The Authorised Representative For Granite Gate Properties Private Limited, Ms. Rakesh Verma vs M/S New Okhla Industrial Development Authority

2026 INSC 952
Reportable


IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION

Civil Appeal No. 3132 of 2026


The Authorised Representative for
Granite Gate Properties Private
Limited, Ms. Rakesh Verma
...Appellant(s)

Versus

M/s New Okhla Industrial
Development Authority and Ors.

...Respondent(s)
With

Civil Appeal No. 4207 of 2026

J U D G M E N T

K.VINOD CHANDRAN, J.

Yet another case highlighting the plight of home
buyers, who invest their hard-earned life savings for a roof
over their heads, on promises of living in style and luxury, in
grandiose high-rise buildings promised by the developer,
with exotic names, end up with the realization that it was all a
pipe dream.
Signature Not Verified
2. Here, we are faced with a developer who took on
Digitally signed by
CHANDRESH
Date: 2026.09.03
17:37:19 IST
Reason:
perpetual lease, at a high premium, two plots of land to put
Civil Appeal No.3132 of 2026 etc. Page 1 of 9

up highrise buildings; apartment complexes thereon. On
lease granted by the New Okhla Industrial Development
Authority (NOIDA), two projects were advertised; one in
Sector 100 and the other in Sector 110, called project ‘Lotus
Boulevard’ and project ‘Lotus Panache’ respectively.
3. The developer M/s Granite Gate Properties Private
Limited, ran into rough weather and was declared a
Corporate Debtor (CD). The Committee of Creditors (CoC)
was constituted of the home buyers who formed a Class of
Financial Creditors. A Resolution Plan was approved and is to
be put in motion through the Successful Resolution Applicant
(SRA).
4. Numerous IAs were filed before the adjudicating
authority, the NCLT, which was disposed of together with an
IA filed by the Resolution Professional (RP) to approve the
Resolution Plan of M/s SMV Agencies Private Limited, who
has now turned the SRA.
5. From amongst the various directions passed by NCLT,
an appeal was filed by the Authorized Representative for M/s
Granite Gate Properties Private Limited, essentially the home
Civil Appeal No.3132 of 2026 etc. Page 2 of 9

buyers (herein after referred to as AR), NOIDA too filed an
appeal.
6. In the appeal before us, the AR is concerned with the
order of the NCLAT which directed the time extension
charges with regard to both the lease deeds to be treated as
CIRP costs for the maximum period of three years provided
in the lease deed, for completion of the project. Insofar as
NOIDA is concerned, they assert that the time extension
charges are sought, not for three years alone, but for the
further period as introduced by office order dated
18.10.2019, which are also to be included as CIRP costs.

7. Mr. Dhruv Mehta, learned Senior Counsel appearing
for the AR submitted that during the CIRP, the home buyers
pooled their own resources as advance payment of the
balance sale consideration and carried out the construction
as a going concern under the CoC approved 'Pool and Build'
mechanism. However, NOIDA sealed three towers of the
Lotus Panache on 16.10.2024 till a decision is arrived on the
time extension charges. As far as time extension charges are
concerned it does not come under Section 5(13)(c) of the
Regulations since neither is it incurred by the Resolution
Civil Appeal No.3132 of 2026 etc. Page 3 of 9

Professional nor does it concern itself with the continuation of
the project.
8. The time extension charges were claimed by NOIDA as
dues payable by the Corporate Debtor for the first year from
December 2016 to December 2017, the second year from
December 2017 to December 2018 and in the third year from
December 2018 up to the insolvency commencement date on
10.01.2019. If at all, the time extension charges are to be paid
as CIRP costs only the remaining period from 10.01.2019
would stand included. The time extension charges in any
event are penal in nature and the developer who has caused
the default having ended up in a CIRP, the inclusion as CIRP
costs would be unjust and misconceived. The default was of
the developer and homebuyers cannot be mulcted with that
liability.
9. Mr. Rachit Mittal, learned counsel appearing for the
appellant-NOIDA in Civil Appeal No.4207 of 2026, on the
other hand asserted that without payment of the time
extension charges, there is no question of the project being
continued and hence it has to be included as CIRP costs. It is
also pointed out from the lease deed that the lease would be
Civil Appeal No.3132 of 2026 etc. Page 4 of 9

governed by the provisions of the UP Industrial Area
Development Act, 1976 as also by the Rules/Regulations
made or directions issued under this Act. NOIDA has come
out with an office order dated 18.10.2019, as per the
prevailing policy which, read with earlier office order dated
18.06.2015 has stipulated time extension, even beyond three
years upto the 10th year. As per the new policy 7, 8, 9 and 10
percentage respectively for the first four years and thereafter
at 1% of the total premium per year upto the 10th year and
cancellation after that, which too has to be included as CIRP
costs.

10. The SRA appears through Mr. Krishnendu Datta,
learned Senior Counsel who adopts the arguments of the AR
but points out, without prejudice, that in the resolution plan
contingent protection is capped at the overlap period
balance alone and the resolution plan itself records that
unless specifically adjudicated to form part of CIRP costs by
a binding judicial pronouncement any cost above Rs.3 crores
estimate shall first be recovered from the allottees of towers
17/18/19 of Lotus Panache as super area charge.
Civil Appeal No.3132 of 2026 etc. Page 5 of 9

11. We are hence concerned with the issue as to whether
the time extension charges are to be treated as CIRP costs.
We have looked at the lease agreement produced as
Annexure A1 in the appeal filed by NOIDA. The lease deed
indicates that the plot demised on lease has been acquired
under the Land Acquisition Act, 1894 for development by
NOIDA for the purpose of setting up an urban and industrial
township. Hence, the intention of NOIDA in entering into
such lease agreements is for development of urban and
industrial township. An overall development of the area
under its control to promote industrial and commercial
enterprises as also build homesteads in multi-storeyed
buildings is the purpose behind the acquisition and lease.
12. As the original lease deed existed, the stipulation for
time extension charges were at 4%, 5% and 6% in the first,
second and the third years of delay, respectively with only a
stipulation for cancellation of the lease itself after the three
year period is over. It would result in resumption of the
properties to the NOIDA. The underlying purpose of the lease
itself is to provide adequate infrastructure for the
development of industries and commercial establishments as
Civil Appeal No.3132 of 2026 etc. Page 6 of 9

also to provide housing by utilisation of lands, both as a
welfare measure and revenue generation to the local
authority. When the development fructifies, by virtue of the
taxes and duties imposed on the various activities as also
housing there is considerable generation of money, which is
pumped into development activities again. The authority
surely is involved in a commercial venture, but it cannot be
divorced from the essential purpose which every local
authority pursues and advances, i.e.: welfare measures
without a mere profit motive. Development brings within its
wake infrastructure challenges and these are to be met from
the taxes, cesses and duties levied and collected,
necessitating prudent financial and economic measures too.
13. In the present case, we see that the project was
commenced to provide housing, an essential part of
development. Lured by the opportunity, many persons had
invested their savings with the intention of obtaining a roof
over their heads. The project itself ran into rough weather
and at this point, the lessee/developer has been declared as
a Corporate Debtor. The homebuyers together have pooled
money to carry on the project during the CIRP period and
Civil Appeal No.3132 of 2026 etc. Page 7 of 9

now a SRA has come into the picture. The Resolution Plan of
the SRA has been accepted by the CoC consisting of the
homebuyers alone. It is to be noted that the project was to be
completed in the year 2016, and despite another decade
having passed, the homebuyers are still left in the lurch. The
essential purpose of development would fail if NOIDA brings
in a stipulation of payment of default charges.
14. 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.
15. In the peculiar circumstances of this case, we are of the
opinion that it is only proper that NOIDA waives the penalty
charges since it is neither the default of the homebuyers nor
the default of the SRA, which led to the delay. The
homebuyers and the SRA are sought to be penalised for past
sins of the Corporate Debtor, which cannot be allowed,
Civil Appeal No.3132 of 2026 etc. Page 8 of 9

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.
16. We hence, order that 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. NOIDA’s
appeal praying for time extension charges even beyond the
three years upto the 10th year also stands rejected.

17. Civil Appeal No.3132 of 2026 is allowed. Civil Appeal
No.4207 of 2026 is dismissed.
18. Pending application(s), if any, shall stand disposed of.

.......…….……………………. J.
(J. B. PARDIWALA)


....……….……………………. J.
(K. VINOD CHANDRAN)

NEW DELHI;
SEPTEMBER 03, 2026.
Civil Appeal No.3132 of 2026 etc. Page 9 of 9