Allahabad High Court Orders YEIDA to Take Over and Complete Jaypee Projects on SDZ Land
In a significant ruling, the Allahabad High Court has directed the Yamuna Expressway Industrial Development Authority (YEIDA) to take control of and complete pending housing projects originally undertaken by Jaypee Associates Limited (JAL) within the Special Development Zone (SDZ). The court’s decision follows YEIDA’s 2020 cancellation of the land allotment due to JAL’s unpaid dues, leaving thousands of homebuyers in limbo.
Background of the Case
JAL had launched 12 housing projects, accommodating around 4,600 investors. An additional 13 projects were started by other developers on land sub-leased to them by JAL. However, due to financial difficulties and outstanding dues, YEIDA revoked JAL’s land allotment on February 12, 2020, citing non-compliance with contractual obligations. This led to an uncertain future for homebuyers who had invested in these developments.
Court’s Ruling and Directives
The ruling, delivered by Justices Manoj Kumar Gupta and Kshitij Shailendra on March 8, orders YEIDA to take over and ensure the completion of these projects as per the terms previously agreed upon between JAL and the homebuyers. The court has also provided certain directives aimed at expediting the completion process while protecting the interests of investors.
The projects affected within the SDZ include Jaypee Greens Bougainvilleas, Jaypee Greens Country Homes 6 & 11, Jaypee Greens Crescent Homes, Jaypee Greens Kove, Jaypee Greens Kassia, Jaypee Greens Buddh Circuit Studios, Jaypee Greens Krowns 1, 2, and 3, Jaypee Greens Sportsville, and Jaypee Greens Villa Expanza. As of now, none of these projects are fully complete.
To ensure efficiency, the court has set strict timelines, mandating YEIDA to finish housing projects that are at least 25% complete within six months, those 50% complete within 18 months, and those only 25% completed or less within 36 months.
Challenges for Homebuyers and Financial Considerations
Although the high court’s ruling provides relief to homebuyers, they may still have to approach the Supreme Court for clarity, given that JAL is currently undergoing insolvency proceedings before the National Company Law Tribunal (NCLT). The NCLT process may complicate the execution of the court order, particularly concerning financial liabilities and asset distribution.
YEIDA has been directed to establish a monitoring committee within four weeks to oversee project completion. This committee will include the principal secretary of housing and industrial development, the chairman of Uttar Pradesh Real Estate Regulatory Authority (UP RERA), the CEO of YEIDA or a designated nominee, and an authorized representative of the homebuyers.
Additionally, YEIDA must appoint a nodal officer to address outstanding payments and disputes. The court declared that any financial dues or penalties imposed on properties during the period between February 11, 2020, and the judgment date should be waived, allowing homebuyers to proceed without additional costs.
Future Implications and Homebuyers’ Reactions
Homebuyers have welcomed the high court’s intervention but remain concerned about certain financial aspects, particularly the ₹2,000 crore paid to JAL. There is uncertainty regarding whether these funds will be redirected toward project completion.
Sunil Sharma, vice president of the Jaypee Sports City Homebuyers Welfare Society, pointed out that the court has not clarified whether the NCLT-appointed representative or a state-appointed authority will advocate for homebuyers’ rights. Many investors had booked their homes between 2011 and 2012, with promised possession in 2014, making the delay of over a decade a pressing concern.
YEIDA’s original intent behind introducing the SDZ policy was to attract investment in sports, education, and healthcare sectors along the Yamuna Expressway. JAL was initially allotted 1,000 hectares in 2008 with plans to develop a sports-centric zone featuring the Formula One Buddh International Circuit. The company committed to paying ₹2,850 crore, including construction costs for the F1 circuit, but later defaulted on payments. This led to YEIDA’s eventual cancellation of JAL’s land allotment.
With the high court’s ruling, YEIDA now faces the challenge of mobilizing resources to complete the stalled projects, ensuring that homebuyers finally receive their long-awaited properties. However, financial and legal complications may still arise as stakeholders seek further clarification from the Supreme Court and NCLT. Meanwhile, homebuyers remain hopeful that the intervention will lead to a swift resolution, enabling them to secure possession of their homes after years of uncertainty.
