SC Rejects NOIDA Extension Fees: Homebuyers Can’t Pay for Builder’s Delay

Case Title: The Authorised Representative for Granite Gate Properties Private Limited Rakesh Verma Versus M/s New Okhla Industrial Development Authority and Ors.

Case No.: Civil Appeal No. 3132 of 2026

Coram: Justice J.B. Pardiwala and Justice K. Vinod Chandran

Court Observation

“The homebuyers and the SRA (Successful Resolution Applicant) are sought to be penalised for past sins of the Corporate Debtor, which cannot be allowed, especially in the context of the authority imposing penalty, ie: the local authority being concerned essentially with the development of the area under its control.”

“The default charges, as imposed in the lease deed as also now introduced as per the new policy, specifies a percentage of the lease premium to penalise a defaulting developer. The intention is also to motivate completion within time lines and to act as a deterrent to avoid time lags. In the present case, the defaulting developer is out of the picture and the half baked project can be completed only if the Resolution Plan is put into operation and completed.”

“…in the peculiar facts and circumstances of the case, the penalty as imposed by the NOIDA on delay, now mulcted on the SRA and the homebuyers, cannot be so validly imposed. We set aside the directions to consider the time extension charges as CIRP costs and modify the impugned order to that extent.”

SC Rejects NOIDA Extension Fees: Homebuyers Can’t Pay for Builder’s Delay