The Noida Supertech Demolition Case, Explained

On September 1st 2021, the Supreme Court brought a seven-year-long matter to resolution by ordering the demolition of the twin 40-storey towers in Supertech Ltd’s Emerald Court Project in Noida.

The order was made with the conclusion that the towers violated building regulations and the requirement of mandatory distance between building blocks which affected the rights of apartment owners and their safety.

Not only will the towers be demolished within three months but the flat buyers in it will also be refunded the purchase amount with a 12% annual interest.

The case not only brings justice for homebuyers who had been duped by the builders but it is also a win for the community which had faced extended worries in tenancy, green planning, landscaping etc. For years due to their closeness to the towers. It also exemplifies the enduring issue of illegal constructions in Indian cities which have led to adverse consequences for governance, environment, health and well-being of cities.

Let’s look at the implications of the case in detail.

The Twin Towers

The project commenced in November 2004 when the New Okhla Industrial Development Authority (NOIDA) had allotted land to Supertech for the development of a group housing society called Emerald Court. By 2005, a building plan was sanctioned for 14 towers each with 10 floors.

But in 2006, a revised plan was sanctioned for 16 towers. The construction of two extra towers became the bone of contention because their sanction was obtained with blatant disregard of the building regulations and without consultation with the individual flat owners. It meant reduction in space for the common area, obliteration of earlier plans for a common garden, endangerment of fire safety norms and obstruction of view, fresh air and sunlight for the occupants.

What the Court Said

The Supreme Court upheld the 2014 order of the Allahabad High Court which had ordered the demolition. Here are the highlights of the judgement:

• Supertech’s actions are “palpably wrong” as the towers were constructed by encroaching upon the green common area of the society.
• Flat buyers suffered on account of evident collusion between the builders and city planners (the officials of NOIDA). They were denied access to information.
• Supertech will pay ₹2cr ($274,371) to the Resident Welfare Association (RWA) as compensation. The costs of demolition will also be borne by Supertech.

Nevertheless, Supertech has indicated its intention to file a review petition in the Court which means it could be a while before the demolition order comes to pass.

The repeated reference to shared culpability of the builders and the NOIDA city officials in the judgment is important. Not just because it brings to light the element of dodgy deal-making between Government agencies and private developers but also because the references go on and on… through mentions of “unholy nexus”, “nefarious complicity”, “dubious dealings” etc.

The court leaves no stone unturned in taking note of this collusion cited through multiple evidence which shows how the lack of effort by NOIDA authorities to ensure compliance of the builders helped them to violate the rights of homebuyers with utmost impunity.

The Cost of Realty

In case the order is followed through, the twin towers will be the country’s tallest buildings to be razed. Many have called it a “historic decision” and a much-needed wake-up call for corrupt actors in the real estate industry.

But if past experiences tell us anything, this is far from reality. The brazen violation of building bylaws, flouting of zoning norms and unauthorised constructions continue rampantly. Cities like Mumbai and Chennai continue to witness poorly-planned housing enclaves and violation of coastal regulations (Coastal Regulation Zone or CRZ rules) frequently.

FYI: In 2020, in a single district of Kerala called Maradu, over 4,000 CRZ violations were identified. Interestingly, only four houses were demolished.

Although cases of real estate frauds (followed by court ordered-demolitions) aren’t inexcusably unheard of, the involvement of public officials in the case makes it part of a bigger debate of the state’s obligation to ensure accountability and transparency in such matters. There is also a factor of status quo operation that comes into play when the illegality element in construction is uncovered years after the residents have taken occupation.

The Campa Cola Compound case is worth mentioning in this context where 35 illegally constructed floors came to light after 20 years of construction. Despite the irregularities, the court opted for a “regularisation” of the construction which was, suffice to say, a watered-down version of justice.

In fact, the corrupt builder-official nexus (that was brought to light in the Supertech case) plays such situations to its advantage by banking on the heightened public interest quotient involved in these situations. The need for restoration of urban planning guidelines, health codes, environmental laws, etc. Almost always comes second to the need for non-displacement of residents.

Case in point is the fact that despite the repeated public reprimand of the NOIDA officials in the Supertech case, the Supreme Court’s order fell short of punishing them for their actions. The announcement of Uttar Pradesh CM to take “strict action” against those officials who cleared the Supertech construction, however prudent, came a day late and a dollar short considering the seeming ambiguity in the announcement.

Not to forget, the task of overseeing the demolition activity has been assigned to NOIDA, the same organisation which was accused of collusion in its construction. Prime real estate irony in your face?!

Home is Where Justice Is Served

An 80-year-old member of the Emerald Court RWA recounts his “good fortune” of having seen through the case’s outcome during his lifetime. The decade-old delay in litigation processes and the unaccounted penalty of the corrupt public officials involved in the matter have diluted the joy of justice to some extent.

However, the verdict is sure to have a profound impact on future judicial matters entailing cases of fraudulent real estate operations. One of the arguments made by Supertech was that since the twin towers were part of a single building block, there was no need to maintain the required minimum distance between them.

To this, the court replied,

"When regulations are brazenly violated by developers, more often than not with the connivance of regulatory authorities, it strikes at the very core of urban planning."

Increase in unauthorised constructions across urban areas, especially in metropolitan cities, where land is priced at sky-high values puts a premium on dubious dealings between developers. As more and more people desperately seek a decent living space in urban centres, judicial pronouncements like these and stern punishment by the state for complicit officials are the only deterrents against controlling the spread of corruption in real estate.

(Originally published September 6th 2021 in transfin.in)