Supreme Court of India
BIKRAM CHATTERJI & ORSversusUNION OF INDIA & ORS
- Citation
- 2022 INSC 1180
- Decided
- 7 November 2022
- Disposal
- Disposed off
- Bench
- UDAY UMESH LALIT
Holding
The Court held that the interest‑rate reduction was limited to Amrapali Group projects and could not be extended to other builders; therefore the orders dated 10‑06‑2020, 19‑08‑2020 and 25‑08‑2020 were recalled.
Summary
The Supreme Court had earlier intervened in the Amrapali Group real‑estate disputes, directing a reduction of interest on outstanding dues to Noida and Greater Noida Authorities to ease the burden on flat buyers. Subsequent orders dated 10‑06‑2020, 19‑08‑2020 and 25‑08‑2020 extended the same 8% interest relief to builders other than Amrapali, based on an application by the Ace Group. The Noida and Greater Noida Authorities filed interlocutory applications seeking recall of those orders, contending that the relief was beyond the scope of the original case and would cause losses of Rs 3,000‑4,000 crores. The Court examined whether the interest reduction could be lawfully extended to other projects and whether it could alter contractual interest terms. It held that the reduction was specific to the peculiar facts of the Amrapali projects and that extending it to other builders was an error. Consequently, the three orders were recalled and the authorities were directed to calculate dues for other builders in accordance with the State Government’s 09‑06‑2020 order.
Issues considered
- The reduction of interest rate ordered for Amrapali projects may be extended to other builders and projects.
- Whether the Court can recall its own earlier orders granting interest relief.
- Whether judicial intervention can alter contractual interest terms agreed in lease deeds.
- The jurisdiction and scope of the original petition concerning Amrapali projects.
Subjects
interest reductionreal estateAmrapali projectNoida AuthorityGreater Noida Authoritycontractual termsjudicial reviewpublic interestlease deedflat buyers
Judgment
[2022] 9 S.C.R. 207 207
BIKRAM CHATTERJI & ORS. A
v.
UNION OF INDIA & ORS.
[I.A. Nos.108696, 108703, 108670 and 108681 of 2020]
In B
(Writ Petition (Civil) No. 940 of 2017)
NOVEMBER 07, 2022
[UDAY UMESH LALIT, CJI AND AJAY RASTOGI, J.]
C
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 D
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 E
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 F
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 G
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
H
207
208 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 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
B 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
C 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
D 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
E 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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 209
court in the present matter was not in any way concerned with A
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
B
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 C
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
D
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; 236- E
A-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 F
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 G
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]
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210 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 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
B
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
C 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; 238-
D
A-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
E 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
F 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.
G CIVIL 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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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 211
Under Article 32 of The Constitution of India A
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., Avinash
Kumar, Rajeev Gupta, M. L. Lahoty, Paban K. Sharma, Anchit Sripat, B
Himanshu Shekhar, Pranab Kumar Nayak, Kumar Mihir, Binay Kumar
Das, Ms. Priyanka Das, Ms. Neha Das, Ms. Saloni Sharan, Gudipati G.
Kashyap, Ms. Apoorva Pandey, Ms. T. Archana, Manoj Singh, Sanjay
Kumar Visen, Ms. Ritu Rastogi, Ms. Mohini Kumari, Sunil Kumar Ojha,
Gurmeet Singh, Aman, Arkaj Kumar, Madhav Singhal, Mukesh Kumar
Maroria, Mukul Singh, Ms. Preeti Rani, Mohd. Akhil, Prashant Singh, C
Sughosh Subramnyam, Vikrant Yadav, R.R. Rajesh, Raj Bahadur Yadav,
Gurmeet Singh Makker, Nachiketa Joshi, Arvind Kumar Sharma, Niraj
Gupta, Ms. Anshu Gupta, Fuzail Khan, Ashutosh Srivastava, Ms. Ramya
Khanna, Ashish J., Alok Kr. Aggarwal, Ms. Anushruti, Ms. Simran Arora,
Ms. Anubha Agrawal, A. P. Mohanty, Prathvi Raj Chauhan, Ms. Priya D
Sharma, Ms. Ruchira Goel, Abhitosh Pratap Singh, Ms. Rita Bhandari,
Rajeev Kumar Dubey, Ashiwan Mishra, Ms. Vaidruti Mishra, Kamlendra
Mishra, Ms. Jyoti Chahar, Karan Chahar, Ms. Pooja Chahar, Shashi
Bhushan, Vinay Garg, M. T. George, Ms. Susy Abrahm, Johns George,
Rajiv Kumar, Kishlay Shukla, Ms. Purnima Jain, Sanjeev Gupta, Rishi
K. Awasthi, Prashant Kumar, Ms. Ritu Arora, Piyush Vatsa, Santosh E
Kumar-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. Beena
Bansal, Saurav Jindal, Kuldip Singh, G. N. Reddy, Alok Kumar, Ms.
Garima Soni, Ms. Neetu Rashi, Rohit Pandit, Ms. Nandita Jha, Vivek F
Kumar Pandey, Krishna Kant Dubey, Ms. Shuchi Singh, Sanjay Kumar
Dubey, Jainendra Kumar, Aman Kumar, Binod Kumar Singh, Kirshna
Vani Sharma, Hitesh Kumar Sharma, S.K. Rajora, Akhileshwar Jha,
Ms. Yamini Sharma, Narendra Pal Sharma, Ms. Sandhya Sharma, Ranjit
Kumar Sharma, Ms. Richa Kapoor, Kunal Anand, Ms. Shivani Sharma,
Sanjay Kapur, Ms. Megha Karnwal, Arjun Bhatia, Ms. Akshata Joshi, G
Ms. Shubhra Kapur, Pradeep Misra, Daleep Dhyani, Manoj Kumar
Sharma, Suraj Singh, Saket Singh, Ms. Sangeeta Singh, Ms. Niranjana
Singh, Ashok Kumar Singh, Shantwanu Singh, Ms. Pragya Singh,
Ms. Akshay Singh, Dr. Ritu Bhardwaj, Sachin Mittal, Rachit Mittal, Parish
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212 SUPREME COURT REPORTS [2022] 9 S.C.R.
A Kumar, Ms. Pooja Kapur, Sudhir Naagar, Pai Amit, Ms. Komal Mundhra,
Saurabh Agrawal, Shantanu Singh, Amitesh Chandra Mishra, Ankit
Chaturvedi, Niteen Kumar Sinha, Ms. Reetu Saipawar, Ms. Pratibha
Yadav, Ram Naresh for ACM Legal, Devendra Kumar Singh, Karunakar
Mahalik, Arpit Rai, Aviral Kashyap, Anil Gaur, Ms. Neha Chaudhary,
Dr. Sunil K. Khattri, Ambrish Kumar Rai, Badri Prasad Singh, Vikas
B
Jain, 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, Kunal
Sachdeva, Chowdhary Zulfikar Ali, M/s. Kings & Alliance LLP, Sanveer
C Mehlwal, Ms. Geetanjali Mehlwal, Ms. Shradha Agrawal, Ms. Kamakshi
S. Mehlwal, Ms. Arti Singh, Akashdeep Singh Roda, Basant Pal Singh,
Ms. Pooja Singh, Kaushal Yadav, Nandlal Kumar Mishra, Arjun
Raghuvanshi, 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. Sujata
D
Kurdukar, 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. Monisha
Handa, Mohit D. Ram, Anubhav Sharma, Janender Kumar Chumbak,
Ms. Radhika, Ms. Amita Singh Kalkal, Sureshan P., Ms. Roma Singh,
E Utkarsh Singh, Gautam Das, Tarun Kant Samantray, Dhirendra Kumar
Jha, Ms. Sanjana Akhilesh Singh, Ms. Gitanjali Tripathi, Ms. Jasmine
Damkewala, Ms. Vaishali Sharma, Ms. Lovely Gargi, Bhupendra Kumar
Singh, 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, Rohit
F
Khurana, Ms. Jahanvi Warah, Krishnam Mishra, Param Kumar Mishra,
Ms. Anisha Upadhyay, Ms. Nisha Thakur, Brijesh Kumar Tamber, Yashu
Rustagi, 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,
G Devendra Singh, Parul Dhurve, Omanakuttan K.K., Mohd. Moonis
Abbasi, Shakil Ahmad Syed, Ms. Smita Pandey, Narendra Kr. Verma,
Aditya Nayyar, Ms. Farhat Jahan Rehmani, Suman Tripathy, Rameshwar
Prasad Goyal, Ms. Indrani Mukherjee, Ms. Tatini Basu, Alok Kumar,
Chandan Kumar, M/s. Dharmaprabhas Law Associates, Abhigya
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 213
Kushwah, Divyakant Lahoti, Rajesh P., Nirmal Kumar Ambastha, Deepak A
Prakash, Dharmendra Kumar Sinha, Tushar Singh, M/s. Cyril Amarchand
Mangaldas, Shovan Mishra, Kumar Dushyant Singh, Aditya Jain-1,
Ms. E. R. Sumathy, Ashok Mathur, Vivek Narayan Sharma, Satish
Pandey, Abhinav Shrivastava, Dheeraj Nair, Balaji Srinivasan, Ms. Charu
Ambwani, Dr. Sarvam Ritam Khare, Malak Manish Bhatt, Sanchit Garg,
B
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, Jasmeet
Singh, Shubham Bhalla, Kanhaiya Singhal, Arup Banerjee, Anuj Kapoor,
Ms. Charu Mathur, Abhinav Agrawal, Ms. Sangeeta Singh, Ms. Sayaree
Basu Mallik, Shishir Pinaki, G. Balaji, B. K. Satija, Ms. Pallavi Pratap, C
Manish Kumar Saran, Sukant Vikram, Gopal Jha, Shadan Farasat,
Kailash Prashad Pandey, Abdul Azeem Kalebudde, Mohammed Sadique
T.A., Gaurav Goel, Akhilesh Kumar Pandey, Ms. Rakhi Ray, Ms. Tulika
Mukherjee, Rabin Majumder, Rajesh Kumar Gupta, Praveen Chaturvedi,
Siddhartha Jha, Ms. Prerna Mehta, Umesh Kumar Khaitan, Ms. Sneha
D
Kalita, Jay Kishor Singh, Ms. Mayuri Raghuvanshi, Somesh Chandra
Jha, Awanish Sinha, Somiran Sharma, Ms. Astha Sharma, Pramod Dayal,
Alok Tripathi, Ms. Vandana Sehgal, Ms. Anannya Ghosh, Sanjai Kumar
Pathak, 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, E
Ms. Manisha Ambwani, Ms. Chandan Ramamurthi, Ms. Mona K.
Rajvanshi, Mishra Saurabh, Christopher D’souza, Ms. Divya Roy, Kabir
Dixit, 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,
F
Ritesh Agrawal, Ms. Indra Sawhney, Aneesh Mittal, Vishal Gupta, Aman
Gupta, Chandra Prakash, Bhuwan Raj, E. C. Vidya Sagar, Uddyam
Mukherjee, Anil Kumar Mishra-I, Kaushik Choudhury, Anas Tanwir,
Ejaz Maqbool, Ms. Swarupama Chaturvedi, Rishi Matoliya, Tahir Ashraf
Siddiqui, Ms. Bharti Tyagi, Anoop Prakash Awasthi, Kedar Nath Tripathy,
Ms. Rashmi Singh, Sunil Fernandes, Ms. Rajkumari Banju, Ajit Sharma, G
Ms. Aruna Gupta, Advs. for the appearing parties.
R. Venkataramani, Court Receiver, Ravinder Bhatia, Pavan
Aggarwal, Forensic Auditors.
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214 SUPREME COURT REPORTS [2022] 9 S.C.R.
A The Judgment of the Court was delivered by
UDAY UMESH LALIT, CJI
1. IA No.108696 of 2020 (Vol.I-147) has been filed by Greater
Noida Authority seeking recall of the orders dated 10.06.2020, 19.08.2020
and 25.08.2020 in so far as they related to interest charged by the
B Applicant on all projects other than the Amrapali Project.
To similar effect, I.A. No.108670 of 2020 (I-148) has been
preferred on behalf of the Noida Authority seeking recall of the orders
dated 10.06.2020, 19.08.2020 and 25.08.2020.
C 2. Before we deal with the rival contentions, certain facts which
have led to the filing of the instant applications must be adverted to.
A. In Writ Petition (C) No.940 of 2017 which raises grievances
on behalf of the purchasers of flats in projects promoted by
the Amrapali Group of Companies, this Court has been
D passing various directions including appointment of Forensic
Auditors. When the matter was listed on 22.05.2020, in
response to a suggestion made by the learned Receiver in
his Note, the applicants were called upon to obtain
instructions with regard to interest to be charged and levied
on the outstanding premium on account of defaults
E committed by Amrapali Group of Companies. The matter
was then adjourned to 27.05.2020.
B. In response, a Note was filed on behalf of applicants
regarding interest payable by the Amrapali Group of
Companies.
F
C. Around this time I.A. No.4139 of 2020 was filed by another
builder named Ace Group of Companies seeking certain
reliefs on same lines as were prayed for on behalf of the
flat buyers of Amrapali Projects. It was claimed by Ace
Group of Companies in this application for general reduction
G in the interest rates to be charged by the Authority. After
having heard the matter on 27.5.2020, the matter which
was reserved for orders.
D. Before the Order could be passed by this Court, considering
the problems in cash flow related to Covid-19 pandemic
H situation and its aftermath, a general direction was issued
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 215
[UDAY UMESH LALIT, CJI]
on 09.06.2020 by the Uttar Pradesh State Government A
reducing the rate of interest charged by the Authorities.
E. On 10.06.2020 the order was passed by this Court in the
matter which was heard on 27.5.2020. Paragraph 31 of
the order dealt with the report of the learned Receiver while
paragraph 32 of the order referred to the IA filed by the B
Ace Group of Companies and the facts pertaining to said
Group were set out in Paragraphs 32 and 33. After noticing
that the rate of interest had gone down, this Court issued
directions that interest on the outstanding premium “to be
realised in all such cases” be at the rate of 8% per annum.
The relevant paragraphs of said order dated 10.06.2020 C
were as under:
“In Re. I.A. No. 49139 of 2020 (Interest to be realized
on the outstanding dues by Noida and Greater Noida
Authorities)
D
31. Learned Receiver has pointed out that there is a lack of
clarity concerning dues of local authorities/banks/lenders. It has
been submitted that proper relaxations and concessions are
required to be given concerning such dues.
32. In the interlocutory application filed by Ace Group of E
Companies, precarious conditions in the entire Noida and Greater
Noida region faced by the developers have been pointed out. It
is submitted that following economic recession in the last decade,
the entire real estate sector has gone downwards and facing
acute financial crunch and is fighting for its survival. The
projects are incomplete, there were various litigations which F
created 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 woes
of the developers. It is averred that the developers and the
home buyers both are adversely affected due to non-delivery G
of booked flats in the regions of Noida and Greater Noida etc.
33. The Ace Group of Companies obtained the plots between
the period 2010 and 2015 from the Authorities in the aforesaid
areas. The Noida Authority is raising additional demand at the
rate of Rs. 600 per square meter, whereas Greater Noida
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216 SUPREME COURT REPORTS [2022] 9 S.C.R.
A Authority is raising demand at the rate of Rs. 1700 per square
meter. Due to recession, developers operating in the region were
not able to receive the requisite amount on time from home
buyers. For one reason or the other, development work of the
projects was halted. The Authorities are levying excessive
interest and penal interest, which continues to rise exponentially,
B
culminating into huge dues, and in some cases, the cost of the
allotted land has doubled than what it was originally fixed at
the time of allotment over a period of time and that the premium
of the land has enhanced manifold after adding the interest and
penal interest thereon, and other liabilities are also fastened.
C There is also considerable delay in the completion of the projects
as scheduled initially. The cost of completion of the project
has thus increased manifold due to delay in construction and
has also resulted in price rise of important construction
components, material, and labour. The burden of Service Tax
and other cess and statutory charges have also increased
D
manifold. Though various companies managed to raise the
construction, however, the cost of land originally allotted has
doubled. The real estate sector is facing financial distress due
to the various intervening factors. The rate of interest has also
gone down substantially. Due to delay, in may cases refund
E order has also been passed by Consumer Forums, which is
adding financial constraints on the part of developers. They are
on the verge of completely financially drained out. It is urged
that interest rate and the delayed penalty being charged by the
Authorities on the allotted plots of land is excessively higher
than the prevailing financial market scenario whereas there
F
has been gradual and consistent fall in the interest rates since
2010 itself. However, the interest rates of the Authorities have
remained exorbitant contrary to the prevailing economic situation
of the country. The rates of interest charged by the Authorities
are extremely high. Apart from that, penal interest on delayed
G payment is also added. The rates have been increased from
11% to 14% - 15% to 18% - 23% per annum.
34. It is submitted by SBI MCLR (Marginal Cost of Funds
based Lending Rate) rate of interest for three years is 7% to
8%, and in the last six months, it has further come down to
H 7.85%. If the base rate of SBI MCLR is compared with the
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 217
[UDAY UMESH LALIT, CJI]
interest rate charged by the Noida and Greater Noida A
Authorities, one can easily find out that it has drastically been
reduced over the years and ranges between 7.5% to 8.15%
over the last ten years. The rate and historical data on the base
rate of SBI is filed.
35. It is further averred that over a period of time in the last B
five years, the Banks have also reduced the interest paid on
Fixed Deposits and currently, it ranges between 6% to 7%
only. However, Noida and Greater Noida Authorities, despite
allotting encumbered and disputed land coupled with various
other issues, failed to take any step to either reduce the exorbitant
rate of interest or completely waive off the interest and other C
charges on account of delay and default in paying the land
dues. The Developers and the applicants and home buyers have
acquired valuable right in the land by paying the hefty amount.
The developers have made numerous efforts by approaching
the concerned authorities for redressal of their grievances. Till D
date, there has been no resolution. Neither the Authorities nor
the State Government has taken the issues seriously. The issue
of the interest affects the public at large, particularly the
home buyers and the interest of banks and financial institutions
as well besides that of Authorities. It is not possible to pay
their dues. Presently, in the wake of COVID 19 pandemic and E
its outbreak in India, there is a continuous nation- wide
lockdown. There have been absolutely no business and
commercial activities in this sector, and the entire real estate
industry has come to a grinding halt causing further financial
losses and damages to the real estate sector, which is generally F
in a precarious condition in the Delhi/NCR region. Therefore,
prayer has been made that there should be a complete waiver
of interest component in the repayment of land dues of Noida
and Greater Noida Authorities, and payment schedule towards
lease rent and premium may be extended. It is further submitted
that various companies have stopped production of the G
construction/building material in the wake of lockdown. Most
of the labourers have gone back to their home States resulting
in shortage of labourers. In short, it is submitted that the real
estate sector is facing a crisis, and due to various aforesaid
reasons, the timeline for completion of projects may be deferred H
218 SUPREME COURT REPORTS [2022] 9 S.C.R.
A by one more year. Due to excessive lease rent, penalty and
interest 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 dormant
projects.
B 36. We are considering prayer Nos. 1 and 2 of the I.A. with
respect to interest to be realized on the outstanding dues by
Noida and Greater Noida Authorities.
37. The rates of SBI MCLR is reduced to 7.45 % in the year
2020 from 8.95% in the year 2016. It is clear that the Noida
C and Greater Noida Authorities, on the outstanding dues, are
realizing the dues from all such projects, interest at exorbitant
rate such as 15% per annum with half-yearly compounding
and in addition are also realizing penal interest on the amount
as fixed from time to time.
D 38. We have noted in the judgment dated 23.7.2019 the figure
given by the Noida and Greater Noida Authorities that after
2005, 114 plots had been allotted to various group housing
societies. 81 plots were handed over the possession on payment
of 10% of the total premium. 29 projects, out of 81 were
completed. Out of the other 33 allotted earlier, 11 were
E completed, and 7 obtained part- completion certificates. Thus,
it is apparent that more than 60% of projects have not been
able to come up so far. We have also noted that the Noida
and Greater Noida Authorities did not take the step of
termination of leases for various reasons. A large number of
F home buyers have been waiting now approximately for the
last 8 to 10 years or more for completion of houses. It is not
in dispute that the real estate sector has suffered a setback at
present. It contributes to the GDP of the country. As a large
number of projects have not come up, at the same time, Noida
and Greater Noida Authorities have not been able to realize
G their dues from such projects which are being piled up for the
last several years, at the same time interest of home buyers
has intervened. Even on the plots where the land was allotted
from 2005 onwards, the projects have not been completed so
far, though the buyers have paid their money. The Noida and
H Greater Noida Authorities are not issuing completion certificates
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 219
[UDAY UMESH LALIT, CJI]
to such projects and they are not able to realize their A
outstanding dues. For various reasons, constructions have not
been completed, including due to diversion of funds. There is a
failure to comply with the obligation to the home buyers whose
money has been invested in the partially constructed structure
and partial dues have been paid to the Noida and Greater Noida
B
Authorities.
39. It cannot be disputed that the rate of interest, on which
agreements were entered into, has gone down by now. The
present lending rate is much below and the RBI has taken
several steps to revive the economy. In such a scenario, it
would never be possible to make payment of interest at the C
rate fixed by authorities and also a penal interest to be realized
by concerned authorities. The home buyers are not able to
obtain fruits of the investment and are deprived of legal title of
the flats.
40. We have heard the learned counsel appearing for Noida D
and Greater Noida Authorities. Learned senior counsel also
drew our attention to the following observations made by this
Court in the judgment dated 23.7.2019:
“72. In our opinion, if the real estate business has to survive in
India, it has to be answerable to the public and has necessarily E
to uphold the trust reposed in builders/promoters. They have
been paid huge amounts not only by the home buyers but also,
they have to pay a huge amount for the public land given to
them on lease by Noida and Greater Noida Authorities for
construction of houses. The land has been given to them by F
the authorities on a concessional basis by making payment of
10% amount at the time of allotment. The builders have to be
accountable to public/home buyers as well as the authorities
and bankers. It is a matter relating to housing needs dealing
with shelter place, such an activity is of the public importance
as the real estate sector plays a pivotal role in the fulfillment of G
needs of housing infrastructure.”
41. It was also argued by the learned senior counsel that even if
the builder may have factored the valuation of price, including
interest on the cost of the land, the lease deed and the authorities
H
220 SUPREME COURT REPORTS [2022] 9 S.C.R.
A will remain unaffected. A prayer was made that the authorities
may be given liberty to recover their amount of interest from the
builder at the contractually agreed rate under the lease deed. It
was lastly and rightly pointed out that the Court can fix a reasonable
rate of interest. Considering the present scenario, we feel that
the aforesaid submission is justified.
B
42. Considering the current state of real estate, the projects are
standstill, and in order to give impetus to such housing projects
and mainly considering plight of home buyers and as pointed out
by Noida and Greater Noida Authorities that 114 plots were
allotted from 2005 onwards, most of projects are incomplete; we
C direct that rate of interest on the outstanding premium and other
dues to be realized in all such cases at the rate of 8% per annum
and let the Noida and Greater Noida Authorities do a restructuring
of the repayment schedule so that amount is paid and Noida and
Greater Noida Authorities are able to realize the same. As to
D reasonable 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 Noida
Authorities shall also ensure that not only instalments/money are
deposited, but also all such projects are completed within the
stipulated time.”
E
F. An application for clarification was immediately moved on behalf
of the Authorities on 15.6.2020. The principal relief claimed in
this application was that the order dated 10.06.2020 be declared
to be operative only prospectively. The matter was heard on
19.08.2020 when following order was passed by this Court:
F
“Vide order dated 10.07.2020, we have ordered the payment
as per the MCLR Rate. It has been pointed out by the learned
senior counsel appearing on behalf of NOIDA/Greater NOIDA
that MCLR rate is applicable with effect from 01.04.2016, and
not before that. It has also been pointed out that prior to that,
G SBAR rate was applicable from 01.01.2010 to 30.06.2010 and
thereafter, the rate which was applicable was called the Base
Rate (w.e.f. 01.07.2010 till 31.03.2016). The details of the rates
have been given in Annexure I of the Affidavit.
In the circumstances, since MCLR rate is not available for
H the entire period and the intention of our order was that the rate
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 221
[UDAY UMESH LALIT, CJI]
chargeable by the Bank has to be paid, we modify the order to the A
effect that the rate from 01.01.2010 to 30.06.2010 would be SBAR,
as specified in Paragraph 1 of Annexure I and thereafter, the
Base Rate as provided in that paragraph would be applicable with
effect from 01.07.2010 till 31.03.2016 and thereafter, MCLR would
be applicable with effect from 01.04.2016 onwards, as ordered
B
by this Court.
The order dated 10.07.2020 is modified/clarified to the
aforesaid extent.”
G. I.A. No. 80560 of 2020 was then filed by the Authorities
with the submission that as a consequence of the orders C
passed by this Court the contractual rate stood completely
overridden and the builders would now require to pay interest
at the rate of 9.5%.
H. The order passed on 25.8.2020 by this Court shows that
after referring to the aforestated two orders, it was observed D
as under:-
“It is apparent that the order dated 10.06.2020 is
not to realise ‘penal rent’ as well as it is to charge simple
rate of interest, not on compounding basis. We have directed
interest per annum. We clarify the same to be simple rate E
of interest as may be applicable from time to time even
during year. The order to be complied with by the NOIDA/
Greater NOIDA accordingly. The demand has to be
monitored. Let the demand be revised and fresh demand be
made in the true spirit of the order.
F
In view of the above, the application is disposed of.”
3. In these circumstances, the instant applications have been
preferred on behalf of the Greater Noida Authority and NOIDA Authority
seeking recall of the orders dated 10.06.2020, 19.08.2020 and 25.08.2020
passed by this Court. It is submitted in I.A. No.108696 of 2020 as
G
under:
“5.It is submitted that in the first instance, the orders provide no
jurisprudential basis for overriding contractual interest and that
too only in relation to the Applicant. ‘There are multifarious
contracts entered into by parties in relation to supplies of goods
H
222 SUPREME COURT REPORTS [2022] 9 S.C.R.
A and services. All these contracts contain interest provisions. The
levy of compound interest, on a contractual basis, is not just well
established in India but is well established internationally. The
charging of interest under a contract is a matter of negotiation
between the parties and once a contract is entered into, the sanctity
of the contract cannot be forsaken in this manner without there
B
being any supervening illegality being established in relation to
any term the contract.
7. The settled law, reiterated in a number of judgements of this
Hon’ble Court is that when a person bids for a property or being
put on the market by the Government on terms that are made
C public, the terms and conditions on which the property is bid for
an acquired cannot be altered much less challenged after the
contract was entered into.
8. Finally, if any term of a contract is found to be illegal, then the
contract has to be unravelled in a manner so that there is restitution
D to both parties. A person who is acquired property belonging to the
Government cannot renege on one element of the contract and
walk away specially where the element is so important being a
part of the consideration for the acquisition of the property.
9. Even in the matter of “unfairness” and its evaluation, the orders
E made by this Hon’ble Court , it is respectfully submitted, are based
on a deeply flawed premise that institutions such as the Applicant
are on par with banks and should charge interest rates comparable
to the base rates charged by the banks. The rates on which interest
has now been directed to be charged are far below the rates
F charged by nationalised banks even in the present times for giving
loans to builders. For example the Bank of Baroda charges 13.2%
interest and in certain transactions the Canara Bank has charged
interest at 16.05 % even in relation to loans granted in 2020.
10. The Applicant has been charging interest at 11% on the
G premium of the land and this is computed on 16 half yearly
instalments. The notion of compound interest is based on an
understanding that, for purposes of interest, the instalments will
be paid in the duration. Thus an interest rate, which requires
compounding quarterly, is charged on the premise that every
quarter the sum in question could be paid and if it is not paid, it
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 223
[UDAY UMESH LALIT, CJI]
would be added to the principal for purposes of computing interest A
for the next quarter and so on. If the amount in which interest has
been 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 long B
lead time for payment of the premium of the land is on terms of
payment of interest at 11%. Any person bidding for the property
would take into account the interest chargeable while computing
the commercial worth and value of the acquisition. It bears
emphasis that the builders will acquire these lands for commercial
projects and not for building their own homes. C
12. A builder who acquires property from the Applicant does so
on the commercial terms which are made public before the bids
are awarded. The builder takes the commercial risk of the
development of the property and gets to keep the entire profit
made in the project. The Applicant has no upside if the builder D
earns greater returns than what were contemplated at the time
when the property was sold. Equally, the purpose of selling these
properties to private builders is to de-risk government and
government agencies and allow the development by private capital
and one very important aspect of that is that the risks of the project E
are taken by private promoters.
13. The result of the orders made by this Hon’ble Court, it is
respectfully submitted, has fully passed on the downside to the
Applicant without even examining the facts of individual cases.”
4. Similar submissions are advanced in IA No.108670 of 2020. F
5. In response to these applications Ace Group of Companies
has submitted:-
“…
3. A perusal of the Order and Judgment dated 10.6.2020 by this G
Hon’ble Court establishes that the said Order was passed granting
one time concession for the very survival of the real estate sector
owing to the precarious condition prevailing in the entire region of
Noida and Greater Noida area for last almost 12-15 years.
H
224 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 4. It is a matter of record that the overall dire precarious situation
in the region was caused due to the fact the Government authorities
breached rules by acquiring Land in violation of the established
rules and regulations leading to multifarious and prolonged litigations
at the behest of the farmers. Various environmental issues cropped
up during the construction period of the projects, leading to
B
prolonged stay in construction activities. All these factors resulted
in huge delays in completion of the projects within the scheduled
construction period. This also caused huge monitory loss, loss of
crucial development period and huge blocking of funds of the
developers. All these reasons badly jolted the entire real estate
C sector in the region.
Further, despite supporting over 250 other industries,
contributing almost 20% to GDP and being the largest employment
generator after agriculture, the real estate sector never received
any concession by the State authorities.
D 6. In this factual background, the Order and judgment dated
10.06.2020 was passed to serve the twin purposes i.e. to ensure
timely construction of projects and to ensure that the Authorities
also receive their dues in a timely manner, the Hon’ble Court
granted a onetime concession by reducing the rate of interest of
E all the allottees of all types of land w.e.f. 01.01.2010 with the rider
that in case of failure to pay the dues in time to the authorities,
the concession granted shall stand withdrawn. The aforesaid one
time concession has been granted by this Hon’ble Court uniformly
to all types of allottees and all the leaseholders of the Noida and
Greater Noida Authorities. It has specifically recorded in para 39
F of the said order, that,
It cannot be disputed that the rate of interest, on
which agreements were entered into, has gone down by
now. The present lending rate is much below and the RBI
has taken several steps to revive the economy. In such a
G scenario, it would never be possible to make payment of
interest at the rate fixed by authorities and also a penal
interest to be realized by concerned authorities. “
7. Therefore, the instant application seeking recall of the
orders dated 10.6.2020, 19.08.2020 and 25.08.2020 is ex facie
H bad in law and devoid of merits. Moreover, the Order and judgment
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 225
[UDAY UMESH LALIT, CJI]
dated 10.06.2020 passed by this Hon’ble Court was duly modified/ A
clarified on an identical and similar application filed by the Noida
and Greater Noida Authorities vide an Order dated 10.07.2020.
6. The order dated 10.07.2020 which has been referred to, was
to the following effect.
“I.A. Nos. 59415 of 2020 and 59400 of 2020. B
Considered the prayer made by Mr. Tushar Mehta, learned
Solicitor General of India, appearing for Greater Noida Authority
and Mr. Mukul Rohtagi, learned senior counsel, appearing for the
Noida Authority.
C
It was submitted that the order dated 09.06.2020 passed
with respect to 8% interest be made prospective. It was also
pointed out that the Government has specified the rate at the SBI
Lending Rate, to be paid. As per that, the dues to be paid comes
to 8.5%.
D
After hearing learned counsel for the parties, we are of
the opinion that SBI MCLR Rates to be applied uniformly to all
the lease holders. Their past dues as well as arrears to be worked
out accordingly. In case any adjustment is to be made, let the
adjustment be made accordingly and the current dues also to be
worked out at the SBI MCLR Rates. Future dues be also worked E
out at the SBI MCLR Rates, which may be fixed. Remaining
order is not modified. The only modification made is about the
rate of interest.
It is clarified that SBI MCLR rate to be applied with effect
from 1.1.2010 and previous dues to be paid as per the rate, as F
provided in the agreement.
The Noida and Greater Noida Authorities to work out the
dues within one month. 25% of the amount of the dues shall be
deposited within 3 months and the remaining amount within one
year from 31 today, failing which concessional rate shall stand G
withdrawn. The applications are accordingly disposed of.”
7. Similar assertions are made in the response filed on behalf of
the Prateek Buildtech (India) Pvt. Ltd. According to said company, it
was entitled to have the outstanding amounts adjusted in terms of the
orders issued by this Court. The details of the projects completed by the H
226 SUPREME COURT REPORTS [2022] 9 S.C.R.
A said company are referred to in the reply as under:
“m. That the Applicant Company, through its group companies has
been allotted the following plots for the development of group
housing projects as well as the progress of the Applicant on
the said projects:
B
C
D
E
F
Response has also been filed on behalf of Prateek Realtors (India)
Private Limited, a company under the same management, giving following
details with regard to its projects
G “m. That the Applicant Company, through its group companies has
been allotted the following plots for the development of group
housing projects as well as the progress of the Applicant on
the said projects:
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 227
[UDAY UMESH LALIT, CJI]
A
B
C
D
E
An amount of Rs.23.78 crores being outstanding on behalf of these
two group companies was tendered along with the representation dated
28.3.2020. However, there was no response on behalf of the Noida
Authority. F
8. In rejoinder, it is submitted on behalf of the Noida Authority as
under:-
(A) Prior to the filing of the instant applications, the authorities
were not able to fathom the extent of the financial loss that G
would accrue to them upon reduction of contractual rate of
interest. In the plots allotted to the Ace Group of Companies
by Greater Noida Authority alone, the financial loss would
be to the tune of Rs.55.41 crores.
H
228 SUPREME COURT REPORTS [2022] 9 S.C.R.
A (B) The financial loss to Greater Noida Authority in relation to
all the Group Housing Projects would exceed Rs.4,279/-
crores, while that to the Noida Authority would be more
than Rs.3,000 crores.
(C) The rate of interest for availing facility of deferred payment
B on instalment by the builders was in consonance with the
rate of interest that was been charged by the banks. The
rate of interest was disclosed in the brochure, in the allotment
letter and in the consequential lease deed. Said rate was
acted upon by the parties with open eyes.
C (D) There was no material for reduction in the contractual rate
of interest except what was stated by Ace Group of
Companies when the application preferred by it came to be
allowed by this Court.
(E) It was not disclosed by Ace Group of Companies that they
D were actually levying on their flat buyers interest at the
rate of 18 %.
9. This rejoinder reflects the stand on behalf of both the Authorities.
10. Appearing for Noida and Greater Noida Authorities, Mr. Harish
N. Salve, and Mr. Ravindra Kumar learned Senior Advocates have
E submitted inter alia:
(A) The point of initiation for order dated 10.06.2020 was a
note of the learned Court Receiver dated 22.5.2020 and by
very nature it was purely in the context of Amrapali Group
of Companies and had nothing to do with flat buyers from
F projects undertaken by builders other than Amrapali Group
of Companies.
(B) On 27.5.2020, an application preferred by Ace Group of
Companies being IA No.49139 of 2020 was listed before
the Court for the first time when this Court was pleased to
G issue notice. The matter was adjourned to 3.6.2020 when
following orders was passed by this Court:-
“…We have considered the application (I.A. No. 49139/
2020) with respect to the interest part. We have already
heard the other matter relating to interest and this application
H is heard and reserved with respect to interest part.”
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 229
[UDAY UMESH LALIT, CJI]
(C) In these circumstances, I.A. No.49139 of 2020 was taken A
up along with the matter pertaining to Amrapali Group of
Companies. There was hardly any discussion on the point
nor was any reply submitted on behalf of the Authorities to
the application preferred by Ace Group of Companies.
(D) An application preferred by Supertech Group of Companies B
being I.A. No.74824 of 2020 praying for similar relief was
dealt with by this Court in its order dated 13.8.2020 as under:-
“I.A. NO. 74824 of 2020
This application is permitted to be withdrawn with liberty
to avail appropriate remedy before the appropriate forum C
and not in this petition.
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 of D
2020 filed on behalf of one of the builders alleging non-
compliance of the orders passed by this Court with regard
to reduction of rate of interest were disposed of by this
Court as under:-
“Contempt Petitions (Civil) Nos. 525/2020, 526/2020 and E
527/2020
Heard.
In our view, no contempt is made out as no specific
directions were issued in the case of the contempt petitioners.
F
The contempt petitions are, therefore, closed giving liberty
to file appropriate proceedings available in law.”
(F) Subsequently, similar application preferred by some of the
interested builders were dealt with by this Court its order
dated 21.9.2020 as under: G
“V. In Re: RATE OF INTEREST
While dealing with the subject concerning rate of
interest to be realised on outstanding dues by NOIDA and
Greater NOIDA, this Court in its order dated 10.06.2020
had observed as under: H
230 SUPREME COURT REPORTS [2022] 9 S.C.R.
A “39. It cannot be disputed that the rate of interest, on which
agreements were entered into, has gone down by now. The
present lending rate is much below and the RBI has taken
several steps to revive the economy. In such a scenario, it
would never be possible to make payment of interest at the
rate fixed by authorities and also a penal interest to be realised
B
by concerned authorities. The home buyers are not able to
obtain fruits of the investment and are deprived of legal title
of the flats.
xxx
C 42. Considering the current state of real estate, the projects
are standstill, and in order to give impetus to such housing
projects and mainly considering plight of home buyers and as
appointed out by NOIDA and Greater NOIDA Authorities that
114 plots were allotted from 2005 onwards, most of projects
are incomplete; we direct that rate of interest on the
D understanding premium and other dues to be realized in all
such cases at the rate of 8% per annum and let the NOIDA
and Greater NOIDA Authorities do a restructuring of the
repayment schedule so that amount is paid and NOIDA and
Greater NOIDA Authorities are able to realize the same. As to
E reasonable 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 NOIDA Authorities shall also ensure that not only
instalments/money are deposited, but also all such projects are
completed within the stipulated time.”
F
Later, said order dated 10.06.2020 on the aforesaid issues
was clarified/modified by further orders dated 10.07.2020,
13.08.2020 and 25.08.2020.
It appears that large number of applications are getting
G preferred by builders/developers who are not connected with
Amrapali projects, seeking inter alia implementation or
clarification or praying for further benefits. Our experience on
last few occasions has been that these applications take up
considerable length of time, as a result of which the main matters
or the issues touching upon the completion of Amrapali projects
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 231
[UDAY UMESH LALIT, CJI]
get sidelined. We, therefore, direct that hereafter the Registry A
shall not entertain and list before the Bench dealing with Amrapali
projects, any application on the issue concerning rate of interest to
be charged on the outstanding dues to NOIDA/Greater NOIDA
and any other allied subjects from the Builders/Developers who
are not connected with Amrapali projects. All the Interlocutory
B
Applications by the Builders/Developers are therefore disposed
of without any orders but reserving the remedy to the concerned
applicants to take appropriate action as is open in law.”
(G) The Rate of interest payable by the concerned builders to
the Authority was one which had the genesis in the Allotment
Letters, Lease Deed and was thus to the knowledge of C
everyone. Consequently, amount of interest went into inputs
forming part of the price payable by the consumers. At no
stage, any of the builders was aggrieved by the rate of
interest.
(H) The well-established principle has been not to interfere with D
the terms of a commercial contract, to which there are
certain exceptions like the case dealt with by this Court in
Central Inland Water Transport Corporation Limited
and Another v. Brojo Nath Ganguly and Anr.1 where
the concerned Clause in the contract was found to be per E
se arbitrary. However, no such plea that the terms in the
contract were unconscionable was ever taken by anyone
nor was there any factual foundation in support of such
plea.
(I) The effect of the burden as a result of the relaxation in F
the rate of interest was to the tune of Rs.4,279/- crores
for Greater Noida Authority and Rs.3,266/- crores for Noida
Authority. These figures were never in contemplation when
the aforesaid orders dated 10.6.2020, 19.8.2020 and
25.8.2020 were passed by this Court.
G
11. Mr. Ranjit Kumar, learned Senior Advocate and Mr. Gaurav
Mitra, Advocate appearing on behalf of Prateek Group of Companies,
Mr. Navin R. Nath, learned Senior Advocate appearing for Ace Group
of Companies, Mr. Kapil Sibal, learned Senior Advocate appearing for
1
(1986) S SCC 156. H
232 SUPREME COURT REPORTS [2022] 9 S.C.R.
A Paramount Group of Companies and Mr. Abhishek Manu Singhvi, learned
Senior Advocate appearing for Ajnara Group of Companies have advanced
following submissions in reply:
(A) These applications are nothing but repetition of what was
argued on behalf of Authorities on 10.7.2020 and the prayers
B having been rejected, the only recourse possible was to file
a review petition and not recall application.
(B) Paragraph 38 of the order dated 10.6.2020 had noted
that large number of plots were allotted to various Group
Housing Societies and large number of these projects had
C not come up as a result of which the Authorities were
not able to realise their dues from such projects.
(C) Paragraph 40 of the said order referred to paragraph 71 of
the order dated 17.1.2019 which was to the following effect.
“72. In our opinion, if the real estate business has to
D survive in India, it has to be answerable to the public and has
necessarily to uphold the trust reposed in 35 builders/
promoters. They have been paid huge amounts not only by the
home buyers but also, they have to pay a huge amount for the
public land given to them on lease by Noida and Greater Noida
E Authorities for construction of houses. The land has been given
to them by the authorities on a concessional basis by making
payment of 10% amount at the time of allotment. The builders
have to be accountable to public/home buyers as well as the
authorities and bankers. It is a matter relating to housing needs
dealing with shelter place, such an activity is of the public
F importance as the real estate sector plays a pivotal role in the
fulfillment of needs of housing infrastructure.”
(D) Thereafter the learned counsel had left it to this Court as is
evident from paragraphs 41 and 42 of the order, which were
to the following effect:
G
“41. It was also argued by the learned senior counsel
that even if the builder may have factored the valuation of
price, including interest on the cost of the land, the lease
deed and the authorities will remain unaffected. A prayer
was made that the authorities may be given liberty to recover
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 233
[UDAY UMESH LALIT, CJI]
their amount of interest from the builder at the contractually A
agreed rate under the lease deed. It was lastly and rightly
pointed out that the Court can fix a reasonable rate of
interest. Considering the present scenario, we feel that the
aforesaid submission is justified.
42. Considering the current state of real estate, the B
projects are standstill, and in order to give impetus to such
housing projects and mainly considering plight of home
buyers and as pointed out by Noida and Greater Noida
Authorities that 114 plots were allotted from 2005 onwards,
most of projects are incomplete; we direct that rate of
interest on the outstanding premium and other dues to be C
realized in all such cases at the rate of 8% per annum and
let the Noida and Greater Noida Authorities do a
restructuring of the repayment schedule so that amount is
paid and Noida and Greater Noida Authorities are able to
realize the same. As to reasonable time frame, we would D
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 Noida Authorities shall
also ensure that not only instalments/money are deposited,
but also all such projects are completed within the stipulated
time.” E
(E) The jurisprudential basis with which all these directions were
issued, was right of shelter for every such similarly situated
flat buyer whose interest needed protection.
(F) Soon after the order passed on 10.7.2020, Contempt Petition F
filed on behalf of the Ace Group of Companies was dealt
with by this Court in its order dated 13.8.2020:
“Contempt Petition (C) Diary No.16757/2020 Issue notice.
Mr. Ravindra Kumar, learned counsel, appears and accepts
notice on behalf of NOIDA and Greater NOIDA. G
Let calculation mistakes be corrected and the order be
worked 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
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234 SUPREME COURT REPORTS [2022] 9 S.C.R.
A and neither the correct notices issued. As such, the time
which was fixed by this Court for payment is being consumed
by the NOIDA itself.
We direct the NOIDA to implement the order in pith and
substance and correct all such errors within seven days,
B otherwise the same will be viewed seriously and the
concerned officers/officials shall have to face the
consequence of noncompliance.
Let NOIDA and Greater NOIDA file affidavit of
compliance as well as the requisite documents, in the
C meantime.”
(G) In the subsequent application being Volume R-117 all the
submissions were advanced on behalf of the authorities but
no prayer was made for recall of the order dated 10.7.2020
(H) Affidavits in compliance of directions dated 13.8.2020 being
D Volume Nos.R-76 and R-77 were filed on behalf of the
Noida and Greater Noida Authorities on 18.8.2020. Said
affidavit contained details of calculation for a large number
of projects including the percentage of loss caused to the
Authorities as well as the fact that in certain instances the
E Authorities would be required to make refunds.
(I) In substance, the Authorities were requesting for recall of
orders after the matters were gone into by this Court at
least on three occasions.
12. To a query whether the benefit resulting out of the orders
F passed by this Court was passed on to the consumers, some of the learned
counsel have submitted that they were ready to pass on the benefit and
undertakings to that effect have been filed in this Court. Every learned
counsel has presented individual facts as to how much had been paid by
the concerned builders all through and what would be the notional impact
as a result of the orders passed by this Court.
G
13. We have considered the rival submissions and have also gone
through the written submissions filed on record.
14. In these proceedings we are principally concerned with the
plight of flat holders of Amrapali Group of Companies. In order to see
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 235
[UDAY UMESH LALIT, CJI]
that the projects do not remain stalled and the investment made by all A
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
B
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 C
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.
15. At that juncture, an application filed on behalf of ACE group D
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 E
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.
16. 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 F
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 G
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
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236 SUPREME COURT REPORTS [2022] 9 S.C.R.
A enough to consider any such plea advanced on behalf of ACE Group of
Companies.
17. 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
B 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
C running into more than Rs. 3000 – 4000 crores for Noida and Greater
Noida Authorities, would be in issue.
18. 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
D 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.
E 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.
19. In cases where contractual terms were sought to be invalidated
this court has repeatedly refrained from entering into such issues. In
F Jagdish Mandal vs. State of Orissa2 the conclusions arrived at by this
Court were as under:
“22. Judicial review of administrative action is intended to
prevent arbitrariness, irrationality, unreasonableness, bias and mala
fides. Its purpose is to check whether choice or decision is made
G “lawfully” and not to check whether choice or decision is “sound”.
When the power of judicial review is invoked in matters relating
to tenders or award of contracts, certain special features should
be borne in mind. A contract is a commercial transaction.
Evaluating tenders and awarding contracts are essentially
2
H (2007) 14 SCC 531
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 237
[UDAY UMESH LALIT, CJI]
commercial functions. Principles of equity and natural justice stay A
at a distance. If the decision relating to award of contract is bona
fide and is in public interest, courts will not, in exercise of power
of judicial review, interfere even if a procedural aberration or error
in assessment or prejudice to a tenderer, is made out. The power
of judicial review will not be permitted to be invoked to protect
B
private interest at the cost of public interest, or to decide contractual
disputes. The tenderer or contractor with a grievance can always
seek damages in a civil court. Attempts by unsuccessful tenderers
with imaginary grievances, wounded pride and business rivalry, to
make mountains out of molehills of some technical/procedural
violation or some prejudice to self, and persuade courts to interfere C
by exercising power of judicial review, should be resisted. Such
interferences, either interim or final, may hold up public works for
years, or delay relief and succour to thousands and millions and
may increase the project cost manifold. Therefore, a court before
interfering in tender or contractual matters in exercise of power
D
of judicial review, should pose to itself the following questions:
(i) Whether the process adopted or decision made by the
authority is mala fide or intended to favour someone;
OR
Whether the process adopted or decision made is so E
arbitrary and irrational that the court can say: “the decision is
such that no responsible authority acting reasonably and in
accordance with relevant law could have reached”;
(ii) Whether public interest is affected.
F
If the answers are in the negative, there should be no interference
under Article 226. Cases involving blacklisting or imposition of
penal consequences on a tenderer/contractor or distribution of
State largesse (allotment of sites/shops, grant of licences,
dealerships and franchises) stand on a different footing as they
may require a higher degree of fairness in action.” G
20. 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
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238 SUPREME COURT REPORTS [2022] 9 S.C.R.
A 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.
B 21. 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.
C
22. The objections that the proper jurisdiction to be exercised would
be jurisdiction in review, according to our considered view, is purely
technical. The matter was dealt with by the Bench dealing with questions
relating to Amrapali Group of Companies. The circumstances delineated
also show that a completely different matter came to be dealt with by
D the Bench principally concerned with matters of Amrapali Group of
Company. No adequate notice was given to the concerned Authorities
and the exact impact of the decisions was also not made known to the
Court when these orders were passed. We therefore have no hesitation
in rejecting all these technical submissions.
E 23. 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.
24. 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
F 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.
G Ankit Gyan IAs disposed of.
(Assisted by : Rahul Rathi, LCRA)
H
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