The Supreme Court on Tuesday ordered fresh e-auction of plots, which became a stalemate between the New Okhla Industrial Development Authority (NOIDA) and private firms, where five-star and three-star hotels were supposed to be constructed before the 2010 Commonwealth Games.
In a 30-page verdict, a bench comprising Justices Uday Umesh Lalit, Indu Malhotra and Krishna Murari said: “NOIDA 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 October 21, 2019.”
The bench noted that the matter was considered from the standpoint of enabling both sides to settle their disputes and get over the stalemate.
The top court ruled that the plots which are with the private companies for making hotels would go back to NOIDA. These plots will then be put up for fresh e-auction and from the proceeds, NOIDA will return the money deposited by the companies along with interest.
“From the 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,” said the top court.
Several litigations were filed by parties in the Allahabad High Court and later in the Supreme Court in connection with either cancellation or execution of the lease deeds on various grounds.
Uttar Pradesh found that the allotments were irregular and directed the NOIDA cancel them. Allegations were made that the reserve price was very low. Later, the high court, on a plea by private firms, set aside the state government decision and asked it to reconsider its decision. The state government did not budge from its stand to cancel the lease deeds. This decision was challenged in the top court.
The bench noted that the present status in the case is nothing but a stalemate in which valuable assets of a public authority are locked completely. The public interest is neither getting subserved, nor is NOIDA getting instalments towards the premium on time.
In 2006, NOIDA launched “the Hotel Plot Allotment Scheme” in the backdrop of Commonwealth Games. At the behest of the Union Sports Ministry, NOIDA 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 metre.
In 2011, the top court had said that although the allotment of commercial plots was valid, these plots could have fetched premium at a rate of Rs 70,000 per square metre, when they were auctioned first.
The court had then said that the allottees, who do not have higher premium to continue the lease, should get a return of the amount paid for allotment and the lease. Seven companies had filed contempt pleas against NOIDA, alleging that it did not obey the top court order on execution of lease deed on fulfilment of certain conditions.