NOIDA Not Authorized To Charge Lease Rent Till Possession Handed Over: Allahabad High Court Reiterates

Relying on various judgments of itself and the Delhi High Court, the Allahabad High Court has reiterated that the New Okhla Development Authority (NOIDA) cannot charge lease rent for the property of which possession has not been given to the lessee.In Allure Developers Private Limited Vs. State Of U P. And 3 Others, the Allahabad High Court had held that the petitioner therein be granted the benefit of zero period and no lease rent shall be payable for the plot of land of which possession had not been transferred at the time of allotment. The same was reiterated in M/S Rudra Buildwell Projects Pvt. Ltd. Vs. State of U.P. & Others. In Parmod Kumar & Anr. vs Lt. Governor of Delhi & Ors., the Delhi High Court held that “The petitioner cannot, therefore, be subjected to any liability in respect of the said plot which is yet to be delivered to him, except to require him to pay the balance price, which he has already paid. The respondent cannot seek to charge ground rent for the plot when, as a matter of fact, the respondent was not in a position to deliver possession of the plot to the petitioner, and the possession has not yet been delivered to the petitioner.”Petitioner' predecessor in interest was allotted a land in Sector 94, Noida. Certain area was curtailed by the authority, premium was paid and the lease deed was executed. A correction deed was executed bifurcating the plot into 2, one of which was transferred to the petitioner by a transfer deed. Vide letter dated letter dated 23.8.2010, NOIDA demanded more than Rs. 7 crores towards Change in Constitution(CIC) of the board of management. The same was deposited by the petitioner. Thereafter, petitioner applied for additional FAR on which a demand of Rs. 1,27,25,37,000/- was raised against the petitioner in 2011. Rs. 15 crores was deposited, however, the application of the petitioner for additional FAR was rejected in 2023. Meanwhile, vide orders dated 02.11.2020 & 08.12.2020, NOIDA cancelled the allotment of the petitioner for non-payment of lease rent of Rs.1,68,370,018. Petitioner claimed the benefit of zero period as the possession certificate had not been issued in favour of the petitioner by NOIDA. The Revisional Authority set aside the order cancelling the lease but did not grant benefit of zero period and the levy of CIC charges. Accordingly, petitioner approached the High Court seeking refund of the CIC charges, restoration of the plot and quashing of demand of Rs. 168.3 crores. Justice Prakash Padia observed that condition no.3 of the lease between the predecessor in interest and NOIDA provided for separate execution of a sublease deed and for independently obtaining the possession certificate. It was observed that NOIDA had not given the possession certificate to the predecessor in interest, so there was no question of transfer of such possession to the petitioner directly from the predecessor in interest. Noting that NOIDA had not denied imposing condition no.3, the Court held that it could not be allowed to take two stands. “As already held by series of judgments of this Court, once the lawful possession of divided plots ie. plot No. 2A was not handed over either to M/s BPTP International Trade Centre Limited or the petitioner, the respondent development authority is not entitled to charge lease rent and the said period i.e. from the date of execution of sub-lease deed by M/s BPTP International Trade Centre Limited to the petitioner is worthy to be allowed, as zero period.”Regarding the CIC charges, the Court relied on an earlier division bench judgment of the Allahabad High Court in International Hospital Pvt. Ltd. Vs. State of U.P. and another where it was held that the same are inapplicable if there is mere change in shareholding and no change in the status of the company which retains its separate legal identity from its shareholding. Holding that the charges were levied illegally, the Court observed “The authority has not been able to provide any valid justification for illegally retaining a sum of Rs.7,38,21,900/-despite the levy of CIC having been declared illegal by two Division Benches of this Court. The action of the respondent-authority is not only both unfair and unreasonable but contemptuous in nature. The petitioner is not only entitled to refund of the entire principle amount of Rs.7,38,21,900/-, but the same shall also carry interest. It has been held in series of judgment that the rate at which illegal monies ought to be refunded shall be same as the rate charged by such entity. The petitioner is therefore, entitled to receive Rs.7,38,21,900/- interest 9% per annum.”Accordingly, the writ petition was allowed. Case Title: Vision Town Planners Private Limited v. State Of U.P. And 2 Others [WRIT – C No. - 26271 of 2025]Click Here To Read/Download Order

NOIDA Not Authorized To Charge Lease Rent Till Possession Handed Over: Allahabad High Court Reiterates

Upasna Agrawal

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