Noida catches fund diversion, Haryana to include ongoing cases
Given how hundreds of real estate builders have got away with leaving projects incomplete, the crackdown on errant players by the Noida Authority could not have come a day too soon. On a rough reckoning there are at least three lakh apartments which are yet to be handed over to their owners and in some instances—Jaypee Infra for instance—the courts are in the process of deciding the future of the projects.
Which is why the Noida Authority has done well to commission an audit of the accounts—by international agency Currie & Brown—of some 51 defaulting developers in the area. In the first phase the accounts of some 14 builders will be scrutinised for further action. Without divulging specific details, the chairman of the authority has said about a dozen builder appears to have misappropriated amounts of anywhere between Rs 150- Rs500 crore each. While initiating disciplinary action against the errant builders will be the first step, there must also be a way to get the projects finished and the apartments handed over to the owners because it is unlikely the builders would be in a position to complete the projects. The authority could call for expressions of interest from reputed builders and hand over the projects leaving them with some incentives.
The Noida authority’s action has been taken even as various state governments across the country are setting up their respective RERAs—Real Estate Regulatory Authority—which will monitor all real projects in the state. Not all state RERAs have made equal progress. While some such as the one in Maharashtra has been quick off the mark, other have given in to the pleas of builders by allowing existing projects to not be registered with them. However, the Haryana government, which had initially permitted ongoing projects to be outside the ambit of RERA, in a violation of the law, has now decided these must register with the authority. The chairperson of the Gurugram bench of the Haryana Real Estate Regulatory Authority (H-Rera), K K Khandelwal, has cited a ruling in the Bombay High Court, to bring ongoing projects into the fold of RERA. If RERA is to be really effective, the respective state governments and executives manning the authorities must take a tough stand. In the case of Haryana, most projects would have remained outside the purview of RERA, had Khandelwal not put his foot down. In Uttar Pradesh, too, the RERA authorities must keep the pressure on.