NOIDA: The Allahabad High Court has quashed a state government order withdrawing a rental waiver granted to a real estate agent under the ‘zero period’ policy.
In an order dated October 8, Justice Subhash Vidyarthi of the Lucknow bench set aside the January 9, 2024 directive of the Commissioner of Infrastructure and Industrial Development (IIDC). The government order had revoked the lease rental exemption earlier granted to Express Builders and Promoters.
The latest judgment closely follows two earlier judgments in which the Supreme Court had set aside the same January 2024 order in cases involving Great Value Projects India (April 23) and Pan Realtors Pvt Ltd (May 29). Because the issues at issue in the present case were identical to those already settled, the court found that there was no reason to take a different position.
It granted the same relief to Express Builders and asked Noida Authority to recalculate the developer’s dues as it stood before the impugned order and address any other outstanding grievances.
The dispute concerns the ‘zero period’ policy, which allows developers to obtain relief from rental rents during periods when construction is halted due to circumstances beyond their control, such as court-ordered suspensions or regulatory delays. In mid-2023, the state revision authority had granted such waivers to Great Value Projects, Pan Realtors and Express Builders, citing lengthy delays not of their own making.
However, in January last year, the IIDC partially revised and amended its own decisions, repealing the leasehold exemption while retaining other exemptions. The review cited a direct contradiction to the Noida Authority’s policy, which prohibits any waiver of rental rent. The developers challenged the revocation in the Supreme Court, arguing that the IIDC had no legal authority to review and reverse its own decisions on its own initiative.
Their arguments found support in an April ruling by Justice Pankaj Bhatia, who noted that Section 41 of the UP Urban Planning and Development Act does not give the revision authority the power to review previous orders. The court ruled that the government’s order was “legally untenable” and ordered the recalculation of dues for the affected developers based on the original exemption.
The Authority – concerned about the financial consequences of these waivers – moved to challenge the Supreme Court’s decisions. At a board meeting on June 14, officials decided to appeal or seek review in higher courts, warning that “allowing rental waivers could have a significant impact on the Authority’s revenue base.”
The Authority continued to maintain that its policy prohibited such waivers in all circumstances and advocated policy uniformity to protect its finances. However, the court ruled in favor of Express Builders.
With Express Builders, three major developers have now received relief from the withdrawal of rent exemptions.
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