A year after the resolution plan for three projects by the developer Earth Infrastructure—Earth Copia (renamed Ananta), Earth Sapphire Court and Earth Techone—was approved, home buyers are still to get their flats because of objections by Greater Noida and Gurugram city development authorities.
While Earth Copia/Ananta is in Sector 112 of Gurugram, Earth Sapphire Court is in Knowledge Park 5 in Greater Noida, and Earth Techone is located on the Yamuna Expressway Tech Zone in Greater Noida. These projects were launched between 2010 and 2012 but not a single unit has been delivered.
Gurugram-based developer Alpha Corp, the successful resolution applicant, had organised a Bhumi Pujan ceremony for the Earth Copia project in 2021. Once completed, the project will have a total of 554 units including 2 BHK, 3 BHK + Servant, and 4 BHK + domestic help units.
The promoters could not be reached as they are behind bars.
The Techone project was envisaged as a mixed-used development and consists of studio apartments, office spaces, and retail spaces. It will have a total of 2869 units. On the other hand, Sapphire Court consists of office spaces and retail outlets.
Earth Copia has completed about 30-40 percent of construction, Sapphire Court (total 1285 units) is about 60-70 percent done, while Earth Techone is only 20-30 percent complete. The three projects will have a saleable area of around 4.5 million square feet.
Problems plaguing the project
In June 2021, the National Company Law Tribunal (NCLT) approved the resolution plan submitted by Alpha Corp Development Pvt Ltd as the resolution applicant for the three projects.
Buyers allege that since then, there has been no headway while the authorities in Gurugram and Greater Noida have raised objections to the projects.
Alpha Corp had taken an interest waiver of Rs 2.66 crore (Greater Noida), Rs 2.23 crore (Yamuna Authority) and Rs 3.12 crore on the Techone project and Rs 22.64 crore on the Earth Copia project. Explaining the waivers, Alpha Corp said, “As per rules of Insolvency and Bankruptcy Code, a new developer who has been awarded a project by NCLT, is not liable to pay interest on money the previous developer owed to regulatory and development authorities.”
“Alpha Corp has no intention of completing the project. This is very clear. We had conducted a meeting on Sunday, May 8, 2022 as well. Officials of Alpha Corp neither come to homebuyers’ meetings nor do they update us about project-related developments,” alleged advocate Ankur Saraswat. His father, who was a government employee, had invested in Earth Titanium, Earth Sapphire and Earth Techone.
Saraswat also alleged that Alpha Corp is making no efforts to get the required permissions as it has not been following up on the matter with the authorities.
"GNIDA made an application to NCLT first and then they moved to NCLAT for relief (Application no. 629/2022). On June 1, the NCLAT granted relief to GNIDA saying that the appellant shall not be obliged to transfer the leasehold land in favour of the Successful Resolution Applicant. Now, the homebuyers are back to square one," said Saraswat.
Alpha Corp blames authorities
Santosh Agarwal, CFO and Executive Director, Alpha Corp, told Moneycontrol that the Greater Noida Industrial Development Authority (GNIDA) was adopting delaying tactics.
“After the NCLT order, we applied to various authorities for approval. Of these, the GNIDA has filed a review of the order in the NCLT itself. The case is pending before the NCLT. The authority had to submit its claim before the resolution professional, which they did not do and now they want payment of their dues. The GNIDA has asked the tribunal not to pass a final order until a direction from the state government or from the Supreme Court to the GNIDA. The intention behind the review is to delay the process and not approve the project,” said Agarwal.
A mail sent to GNIDA remains unanswered. This article will be updated once Moneycontrol receives responses to its queries.
The Greater Noida Authority is owed between Rs 20-25 crore for both projects. Agarwal said that once Alpha Corp gets all the approvals and clearances, it will start construction (of Sapphire and Techone), which will be completed in two to four years.
Alpha Corp claims it has started the licence renewal process for Copia and expects to receive the same by the middle of this year.
“As far as Earth Copia is concerned, the Gurugram authorities have sent it to their advocate general for his opinion. We are also moving ahead with other authorities. The government is looking into how to deal with other dues and has constituted a committee under the chairmanship of Rajan Gupta (the chairman of the Haryana Real Estate Regulatory Authority) to deal with it. We are hoping that a resolution will come out in one-and-a-half months,” said Agarwal.
Alpha Corp will be investing around Rs 50-100 crore to start construction on the three projects and Rs 500 to 600 crore in total to complete them. Agarwal said that he expects a topline of close to Rs 700 to Rs 800 crore from the sale of the remaining flats after delivery to existing buyers.
Challenges facing the projects
The issue is not only limited to the payment of dues to the authorities.
Noida Authority has moved the Supreme Court challenging an NCLT order where the tribunal had assigned operational creditor status to the authority, while buyers get financial creditor status, per the Insolvency and Bankruptcy Code. While the Supreme Court upheld the NCLT order, the authority has filed a review petition against the order. A final verdict in the case is awaited and will have a bearing on the Sapphire Court and Techone projects.
Earth Infrastructure lured buyers into these projects promising them a fixed assured return till possession. While it paid investors a fixed monthly return till 2015, it did not make significant advancements on the construction front. Once it stopped paying the investors, they grew suspicious and that led to the exposure of alleged wrongdoings by the directors of the developer.
According to a Noida Police official who spoke on the condition of anonymity, the directors of Earth Infrastructure floated several shell companies to divert funds meant for the projects. The company owners transferred the money to over 100 front companies run in the names of their wives and relatives, police alleged.
While those involved in the fraud have been arrested for their unlawful acts, homebuyers have been left in the lurch, and are facing a wait that appears eternal.
According to the company tracking website Zauba Corp, Earth Infrastructure was founded on June 19, 2007. Between 2009 and 2011, the company came out with around eight real estate projects across Noida, Greater Noida and Gurugram. However, none of the projects was completed for reasons unknown.
On the other hand, Alpha Corp had so far completed many projects that include GurgaonOne in Sector 22, GurgaonOne in Sector 84, MeerutOne in Meerut, and Alpha International City in Karnal, Alpha International City in Fatehabad, and Alpha International City in Amritsar. It is also developing a Model Industrial Park in Amritsar.Timeline: