Noida Authority Files Complaint Against Logix City Developers
The Noida Authority has recently lodged a complaint with the Economic Offences Wing (EOW) of the Delhi Police against the promoters of Logix City Developers. The complaint focuses on two crucial areas: unpaid dues and delays in delivering units at the Blossom Zest housing project in Sector 143, Noida.
Allegations of Misconduct
Logix City Developers was allotted a one-lakh-square-meter group housing plot in Noida back in 2011. However, the long-awaited units in the Blossom Zest housing project have yet to be handed over to buyers. In light of this, the Noida Authority has accused the company promoters, including Devendra Mohan Saxena, Shakti Nath, Vikram Nath, and Meena Nath, of creating third-party rights and misappropriating the funds collected from apartment sales.
Given these alleged irregularities, the Noida Authority noted that it has suffered significant financial losses as a result. Additionally, homebuyers have been left in distress because of the delays and mismanagement. This has prompted the CEO of the Noida Authority, Lokesh M, to emphasize the detrimental effect these actions have had not just on individual buyers, but also on the organization itself.
Insolvency Proceedings Initiated
To exacerbate matters, Blossom Zest has now entered insolvency proceedings at the National Company Law Tribunal (NCLT). Charged with accumulated dues amounting to a staggering Rs 6.66 billion, the project’s financial troubles reached a tipping point in 2022. Subsequently, Blossom County, another project by Logix City Developers in Sector 137, faced a similar fate, with dues totaling Rs 4.46 billion, sent to the NCLT in July 2023.
The Noida Authority hasn’t stopped there. It has also brought attention to discrepancies in asset valuations in two other projects currently undergoing insolvency proceedings. One such project is Lotus Zing by 3C Projects in Sector 168, which owes Rs 5.72 billion. The other project is Victory Crossroads by GSS Procon in Sector 143B, possessing dues amounting to Rs 330 million. Such inconsistencies prompted the Noida Authority to refer these matters to the Insolvency and Bankruptcy Board of India (IBBI) for further investigation.
Offering a Solution
Earlier this year, the Noida Authority extended a lifeline to developers experiencing stalled projects and subjected to insolvency proceedings. In a bid to help impacted parties, the Authority granted an option for these developers to withdraw from the NCLT resolution process. Instead, they were allowed to apply for a rehabilitation package introduced by the state government in December 2023.
Designed following recommendations from the Amitabh Kant committee, this rehabilitation package aims to support both residential projects and the housing components of commercial developments. With a focus on reviving stalled projects, the package offers potential relief to beleaguered developers and strives to mitigate hardships faced by homebuyers affected by these delays.
In conclusion, the Noida Authority’s complaint against Logix City Developers sheds light on the alleged misconduct in the form of unpaid dues, developer’s inaction, and alleged misappropriation of funds. The initiation of insolvency proceedings further emphasizes the gravity of the situation. However, the offering of a rehabilitation package provides a potential avenue for resolution, helping both developers and economically distressed homebuyers in Noida.
