How the dream of “Affordable Homes” turned into a nightmare!

Parsvnath Developers Sentenced, Leaving Homebuyers in Limbo

The National Consumer Disputes Redressal Commission's (NCDRC) decision to imprison Parsvnath Developers' CEO and directors for failing to comply with a 2019 refund order initially offered a glimmer of hope to aggrieved homebuyers. These families, caught in a protracted struggle since 2007, anticipated a resolution. The court mandated refunds with 12% annual interest from the payment date, totaling ₹1.55 crore per buyer. However, Parsvnath Developers appealed to the Supreme Court, which, while upholding the NCDRC's ruling, granted a three-month extension starting February 9th.

The Unfulfilled Promise of Parsvnath Privilege

Buyers booked apartments in Parsvnath Privilege, a residential complex near the upcoming Jewar International Airport, between 2007 and 2009, investing between ₹50 and ₹65 lakh. Twelve years later, only three of the planned 20 residential towers have been constructed. A mere 126 of the promised 958 flats are ready for possession, leaving the fate of the remaining 832 units uncertain, with the company offering no updates.

The Pervasive Issue of Pending Apartments

The Greater Noida Industrial Development Authority (GNIDA) has identified over 100 defaulting builders, collectively owing approximately ₹6,000 crore. This list includes prominent names like Amrapali (owing over ₹2,700 crore), Unitech (around ₹410 crore), and Parsvnath (about ₹113 crore), along with other large developers such as Panchsheel and Supertech. A 2019 Indian Express report revealed that 1.06 lakh apartments in Noida and Greater Noida remain undelivered, with approximately 1.03 lakh units in Greater Noida lacking completion certificates.

Jaypee Infratech and the Growing Frustration of Homebuyers

Jaypee Infratech Limited (JIL) faces significant backlogs, yet to deliver around 17,756 of the 30,000 apartments in its Wish Town project. Recently, distressed homebuyers protested at Jantar Mantar, urging Prime Minister Narendra Modi's intervention to resolve the JIL situation. Real estate agents suggest that many builders lack the necessary capital to complete their projects.

JLL India Report Sheds Light on Delayed Projects

A January 2020 report by JLL India highlighted the extent of delayed residential units across major Indian cities, including Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, and Pune. A total of 2,18,257 units, worth ₹1,55,803 crore, faced construction delays. Delhi-NCR accounted for the highest number of insolvent companies or defaulters, representing about 70% by volume and 55% by value.

Parsvnath's Financial Struggles and Homebuyer Concerns

Parsvnath has been reporting financial difficulties since 2016-17. Homebuyers express skepticism about the company's commitment to fulfilling the NCDRC's compensation order. Rakesh Dhir, a retired army officer and one of the petitioners, shared his plight, "All my savings have been finished, and the company has to pay the compensation till 9 May." He continues to pay EMIs for an apartment he should have received a decade ago. Even those who have taken possession face challenges. Twelve families who moved into Parsvnath towers a year ago received unfinished apartments, forcing them to bear the cost of tiling and an additional ₹10 lakh for security and maintenance.

NCDRC's Unprecedented Order and Parsvnath's Response

Sukham Ahluwalia, a homebuyer representative at NCDRC, described the order against Parsvnath as unprecedented. Despite the commission's attempts at a settlement, the company's refusal to cooperate led to the stringent order. Parsvnath's lawyer, Manoranjan Sharma, maintained that the three-month deadline had not yet expired and that the matter of the remaining apartments was not under the Supreme Court’s consideration, assuring that and emphasized that the company’s goal was to deliver compensation within the prescribed timeframe. Despite this, Parsvnath's compliance with the Supreme Court-backed compensation order seems inevitable.

Market Recovery and Lingering Concerns

A JLL report indicates a 90% recovery in home sales in seven major cities, including Delhi-NCR, during the first quarter of 2021, compared to pre-COVID levels. While Mumbai leads with the highest sales figures (23%), Delhi-NCR accounts for 21%. However, these figures are subject to change in the second quarter. Samantak Das, chief economist and head of research at JLL, views this growth as a positive sign of renewed buyer confidence. However, the underlying issues of over-investment, land acquisition practices, and liquidity crunches continue to plague the Greater Noida market, necessitating perhaps a government-led intervention to bring stalled projects to fruition and prevent future occurrences.