NOIDA: The Greater Noida Industrial Development Authority (GNIDA) has provisionally approved a proposal from Gaursons Group to mortgage part of its Gaur City Mall in Greater Noida West. This mortgage will serve as security for additional compensation dues owed to farmers, facilitating the execution of about 2,100 long-awaited sub-lease deeds in three housing projects by the developer. This decision aims to relieve residents who have taken possession of their flats but have not yet secured legal ownership.
Without these sub-lease deeds, residents are caught in legal uncertainty, despite having fully paid for and occupied their flats in the three projects.
In Gaursons Promoters’ plot in Sector 16C of Gaur City 2, out of 11,354 sanctioned units, only 9,655 sub-leases have been executed, leaving 1,699 pending. In Gaursons Realty’s project in Tech Zone-IV, Gaur Saundaryam, 2,068 units have been sanctioned and completed, with 1,881 sub-leases executed and 187 still pending. For Gaursons Hi-Tech Infrastructure’s project in Sector 4, Gaur City 1, of the sanctioned 11,742 units, 7,412 are complete, with only 7,209 registered, leaving 203 sub-leases pending.
This July, the GNIDA board reviewed the affidavit and documents supporting the proposal and granted its in-principle approval. CEO Saumya Srivastava stated that before any sub-leases are finalized, an independent valuation of the mall property will be conducted to ensure its security value adequately covers the disputed dues. Once the mortgage is formally executed, registrations will proceed.
The independent valuation will be carried out in the coming weeks, after which GNIDA is expected to approve the registration of approximately 2,100 flats across the three projects, potentially providing long-awaited ownership documents for many homebuyers.
This approval comes as a result of directives from the Allahabad High Court and an application from Gaursons Hi-Tech Infrastructure in July, aiming to mortgage up to the fifth floor of Gaur City Mall to settle outstanding liabilities related to additional farmer compensation. This issue has been under litigation between GNIDA and various Gaursons entities in the Allahabad High Court.
Claims concerning farmer compensations date back to 2018, with GNIDA demanding a total of Rs 315 crore from three Gaursons companies: Gaursons Hi-Tech Infrastructure (Rs 186 crore), Gaursons Promoters (Rs 110 crore), and Gaursons Realty (Rs 19 crore). These demands have been contested through separate writ petitions in the High Court.
In September 2024, the court issued interim orders on two petitions concerning Gaursons Hi-Tech Infrastructure and Gaursons Promoters. The court directed the companies to deposit the amount proposed by the developer for farmers’ compensation and secure the remaining 25% of the total compensation through a charge on immovable assets.
The High Court emphasized that in line with the government’s order for the rehabilitation of stalled projects, the developer would be able to leverage this policy to obtain completion certificates for the two projects. GNIDA was instructed to issue the completion certificates and allow the execution of tripartite sub-lease deeds favoring the allottees once the developer deposited the necessary amount.
In response, Gaursons deposited Rs 37 crore with GNIDA.
In a third petition involving Gaursons Realty filed in 2018, the High Court prevented GNIDA from taking any coercive action while the case is still pending. The developer has also deposited over Rs 9 crore with the Authority in this context.
Overall, the developer has deposited Rs 46 crore against the GNIDA’s demand of Rs 315 crore, while the remaining liability of Rs 269 crore is still pending court adjudication. To cover this, the companies have proposed to mortgage part of Gaur City Mall, specifically the leasable area up to the fifth floor, covering approximately 8.26 lakh square feet.
Importantly, over 95% of this mall space is already leased to commercial brands, and the company has confirmed that there are no third-party rights up to the fifth floor, making it available as security.
The mall was valued at Rs 1,276 crore by a registered valuer associated with the Insolvency and Bankruptcy Board of India. There is an existing charge of Rs 549 crore in favor of ICICI Bank. However, even after this encumbrance, the net unencumbered value stands at Rs 727 crore, nearly three times higher than the outstanding dues claimed by GNIDA.
Gaursons has also committed to refrain from selling, transferring, or creating any further third-party interests in the mortgaged portion until a final judgment is issued by the High Court.
