Allahabad HC Allows Sunworld Zero Period Benefit Under 2023 Government Order, Directs YEIDA to Complete Lease of Remaining Land Within a Month
The Allahabad High Court held that Sunworld City Pvt. Ltd. is entitled to zero period benefit under the Government Order of 27 October 2023, while finding both YEIDA and the developer in default over a decade-long residential township dispute at Sector 22D on the Yamuna Expressway.
Justice Saurabh Shyam Shamshery, sitting singly at Allahabad, on 13 August 2026 disposed of a writ petition filed by the Yamuna Expressway Industrial Development Authority (YEIDA) arising from a long-running dispute over a 414538 sq. metre residential township plot allotted in 2011 at Plot No. TS-7, Sector 22D. The court held that the respondent-developer, M/s Sunworld City Pvt. Ltd. (lead member of a four-company Consortium), is entitled to the benefit of the zero period scheme under the Government Order dated 27 October 2023, though not in its entirety. At the same time, the court found YEIDA's own conduct wanting — it had failed to hand over the complete allotted land and had not disclosed that even the land covered by the lease deed was non-contiguous. YEIDA was directed to conclude the lease for the remaining area within one month, and the zero period benefit was expressly linked to construction progress.
The Plot Allotment and a Cancelled Lease
YEIDA launched a scheme in 2011 for allotment of residential plots in Sectors 18 and 22D on a 90-year lease, inviting sealed tenders through a two-bid system. Following the bid process, an allotment letter dated 16 August 2011 was issued to a Consortium of four companies — M/s Sunworld City Private Limited (lead member), M/s Vanalika Infrastructure (P) Ltd., M/s Vanalika Developers (P) Ltd., and M/s Odeon Builders (P) Ltd. — to develop a residential township at Plot No. TS-7, Sector 22D. The plot area was 414538 sq. metres at a quoted rate of Rs. 4,726 per sq. metre.
A reservation letter dated 30 March 2011 fixed the total premium at Rs. 191,26,12,200, requiring 10% (Rs. 19,12,61,220) within 30 days. Sunworld had already deposited Rs. 10 crores, so the balance of Rs. 9,12,61,220 was required and was deposited on 28 April 2011. Later, a 20% tranche of Rs. 38,25,22,440 along with interest of Rs. 94,32,120 fell due. The Consortium sought extensions in October and November 2011. YEIDA granted 60 days by its letter of 24 November 2011 and a further 52-day extension by letter of 16 January 2012. The Consortium failed to pay even after the second extension, and YEIDA issued a cancellation letter on 1 February 2012.
Sunworld challenged the cancellation before this court by filing Writ-C No. 7221 of 2012 (and a companion petition, Writ-C No. 5661 of 2012, seeking plot information). An interim order of 28 February 2012 restrained YEIDA from creating third-party rights. After hearing both petitions together, the court passed an order on 1 June 2012 directing Sunworld to deposit the balance allotment money with penal interest within a week, after which YEIDA was to execute the lease deed and hand over possession of unencumbered land. The order also provided that on such deposit the cancellation would stand set aside.
A Partial Lease Deed and the Land That Was Never There
YEIDA communicated on 13 July 2012 that out of 414538 sq. metres only 263483 sq. metres was available for execution of a lease deed. By its letter of 14 August 2012, YEIDA offered Sunworld the choice of accepting available land or waiting for the entire allotted area. Sunworld responded on 20 August 2012 that it would accept the lease for 263483 sq. metres immediately and wait for the balance.
A lease deed was executed on 14 September 2012 between YEIDA as Lessor and the Consortium as Lessee for 263483 sq. metres. The total premium of the allotted area was recorded as Rs. 195,91,06,588, with the premium for the leased area being Rs. 124,52,20,658. A possession certificate for 262483 sq. metres was also issued. A map was approved and communicated by YEIDA in March 2014 for the entire allotted area, though for land under litigation it was to be treated as symbolic only.
The State Government issued an Office Memorandum on 29 August 2014 increasing compensation to land owners by 64.70%, following which YEIDA raised an additional demand of Rs. 71,63,19,000 vide order dated 1 December 2014. Sunworld challenged that demand in Writ-C No. 12208 of 2015. A Division Bench dismissed the petition on 6 December 2017 on the ground of alternative remedy, observing that the demand arose from a contractual relationship and that arbitration or common law was the appropriate route.
Sunworld wrote to YEIDA on 20 January 2017 requesting that the entire period from the date of allotment on 16 August 2011 to that date be declared a “zero period” with interest, penal interest, and lease rent waived. The request cited the inability to commence construction because of land under litigation, inaccessible Gaon Sabha land that had not been resumed, absence of an approach road, and impounding of the lease deed for additional stamp duty assessment. YEIDA accepted the zero period request through its letter dated 19 April 2017, based on a decision taken in its 58th Board Meeting, covering the period 16 November 2011 to 31 December 2016 for a partial area of 1,60,565.30 sq. metres, subject to conditions — which were ultimately not complied with.
Surrender, Intra-Consortium Litigation, and a Reversal
Differences among Consortium partners culminated in Sunworld submitting a letter dated 20 August 2019 requesting YEIDA to accept surrender of the plot, citing inability to proceed with the project due to land unavailability, absence of approach roads, no consent from majority shareholders to infuse funds, and customer liabilities in courts, RERA, and the Economic Offences Wing. YEIDA's 66th Board Meeting on 21 December 2019 accepted the surrender. The acceptance was communicated by letter dated 26 December 2019.
M/s Vanalika Developers (P) Ltd., one of the Consortium partners, opposed the surrender and had already filed Company Petition No. 305/ALD/2019 before the National Company Law Tribunal for oppression and mismanagement. It also filed Writ-C No. 42959 of 2019 before a Division Bench of this court seeking a stay on the surrender. That petition was disposed of on 2 January 2020, granting Vanalika liberty to file a fresh representation before YEIDA.
Vanalika filed a detailed representation on 10 January 2020. YEIDA's 67th Board Meeting on 29 February 2020 cancelled the earlier letter of 26 December 2019 accepting surrender, primarily because the NCLT petition was pending. A consequential order was passed by the Chief Executive Officer on 20 April 2020. Vanalika's separate Writ-C No. 10498 of 2020 before a Division Bench was also dismissed on the basis of the decisions taken in the 66th and 67th Board Meetings. The NCLT petition was finally withdrawn on 6 March 2025.
The State Government issued a zero period Government Order on 5 December 2019, based on Supreme Court directions to grant zero period to allottees in certain circumstances. YEIDA subsequently modified the zero period conditions through its order dated 27 October 2023, issued in terms of a decision of its 69th Board Meeting. The 2023 order carried conditions similar to those in the December 2019 Government Order but modified the formula for calculating the zero period.
YEIDA eventually issued letters dated 30 October 2024 and 31 December 2024 making final calculations of dues based on the Legacy Policy. Sunworld paid some amount under protest and filed a revision, leading to the present writ petition before the court.
How the Court Reasoned
Justice Shamshery found fault on both sides. On Sunworld's conduct, the court held that the Consortium knew when the lease was executed in September 2012 that only 263483 sq. metres was available and had accepted that position, even declaring it would wait for the remaining area. The claim of being entirely unaware of the land's actual condition on the ground was not accepted. The court further noted that Sunworld had taken advantage of the first zero period scheme, then applied for surrender, and did not object to the cancellation of the accepted surrender even though it was procured at the instance of Vanalika.
On YEIDA's conduct, the court was equally critical. YEIDA knew it could not hand over the entire allotted land, yet at the time of the lease it disclosed only that 263483 sq. metres was available — without disclosing that even that available area was not contiguous. This, the court held, was established from the report and map submitted by YEIDA during revisional proceedings. YEIDA's conduct was therefore also not bona fide.
On the applicability of the zero period policies, the court held that the benefit of the Government Order of 5 December 2019 could not be directly granted to Sunworld because Sunworld had not sought it immediately upon its issuance — it had by then already applied for surrender, which was accepted on 21 December 2019 and cancelled only on 29 February 2020. Moreover, that policy required an undertaking that the project would be completed by June 2021, a condition that could not now be satisfied.
However, the court found that the Government Order of 27 October 2023 modified the zero period scheme on similar conditions and adopted the same method of calculation as the December 2019 order. Since YEIDA's own objections to the 2019 Government Order's applicability were addressed by the subsequent 2023 order carrying like provisions, Sunworld was entitled to consideration under the 27 October 2023 Government Order. The state report placed before the Revisional Authority disclosed that 126470 sq. metres of land was affected by various legal impediments, representing more than 30% of the total allotted area of 414538 sq. metres, and those impediments have now been removed.
The court also held that while Sunworld is entitled to zero period benefit, it cannot claim it in entirety given that it had knowledge of the land's condition when the lease was executed, had already availed the first zero period scheme, and had not commenced any construction. Separately, the court directed that Sunworld must pass on at least 25% of the zero period benefit to home buyers.
Order
Justice Shamshery disposed of Writ-C No. 41576 of 2025 with the following directions:
YEIDA is to conclude the process of executing the lease for the remaining area of the plot within one month so that construction can commence. If Sunworld fails to get the lease of the remaining area executed within that period, the benefit of zero period will come to an end.
Once the lease for the remaining area is executed and the entire land handed over, if Sunworld fails to complete at least 25% construction within nine months, the zero period benefit will also cease.
The parties are to exchange their respective calculations for the final monetary benefit before YEIDA makes a final computation. Sunworld must pass on at least 25% of the zero period benefit to home buyers.
Either party may apply to the court for extension of the stipulated periods if circumstances so warrant.