GDA cannot charge development fee from builders for elevated road or metro station: HC

The Allahabad High Court has held that the Ghaziabad Development Authority (GDA) cannot levy development fees in context with elevated roads or metro stations, from builders

The Allahabad High Court, on February 18, 2020, held that demanding external development fees from builders or developers under the heads of ‘elevated road and metro station’ and security for the ‘rainwater harvesting system’ was illegal and without jurisdiction. The court quashed the demands raised by the Ghaziabad Development Authority (GDA) against builders and developers.

A bench comprising justice Pankaj Mithal and justice VC Dixit passed the order while allowing a writ petition filed by the Raj Nagar Extension (NH-58) Developers’ Association, a registered society with 25 real estate developers as its members. The petitioner’s plea was that the demand raised by the GDA was illegal and without jurisdiction, because individual developers and builders or the members of the society were not concerned with the construction of any elevated road or metro station and therefore, no fee on account of the same could be demanded from them under the head ‘external development charges’.

After hearing the counsels for the parties, the bench observed, “A perusal of the Uttar Pradesh Urban Planning and Development (Assessment, Levy and Collection of Development Fee) Rules, 2014, reveals that there is no provision for demanding or collecting any development fee in context with elevated road or metro station.”


CCI slaps Rs one crore fine on Ghaziabad Development Authority

The Competition Commission has imposed a penalty of Rs one crore on the Ghaziabad Development Authority, for arbitrarily increasing the price of a flat in a housing scheme, from Rs two lakhs to Rs seven lakhs

March 1, 2018: The Competition Commission of India (CCI), on February 28, 2018, imposed a penalty of Rs one crore on the Ghaziabad Development Authority (GDA), for abuse of dominant position with regard to sale of flats under a housing scheme for the economically weaker sections (EWS). Passing a detailed order, the watchdog noted that consumers belonging to the EWS have been made to suffer, due to the abusive conduct of the GDA.

The GDA has not delivered possession of the flats to the allottees, even after the lapse of almost 10 years, the CCI said, in a 30-page order, passed after taking into account the detailed investigation report in the matter. It was alleged that GDA had arbitrarily increased the price of a flat from Rs two lakhs mentioned in the allotment letter to Rs seven lakhs. The complainant had got the flat through a lottery draw in 2009 under a housing scheme for the EWS.

For the case, the CCI considered ‘the market for provision of services for development and sale of low-cost residential flats under affordable housing schemes for the economically weaker sections in the district of Ghaziabad’, as the relevant market one. According to the order, GDA’s conduct in raising the price of EWS flats from the initial price, without any enabling provision, on ‘the pretext of miscalculation of cost of the project’, can only be explained as a case of abuse of dominant position by it in the relevant market. “The Commission observes that the consumers who belong to EWS have been made to suffer because of such abusive conduct of GDA,” it added.

See also: Nearly 50 per cent of allottees seek cancellation, in DDA’s 2017 Housing Scheme

The fine of Rs 1,00,60,794 imposed on the GDA, translates to five per cent of average turnover/ receipts generated from the provision of services for development and sale of low-cost residential flats under affordable housing schemes for the EWS. The figures for three financial years – 2014-15, 2015-16 and 2016-17 – were taken into consideration. The CCI noted that the abusive behaviour of GDA is also seen, in respect of imposing arbitrary and unilateral conditions in the allotment letter, if there is a delay in payment of the instalments by the allottees.


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