State Government Reverses Noida Authority’s Order, Wave Group’s Lease of Commercial Land Reinstated
In a significant development, the state government has overturned the Noida Authority’s previous order that canceled Wave Group’s lease of a whopping 1.08 lakh square meters of prime commercial land in the heart of the city. The move highlights the government’s intention to give the company a fair chance and emphasizes the economic benefits and investment boost to Noida by allowing the project to go ahead.
The land in question was originally allotted to Wave Mega City Centre Pvt Ltd in 2011 for its mixed land-use project in sectors 25A and 32. The state government, through an order dated August 25, reinstated Wave Group’s lease and introduced updated compliance requirements for the project.
Wave Group’s Plea and Government Intervention
The reversal of the lease cancellation order came after Wave Group approached the government with a revision plea against Noida Authority’s decision. Among their arguments, the company alleged procedural flaws in the lease cancellation process. They filed the plea under Section 413 of the Uttar Pradesh Urban Planning and Development Act, 1973, and Section 12 of the Industrial Area Development Act, 1976. A hearing on the matter took place on June 11 this year, following which the final order was passed.
Revised Terms and Settlement Policies introduced
As per the revised terms, Wave Group’s total dues of Rs 1,156 crore will be recalculated under the project settlement policy framework. To guide this process, a committee led by the Greater Noida Industrial Development Authority chairman has been appointed. The portion of the land whose lease was previously scrapped will not accrue any interest or penalties for the duration of the lease cancellation.
However, until Wave Group complies fully with the revised terms, the developer will be unable to create third-party rights on the land. This means that no construction or development can begin until all compliance requirements are met.
Wave Mega City Centre Project Status and Impacts on Noida’s Real Estate Developers
Wave Mega City Centre Pvt Ltd, a part of Wave Group, launched the Mega City Centre project in sectors 25A and 32 back in 2011-12. The project aimed to develop high street stores and the Amore residential society. However, despite an initial expected delivery date in 2014, several residential towers and commercial spaces remain incomplete, with only a few finished shops in Sector 32.
These delays and financial constraints severely impacted many developers in Noida, causing it to have the largest number of halted projects in the country, along with Greater Noida. In response to these challenges, the state government implemented the project settlement policy on December 15, 2016.
Wave Mega City Centre sought to retain only 1.57 lakh sqm of the original allotment by applying under the project settlement policy. The company had paid a significant amount of Rs 1,469 crore, which included standard interest of Rs 650 crore and penal interest of Rs 109 crore. As per the policy, Rs 106 crore out of the deposited amount was forfeited, leaving a balance for further allocation. Noida subsequently allocated an additional 56,400 sqm at the original allotment rate and offered 1 lakh sqm for purchase at a revised rate.
Elaborating on the financial challenges faced by Wave Group, their concerns about high interest charges were raised during subsequent proceedings. After discussions, on December 3, 2020, the Noida Authority board made the decision to credit the principal paid by the developer toward premium payments while leaving the interest dues untouched.
Following this decision, Noida issued a final notice to Wave Group, demanding payment of around Rs 2,500 crore for the 1.08 lakh sqm of land. Despite the company’s claims of active financial obligations and continuous payments amidst challenging market conditions, Noida Authority passed a cancellation order and reclaimed the land due to non-payment. It is worth noting that Wave Group issued a warning that this cancellation would ultimately harm the retail unit buyers who had invested in the project.
Conclusion
With its recent decision to reinstate Wave Group’s lease and impose updated compliance requirements, the state government is signaling its commitment to revitalizing the real estate sector in Noida. This development will help in driving economic growth, attracting investment, and providing opportunities for continued residential and commercial development in the city. Although challenges lie ahead for Wave Group to meet the revised terms, it is anticipated that the resolution of the lease cancellation will pave the way for the completion of the long-awaited Mega City Centre project.
