Noida Extention Flats in Problem

POSTED BY Jagoinvestor ON July 31, 2011 COMMENTS (36)

Is your under-construction flatin Noida Extention in danger? No! But there are thousands of buyers who have invested their hard earned money in flats that are being constructed at Noida Extension. In this article I will talk on the issue of Noida Extension and what learnings can we take from this whole issue. For people who are not aware on the recent Supreme Court decision to stop construction in a part of Noida Extension and give it back to farmers from whom it was taken by the Noida Authority in the name of “Land Acquisition”. Now thousands of buyers who booked their flats are in danger of not getting their homes which they had booked.


So the whole issue goes back to 2005-06 when Noida Authority snatched land from farmers saying that the land will be used for “Development” purposes, Industries will be put in, there will be factories which will further help villagers and their future generations get employment and their life will be “great”. They were given pennies for that land. Then later this land was given to Builders for construction purpose and thousands and lacs of investors bought their dream homes in these projects.

The land was under dispute and after a lot of construction has already happened and people have put their hard earned money in lumpsum or through EMI’s. Now Supreme Court says that the land acquisition was illegal and was not done in the right way, so the land now should be given back to farmers. This is only for one part of Noida Extension issue which still affects thousands of buyers and later again there was a judgement passed in favour of farmers for another village.

Now this has given farmers the confidence that even they have a big say in this issue and someone is there to listen to them. All villagers now want a revised compensation at high rates (which I feel is totally right and it should always have been that way) or they want their land back. The builders have already spent crores of rupees in construction buyers have already paid the money for flats or have taken a home loan and paying the EMI. Now if all the land is given back to farmers what will happen to builders and thousands of buyers who bought the homes? Who will bear the loss of the mental agony and financial setback which will come as part of this package?

Recently, the judgement has been postponed till mid Aug 2011, when Allahabad High court will decide on the final judgement for the dozens of villagers land. If it says that the land has to be given back, the situation will get uglier. This whole issue is now engulfing whole of Noida and Greater Noida.

Who is to be blamed ?

Now assuming you have understood the situation, who do you think is the real culprit here? Is it the builders lobby who are known (or I would say secretly known) to manipulate the land acquisition part and then do construction there? Or is it only Noida Authority (read Mayawati Sarkar) and their policies for land acquisition? Or if you allow me to say, is it buyers who didn’t spend too much time to foresee the future of their houses if legal dispute gets uglier later? Who among all took things for granted?

I personally feel that there are two main parties who are really suffering here and those are Farmers and the home buyers. Farmers plight is from long time who are fighting for their rights from years and not even living a life of dignity even after feeding me and you and the whole country. Buyers are those who had spend their life earnings in their dream homes and now are seeing chances of delay, in their dream to own a house. More than financial loss, I see it as a big emotional breakdown. No one is there to hear and address their issues. They are skipping their work and business to give Dharna’s and by showing their outrage in masses.

What do you think is the solution in this case? Do you think incident like these are going to change the way people look at real estate buying? Can this Noida Extension issue teach people to pay more attention in what they are buying?

What do you think about this? Open your heart on comments section and let’s discuss it?

36 replies on this article “Noida Extention Flats in Problem”

  1. ayush agarwal says:

    am looking to buy a farm house in greater noia in sec 151,names ECNON sportsland.Can anyone advise is it a safe investment or not????

    1. Hi Ayush

      I am not sure if only this much info anyone will be able to guide you !

  2. Saurabh says:

    Manish i find you to be very critical of Mayawati and the Noida & Gnoida authority.I stay in Noida from last 6 years and i can bet you cannot name any other city apart from Chandigarh which is planned in such a great manner.Almost 50% of the area is open and green.It is a completely planned city with wide roads and an excellent water and drainage system.

    To develop anything in such a manner you need to acquire vast tracts of contigous land.We all agree that next few decades will see rapid urbanization and area like NCR will need lakhs of dwelling units to support this demand.What Noida authority does is that it notifies an area under section 4 A, which shows the intent to acquire, as soon as this is done the farmers and landowners start illegal construction and cut illegal plots and colonies to escape from acquisition.Later they claim this as abadi land and ancestral dwelling.

    To avoid this illegal construction the noida officials cut corners and immediately acquire land using emergency clause.Now coming to specific area of Noida extension.Four years back there was no such place on earth.Noida & GNIDA officials connected the so called Noida extension area to Mainland Noida via a 6 lane bridge over river Hindon which seperates Noida and North Greater noida .After this a web of roads was built around the area.This spiked the value of the land which had no more value than a agricultural land has.

    Now coming to point of profitability of Noida and Gnida authorities and Peanuts that farmers claim to have recieved.GNOIDA authority paid 850/- per sqmt to farmers as compensation, along with that farmers were to get back 6% developed land.That means that any farmer whose 2 acres (8000 sqmt) were acquired will get a 500 SQmt developed plot. Well now you are wise enough to calculate the asset value of a 500 sqmt plot in NCR and not a agricultural plot.

    The same land which was acquired for 850/- was sold to builders for 11000/- per sqmt. BIG LOOT?? I think not at all? Suppose the land acquired was 100 acres, of this almost 50% land area goes in building Roads , green areas, common facility centers, stadium, government hospitals, schools etc. 6% land goes back to the farmers.So the authorities are left with just 44% of salable land.Also farmers get reservation in future housing schemes launched by authority in which chance of allotment is very very high and getting lucky in draw is almost a certainity.

    Out of this 44% salable land there are two categories one is residential and the other is institutional & industrial.The allotment rate of both varies alot, institutional rates are almost half to residential.Now this was about the land rates, now the roads have to be laid afresh, main roads, sector roads, service roads etc. Drainage system has to be setup. Electricity infrastructure is to be installed. You add all this and starting with 850/- you will definetly reach very close to 11000/-.

    Yes but i agree on the point that builders and developers had to pay undertable to get their group housing plots, that corruption has surely happened and it happens in not only Myawati’s UP but across the nation from last 60+ years.

    OK now coming back to compensation amount of 850/-sqmt on a standalone basis. We know that agriculture happens on vast lands and not on a 200 sqmt plot but on acres of land. Every farmer has acres of land and the rate of agriculture land is very less compared to residential or commercial.For every acre of land the compensation on older rate (850/-) was 32 lakhs+ 6% plot= 240 sqmt, market value 50 lakhs +reservation in housing schemes which is almost a certainity.
    So roughly farmer gets 80lakhs for an acre.If on same one acre he does three crops a year he can earn maximum to maximum 40000/- per annum after all costs paid( seeds+labour) etc.

    The problem is that state govt should provide some mechanish to safeguard this money.

    Farmers are mostly uneducated and do not have the financial wisdom to handle large sums of mney and use it wisely, we know even graduates , and PGDBM MBA are not always able to handle and grow money.Thats why we need your site “jagoinvestor”.

    The present problem is more of political slugfest between RG and Mayawati. Farmers know they have a chance to earn big Moolah here, there is not a single farmer in Noida extension area who wants to do farming. They want land to be acquired.Consider this there are many farmers in Patwari village of noida extension who have more than 30 bigha of land.On current comensation rate that turns out to be 3 crore of tax free white money + 6% land returned as developed plot.That means 6 plots of 200 sq mt. That means 3 crore more. And we say it peanut.

    1. Binu Nair says:

      Dear Manish and others

      I just have one question for all of u. As a person directly impacted by the Noida Extension issue
      I am raising this question.

      If the Government start cheating on us, then where do we the citizens go from here.

      When I purchased the property in Extension, I looked at all necessary Government approvals and lay out plans.
      Infact Government bought the land from farmers and was facilitating the housing projects through builders.

      Second point, while making the payment and with all the periodic payments we had paid service tax and stamp duties which
      Is not only goes to State Govt but also to Central Govt.

      Banks have taken the processing fees and as per their did legal due deligience of land titles and only after that sanctioned our

      So tell me as a customer what more can u look at. So to answer ur question that who to be blamed is very clear, its the Government.

      I also agree with Sourabh, those who are closely following this issue understand the actual situation and whether compensation paid
      To farmers was less or not. No body is looking at the other financial implications which the authority has to undertake to develop the area.

      Also the court did not give enough time to understand the entire issue and passed on the cancellation order.

      1. Binu

        Yes .. i also thinik Noida exntention is the main culprit .. But builders knew that the land is not clear 100% and things can go wrong , it investors who are sufferening because of this ..


  3. dhanraj says:

    new people 1st stop givin flimy background scores songs … so bullshit to play with some1s emotions..

    1. Dhanraj

      Which comments are you pointing at ? Who you thought is paying filmy background songs 🙂 ?

  4. Gopinath says:

    Hi Manish,

    From the buyers point of view, what more can one do to avoid getting into such situations? If the banks due-diligence cannot be trusted blindly, is it possible for us as buyers do legal checking which will be better than the banks due-diligence?
    Kindle share your thoughts.


    1. Gopinath

      I agree that banks giving loan can be taken as a good enough indicator that things are ok . Do you think in that case we can say that people should start doing ethical buying only . like in this case , buying flats on area’s which has not impacted some one’ life ? especially like what happened with Noida Extention farmers

      1. Gopinath says:

        Hi Manish,
        I wouldn’t suggest the ‘ethical buying’ route. But my concern is about finding out if a particular project ‘affects’ certain people or not. Guess it is a RISK that we as buyers have to live with

  5. amol says:

    I think that except farmers everyone else which is buyer, noida authority, builders to be blame for this.
    Where is the fault of farmers here. These crooks noida authority and builders cheated farmers with wrong information which is totally unfair to them. They must have paid Rs. 10 to farmers and now making Rs. 10000 from it.
    so on the bigger part authority and builders need to be blamed.
    Buyers are also responsible some or the other way. As Deepak said, its always a risk in buying under construction house. Buying a home is big time decision but buyers just ignore lot of things before they buy it

    1. Amol

      Yea .. I agree to you . The least innocent here would be farmers only and most one to blame would be Authority and Builders .


  6. Rupali says:


    Needless to say who can be blamed obviously the govt(Mayawati sarkar) and builders too.. I think its right that the court has favored the farmers as land is bread and butter for them if they had paid peanuts then what about their source of income, they are fooled by the builders lobby. On the other hand if you see buyers, do agree that they had invested their all earnings still by anyway they can at least recover money from builders who must be millioners. But on the other hand I do feel that keeping in mind the noida issue people needs to pay more attention in what they are buying, after all their hard earned money going to be on toss if they can’t pay the attention. I strongly feel that these builders should be punished and penalize for this issue so that next time if such situation comes they will not dare to do so, and about government its the greater part of negligence rather purposeful negligence its the buyer and the builders will have to pay for it.

    1. Rupali

      Agree .. there comes what i call as Ethical buying . Right ?


      1. Rupali says:

        Yes, very well said

  7. Srinivas says:

    Though one can see an element of greed in some buyers, mostly it is the emotional want to own a dwelling with life’s savings that propel one for a flat.

    In this whole episode, one can see clear absense of a regulatory role which led to the mess.

    Free market will benefit all concerned only if the buyer and seller are equally competant to take(or change) a decision. In this case once buyer is into the project he/she cannot change the decision as the investment quantum is high. As regards due deligence, one(an ordinary investor) donot have have full facts/can not quantify the value of in tangibles like land. Thus one is forced to take a decision following other similar cases and not on the merit.

    Though the current situation is bolt from the blue for all except the formers, it was their long overdue demand(getting realistic price for their property).

    In view of many aspects which are not clearly known/understood by the layman investor, i feel that a regulator for real estate be put in place by government for bringing in much needed transperancy in real estate dealings and address consumer’s grievances.

    That said, i am not optimisitc on this(setting up of regulator) as many of the politicians are hand in glove with the builders or builders themselves.

    1. Are you sure you want a regulator? You are assuming that regulator will have best interest of consumers in its heart. You are assuming that regulator will like to make life easy for consumers like us who do not have easy access to information. These assumptions may be true but what if assumptions are not true?

      Why not let market take its course? After all, no body can put a gun to my head and force me to buy. I can choose to buy from a builder who has made a name for itself. I can choose to buy only readymade properties. Won’t this kind of ‘regulation’ be better than a government appointed regulator?

      1. Srinivas says:

        As i said, it is well if market takes its own course, if only the consumers have the power to change the decisions. This is one big a decision which, once one enters an agreement, one looses control.

        Here i want to emphasis one more point. It is not true that quality builder always delivers quality. A friend of mine took flat from reputed mumbai builder and from the first year on there is problem with water seepage. Of course he does not have land dispute(so far!!!!).

        I appreciate your view that regulators can also act with vested interest. My thought was something is better than nothing. This (i thought) will be similar to regulation of mutual funds which i think is doing a reasonable job for the consumers.

        Thanks for your view.

  8. KK says:


    I feel sorry for those who invested money for living on those houses. But there are some people also who put their money for greed.

    I met one people who bought flat 3 months ago on 40 lakhs and after 3 months he wants more than 50 lakhs for his flat. He said that he invested money for such type of returns. Can you believe it this is height of greed.

    This type of problem could be solved by proper regulator in Real state like SEBI, RBI. But I think government is not serious about that because all know that apart from swiss bank where 2G, CWG money gone. In current scenario real state is driven by black money and powerful people and if regulation comes into picture all will be changed.

    1. KK

      10 lacs profit in 3 months , thats 25% in 3 months and more than 110$ on CAGR basis . This is totally idiotic for a novice investor to expect that ..


      1. KK says:

        Hi Manish,

        Yes this is true. In NCR, people thinks property is God. If they have property their social status has changed, their attitude has changed.
        When people sees around that every body is investing money in Real State and making money, they can not control their greed.


        1. KK

          hmm.. some of them then pay for it later 🙂


  9. India today, with our current state of law and order, is not suitable for enforcing contract. It is easy to say that customer should do due-diligence before buying. However it is easier said than done. One of the ways an otherwise powerless customer can address the real estate issue is through buying readymade property only. An under construction residential property in India carries too many ifs-and-buts before becoming a functional residential unit. More of my thoughts here:

    1. Sambaran

      Goood to hear your exerperience . I read your blog points and I am sure most of the people go through the same experience .


  10. Santosh says:

    Hi Manish and all
    The incident should be a wake up call for all of us as a buyers and investors. Real estate business is lucrative and we investors are easily lured into it. The hard earned money goes in systematically and it is disheartening to see the money not coming back as expected.
    But even if one wishes to make a informed decision on buying home, how to check the authenticity. Is there any regulatory body exists which sees through the entire business sector and where buyers can refer their queries, grievences? If not, we must have a regulatory body on real estate as well. After all real estate is a huge and blooming sector.

    1. Santosh

      As deepak said in the video , there will always be risk in buying the underconstructed properties .. one cant deny that he can get into trouble at some point of time . A little better thing is to buy ready to move in houses


  11. Thanks for the great commentary too, Manish and for the interview. I have posted more views at and will monitor here as well. Cheers!

    1. Nice post from your side too … Lets do more of this later again


  12. jitendra solanki says:

    Hi Manish,

    I personally believe this is lesson for all home buyers to do our homework well before we take a decision.However, it is easy said then done.
    To my mind banks play a very big role here.They have all means to do due deligence of property before they sanction any loans.Infact, buyers are sometime helpless in most cases as it involves a cost also.So if banlk are sanctioning loans, buyer is more or less convinced that property has no dispute.Its a trust buyers put on banks.If loan would have denied , the information itself would have been a thinker fo rmany homebuyers.

    Hence i personally belive banks failed a big time here to know the exact situation.Yes some banks would have known and probably they neglected or tied up with builders.

    What are your view?Does banks would have played their role much efficiently here?

    1. Jitendra

      Yea .. generally we tell that one should take some part of loan from bank so that banks can do all the due deligence in terms of checkings . But in this case even banks failed big time .. so overall I woiuld ssay that onus and responsibilities lie on buyers front mostly /


  13. Lokesh says:

    If banks has sanctioned a loan on this project then it means they have search report of past history and this is Non-Agricultural land, besides this they haven’t
    sanctioned a loan, so i don’t think there is mistake from the flat buyers side.

    1. Lokesh

      Banks mainly trust the builders and builders are the one who make sure there is smooth loan sanctioning with some banks .. So somewhere yes banks are to be blamed


  14. Anuj Joshi says:

    “Fools build houses and wise men live in them”

    Thanks to human greed we are in this mess!

    1. Anuj

      Is’int it the other way round ?

      Also , no matter what, we need houses to live in the house anyways


  15. Harsha says:

    Hi Manish,

    You have asked a lot of questions there! which a person would really want to ask before getting into a deal, not with oneself, but to a legal pro.

    I had approached 2 separate Law firms before I bought a piece of land in Bangalore, I was told all’s well, its been couple years now, but I am not 100% at peace with the deal, because of looking at others experiences.

    Now how safe is buying anything, if things could go wrong in spite of it being reviewed by Law-experts?


    1. Harsha

      yea .. Land is altogether a different thing . You can never be 100% sure which part you didnt cover .. What problem are you facing exactly ?

      Did you cover the land with fence after getting the possession ?


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