Moneycontrol PRO

SC directs consortium of banks to take measures for release of remaining funds to NBCC

The Enforcement Directorate informs the apex court that it made ' bonafide error' in attaching properties of former director of Amrapali Group

NBCC is the project management consultant for the Amrapali projects and is responsible for the quality and timely completion of work (Representative picture)

NBCC is the project management consultant for the Amrapali projects and is responsible for the quality and timely completion of work (Representative picture)

The Supreme Court on April 11 directed that the consortium of seven banks to take appropriate measures for the release of remaining funds to the National Buildings Construction Corporation (NBCC) for the stalled Amrapali projects even as the enforcement directorate told the apex court that it had made a ‘bonafide error’ in attaching the properties of a former director of the erstwhile Amrapali Group.

Senior advocate Siddharth Dave, appearing for the NBCC that has been tasked with completing the stalled projects of Amrapali Group said that only Rs 150 crore have been given to them out of the Rs 540 crore to be paid by the banks and that it requires funds for further construction of the projects.

Venkataramani said that it was up to the consortium of seven banks to pay the NBCC. The bench said that the apprehension expressed by the banks has been taken care of by its order dated April 4, and now there should not be any impediments in the release of Rs 540 crore, required by the NBCC.

A bench of Justices UU Lalit and Bela M Trivedi directed that the consortium may take appropriate measures for the release of remaining funds to NBCC and that statutory approvals taken for the projects should be placed on record by the next date of hearing.

On April 4, the Supreme Court-appointed court receiver R Venkataramani had informed the apex court that the consortium of seven banks -- Bank of Baroda, Indian Bank, State Bank of India, Punjab National Bank, UCO Bank, Bank of India, and Punjab and Sindh Bank -- had executed the loan and other transaction documents on March 29, 2022, and had extended the loan facility for Rs 1500 crore of which Rs 150 crore has been directly paid to National Buildings Construction Corporation (NBCC).

In compliance with the order dated March 28, 2022, the banks had disbursed a sum of Rs 150 crore on March 31, 2022, though the actual requirement/request by NBCC was for Rs 540 crore. The disbursal of the loan was subject to certain pre-condition compliances, as set out in the sanction letter(s) of each bank, the court receiver had informed the court.

The consortium of banks is headed by Bank of Baroda. The seven banks on March 31 released the first instalment of Rs 150 crore to Amrapali Stalled Projects and Investment Reconstruction Establishment (ASPIRE) for the completion of stalled Amrapali projects.

A bench of Justices UU Lalit and Bela M Trivedi was told by court receiver R Venkataramani that the rest of the amount could not be released as banks said that for the purposes of disbursal of funds they would require equitable mortgage by deposit of title deeds as a pre-condition.

The Enforcement Directorate (ED) on April 11 accepted before the Supreme Court that the agency made a "bona fide error" in provisionally attaching properties of a former director of Amrapali Group taking it as proceeds of crime.

Appearing for the ED, Additional Solicitor General Sanjay Jain told the bench that the officials attached wrong properties worth around Rs 4.79 crore of Amrapali Group's former director Prem Mishra.

It was a bona fide error on the part of the investigating agency as it treated these properties as proceeds of crime, Jain said.

He sought direction from the court that the competent authority be asked to substitute the attached assets with the personal properties of Mishra by exercising powers under Article 142 of the constitution.

The bench rejected this submission, saying it cannot pass any such orders as it will not be appropriate.

The bench said it is reserving its verdict on the issue and would pass appropriate orders.

On March 14, the court-appointed forensic auditor had said that the ED has attached the wrong properties of Mishra taking them as proceeds of crime. The top court was informed by forensic auditor Pawan Agarwala that these were actually the properties of Amrapali Modern Homes Pvt Ltd, which has been constructed by siphoning off homebuyers' funds and that the said properties should be detached and handed over to court receiver R Venkataramani to be auctioned to raise funds for the completion of stalled projects.

Nearly 40,000 homebuyers are awaiting possession in Amrapali projects.

On July 23, 2019, the top court cancelled the registration of the Amrapali Group under the Real Estate (Regulation and Development) Act, 2016, and ousted it from its prime properties in NCR by nixing land leases for breaching buyers’ trust.

Former group directors of Amrapali - Anil Kumar Sharma, Shiv Priya, and Ajay Kumar - are currently in prison following the Supreme Court’s orders.
Vandana Ramnani
first published: Apr 11, 2022 10:53 pm