The Yamuna Expressway Industrial Development Authority (YEIDA) has received a roadmap from Jaiprakash Associates Ltd (JAL) to clear the dues it has accrued on land allotted to it.
The development authority had on February 12, 2020 cancelled the allotment of 1,000 hectares over non-payment of lease rent, premium and interest, together amounting to Rs 900 crore.
JAL was allotted land to develop a sports city along the Yamuna expressway under the special development zone (SDZ) scheme in February 2009. There are both residential projects as well as the Buddh International Circuit and a cricket stadium in the SDZ.
After a long hiatus from international events since Formula 1’s Indian GP stopped in 2013, the circuit is preparing to host the MotoGP next year.
YEIDA officials said the developer has proposed to return some land against a part of the dues and for the 64.7% additional compensation to be paid to farmers. Jaypee currently has 44 hectares of unused land in the sports city. Officials said the developer has sought a reduction in interest rates and waiver of penal interest while assuring it will complete residential projects after selling its assets.
YEIDA CEO Arun Vir Singh said a presentation of the JAL proposal was made on Thursday evening. “Some of the issues related to the rate of interest raised by JAL have already been rejected in past board meetings. But we will once again take the developer’s proposal to the board for taking any final decision or making any amendments. The same will be apprised to the high court in the next hearing on November 9,” he said.
JAL had paid 20% upfront for the land and agreed to settle the dues in 20 instalments over 10 years. In January 2019, the terms of payment were tweaked and a fresh deadline of 2023 was set to settle the dues. But with little progress, on December 21, 2019, YEIDA’s board decided to cancel the allotment for sports city.
A week after the land allotment was cancelled in February 2020, JAL approached the Allahabad high court. It told the court substantial development work had happened on allotted land and it had paid Rs 2,379 crore, claiming the dues amounted to only Rs 360 crore on July 31, 2017. It cited a serious financial crisis being faced by the real estate sector as a reason for some of the defaults. The company termed the YEIDA’s order “arbitrary”, arguing it should have at best gone for a proportionate cancellation.
The HC subsequently directed YEIDA and JAL to maintain status quo while asking JAL to deposit Rs 100 with YEIDA within a month in two instalments of Rs 50 crore each. Because of the outbreak of the pandemic after that, no hearings took place for about a year. On February 2, 2021, JAL’s counsel informed the court it had deposited Rs 55 crore and was willing to pay the remaining amount within a week’s time.
However, no further payment was done, the YEIDA CEO said.
Instead, in November 2021, the company moved an application seeking amendment in the writ petition. The court also allowed it to file an application for restructuring and recomputing the dues payable to YEIDA.
In February this year, JAL told the court it would provide a roadmap for completing residential projects in the interest of homebuyers. At the last hearing in September, it placed before the HC a proposal explaining how it intends to revive residential projects. The HC directed JAL to deposit Rs 100 crore within a month with YEIDA as upfront money for considering its proposal. That money has been deposited.
