The Noida Authority has issued notices to builders of 11 projects because audit of their accounts has revealed fund diversion to the tune of Rs 4,000 cr meant essentially for completing the residential flats booked by thousands of homebuyers in the city.
The move follows the recently concluded audit of 14 projects by international firm M/s Currie & Brown. Though Authority chairman & CEO Alok Tandon refused to quantify the amount diverted by each of the builders, he said on Sunday that “the range of diversion of funds varied from Rs 150 to Rs 500 cr in each separate case.”
The audit had found a difference between income and expenditure in the builders’ accounts in the residential projects audited by the firm, Tandon said. The number of housing units in the 14 audited projects is nearly 36,000. Most of these projects are in various stages of completion with the homebuyers running from pillar-to-post to get possession of their long-delayed homes. “We have found a difference in what some developers have collected from the homebuyers and what has been spent on completing the group housing projects,” Tandon said. “Notices have been issued to builders of 11 projects and they have been asked to explain this difference of what they have earned and what they have spent on the ground for each project within the next seven days,” he said.
“The developers have no choice but to bring these projects back on track and deliver them to homebuyers,” he said. “We have also informed the Real Estate Regulatory Authority (Rera) about the audit for further action,” he added.
Tandon also said the developers had failed to clear the land dues owed to the Authority. These builders have outstanding dues of more than Rs 7,000 cr. “In the first phase of the audit, we took up the big defaulters who have failed to clear their land dues and also failed to deliver the housing units. In the second phase, which is likely to commence soon, we will audit 37 projects involving nearly 37,000 housing units in Noida,” he said.
Pankaj Bajaj, president, Confederation of Real Estate Developers Association of India, NCR, said the builders will have to bring the money back as third party rights have been created. It is their social responsibility.
“Either the money will have to be refunded to the homebuyers or projects will have to be completed as money has been taken in advance from the homebuyers. The customers’ rights have to be protected under any circumstances. If money has been diverted for use other than what it was collected for, then law should take its course,” he said.