The Allahabad High Court recently delivered a significant judgment, quashing Noida Authority’s decision to seal several towers in the Lotus Zing project, located in Sector 168 of Noida. The court ruled that the sealing was executed without due process and without providing the developer, Three C Projects, an opportunity for a hearing, violating the principles of natural justice.
The decision, delivered by a division bench comprising Justices Manoj Kumar Gupta and Anish Kumar Gupta on December 3, came after Three C Projects argued that Noida Authority’s action was “mechanical and illegal.” The developer contended that it had not been served a prior notice and had not been given a chance to present its case before the sealing order was issued. Noida Authority had ordered the sealing of the towers in an October 16 communique, citing that the sanctioned plan’s validity had expired, and the developer had failed to obtain a completion certificate. The Authority also claimed that construction was continuing without necessary approvals. However, the developer clarified that the ongoing work was minor finishing and repair work and did not require an extension of the sanctioned plan.
Noida’s legal team defended the sealing, stating that the developer had outstanding dues. They argued that the sealing would only be lifted once the dues were paid and an application for extending the sanctioned plan’s validity was submitted. However, the court rejected this reasoning, asserting that financial arrears could not justify sealing without due process. The judgment emphasized that the developer was entitled to a hearing before any such action was taken. The court’s judgment declared the sealing order unsustainable in law, quashing the directive and instructing Noida Authority to issue a show-cause notice to Three C Projects. The developer will have two weeks to respond to the notice. Until a final decision is made, the developer is prohibited from making any structural changes or commencing new construction at the site.
In addition to the ruling, the Noida Authority had referred discrepancies in asset valuations for Lotus Zing to the Insolvency & Bankruptcy Board of India (IBBI) as part of insolvency proceedings. Lotus Zing has reportedly accrued dues amounting to Rs 572 crore. Despite the challenges, the developer continues to make progress, with 16 towers in the complex and ongoing work on several of them. The ruling has been hailed as a victory for procedural fairness and a reminder for authorities to adhere to legal norms while taking action against developers.
