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Construction : Web Exclusive | May 2014 | Source : Construction Update

The Great Fall

The Allahabad High Court’s order to demolish Supertech’s two towers – Apex and Ceyane – in its Emerald Court in Noida sends shock waves in the real estate sector.

By MONISHA RAO

Noida-based Supertech’s growth trajectory, which seemed to be on a new high, dipped last month, when the Allahabad High Court ordered demolition of its two under-construction towers within the next four months, leaving about 600 investors in a lurch. This case has brought to light some irregularities in the norms that are being followed in the real estate sector.

Problem area

With an investment close to Rs 100 core, Supertech initiated the construction of two towers – Apex and Ceyane – as part of its 14-acre Emerald Court in Noida. These two projects are in addition to the 15 fully occupied towers in the Emerald Court. However recently, the Resident Welfare Association (RWA) of Emerald Court dragged Supertech to the Allahabad High Court for the new upcoming towers. RWA alleged that the two towers had been in complete violation of the UP Apartment Act. So what went wrong? Sanjay Sharma, Managing Director, QuBREX, Gurgaon-based real estate consulting firm answers, “The Uttar Pradesh Government had sanctioned an increase in Floor Area Ratio (FAR) for Emerald Court following which, the developer can build additional floors to the existing towers or construct more towers. However, to begin construction, the developer should attain 60 per cent consent from the existing residents, which Supertech eventually failed to do.”

The towers, which are currently sealed, were granted permission to raise the number of stories first from 11 to 24 to finally 40 without maintaining the mandatory distance of 16 m from other blocks. This approval by the Noida Authority highlight’s its failure in implementing the existing Act. “Although the decision to demolish the towers has not been taken back, the third party rights where the builder had already sold apartments to buyers have been considered. The result: The court has slapped a 14 per cent rate of interest on the amount, which was earlier paid by the builder,” informs Sharma. “The developer should be aware of the existing Acts in the sector as well as ensure that these are implemented.”

On Supertech’s part, it reportedly says that no norms have been violated and the construction commenced only after attaining clearances from the Noida Authority.

What’s next!

This first-of-a-kind court decision is expected to enable the government see through the loop holes not only in this case but also such violation of FAR in cities that face land scarcity. Moreover, it has brought to the fore some fundamental and commonly observed problems in the real estate sector. By rejecting Supertech’s third party plea and the fact that the construction has reached an advanced stage, the Allahabad High Court has set a strong example against such illegal constructions.

Against this backdrop, the company has recently filed a petition in the Supreme Court against the Allahabad High Court's order to demolish two residential towers.
 
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