HC Junks Uttar Pradesh Government's Order to Cancel ‘Zero-Period’ Waiver to Builder

The Allahabad High Court has struck down the Uttar Pradesh government’s order to cancel ‘zero-period’ waiver to builder Express Builders and Promoters. The verdict reinforces earlier judicial decisions that questioned the state’s power to withdraw lease rent waivers previously granted to developers. It also redefines the legal limits of the Infrastructure and Industrial Development Commissioner’s (IIDC) authority in reviewing and reversing past decisions.

This judgment not only protects developers from retrospective administrative reversals but also restores confidence in the legal validity of the state’s zero-period relief policy.

Background of the Case

The case centers around Express Builders, a Noida-based real estate developer that was granted relief under Uttar Pradesh’s zero-period policy — a provision designed to support developers whose projects faced delays due to circumstances beyond their control.

In January 2024, the IIDC issued an order to cancel ‘zero-period’ waiver to builder Express Builders, citing a contradiction with Noida Authority’s policy that prohibits any lease rent waiver. The decision effectively withdrew relief that had been granted in mid-2023.

Express Builders, along with other developers such as Great Value Projects India and Pan Realtors Pvt Ltd, challenged the government’s move before the Allahabad High Court, arguing that the IIDC had exceeded its legal authority by reviewing and overturning its own order.

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Court’s Verdict and Observations

In a detailed order dated October 8, Justice Subhash Vidyarthi of the Lucknow Bench quashed the state’s order to cancel ‘zero-period’ waiver to builder, terming it “unsustainable in law.”

The court held that the issues involved were identical to earlier cases decided in favor of developers, including Great Value Projects (April 23) and Pan Realtors (May 29). Since the same legal question was already settled, the court saw no reason to deviate from its previous stance.

Accordingly, the Allahabad High Court directed the Noida Authority to recalculate the dues of Express Builders as they stood prior to the government’s withdrawn order and to address any remaining grievances within a stipulated period.

Understanding the ‘Zero-Period’ Policy

The zero-period policy is a crucial mechanism in Uttar Pradesh’s real estate regulatory framework. It grants developers relief from lease rent, penalties, or interest for the duration during which project construction remains stalled for reasons beyond their control.

Such situations include:

• Court-imposed stays or injunctions,
• Delays due to regulatory approvals, or
• Force majeure events such as pandemics or natural disasters.

This policy ensures that developers are not unfairly penalized for administrative or judicial delays, thereby promoting fairness and maintaining project viability in long-term developments across Noida and Greater Noida.

State Government’s Justification

When the IIDC issued the order to cancel ‘zero-period’ waiver to builder, it justified the move on financial and policy grounds. Officials stated that the Noida Authority’s policy framework does not permit any waiver of lease rent, and the prior relief was in conflict with this principle.

The government argued that lease rent waivers could adversely impact public revenue and disrupt uniformity in policy enforcement across different projects. Consequently, the IIDC decided to modify its earlier orders by rescinding the waiver while retaining other reliefs previously granted.

Developers’ Arguments Before the Court

Developers, including Express Builders, strongly opposed the order to cancel ‘zero-period’ waiver to builder, asserting that the IIDC lacked the legal authority to review its own decisions.

They cited Section 41 of the Uttar Pradesh Urban Planning and Development Act, which does not empower the revisional authority to re-evaluate or revoke its previous orders. Developers also argued that once relief is granted after due process, it cannot be withdrawn arbitrarily, as doing so violates the principles of natural justice and administrative consistency.

The High Court agreed with this interpretation, upholding that administrative orders must remain final unless a statutory provision explicitly allows for review or revision.

Legal Precedents and Judicial Reasoning

The Allahabad High Court’s reasoning closely follows an earlier ruling by Justice Pankaj Bhatia in April 2024, where it was held that the IIDC has no authority to review or modify its own prior decisions under the Urban Planning Act.

In reaffirming this principle, the court declared that the government’s order to cancel ‘zero-period’ waiver to builder was beyond its jurisdiction and hence invalid.

By consistently striking down similar withdrawal orders across multiple cases, the High Court has reinforced the boundaries of administrative power, ensuring that government departments adhere to the rule of law when revisiting policy-based relief.

Reaction from Noida Authority

The Noida Authority has expressed serious concerns about the long-term financial implications of such lease rent waivers. In its June 14 board meeting, officials noted that allowing developers to retain these waivers could substantially reduce the Authority’s revenue and disrupt budgetary planning.

The Authority emphasized the need for policy uniformity and hinted at the possibility of filing an appeal in higher courts to protect its financial interests. However, until a new judicial direction is issued, the High Court’s order remains binding.

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Broader Implications for Uttar Pradesh’s Real Estate Sector

The court’s decision offers much-needed relief to developers facing prolonged project delays due to external factors. By quashing the order to cancel the ‘zero-period’ waiver to builder, the judiciary has reinforced legal predictability and fairness in regulatory enforcement.

This ruling is expected to restore confidence among developers and investors, especially in regions like Noida and Greater Noida, where project delays have been common. It also sends a clear message that administrative reversals without statutory backing will not stand judicial scrutiny.

Conclusion

The Allahabad High Court’s decision to nullify the order to cancel the ‘zero-period’ waiver to builder marks an important step toward ensuring transparency and accountability in real estate governance.

It upholds the principle that once relief has been lawfully granted, it cannot be unilaterally withdrawn without legal justification. For developers, the verdict signifies judicial protection against retrospective administrative actions.

As the Noida Authority and state government consider their next legal moves, this ruling reinforces a critical precedent that regulatory stability and fairness are essential for sustaining investor confidence in Uttar Pradesh’s rapidly evolving real estate sector.