singh, Amitesh Chandra Mishra, AnkitChaturvedi, Niteen Kumar Sinha, Ms. Reetu Saipawar, Ms. PratibhaYadav, Ram Naresh for ACM Legal, Devendra Kumar Singh, KarunakarMahalik, Arpit Rai, Aviral Kashyap, Anil Gaur, Ms. Neha Chaudhary,Dr. Sunil K. Khattri, Ambrish Kumar Rai, Badri Prasad Singh, VikasBJain, Aviral Saxena, Manjeet Singh Rathor, Digant Mishra, G.A. Sundram,Raj Kamal, Aseem Atwal, Zafar Inayat, Satyajit Desai, Siddharth Gautam,Satya Kam Sharma, Ms. Deb Deepa Majumdar, Ms. Gajanan Tirthkar,Ms. Anagha S. Desai, Mohit Chaudhary, Ms. Pooja Sharma, KunalSachdeva, Chowdhary Zulfikar Ali, M/s. Kings & Alliance LLP, SanveerCMehlwal, Ms. Geetanjali Mehlwal, Ms. Shradha Agrawal, Ms. KamakshiS. Mehlwal, Ms. Arti Singh, Akashdeep Singh Roda, Basant Pal Singh,Ms. Pooja Singh, Kaushal Yadav, Nandlal Kumar Mishra, ArjunRaghuvanshi, Pramod Kumar, Vivekanand Rana, Ms. Yashoda Katiyar,Ms. Apeksha Rai, Ms. Akansha Rai, Abhijit Sengupta, Rohit Jaiswal,Ms. Kuheli Mitra, Shiv Singh Yadav, Karan Singh Chhabra, Ms. SujataDKurdukar, Ms. Tanuj Bagga Sharma, Ashutosh Shukla, Dr. M. K. Ravi,Raj Kamal, Kartavya Batra, Anurag Chandra, Siddharth Acharya,Ms. Sonali Agarwal, Ms. Mithu Jain, Rajul Shrivastav, Ms. MonishaHanda, Mohit D. Ram, Anubhav Sharma, Janender Kumar Chumbak,Ms. Radhika, Ms. Amita Singh Kalkal, Sureshan P., Ms. Roma Singh,EUtkarsh Singh, Gautam Das, Tarun Kant Samantray, Dhirendra KumarJha, Ms. Sanjana Akhilesh Singh, Ms. Gitanjali Tripathi, Ms. JasmineDamkewala, Ms. Vaishali Sharma, Ms. Lovely Gargi, Bhupendra KumarSingh, Devendra Kumar Shukla, Amit Kumar, Abhishek Kumar Suman,Ramesh Babu M. R., Ms. Manisha Singh, Ms. Tanya Chowdhary,Ms. Shobha Gupta, Ms. Pooja Tripathi, Rohit Kumar Singh, RohitFKhurana, Ms. Jahanvi Warah, Krishnam Mishra, Param Kumar Mishra,Ms. Anisha Upadhyay, Ms. Nisha Thakur, Brijesh Kumar Tamber, YashuRustagi, Ashutosh, M/s. V. Maheshwari & Co., Rohit Amit Sthalekar,Avi Tandon, Rajeev Lochan, Prithvi Pal, Rinki Singh, Anand Nandan,Amit Pawan, Dr. Ritu Bhardwaj, Naresh Kumar, Kaushal Kishore,GDevendra Singh, Parul Dhurve, Omanakuttan K.K., Mohd. MoonisAbbasi, Shakil Ahmad Syed, Ms. Smita Pandey, Narendra Kr. Verma,Aditya Nayyar, Ms. Farhat Jahan Rehmani, Suman Tripathy, RameshwarPrasad Goyal, Ms. Indrani Mukherjee, Ms. Tatini Basu, Alok Kumar,Chandan Kumar, M/s. Dharmaprabhas Law Associates, Abhigya H

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Kushwah, Divyakant Lahoti, Rajesh P., Nirmal Kumar Ambastha, DeepakPrakash, Dharmendra Kumar Sinha, Tushar Singh, M/s. Cyril AmarchandMangaldas, Shovan Mishra, Kumar Dushyant Singh, Aditya Jain-1,Ms. E. R. Sumathy, Ashok Mathur, Vivek Narayan Sharma, SatishPandey, Abhinav Shrivastava, Dheeraj Nair, Balaji Srinivasan, Ms. CharuAmbwani, Dr. Sarvam Ritam Khare, Malak Manish Bhatt, Sanchit Garg,Prateek K Chadha, Udita Singh, Amrish Kumar, M/s. Devasa & Co.,M/s. PBA Legal, Sanjeev Gupta, Divyesh Pratap Singh, Sumit Kumar,Ms. Taruna Singh Gohil, Deepak Goel, Sonal Jain, Vivek Sharma, JasmeetSingh, Shubham Bhalla, Kanhaiya Singhal, Arup Banerjee, Anuj Kapoor,Ms. Charu Mathur, Abhinav Agrawal, Ms. Sangeeta Singh, Ms. SayareeBasu Mallik, Shishir Pinaki, G. Balaji, B. K. Satija, Ms. Pallavi Pratap,Manish Kumar Saran, Sukant Vikram, Gopal Jha, Shadan Farasat,Kailash Prashad Pandey, Abdul Azeem Kalebudde, Mohammed SadiqueT.A., Gaurav Goel, Akhilesh Kumar Pandey, Ms. Rakhi Ray, Ms. TulikaMukherjee, Rabin Majumder, Rajesh Kumar Gupta, Praveen Chaturvedi,Siddhartha Jha, Ms. Prerna Mehta, Umesh Kumar Khaitan, Ms. SnehaKalita, Jay Kishor Singh, Ms. Mayuri Raghuvanshi, Somesh ChandraJha, Awanish Sinha, Somiran Sharma, Ms. Astha Sharma, Pramod Dayal,Alok Tripathi, Ms. Vandana Sehgal, Ms. Anannya Ghosh, Sanjai KumarPathak, Aakarshan Aditya, Pawanshree Agrawal, Syed Mehdi Imam,K. Paari Vendhan, Ashwarya Sinha, Ms. Kirti Renu Mishra,M/s. Karanjawala & Co., Kumar Sudeep, Ms. Dharitry Phookan, Gaurav,Ms. Manisha Ambwani, Ms. Chandan Ramamurthi, Ms. Mona K.Rajvanshi, Mishra Saurabh, Christopher D’souza, Ms. Divya Roy, KabirDixit, S. K. Verma, Somanatha Padhan, Ms. Anindita Pujari, Rajat Mittal,Rahul Joshi, Vipin Kumar Jai, Ravindra Sadanand Chingale, Sumit Sinha,T. Mahipal, Ms. Shilpa Liza George, M/s. D.S.K. Legal, Vishnu Sharma,Ritesh Agrawal, Ms. Indra Sawhney, Aneesh Mittal, Vishal Gupta, AmanGupta, Chandra Prakash, Bhuwan Raj, E. C. Vidya Sagar, UddyamMukherjee, Anil Kumar Mishra-I, Kaushik Choudhury, Anas Tanwir,Ejaz Maqbool, Ms. Swarupama Chaturvedi, Rishi Matoliya, Tahir AshrafSiddiqui, Ms. Bharti Tyagi, Anoop Prakash Awasthi, Kedar Nath Tripathy,Ms. Rashmi Singh, Sunil Fernandes, Ms. Rajkumari Banju, Ajit Sharma,Ms. Aruna Gupta, Advs. for the appearing parties.

R. Venkataramani, Court Receiver, Ravinder Bhatia, PavanAggarwal, Forensic Auditors.

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AThe Judgment of the Court was delivered byUDAY UMESH LALIT, CJI

1. IA No.108696 of 2020 (Vol.I-147) has been filed by GreaterNoida Authority seeking recall of the orders dated 10.06.2020, 19.08.2020and 25.08.2020 in so far as they related to interest charged by theBApplicant on all projects other than the Amrapali Project.

To similar effect, I.A. No.108670 of 2020 (I-148) has beenpreferred on behalf of the Noida Authority seeking recall of the ordersdated 10.06.2020, 19.08.2020 and 25.08.2020.

C2. Before we deal with the rival contentions, certain facts whichhave led to the filing of the instant applications must be adverted to.

A.In Writ Petition (C) No.940 of 2017 which raises grievanceson behalf of the purchasers of flats in projects promoted bythe Amrapali Group of Companies, this Court has beenDpassing various directions including appointment of ForensicAuditors. When the matter was listed on 22.05.2020, inresponse to a suggestion made by the learned Receiver inhis Note, the applicants were called upon to obtaininstructions with regard to interest to be charged and leviedon the outstanding premium on account of defaultsEcommitted by Amrapali Group of Companies. The matterwas then adjourned to 27.05.2020.

B.In response, a Note was filed on behalf of applicantsregarding interest payable by the Amrapali Group ofCompanies.

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C.Around this time I.A. No.4139 of 2020 was filed by anotherbuilder named Ace Group of Companies seeking certainreliefs on same lines as were prayed for on behalf of theflat buyers of Amrapali Projects. It was claimed by AceGroup of Companies in this application for general reductionGin the interest rates to be charged by the Authority. Afterhaving heard the matter on 27.5.2020, the matter whichwas reserved for orders.

D.Before the Order could be passed by this Court, consideringthe problems in cash flow related to Covid-19 pandemicHsituation and its aftermath, a general direction was issued

on 09.06.2020 by the Uttar Pradesh State Governmentreducing the rate of interest charged by the Authorities.

E.On 10.06.2020 the order was passed by this Court in thematter which was heard on 27.5.2020. Paragraph 31 ofthe order dealt with the report of the learned Receiver whileparagraph 32 of the order referred to the IA filed by theAce Group of Companies and the facts pertaining to saidGroup were set out in Paragraphs 32 and 33. After noticingthat the rate of interest had gone down, this Court issueddirections that interest on the outstanding premium “to berealised in all such cases” be at the rate of 8% per annum.The relevant paragraphs of said order dated 10.06.2020were as under:

“In Re. I.A. No. 49139 of 2020 (Interest to be realizedon the outstanding dues by Noida and Greater NoidaAuthorities)

31. Learned Receiver has pointed out that there is a lack ofclarity concerning dues of local authorities/banks/lenders. It hasbeen submitted that proper relaxations and concessions arerequired to be given concerning such dues.

32. In the interlocutory application filed by Ace Group ofCompanies, precarious conditions in the entire Noida and GreaterNoida region faced by the developers have been pointed out. Itis submitted that following economic recession in the last decade,the entire real estate sector has gone downwards and facingacute financial crunch and is fighting for its survival. Theprojects are incomplete, there were various litigations whichcreated a huge financial impact and non-delivery of projects,which reflects the pathetic condition of the real estate sector.Multiple issues are pointed out, which are adding to the woesof the developers. It is averred that the developers and thehome buyers both are adversely affected due to non-deliveryof booked flats in the regions of Noida and Greater Noida etc.

33. The Ace Group of Companies obtained the plots betweenthe period 2010 and 2015 from the Authorities in the aforesaidareas. The Noida Authority is raising additional demand at therate of Rs. 600 per square meter, whereas Greater Noida A

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Authority is raising demand at the rate of Rs. 1700 per squaremeter. Due to recession, developers operating in the region werenot able to receive the requisite amount on time from homebuyers. For one reason or the other, development work of theprojects was halted. The Authorities are levying excessiveinterest and penal interest, which continues to rise exponentially,culminating into huge dues, and in some cases, the cost of theallotted land has doubled than what it was originally fixed atthe time of allotment over a period of time and that the premiumof the land has enhanced manifold after adding the interest andpenal interest thereon, and other liabilities are also fastened.There is also considerable delay in the completion of the projectsas scheduled initially. The cost of completion of the projecthas thus increased manifold due to delay in construction andhas also resulted in price rise of important constructioncomponents, material, and labour. The burden of Service Taxand other cess and statutory charges have also increasedmanifold. Though various companies managed to raise theconstruction, however, the cost of land originally allotted hasdoubled. The real estate sector is facing financial distress dueto the various intervening factors. The rate of interest has alsogone down substantially. Due to delay, in may cases refundorder has also been passed by Consumer Forums, which isadding financial constraints on the part of developers. They areon the verge of completely financially drained out. It is urgedthat interest rate and the delayed penalty being charged by theAuthorities on the allotted plots of land is excessively higherthan the prevailing financial market scenario whereas therehas been gradual and consistent fall in the interest rates since2010 itself. However, the interest rates of the Authorities haveremained exorbitant contrary to the prevailing economic situationof the country. The rates of interest charged by the Authoritiesare extremely high. Apart from that, penal interest on delayedpayment is also added. The rates have been increased from11% to 14% - 15% to 18% - 23% per annum.

34. It is submitted by SBI MCLR (Marginal Cost of Fundsbased Lending Rate) rate of interest for three years is 7% to8%, and in the last six months, it has further come down to7.85%. If the base rate of SBI MCLR is compared with the interest rate charged by the Noida and Greater NoidaAuthorities, one can easily find out that it has drastically beenreduced over the years and ranges between 7.5% to 8.15%over the last ten years. The rate and historical data on the baserate of SBI is filed.

35. It is further averred that over a period of time in the lastfive years, the Banks have also reduced the interest paid onFixed Deposits and currently, it ranges between 6% to 7%only. However, Noida and Greater Noida Authorities, despiteallotting encumbered and disputed land coupled with variousother issues, failed to take any step to either reduce the exorbitantrate of interest or completely waive off the interest and othercharges on account of delay and default in paying the landdues. The Developers and the applicants and home buyers haveacquired valuable right in the land by paying the hefty amount.The developers have made numerous efforts by approachingthe concerned authorities for redressal of their grievances. Tilldate, there has been no resolution. Neither the Authorities northe State Government has taken the issues seriously. The issueof the interest affects the public at large, particularly thehome buyers and the interest of banks and financial institutionsas well besides that of Authorities. It is not possible to paytheir dues. Presently, in the wake of COVID 19 pandemic andits outbreak in India, there is a continuous nation- widelockdown. There have been absolutely no business andcommercial activities in this sector, and the entire real estateindustry has come to a grinding halt causing further financiallosses and damages to the real estate sector, which is generallyin a precarious condition in the Delhi/NCR region. Therefore,prayer has been made that there should be a complete waiverof interest component in the repayment of land dues of Noidaand Greater Noida Authorities, and payment schedule towardslease rent and premium may be extended. It is further submittedthat various companies have stopped production of theconstruction/building material in the wake of lockdown. Mostof the labourers have gone back to their home States resultingin shortage of labourers. In short, it is submitted that the realestate sector is facing a crisis, and due to various aforesaidreasons, the timeline for completion of projects may be deferred A

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by one more year. Due to excessive lease rent, penalty andinterest charged and levied, additional land costs demanded,and charged on the land allotted, various projects are stalled.Most of the projects have acquired the status of dormantprojects.

36. We are considering prayer Nos. 1 and 2 of the I.A. withrespect to interest to be realized on the outstanding dues byNoida and Greater Noida Authorities.

37. The rates of SBI MCLR is reduced to 7.45 % in the year2020 from 8.95% in the year 2016. It is clear that the Noidaand Greater Noida Authorities, on the outstanding dues, arerealizing the dues from all such projects, interest at exorbitantrate such as 15% per annum with half-yearly compoundingand in addition are also realizing penal interest on the amountas fixed from time to time.

38. We have noted in the judgment dated 23.7.2019 the figuregiven by the Noida and Greater Noida Authorities that after2005, 114 plots had been allotted to various group housingsocieties. 81 plots were handed over the possession on paymentof 10% of the total premium. 29 projects, out of 81 werecompleted. Out of the other 33 allotted earlier, 11 werecompleted, and 7 obtained part- completion certificates. Thus,it is apparent that more than 60% of projects have not beenable to come up so far. We have also noted that the Noidaand Greater Noida Authorities did not take the step oftermination of leases for various reasons. A large number ofhome buyers have been waiting now approximately for thelast 8 to 10 years or more for completion of houses. It is notin dispute that the real estate sector has suffered a setback atpresent. It contributes to the GDP of the country. As a largenumber of projects have not come up, at the same time, Noidaand Greater Noida Authorities have not been able to realizetheir dues from such projects which are being piled up for thelast several years, at the same time interest of home buyershas intervened. Even on the plots where the land was allottedfrom 2005 onwards, the projects have not been completed sofar, though the buyers have paid their money. The Noida andGreater Noida Authorities are not issuing completion certificates to such projects and they are not able to realize theiroutstanding dues. For various reasons, constructions have notbeen completed, including due to diversion of funds. There is afailure to comply with the obligation to the home buyers whosemoney has been invested in the partially constructed structureand partial dues have been paid to the Noida and Greater NoidaAuthorities.

39. It cannot be disputed that the rate of interest, on whichagreements were entered into, has gone down by now. Thepresent lending rate is much below and the RBI has takenseveral steps to revive the economy. In such a scenario, itwould never be possible to make payment of interest at therate fixed by authorities and also a penal interest to be realizedby concerned authorities. The home buyers are not able toobtain fruits of the investment and are deprived of legal title ofthe flats.

40. We have heard the learned counsel appearing for Noidaand Greater Noida Authorities. Learned senior counsel alsodrew our attention to the following observations made by thisCourt in the judgment dated 23.7.2019:

“72. In our opinion, if the real estate business has to survive inIndia, it has to be answerable to the public and has necessarilyto uphold the trust reposed in builders/promoters. They havebeen paid huge amounts not only by the home buyers but also,they have to pay a huge amount for the public land given tothem on lease by Noida and Greater Noida Authorities forconstruction of houses. The land has been given to them bythe authorities on a concessional basis by making payment of10% amount at the time of allotment. The builders have to beaccountable to public/home buyers as well as the authoritiesand bankers. It is a matter relating to housing needs dealingwith shelter place, such an activity is of the public importanceas the real estate sector plays a pivotal role in the fulfillment ofneeds of housing infrastructure.”

41. It was also argued by the learned senior counsel that even ifthe builder may have factored the valuation of price, includinginterest on the cost of the land, the lease deed and the authorities AB

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will remain unaffected. A prayer was made that the authoritiesmay be given liberty to recover their amount of interest from thebuilder at the contractually agreed rate under the lease deed. Itwas lastly and rightly pointed out that the Court can fix a reasonablerate of interest. Considering the present scenario, we feel thatthe aforesaid submission is justified.

42. Considering the current state of real estate, the projects arestandstill, and in order to give impetus to such housing projectsand mainly considering plight of home buyers and as pointed outby Noida and Greater Noida Authorities that 114 plots wereallotted from 2005 onwards, most of projects are incomplete; wedirect that rate of interest on the outstanding premium and otherdues to be realized in all such cases at the rate of 8% per annumand let the Noida and Greater Noida Authorities do a restructuringof the repayment schedule so that amount is paid and Noida andGreater Noida Authorities are able to realize the same. As toreasonable time frame, we would like to hear the parties. In case of failure to pay, the concession granted shall stand withdrawn.However, at the same time, the Noida and Greater NoidaAuthorities shall also ensure that not only instalments/money aredeposited, but also all such projects are completed within thestipulated time.”

F. An application for clarification was immediately moved on behalfof the Authorities on 15.6.2020. The principal relief claimed inthis application was that the order dated 10.06.2020 be declaredto be operative only prospectively. The matter was heard on19.08.2020 when following order was passed by this Court:

“Vide order dated 10.07.2020, we have ordered the paymentas per the MCLR Rate. It has been pointed out by the learnedsenior counsel appearing on behalf of NOIDA/Greater NOIDAthat MCLR rate is applicable with effect from 01.04.2016, andnot before that. It has also been pointed out that prior to that,SBAR rate was applicable from 01.01.2010 to 30.06.2010 andthereafter, the rate which was applicable was called the BaseRate (w.e.f. 01.07.2010 till 31.03.2016). The details of the rateshave been given in Annexure I of the Affidavit.

In the circumstances, since MCLR rate is not available forthe entire period and the intention of our order was that the rate chargeable by the Bank has to be paid, we modify the order to theeffect that the rate from 01.01.2010 to 30.06.2010 would be SBAR,as specified in Paragraph 1 of Annexure I and thereafter, theBase Rate as provided in that paragraph would be applicable witheffect from 01.07.2010 till 31.03.2016 and thereafter, MCLR wouldbe applicable with effect from 01.04.2016 onwards, as orderedby this Court.

The order dated 10.07.2020 is modified/clarified to theaforesaid extent.”

G.I.A. No. 80560 of 2020 was then filed by the Authoritieswith the submission that as a consequence of the orderspassed by this Court the contractual rate stood completelyoverridden and the builders would now require to pay interestat the rate of 9.5%.

H.The order passed on 25.8.2020 by this Court shows thatafter referring to the aforestated two orders, it was observedas under:- “It is apparent that the order dated 10.06.2020 isnot to realise ‘penal rent’ as well as it is to charge simplerate of interest, not on compounding basis. We have directedinterest per annum. We clarify the same to be simple rateof interest as may be applicable from time to time evenduring year. The order to be complied with by the NOIDA/Greater NOIDA accordingly. The demand has to bemonitored. Let the demand be revised and fresh demand bemade in the true spirit of the order.

In view of the above, the application is disposed of.”

In view of the above, the application is disposed of.”

3. In these circumstances, the instant applications have beenpreferred on behalf of the Greater Noida Authority and NOIDA Authorityseeking recall of the orders dated 10.06.2020, 19.08.2020 and 25.08.2020passed by this Court. It is submitted in I.A. No.108696 of 2020 asunder:

“5.It is submitted that in the first instance, the orders provide nojurisprudential basis for overriding contractual interest and thattoo only in relation to the Applicant. ‘There are multifariouscontracts entered into by parties in relation to supplies of goods AB

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and services. All these contracts contain interest provisions. Thelevy of compound interest, on a contractual basis, is not just wellestablished in India but is well established internationally. Thecharging of interest under a contract is a matter of negotiationbetween the parties and once a contract is entered into, the sanctityof the contract cannot be forsaken in this manner without therebeing any supervening illegality being established in relation toany term the contract.

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7. The settled law, reiterated in a number of judgements of thisHon’ble Court is that when a person bids for a property or beingput on the market by the Government on terms that are madepublic, the terms and conditions on which the property is bid foran acquired cannot be altered much less challenged after thecontract was entered into.

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8. Finally, if any term of a contract is found to be illegal, then thecontract has to be unravelled in a manner so that there is restitutionto both parties. A person who is acquired property belonging to theGovernment cannot renege on one element of the contract andwalk away specially where the element is so important being apart of the consideration for the acquisition of the property.

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9. Even in the matter of “unfairness” and its evaluation, the ordersEmade by this Hon’ble Court , it is respectfully submitted, are basedon a deeply flawed premise that institutions such as the Applicantare on par with banks and should charge interest rates comparableto the base rates charged by the banks. The rates on which interesthas now been directed to be charged are far below the ratesFcharged by nationalised banks even in the present times for givingloans to builders. For example the Bank of Baroda charges 13.2%interest and in certain transactions the Canara Bank has chargedinterest at 16.05 % even in relation to loans granted in 2020.

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10. The Applicant has been charging interest at 11% on thepremium of the land and this is computed on 16 half yearlyinstalments. The notion of compound interest is based on anunderstanding that, for purposes of interest, the instalments willbe paid in the duration. Thus an interest rate, which requirescompounding quarterly, is charged on the premise that everyquarter the sum in question could be paid and if it is not paid, it G

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would be added to the principal for purposes of computing interestfor the next quarter and so on. If the amount in which interest hasbeen charged during a quarter is paid back within the quarter,there is no question of compounding.

11. In the case of the Applicant, if the premium is paid upfront,there is no question of any interest, the advantage of the longlead time for payment of the premium of the land is on terms ofpayment of interest at 11%. Any person bidding for the propertywould take into account the interest chargeable while computingthe commercial worth and value of the acquisition. It bearsemphasis that the builders will acquire these lands for commercialprojects and not for building their own homes.

12. A builder who acquires property from the Applicant does soon the commercial terms which are made public before the bidsare awarded. The builder takes the commercial risk of thedevelopment of the property and gets to keep the entire profitmade in the project. The Applicant has no upside if the builderearns greater returns than what were contemplated at the timewhen the property was sold. Equally, the purpose of selling theseproperties to private builders is to de-risk government andgovernment agencies and allow the development by private capitaland one very important aspect of that is that the risks of the projectare taken by private promoters.

13. The result of the orders made by this Hon’ble Court, it isrespectfully submitted, has fully passed on the downside to theApplicant without even examining the facts of individual cases.”

4. Similar submissions are advanced in IA No.108670 of 2020.

5. In response to these applications Ace Group of Companieshas submitted:- “…

3. A perusal of the Order and Judgment dated 10.6.2020 by thisHon’ble Court establishes that the said Order was passed grantingone time concession for the very survival of the real estate sectorowing to the precarious condition prevailing in the entire region ofNoida and Greater Noida area for last almost 12-15 years.

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4. It is a matter of record that the overall dire precarious situationin the region was caused due to the fact the Government authoritiesbreached rules by acquiring Land in violation of the establishedrules and regulations leading to multifarious and prolonged litigationsat the behest of the farmers. Various environmental issues croppedup during the construction period of the projects, leading toprolonged stay in construction activities. All these factors resultedin huge delays in completion of the projects within the scheduledconstruction period. This also caused huge monitory loss, loss ofcrucial development period and huge blocking of funds of thedevelopers. All these reasons badly jolted the entire real estatesector in the region.

Further, despite supporting over 250 other industries,contributing almost 20% to GDP and being the largest employmentgenerator after agriculture, the real estate sector never receivedany concession by the State authorities.

6. In this factual background, the Order and judgment dated10.06.2020 was passed to serve the twin purposes i.e. to ensuretimely construction of projects and to ensure that the Authoritiesalso receive their dues in a timely manner, the Hon’ble Courtgranted a onetime concession by reducing the rate of interest ofall the allottees of all types of land w.e.f. 01.01.2010 with the riderthat in case of failure to pay the dues in time to the authorities,the concession granted shall stand withdrawn. The aforesaid onetime concession has been granted by this Hon’ble Court uniformlyto all types of allottees and all the leaseholders of the Noida andGreater Noida Authorities. It has specifically recorded in para 39of the said order, that, It cannot be disputed that the rate of interest, onwhich agreements were entered into, has gone down bynow. The present lending rate is much below and the RBIhas taken several steps to revive the economy. In such ascenario, it would never be possible to make payment ofinterest at the rate fixed by authorities and also a penalinterest to be realized by concerned authorities.“

7. Therefore, the instant application seeking recall of theorders dated 10.6.2020, 19.08.2020 and 25.08.2020 is ex faciebad in law and devoid of merits. Moreover, the Order and judgment dated 10.06.2020 passed by this Hon’ble Court was duly modified/clarified on an identical and similar application filed by the Noidaand Greater Noida Authorities vide an Order dated 10.07.2020.

6. The order dated 10.07.2020 which has been referred to, wasto the following effect.

“I.A. Nos. 59415 of 2020 and 59400 of 2020.

Considered the prayer made by Mr. Tushar Mehta, learnedSolicitor General of India, appearing for Greater Noida Authorityand Mr. Mukul Rohtagi, learned senior counsel, appearing for theNoida Authority.

It was submitted that the order dated 09.06.2020 passedwith respect to 8% interest be made prospective. It was alsopointed out that the Government has specified the rate at the SBILending Rate, to be paid. As per that, the dues to be paid comesto 8.5%.

After hearing learned counsel for the parties, we are ofthe opinion that SBI MCLR Rates to be applied uniformly to allthe lease holders. Their past dues as well as arrears to be workedout accordingly. In case any adjustment is to be made, let theadjustment be made accordingly and the current dues also to beworked out at the SBI MCLR Rates. Future dues be also workedout at the SBI MCLR Rates, which may be fixed. Remainingorder is not modified. The only modification made is about therate of interest.

It is clarified that SBI MCLR rate to be applied with effectfrom 1.1.2010 and previous dues to be paid as per the rate, asprovided in the agreement.

The Noida and Greater Noida Authorities to work out thedues within one month. 25% of the amount of the dues shall bedeposited within 3 months and the remaining amount within oneyear from 31 today, failing which concessional rate shall standwithdrawn. The applications are accordingly disposed of.”

7. Similar assertions are made in the response filed on behalf ofthe Prateek Buildtech (India) Pvt. Ltd. According to said company, itwas entitled to have the outstanding amounts adjusted in terms of theorders issued by this Court. The details of the projects completed by the A

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Asaid company are referred to in the reply as under:

“m. That the Applicant Company, through its group companies hasbeen allotted the following plots for the development of grouphousing projects as well as the progress of the Applicant onthe said projects:

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Response has also been filed on behalf of Prateek Realtors (India)Private Limited, a company under the same management, giving followingdetails with regard to its projects G“m. That the Applicant Company, through its group companies hasbeen allotted the following plots for the development of grouphousing projects as well as the progress of the Applicant onthe said projects:

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An amount of Rs.23.78 crores being outstanding on behalf of thesetwo group companies was tendered along with the representation dated28.3.2020. However, there was no response on behalf of the NoidaAuthority.

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8. In rejoinder, it is submitted on behalf of the Noida Authority asunder:- (A)Prior to the filing of the instant applications, the authoritieswere not able to fathom the extent of the financial loss thatGwould accrue to them upon reduction of contractual rate ofinterest. In the plots allotted to the Ace Group of Companiesby Greater Noida Authority alone, the financial loss wouldbe to the tune of Rs.55.41 crores.

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A(B)The financial loss to Greater Noida Authority in relation toall the Group Housing Projects would exceed Rs.4,279/-crores, while that to the Noida Authority would be morethan Rs.3,000 crores.

(C)The rate of interest for availing facility of deferred paymentBon instalment by the builders was in consonance with therate of interest that was been charged by the banks. Therate of interest was disclosed in the brochure, in the allotmentletter and in the consequential lease deed. Said rate wasacted upon by the parties with open eyes.

C(D)There was no material for reduction in the contractual rateof interest except what was stated by Ace Group ofCompanies when the application preferred by it came to beallowed by this Court.

(E)It was not disclosed by Ace Group of Companies that theyDwere actually levying on their flat buyers interest at therate of 18 %.

9. This rejoinder reflects the stand on behalf of both the Authorities.

10. Appearing for Noida and Greater Noida Authorities, Mr. HarishN. Salve, and Mr. Ravindra Kumar learned Senior Advocates haveEsubmitted inter alia:

(A)The point of initiation for order dated 10.06.2020 was anote of the learned Court Receiver dated 22.5.2020 and byvery nature it was purely in the context of Amrapali Groupof Companies and had nothing to do with flat buyers fromFprojects undertaken by builders other than Amrapali Groupof Companies.

(B)On 27.5.2020, an application preferred by Ace Group ofCompanies being IA No.49139 of 2020 was listed beforethe Court for the first time when this Court was pleased toGissue notice. The matter was adjourned to 3.6.2020 whenfollowing orders was passed by this Court:- “…We have considered the application (I.A. No. 49139/2020) with respect to the interest part. We have alreadyheard the other matter relating to interest and this applicationHis heard and reserved with respect to interest part.”

(C)In these circumstances, I.A. No.49139 of 2020 was takenup along with the matter pertaining to Amrapali Group ofCompanies. There was hardly any discussion on the pointnor was any reply submitted on behalf of the Authorities tothe application preferred by Ace Group of Companies.

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(D)An application preferred by Supertech Group of Companiesbeing I.A. No.74824 of 2020 praying for similar relief wasdealt with by this Court in its order dated 13.8.2020 as under:- B

“I.A.NO.74824of2020

This application is permitted to be withdrawn with libertyto avail appropriate remedy before the appropriate forumand not in this petition.

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The application not to be entertained in this petition.

The application is, accordingly, dismissed as withdrawn.”

(E)On 7.9.2020, Contempt Petition Nos.525, 526, and 527 ofD2020 filed on behalf of one of the builders alleging non-compliance of the orders passed by this Court with regardto reduction of rate of interest were disposed of by thisCourt as under:- “ContemptPetitions(Civil)Nos.525/2020,526/2020 and527/2020

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Heard.

In our view, no contempt is made out as no specificdirections were issued in the case of the contempt petitioners.

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The contempt petitions are, therefore, closed giving libertyto file appropriate proceedings available in law.”

(F)Subsequently, similar application preferred by some of theinterested builders were dealt with by this Court its orderdated 21.9.2020 as under:

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“V. InRe:RATEOFINTEREST

While dealing with the subject concerning rate ofinterest to be realised on outstanding dues by NOIDA andGreater NOIDA, this Court in its order dated 10.06.2020had observed as under:

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“39. It cannot be disputed that the rate of interest, on whichagreements were entered into, has gone down by now. Thepresent lending rate is much below and the RBI has takenseveral steps to revive the economy. In such a scenario, itwould never be possible to make payment of interest at therate fixed by authorities and also a penal interest to be realisedby concerned authorities. The home buyers are not able toobtain fruits of the investment and are deprived of legal titleof the flats.

x x x

42. Considering the current state of real estate, the projectsare standstill, and in order to give impetus to such housingprojects and mainly considering plight of home buyers and asappointed out by NOIDA and Greater NOIDA Authorities that114 plots were allotted from 2005 onwards, most of projectsare incomplete; we direct that rate of interest on theunderstanding premium and other dues to be realized in allsuch cases at the rate of 8% per annum and let the NOIDAand Greater NOIDA Authorities do a restructuring of therepayment schedule so that amount is paid and NOIDA andGreater NOIDA Authorities are able to realize the same. As toreasonable time frame, we would like to hear the parties, incase of failure to pay, the concession granted shall standwithdrawn. However, at the same time, the NOIDA andGreater NOIDA Authorities shall also ensure that not onlyinstalments/money are deposited, but also all such projects arecompleted within the stipulated time.”

Later, said order dated 10.06.2020 on the aforesaid issueswas clarified/modified by further orders dated 10.07.2020,13.08.2020 and 25.08.2020.

It appears that large number of applications are gettingpreferred by builders/developers who are not connected withAmrapali projects, seeking inter alia implementation orclarification or praying for further benefits. Our experience onlast few occasions has been that these applications take upconsiderable length of time, as a result of which the main mattersor the issues touching upon the completion of Amrapali projects

get sidelined. We, therefore, direct that hereafter the Registryshall not entertain and list before the Bench dealing with Amrapaliprojects, any application on the issue concerning rate of interest tobe charged on the outstanding dues to NOIDA/Greater NOIDAand any other allied subjects from the Builders/Developers whoare not connected with Amrapali projects. All the InterlocutoryApplications by the Builders/Developers are therefore disposedof without any orders but reserving the remedy to the concernedapplicants to take appropriate action as is open in law.”

(G)The Rate of interest payable by the concerned builders tothe Authority was one which had the genesis in the AllotmentLetters, Lease Deed and was thus to the knowledge ofeveryone. Consequently, amount of interest went into inputsforming part of the price payable by the consumers. At nostage, any of the builders was aggrieved by the rate ofinterest.

(H)The well-established principle has been not to interfere withthe terms of a commercial contract, to which there arecertain exceptions like the case dealt with by this Court inCentral Inland Water Transport Corporation Limitedand Another v. Brojo Nath Ganguly and Anr.[1]wherethe concerned Clause in the contract was found to be perse arbitrary. However, no such plea that the terms in thecontract were unconscionable was ever taken by anyonenor was there any factual foundation in support of suchplea.

(I)The effect of the burden as a result of the relaxation inthe rate of interest was to the tune of Rs.4,279/- croresfor Greater Noida Authority and Rs.3,266/- crores for NoidaAuthority. These figures were never in contemplation whenthe aforesaid orders dated 10.6.2020, 19.8.2020 and25.8.2020 were passed by this Court.

11. Mr. Ranjit Kumar, learned Senior Advocate and Mr. GauravMitra, Advocate appearing on behalf of Prateek Group of Companies,Mr. Navin R. Nath, learned Senior Advocate appearing for Ace Groupof Companies, Mr. Kapil Sibal, learned Senior Advocate appearing for 1 (1986) S SCC 156.

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AParamount Group of Companies and Mr. Abhishek Manu Singhvi, learnedSenior Advocate appearing for Ajnara Group of Companies have advancedfollowing submissions in reply:

(A)These applications are nothing but repetition of what wasargued on behalf of Authorities on 10.7.2020 and the prayersBhaving been rejected, the only recourse possible was to filea review petition and not recall application.

(B)Paragraph 38 of the order dated 10.6.2020 had notedthat large number of plots were allotted to various GroupHousing Societies and large number of these projects hadnot come up as a result of which the Authorities werenot able to realise their dues from such projects.

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(C)Paragraph 40 of the said order referred to paragraph 71 ofthe order dated 17.1.2019 which was to the following effect.

“72. In our opinion, if the real estate business has toDsurvive in India, it has to be answerable to the public and hasnecessarily to uphold the trust reposed in 35 builders/promoters. They have been paid huge amounts not only by thehome buyers but also, they have to pay a huge amount for thepublic land given to them on lease by Noida and Greater NoidaEAuthorities for construction of houses. The land has been givento them by the authorities on a concessional basis by makingpayment of 10% amount at the time of allotment. The buildershave to be accountable to public/home buyers as well as theauthorities and bankers. It is a matter relating to housing needsdealing with shelter place, such an activity is of the publicFimportance as the real estate sector plays a pivotal role in thefulfillment of needs of housing infrastructure.”

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(D)Thereafter the learned counsel had left it to this Court as isevident from paragraphs 41 and 42 of the order, which wereto the following effect:

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“41. It was also argued by the learned senior counselthat even if the builder may have factored the valuation ofprice, including interest on the cost of the land, the leasedeed and the authorities will remain unaffected. A prayerwas made that the authorities may be given liberty to recover H

their amount of interest from the builder at the contractuallyagreed rate under the lease deed. It was lastly and rightlypointed out that the Court can fix a reasonable rate ofinterest. Considering the present scenario, we feel that theaforesaid submission is justified.

42. Considering the current state of real estate, theprojects are standstill, and in order to give impetus to suchhousing projects and mainly considering plight of homebuyers and as pointed out by Noida and Greater NoidaAuthorities that 114 plots were allotted from 2005 onwards,most of projects are incomplete; we direct that rate ofinterest on the outstanding premium and other dues to berealized in all such cases at the rate of 8% per annum andlet the Noida and Greater Noida Authorities do arestructuring of the repayment schedule so that amount ispaid and Noida and Greater Noida Authorities are able torealize the same. As to reasonable time frame, we wouldlike to hear the parties. In case of failure to pay, theconcession granted shall stand withdrawn. However, at thesame time, the Noida and Greater Noida Authorities shallalso ensure that not only instalments/money are deposited,but also all such projects are completed within the stipulatedtime.”

(E)The jurisprudential basis with which all these directions wereissued, was right of shelter for every such similarly situatedflat buyer whose interest needed protection.

(F)Soon after the order passed on 10.7.2020, Contempt Petitionfiled on behalf of the Ace Group of Companies was dealtwith by this Court in its order dated 13.8.2020:

“ContemptPetition(C)DiaryNo.16757/2020Issue notice.

Mr. Ravindra Kumar, learned counsel, appears and acceptsnotice on behalf of NOIDA and Greater NOIDA.

Let calculation mistakes be corrected and the order beworked out in pith and substance by the next date of hearing.

At the same time, it was pointed out by Mr. Keshav Mohan,learned counsel, that the dues have not been worked out A

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and neither the correct notices issued. As such, the timewhich was fixed by this Court for payment is being consumedby the NOIDA itself.

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We direct the NOIDA to implement the order in pith andsubstance and correct all such errors within seven days,Botherwise the same will be viewed seriously and theconcerned officers/officials shall have to face theconsequence of noncompliance.

Let NOIDA and Greater NOIDA file affidavit ofcompliance as well as the requisite documents, in themeantime.”

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(G)In the subsequent application being Volume R-117 all thesubmissions were advanced on behalf of the authorities butno prayer was made for recall of the order dated 10.7.2020

(H)Affidavits in compliance of directions dated 13.8.2020 beingDVolume Nos.R-76 and R-77 were filed on behalf of theNoida and Greater Noida Authorities on 18.8.2020. Saidaffidavit contained details of calculation for a large numberof projects including the percentage of loss caused to theAuthorities as well as the fact that in certain instances theEAuthorities would be required to make refunds.

(I)In substance, the Authorities were requesting for recall oforders after the matters were gone into by this Court atleast on three occasions.

12. To a query whether the benefit resulting out of the ordersFpassed by this Court was passed on to the consumers, some of the learnedcounsel have submitted that they were ready to pass on the benefit andundertakings to that effect have been filed in this Court. Every learnedcounsel has presented individual facts as to how much had been paid bythe concerned builders all through and what would be the notional impactas a result of the orders passed by this Court.G

13. We have considered the rival submissions and have also gonethrough the written submissions filed on record.

14. In these proceedings we are principally concerned with theplight of flat holders of Amrapali Group of Companies. In order to see H

that the projects do not remain stalled and the investment made by allthe flat buyers comes out of cloud of uncertainty, certain measures wereadopted by this Court in its order dated 23.07.2019. Those measurescontemplated restriction on the Noida and Greater Noida Authorities toresume the properties in question, as well as, cancellation of lease deedgranted in favour of Amrapali Group of Companies and vesting all therights in favour of the Court Receiver and NBCC was appointed tocomplete various projects. These directions were passed in the peculiarfacts and circumstances in Amrapali Projects. It was in light of thesedirections that one of the issues which came up for consideration beforethe Court related to reduction in rate of interest. The dues payable toNoida or Greater Noida in respect of projects of Amrapali Group ofCompanies would otherwise have been liable to pay along with interestat certain rates. Since that would have put additional burden on the entireproject, it was deemed appropriate to consider reduction in rate ofinterest.

15. At that juncture, an application filed on behalf of ACE groupof companies was listed for the first time on 27.05.2020 by which timethe note prepared by the learned Court Receiver seeking reduction inrate of interest for Amrapali Group of Companies was taken up on25.05.2020 and the order was reserved. The order dated 27.05.2020, asextracted hereinabove noted the fact that similar matter was underconsideration and therefore reserved order in that matter. The recordindicates, no reply was filed by the concerned authorities nor were theymay aware of the impact of such application preferred by ACE Group ofCompanies.

16. The order dated 10.06.2020 did consider the case projectedby ACE group of companies in its application dated 27.05.2020 but asindicated earlier, there was no response on behalf of the concernedauthorities. It must be noted that this court in the present matter was notin any way concerned with the facts and circumstances pertaining toany of the flat buyers in projects of ACE Group of Companies. Nogrievance was raised by anybody that the individual flat buyers were putto prejudice as a result of rate of interest charged on the amounts due.What was under consideration before the court was the peculiar factsituation pertaining to Amrapali Group of Companies. Neither was thereany general petition on behalf of any or all builders of Noida or GreaterNoida in a manner known to law nor was the scope of the matter vide AB

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Aenough to consider any such plea advanced on behalf of ACE Group ofCompanies.

17. Around this time a decision was taken by the State Governmenton 09.06.2020 giving reduction in interest rates generally to all builderspertaining to all projects. However, this court was not aware of the orderBdated 09.06.2020 when the order was pronounced on 10.06.2020 in thematter reserved earlier. It is true that though it was completely beyondthe scope of instant matters to consider the cases of other builders, thisCourt did to consider the case of builders such as ACE group ofcompanies 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 amountCrunning into more than Rs. 3000 – 4000 crores for Noida and GreaterNoida Authorities, would be in issue.

18. As a result of the orders passed by this court the builders arenow asking for adjustment of whatever they had paid earlier and incertain cases they are even demanding refund of the amount paid inDexcess. In every case, the concerned builder had opted for allocation ofplot on the basis of brochure which had clearly indicated the rate ofinterest. The allotment letter and consequential lease deed carried thesame intent. Thus, every builder was well aware and had entered intotransaction with Noida and Greater Noida Authorities with open eyes.EWhatever was the impact on account of that rate of interest must havebeen subsumed in the price which was arrived at and had to be paid byevery flat holder.

19. In cases where contractual terms were sought to be invalidatedthis court has repeatedly refrained from entering into such issues. InFJagdish Mandal vs. State of Orissa[2]the conclusions arrived at by thisCourt were as under:

“22. Judicial review of administrative action is intended toprevent arbitrariness, irrationality, unreasonableness, bias and malafides. Its purpose is to check whether choice or decision is madeG“lawfully” and not to check whether choice or decision is “sound”.When the power of judicial review is invoked in matters relatingto tenders or award of contracts, certain special features shouldbe borne in mind. A contract is a commercial transaction.Evaluating tenders and awarding contracts are essentially H2 (2007) 14 SCC 531

commercial functions. Principles of equity and natural justice stayat a distance. If the decision relating to award of contract is bonafide and is in public interest, courts will not, in exercise of powerof judicial review, interfere even if a procedural aberration or errorin assessment or prejudice to a tenderer, is made out. The powerof judicial review will not be permitted to be invoked to protectprivate interest at the cost of public interest, or to decide contractualdisputes. The tenderer or contractor with a grievance can alwaysseek damages in a civil court. Attempts by unsuccessful tendererswith imaginary grievances, wounded pride and business rivalry, tomake mountains out of molehills of some technical/proceduralviolation or some prejudice to self, and persuade courts to interfereby exercising power of judicial review, should be resisted. Suchinterferences, either interim or final, may hold up public works foryears, or delay relief and succour to thousands and millions andmay increase the project cost manifold. Therefore, a court beforeinterfering in tender or contractual matters in exercise of powerof judicial review, should pose to itself the following questions:

(i) Whether the process adopted or decision made by theauthority is mala fide or intended to favour someone; OR

Whether the process adopted or decision made is soarbitrary and irrational that the court can say: “the decision issuch that no responsible authority acting reasonably and inaccordance with relevant law could have reached”;

(ii) Whether public interest is affected.

If the answers are in the negative, there should be no interferenceunder Article 226. Cases involving blacklisting or imposition ofpenal consequences on a tenderer/contractor or distribution ofState largesse (allotment of sites/shops, grant of licences,dealerships and franchises) stand on a different footing as theymay require a higher degree of fairness in action.”

20. If even in normal circumstances, the interference withcontractual terms is not easily to be taken resort to, it does not stand toreason 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 AB

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AGreater Noida. Reference made to a number of stalled projects includingsome of the projects of the builders who are presently before us, cannotbe taken as an indication that the benefits which were to be extended tothe flat buyers from Amrapali Group of Companies must also be extendedto the flat buyers to the other projects from Noida or Greater Noida.

B21.Some of the orders, namely the order pertaining to IA No.74824of 2020 allowing Supertech Group of Companies to withdraw theirapplication as well as order dated 07.09.2020 in Contempt PetitionNos.52525, 52526, 52527 of 2020 stating that no contempt was madeout, are an indication that this court was not concerned that the matterpertaining to projects other than Amrapali Group of Companies.

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22. The objections that the proper jurisdiction to be exercised wouldbe jurisdiction in review, according to our considered view, is purelytechnical. The matter was dealt with by the Bench dealing with questionsrelating to Amrapali Group of Companies. The circumstances delineatedalso show that a completely different matter came to be dealt with byDthe Bench principally concerned with matters of Amrapali Group ofCompany. No adequate notice was given to the concerned Authoritiesand the exact impact of the decisions was also not made known to theCourt when these orders were passed. We therefore have no hesitationin rejecting all these technical submissions.

E23. In conclusion, we must say that this Court erred in grantingrelief to projects other than Amrapali Group of Companies vide its ordersdated 10.06.2020, 19.08.2020 and 25.08.2020.

24. Consequently, the instant applications are allowed and the ordersdated 10.6.2020, 19.8.2020 and 25.8.2020 are recalled, as prayed. TheFNoida and Greater Noida Authorities are directed to calculate the amountdue in respect of builders other than Amrapali Group of Companies aftertaking into consideration the effect of the order dated 09.06.2020 issuedby the State Government.

GAnkit Gyan

(Assisted by : Rahul Rathi, LCRA)

IAs disposed of.

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