Amrapali case: Supreme Court reserves order on financing of stalled projects

Banerjee said that the government does not have any option of one-off funding for projects and that the funding had to be routed only through SBI Cap which has a set of formalities to be followed.

The Rs 25,000 crore stressed asset fund was set up by the Centre last year and is managed by SBI Cap.

Advocate Harish Salve, appearing on behalf of SBI Cap, said that the fund was currently carrying out due diligence on the issue.

"Time is granted to the SBI CAP, as prayed for by  Harish Salve, learned senior counsel, to obtain further instructions with respect to the funding of the project," the court order said.

"We have heard learned counsel Vikramjit Banerjee, learned Additional Solicitor General, appearing on behalf of Government of India and RBI as well as other learned counsel for the banks as to financing of the home buyers. Orders are reserved in the above applications/issues," the court order said.

Last week the top court had asked ASG to seek instructions on providing Rs 500 crore as loan to NBCC for completing the stalled projects of the embattled real estate firm Amrapali, as there is no private player involved in it.

The bench Justices Arun Mishra and U U Lalit, which took up the matter through video conferencing, had said last week that the government has to take care of the funding as there are no private players involved and that the stalled projects are stuck due to lack of funding. It had observed that these unsold inventories also have money stuck and if they are completed and sold, they may fetch a considerable amount.

The bench had said that for funding through SBI Cap under government's stress funding, a relaxed policy can be issued for Amrapali projects.

The court on May 27 also reserved its order on the issue of unused FAR be handed over to Amrapali buyers by Noida and Greater Noida Authority. Advocates representing the two authorities said that the unused FAR does not belong to homebuyers and must be returned to the authorities.

In a written note submitted before the court, the Authorities said that “Not all the flats that can be constructed within the permitted FAR of 2.75 have been actually constructed or sold to any homebuyer. In other words, no homebuyer can be said to have been cheated or exploited or deceived by the builder or any other person on account of the unused FAR… The pre-existing homebuyer can have neither any legal nor equitable interest in such unused FAR,” the note said.

Last week, the court receiver had sought permissions to deal with sale of FARs and other properties of Amrapali. “Permit the Receiver and the Committee assisting him to proceed to sell or otherwise transfer the unused sanctioned FAR; permissible FAR; and purchasable FAR, as well as additional FAR due to existing or proposed Metro line. The sale or transfer can be on such terms and conditions as may be found profitable and expeditiously executable,” he had said.

Both Noida and Greater Noida Authorties had sought time to seek instructions on this issue.

The bench on May 27 also asked the ED to consider the objections raised by JP Morgan India against attachment of its properties in the Amrapali case. ED had earlier informed the court that it had attached the properties of JP Morgan in compliance of the previous court order.

JP Morgan India told the Supreme Court that the attachment of its properties is illegal as it was not involved in financial dealing with the Amrapali Group and it was JP Morgan Singapore and Mauritius that had invested money in the embattled firm.

Last week the ED had informed the top court that it has prima facie identified Rs 187 Crores in the accounts of JP Morgan, as proceeds of crime under the Prevention of Money Laundering Act (PMLA) and it required permission to attach its properties to recover the same. The bench had granted the permission to the ED to attach the properties of the multi-national firm.

Additional Solicitor General Sanjay Jain, appearing for ED had told the bench last week that the probe agency has so far prima facie identified Rs 187 crore in the accounts of JP Morgan, which according to them are proceeds of crime under the anti-money laundering law.

He had said that the top court had on December 2, last year restrained the agency from attaching any properties and therefore now it needs permission to attach them, in order to move ahead as per law.

The court appointed receiver in the Amrapali case, senior advocate R Venkataramani, informed the court that so far the court had received Rs 146 crore from homebuyers.

The court also received a proposal from Engineering Project India Limited (EPIL) that said that it was willing to commence work on any Amrapali project without funds. It has proposed that it would take the unsold inventory in lieu of their investment. The court has directed the receiver to finalise the proposal.

Cracking its whip on Amrapali Group, the Supreme Court in July last year had ordered cancellation of Amrapali Group's registration under real estate law RERA and ousted it from its prime properties in the NCR by nixing the land leases. It had ordered a probe by the ED into allegations of money laundering and to look into the charge of FEMA violation by JP Morgan.

The top court had also termed the sequence of events in Amrapali group a "shocking and surprising state of affairs" where such large-scale cheating has taken place and middle and poor class home buyers were duped and deprived of their hard-earned money.