Noida Authority Invites Consultant for Escrow and Insolvency Oversight

The Noida Authority is taking proactive steps to enhance financial oversight and ensure compliance among developers by hiring a consultancy firm to manage its escrow accounts and monitor insolvency cases under the National Company Law Tribunal (NCLT). The selected firm will also assist with internal coordination and provide regular updates on insolvency proceedings.

To kickstart this initiative, the Authority has issued a Request for Proposal (RFP) for consultancy services. Interested firms are invited to submit their bids by February 18, with technical evaluations scheduled for the following day. The initial contract period will be one year.

The Noida Authority allocates land parcels on a lease basis for development under specified agreements. However, several developers have failed to adhere to these terms, resulting in delayed project execution and defaults on land payments. To address these issues and prevent further defaults, the Authority is introducing an escrow mechanism.

The escrow mechanism aims to ensure timely settlement of dues when third-party rights are created through the sale of units, apartments, or plotted developments. The appointed consultant will play a crucial role in drafting and executing escrow agreements while regularly monitoring fund flows. This initiative is part of a broader strategy to recover outstanding dues from defaulting developers, who collectively owe the Authority thousands of crores.

These jointly operated escrow accounts will serve as a safeguard against the misuse of buyer funds, preventing developers from diverting resources to other projects instead of settling their financial obligations with the Authority, officials explained.

In addition to overseeing escrow accounts, the consultant will monitor companies undergoing insolvency proceedings. The Authority requires real-time updates on cases being heard at the NCLT, particularly for firms that are at risk of insolvency but have not yet entered formal proceedings. By tracking these developments, the Authority will be able to make informed decisions and take preemptive measures where necessary.

For companies already facing insolvency, the consultant will assist in filing claims, coordinating with the Committee of Creditors (CoC), and ensuring active participation in the resolution process. Currently, 17 group housing projects in the city are undergoing NCLT proceedings, making it essential for the Authority to closely monitor developments and safeguard its financial interests, officials added.

The Noida Authority’s decision to hire a consultancy firm reflects its commitment to robust financial oversight and compliance. By introducing an escrow mechanism and closely monitoring insolvency cases, the Authority aims to protect its financial interests and ensure that developers adhere to their obligations. This move is expected to bring greater transparency and accountability to the development process in Noida.