'Dirty Nexus' Of Allottee Builders, NOIDA's Officials: Allahabad High Court Orders CBI Probe Into Sports City Development Scam

The Allahabad High Court has directed CBI inquiry against the officials of New Okhla Development Authority and various allottees/ builder allegedly involved in a "scam" pertaining to the development of the Sporty City project in Noida.Ordering CBI inquiry and dismissing writ petitions filed by the allottees seeking various reliefs against NOIDA, the bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar observed “The action of the officials of the Noida Authority is highly questionable. In fact, the entire process of allotting Sports City to the petitioners and in the implementation of the Sports City, there were large scale bungling and a huge benefit was extended to the builders by the conniving officials of the Noida Authority. Shockingly, no action is taken against the builders and the conniving officials whose deeds have resulted in such a huge scam.”Dirty Nexus of Allottee Builders and NOIDA's officialsThe court in its order observed that the present matter is a study of "dirty nexus of the builders and the officials of the Noida Authority, where benefits after benefit were doled out to the builders, which was completely contrary to the Scheme, MOA and the implementation of the Sports City Scheme".The court said that several years had passed, and a number of officers in NOIDA would have come and gone, however surprisingly "no one blowed a whistle to the scam, or took any action against them", and did no efforts to recover the outstanding dues, and continued to extend undue benefits / favors to all the allotee / sublesses of the sports city, which was contrary to the interest of Noida Authority/Bank and the State Government. "What is most shocking is CAG unearthed the scam in 2021, but till date Noida Authority or the State Government have not lodged a single FIR against any of the officials, who were involved in the scam. No effort has been made to retrieve the losses, only a notice was sent in 24.07.2023 asking the builders to pay the outstanding premium. However, no action has been taken to recover the dues. This shows how influential the builder lobby is, and how well entrenched there are in the government system. The Court will not be wrong to say that the efforts are made to shield the corrupt officers and also the builders who had made huge amount of money by defrauding the State Government, Noida Authority. The court also realises that all investigations cannot be entrusted to the CBI. The courts should infact be reluctant in straight away referring the matters to CBI. However, in view of the possibility of involvement of high functionaries, a CBI enquiry is more desirable," the court observed. The court after referring to various judgments on when can a CBI probe be directed said that the court has no other recourse but to refer the investigation to the CBI. It said that the central agency would also investigate the role of all the persons involved in this scam. "The Central Bureau of Investigation (CBI) is hereby directed to lodge a complaint against all the conniving officials of the Noida Authority and the allottees/ builders involved in allotment, development, sanction of Sports City Project and any other person who may be involved in the present scam," the court directed. Factual BackgroundNOIDA launched a scheme for development of Sports City in Sector Nos. 78, 79, and 150 in 2011. The reserve price for the scheme was set at Rs.11,500/- per square metre with the intention for development of sports facilities over 70% of the entire land allotted to the developer by the developer. One of the conditions was that the developer had to infuse his funds to develop the same. Out of the 30% land on which construction was allowed, 28% was to be developed for Group Housing and 2% for commercial purpose. The entire project was for an area of 7,27,500 sqm., out of which 5,92,300 sqm. land was immediately allotted to the Consortium lead by M/s. Xanadu Estates Private Limited on 04.05.2011. An application to sub-divide the land was approved by NOIDA. A revised master plan was approved by NOIDA in 2014 which provided that development of sports facilities would be done only by two companies, whereas the development of residential and commercial plots would be done by several other sub-allotees. Due to various irregularities in the development of the Sports City, the Comptroller and Auditor General of India gave a report of a scam of around Rs. 9000 crores. Pursuant to this report, NOIDA ceased all operations in the Sports City and deferred to the State Government for taking decisions. Many allottees and sub-allotees approached the High Court seeking various relieves including deferred payments, grant of benefit of zero period. Some companies involved in developing the project have also been admitted in insolvency. FindingsThe Court observed that there were large illegalities committed by the Builders (sub-lessees) in connivance with the officials of NOIDA which resulted...

'Dirty Nexus' Of Allottee Builders, NOIDA's Officials: Allahabad High Court Orders CBI Probe Into Sports City Development Scam

Upasna Agrawal

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