On July 23, 2019, the Supreme Court had ordered cancellation of the registration of the Amrapali Group under the Real Estate (Regulation and Development) Act
Hearing the Amrapali case, the Supreme Court on August 19 clarified the rate of interest to be charged by Noida and Greater Noida authorities from real estate developers.
The two-member bench said that builders will be charged interest as per the State Bank of India (SBI) aggregate rate from January 1, 2010 to 2013. Thereafter, the base rate would be charged from until 2016. The marginal cost of funds-based lending rate (MCLR) would be applicable only from April 2016 onward (which is when the system was introduced).
The order is awaited.
Senior advocate Mukul Rohatgi, appearing for Noida and Greater Noida authorities, informed the court that they have filed affidavits giving details of the dues and that aggregate rate was available until 2013, after which the base rate system was in place until 2016.
The apex court accordingly modified its order dated July 10 to say that the dues of builders will be calculated from January 2020 as per SBIAR till 2013 and thereafter till 2016 and that base rate would be considered and from April 1, 2016 till date, MCLR rates will be applied.
The two authorities generally charge interest at the rate of 11 percent from developers, who pay for housing land in installments. On default of installments, the authorities impose a penal interest, which keeps increasing with each non-payment, depending upon the number of times the payment is not made.
Noida and Greater Noida authorities have said all along that these rates would only be applicable to group housing projects and not to all others.
"This issue whether this benefit is to be given to all builders or only to housing societies is yet to be decided by the court," said Kumar Mihir, advocate, Supreme Court.
Senior advocate Harish Salve, appearing for SBI Caps, informed the court that the company had a meeting with the court receiver senior advocate R Venkataramani, who has been entrusted with the task of managing the affairs of the Amrapali Group, and had agreed in-principle to finance the Amrapali projects.
However, it has issues with two projects namely Tropical Garden and Terrace Homes which are financially unviable as the total cost of construction is Rs 533 crore whereas the receivable is only Rs 338 crore.
NBCC informed the court that these projects are an integral part of Centurian Park and as the amenities are common, only one tender has been issued for all of them. The court directed NBCC to construct the amenities, but said that for the time being these two projects may not be included in those being financed by SBI Caps.
Ace Group had filed a contempt petition against CEO of Noida and Greater Noida for not providing the details of dues in terms of orders dated June 2020 and July 2020. The matter had now been listed for August 25, 2020
On July 10, while hearing petitions in a matter regarding the Amrapali Group, the Supreme Court had directed the two authorities to only charge an interest of 8.5 percent as per the MCLR on land cost, fixed by the Reserve Bank of India, on land dues of developers.
This was in response to Noida and Greater Noida authorities filing applications seeking clarifications in the judgment dated June 10 passed by the apex court to the effect that the direction to levy interest at the rate of 8 percent must be prospective and the rate of interest may be as per the government order dated June 9 which had prescribed the MCLR rate.
The court had later agreed that the said levy must be prospective, but refused to change the rate as per the government order dated June 9.
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) for the real estate sector, informed the SC on July 10 that it had identified eight incomplete projects by embattled Amrapali Group located in Noida and Greater Noida.
On July 23 last year, 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.