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Allahabad HC dismisses GDA’s review plea about Raj Nagar Extension cess, Real Estate News, ET RealEstate

Allahabad HC dismisses GDA's review plea about Raj Nagar Extension cess, Real Estate News, ET RealEstate
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GHAZIABAD: In a major setback for the Ghaziabad Development Authority (GDA), the Allahabad high court has dismissed its petition seeking a review of a February order that deemed illegal the authority’s demand for metro cess and elevated road cess from the developers of Raj Nagar Extension.

Essentially, it means that the GDA can no longer impose the two cess on new projects in Raj Nagar Extension and will have to return the additional amount taken from some developers of the area. The GDA, however, has the legal option to move the Supreme Court against the high court’s division bench of justices Sunita Agarwal and Justice Vipin Chandra Dixit that dismissed its review petition on August 11.

The development authority started charging Rs 750 per sqm as metro cess and elevated road cess in 2015, and has so far collected close to Rs 450 crore from the developers of Raj Nagar Extension. GDA’s contention was that since RNE residents stand to benefit directly from the Hindon elevated road and the Dilshad Garden-New Bus Adda metro projects, it was within its rights to impose the two cess.

However, the high court in February this year ruled in favour of a consortium of 27 developers — Raj Nagar Extension N.H.58 Developers Association —that had challenged the GDA’s decision to impose the additional amount. “The consortium filed the case in 2017, and the ruling came after nearly four years,” said Gaurav Gupta, president of CREDAI’s Ghaziabad chapter.

The RNE developers argued in the court that the metro and the elevated road are for everyone, “so why only RNE builders are made to pay”.

GDA, on its part, said that the two projects cost the authority Rs 3,000 crore and it also had to take a loan of Rs 800 crore from the NCR Planning Board for its elevated road project. “While the Hindon elevated road has offered direct connectivity to RNE, the Hindon metro station was planned for the benefit of RNE,” said Asheesh Shivpuri, chief architect and town planner, GDA.

“Since RNE is a direct beneficiary to these two projects, we were advised to impose the two cess on the developers of the area. Moreover, the two projects fuelled the sale of properties in the township. As for the court’s decision against us, we have not exhausted our legal options yet,” he added.


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