Who's afraid of the Noida twin tower demolition?

Unless there are systemic changes on the ground, a big-bang demolition will do little to root out the culture of malpractices in the real estate sector

In terms of optics, you could scarcely beat Sunday's demolition of the Supertech twin towers in Noida in the National Capital Region. There was news television's breathless, blanket coverage of the event, counting down to the moment when the "waterfall implosion" made the buildings collapse upon themselves and send up a monster dust cloud billowing in the air. There was the stern, almost Biblical symbolism of the demolition itself — that terrible destruction befalls those who commit wrongful acts (in this case, corrupt builders who, in cahoots with corrupt local authorities, flouted the norms and constructed the towers). And there was the consequent public celebration of the spectacle, the gawking and the hooting — not unlike the way crowds would gather once upon a time to cheer the hanging or beheading of a nefarious criminal.

That said, it was certainly a victory — and a just one — for the residents of the adjacent housing complex, who had been fighting a legal battle since 2012 to have the offending towers demolished. And the demolition, which was in compliance with last year's Supreme Court order, does indeed send out a strong warning that unscrupulous builders cannot get away with violating the rules because they have the urban authorities in their pocket.

The question is, will the dramatic act of blasting two illegal structures taller than the Qutub Minar do anything for the thousands of home buyers whose life's savings are tied up in stalled housing projects? Will it do anything to fix the problem of real estate developers who have reneged on the terms of their contracts, defrauded their customers and landed up in jail or been declared insolvent under the National Company Law Tribunal (NCLT)? For the fact is that when the law catches up with realtors who commit graft on a gargantuan scale, it is the home buyers who are wrung dry, as they have to continue to pay both their rent and the EMIs for the flats which, even after several years, may not even have got off the ground. And they have to wait interminably for the insolvency process to be resolved, which is when they might finally get a refund of their money or get delivery of their flats.

The Real Estate (Regulation and Development) Act (RERA), which came into force in 2016, was hailed as a landmark legislation as it was meant to regulate the real estate sector and protect the interests of home buyers. And indeed, it has brought in a fair degree of order and transparency to the sector, making builders more accountable, and creating an ecosystem wherein buyers can take them to a RERA court and file for compensation if they fail to complete the project on time and hand over the apartments.

But talk to home buyers, and they will tell you that despite RERA, builders are continuing to find ways to bend the rules. For example, the Act stipulates that the builder has to sell flats on the basis of the "carpet area", and not the "super area". However, in practice, many builders are continuing to sell their units based on the "super area", which is an excellent way to create confusion and hoodwink buyers into believing that their floor area is much more than it actually is.

Again, even though RERA lays down that the adjudication of a dispute must be completed within 60 days, there are instances where a RERA court has adjourned hearings again and again. Another person says that despite having made the payment for her flat in an under-construction project in NCR, she is yet to receive a formal builder-buyer agreement, apparently because some key RERA approval for the project has not come through. But if that be the case, is it legal to pre-sell the units? And how is it that the authorities are unaware of what is going on?

Such regulatory jiggery pokery points to a systemic malaise. In fact, the collusion between real estate companies and pliant urban authorities, especially in the NCR, lies at the heart of builders being able to spirit away thousands of crores of public money, resulting in projects that have been lying unfinished for years. Whether it is Amrapali, Jaypee Infratech or Unitech, despite the Supreme Court's intervention, and despite the promoters of these real estate companies shut up in jail, their insolvency proceedings grind on at a glacial pace, leaving buyers in a sorry plight. Many of them have lost hope that they will ever get the flat that they have paid for.

A report by the Comptroller and Auditor General (CAG) in December last year stated that between 2005 and 2018, three real estate developers — Logix, Wave and 3C — were allotted 79.8 per cent of all commercial land in Noida. Plots for housing projects were also given to little-known builders, often at absurdly low reserve prices. After making the initial payments to the Noida Authority, many developers started defaulting on the payments, while continuing to take money from home buyers and siphoning it off elsewhere.

Today, even those who have got possession of their apartments in projects that are only partially complete, are unable to get them registered because the developers owe thousands of crores to the Noida Authority. In many cases, more than a year after they were commissioned, the few completed towers do not have an electricity connection as yet and rely on diesel generator sets for power.

RERA has certainly put in some curbs on the ease with which realtors have managed to pull off this monstrous abuse of public money. But much more needs to be done in terms of enforcing the law rigorously. Tackling corruption in the local administrative bodies must be a priority as well, since, without their connivance, these grand scams would scarcely have been possible. Unless there are systemic changes on the ground, a big-bang demolition, for all its shock-and-awe value, will do little to root out the culture of malpractices in the real estate sector.

(Shuma Raha is a journalist and author)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.