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Amrapali case: SBICAP seeks more time to finalise proposal for financing stuck projects

The SC lashes out at the Centre for not releasing funds from SBICAP stress asset fund, warns that if the proposal is not finalised within a week, it will pass orders for financing the projects independently.

The amount would cover a total of 6,973 units

The amount would cover a total of 6,973 units

The Supreme Court on August 13 came down heavily on the Centre for not releasing funds for the stuck Amrapali projects from the Rs 25,000 crore stressed asset fund despite its repeated requests for almost three months, even as SBICAP Ventures sought some more time to finalise its proposal.

The court has granted SBICAP time until next week and asked it to place the proposal before the court on August 19. It said that if the proposal by SBICAP is not finalised by next week, it will pass orders for financing the Amrapali projects independently.

The court order is awaited.

The apex court was informed by the court receiver and senior advocate R Venkataramani, who has been entrusted with the task of managing the affairs of the Amrapali Group, and Harish Salve, counsel for SBICAP, that an amount of Rs 1,050 crore may be released by way of funding for the stuck projects but there were issues with respect to monitoring the completion of projects and the fact that NBCC was not agreeable to a fixed price contract.

“The issue of whether billing would be done on milestone basis or an expenses incurred-basis remains to be sorted,” advocate Mihir Kumar told Moneycontrol.


The court receiver also informed the Supreme Court that he may be allowed to explore the possibility of some banks forming a consortium and providing project finance to Amrapali projects. The apex court allowed the court receiver to work out the details and place them before the court.

He also informed the court that Metal Scrap Trade Corporation (MSTC) has prepared the final valuation report of the properties to be auctioned. However, the Committee of Court receiver and auditors were not satisfied with the same and they wanted it to be reworked.

The Supreme Court also allowed the court receiver to accept the balance from the buyers of Corporate Hub near IMT Manesar and execute registries. The court directed MSTC to take over and sell the unsold units. It also directed the district magistrate of Gurgaon to help the court receiver to carry out registrations.

The court receiver informed the Supreme Court that the banks have started negotiations with homebuyers for restructuring the loan accounts and disbursal of loans and that a deadline of August end should be given to banks for the same.

Counsels for UCO Bank and Corporation Bank informed the court that instructions have already been given to their respective branches to start disbursing the loans. An MOU to the court receiver for restructuring the defaulted loan accounts has also been signed. The top court asked the receiver to finalise the same and place it before the court.

The Orissa Housing Board informed the court that it had deposited Rs 34 crore and had also advertised for the auction of plot earlier allotted to Amrapali. However, no response had been received on account of COVID-19 and therefore more time should be granted to them. The court has given them an extension until September 30 to auction the plot.

Ace Group and Supertech had filed a contempt petition against the CEO of Noida and Greater Noida for not providing the details of dues as per orders issued in June and July. The court has issued a notice on contempt and the counsel for Noida and Greater Noida informed that details of dues will be provided by the next hearing.

The court receiver also informed the apex court that tenders for Heart Beat and Tech Park will be issued shortly.

SBICAP Ventures that manages the government’s Rs 25,000 crore Special Window for Completion of Construction of Affordable and Mid-Income Housing Projects Investment Fund (SWAMIH) created by the Centre and managed by the bank for the real estate sector, informed the Supreme Court on July 10 that it had identified eight incomplete projects by embattled Amrapali Group located in Noida and Greater Noida and that a final proposal for releasing funds for the projects could be finalised in three weeks.

It has been nearly a year since the SC took over management of the Group, but construction work has remained tardy due to fund crunch as NBCC, which has been tasked to complete the projects, refused to invest while buyers were not able to clear their dues with banks refusing to disburse money.

The apex court-appointed court receiver in the Amrapali Case R Venkataramani had submitted an application to SBICAP to fund stuck projects in May. A series of meetings have taken place with the court receiver, NBCC and SBICAP on the issue.

At the Amrapali case hearing on June 3, SBICAP Ventures had informed the apex court that it would create a Special Purpose Vehicle (SPV) with the court receiver and would appoint a chief executive officer (CEO) to take over the construction of stalled projects in Noida and Greater Noida.

The apex court was on July 10 informed by the court receiver that none of the banks had responded to the order passed for the release of funds to which the court directed heads of all banks to send their proposals for disbursement of loans/restructuring of default loan accounts and of fresh loans to homebuyers as per the earlier orders to the court receiver within two weeks.

As directed by the apex court, NBCC is involved in the completion of 23 projects of Amrapali Housing, of which it has already completed and handed over two projects: Eden Park (Noida) and Castle (Greater Noida) comprising 618 units and valued at Rs 7.5 crore. Execution work in another eight projects -- seven in Noida and one in Greater Noida, having a total of 12,169 units and valued at Rs 618.08 crore -- is currently on.

On July 23, 2019, the apex court had cracked its whip on errant builders for breaching the trust reposed by homebuyers and ordered cancellation of the registration of the Amrapali Group under the real estate law RERA, and ousted it from its prime properties in the NCR by nixing the land leases.
Vandana Ramnani
first published: Aug 13, 2020 07:25 pm

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