UP government seeks report about commercial plot allotment cancellation
The matter pertains to a 13-acre land parcel in Sector 94 and a three-acre land parcel in Sector 72 along the Aqua Line Metro
The Uttar Pradesh government has sought a report from the Noida authority about two commercial plot allotments that were cancelled on the ground that procedures were violated during the allotment process, people familiar with the matter said.
The matter pertains to a 13-acre land parcel in Sector 94 and a three-acre land parcel in Sector 72 along the Aqua Line Metro. The Noida authority began the allotment process on August 1, 2022. In February 2023, these plots were allotted to two real estate agencies which are subsidiaries of a major real estate developer. The developer began construction on the two land parcels, covering them with iron sheets, set up a sales office, and dug the foundations.
But on February 28, 2024, Roop Singh, an activist, filed a complaint with the Noida authority and the Uttar Pradesh government’s industrial department, alleging that the terms of brochures were violated during the allotment and there was no proper competition during the e-bidding process. The state government then directed the Noida authority’s additional chief executive officer (ACEO) to compile a report about the issue. Based on the complaint and ACEO’s report, the state government on May 10, 2024, sent a plot cancellation notice to the Noida authority. HT has seen the state government’s notice.
The notice, which was from the state’s infrastructure and industrial development department’s principal secretary, Anil Kumar Sagar, said that the Noida authority kept the reserve price of ₹827.35 crore for the Sector 94 plot and ₹176.48 crore for the Sector 72 plot.
“These plots were allotted at ₹5 lakh price higher than the reserve price by the Noida authority to two subsidiaries...It means there was no competition against the norms. The aim of the e-tender bidding is to allot a plot on a competitive bid which did not happen in these two allotment processes. And the rule of net worth, insolvency and turnover was not followed. Even after the Comptroller Auditor General of India had in August 2020 warned Noida authority to end ambiguity from tender conditions. But in this scheme launched in 2022 the Noida authority did not end the ambiguous terms of allotment,” said the cancellation letter sent to the Noida authority.
“It was a single tender bid that placed a bid of ₹5 lakh higher than the reserve prices, and single tender was considered on the ground that after two unsuccessful tenders, it was the only one who expressed intention to buy these plots. But these two companies were 100% subsidiaries...It means both the plots were sold out to only one company and that too without any competition against the mandate of e-bidding that has the aim to create competition so that government gets a better price,” said the letter.
The state government said that the developer has through a representation made a submission seeking the restoration of the two allotments.
“We have directed the Noida authority to submit a detailed report about these two commercial allotments. Once the detailed report is submitted the next course of action will be decided in this case. Let me first look into this case and then we will decide what to do ahead,” said Manoj Kumar Singh, Uttar Pradesh’s additional chief secretary, who is also the state’s infrastructure and industrial development commission and chairman of the Noida authority.
The Noida authority’s chief executive officer, Lokesh M, said, “We have sent the report to the state government.” He refused to talk further about the report. The state government has sought details of the turnover of the developer’s subsidiary companies, shares, and net worth of these companies, from the Noida authority, people familiar with the matter said. The state government has also asked why the terms were not streamlined following the CAG suggestions, they added.
When HT approached the developer, they said to send an email, and they would reply. The developer’s response was awaited till the time of going to print.
Meanwhile, the investors and property buyers are worried about their allotment since it was cancelled. “We bought one commercial space for ₹2 crore in the Sector 94 project and my relative bought the commercial space in the same project. We are in uncertainty and shock. Why did the Noida authority or the state government let the realtor sell this project if there were violations?” asked Preety Maheshwari, a homebuyer.