SC directs Noida Authority to look into the issue of modifying lease deeds in favour of court receiver

The court had in 2019 asked the government’s construction arm to finish and deliver 38,159 flats by the erstwhile Amrapali Group by 2023.

The Supreme Court on April 4 directed Noida Authority to look into the matter of modifying the lease deeds in favour of the court receiver appointed in the Amrapali matter so that he can seek disbursal of subsequent tranches of funding for completion of the unfinished projects.

During the 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 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 loan was subject to certain pre-condition compliances, as set out in the sanction letter(s) of each bank, the court receiver 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 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 reasons for not disbursing the amount of Rs 540 crore was that the banks have expressed genuine concern that creation of security by way of equitable mortgage by deposit of title deeds, is a precondition. That, as the order mentions that the ‘Lease’ stands cancelled, there is no title document as such which can be deposited with the banks, even though the lease deeds in favour of various Amrapali companies have been shared with the banks," the court receiver said.

The court receiver had suggested that the apex court direct that the “Court Receiver” may be substituted in place of the original lessee/Amrapali group companies in the documents and that the Noida/Greater Noida authorities should make necessary amendments in the lease deeds of all Amrapali projects and make available such lease deeds to the court receiver in order that equitable mortgage may be created in favour of lenders by ASPIRE.

In its order dated July 23, 2019, the court had cancelled on the lease deeds and vested all rights of Amrapali as a lessee in the court receiver. As on date nothing exists on paper except the court order and therefore it is imperative that the title deeds be modified in favour of the court receiver, explained Kumar Mihir, advocate representing homebuyers in the Amrapali case.

The court receiver also informed the apex court that one of the precondition for disbursal is the provision of documents evidencing applicable statutory compliances such as fire, environmental, etc. “Due to non-availability of such statutory approvals, the same could not be provided to the banks,” he said.

The bench noted the agreement of advocate Ravindra Kumar, appearing for NOIDA and Greater Noida authority, and directed the authorities to withdraw the lease deeds of Amrapali Projects with respect to NOIDA and Greater NOIDA and make available these deeds to the court receiver, so that equitable mortgage could be created in favour of the consortium.

Let the needful be done within seven days from today, the bench said.

The court receiver also suggested that an order be passed stating that NBCC obtain all statutory approvals and that appropriate authorities should accord necessary approvals within 15 days from this order. The court directed NBCC to obtain pre construction approvals except building approvals (which is to be taken post completion) as soon as possible.

The statutory approvals could be those which are required at the initial stage of inception before the stage of construction or those which are required before issuance of final completion certificate is accorded, the bench said.

The top court also asked the court receiver that where construction is completed he shall execute appropriate documents in favour of the association of buyers. "You must also get out of the scenario. The receiver is not supposed to be there for eternity. Rest is for the association of owners to do," the bench said.

Venkataramani said he has some plans for the issue and would be placed before the court after a couple of weeks.

On the issue of whether charges that will be applicable during registry will be calculated basis the carpet area or the super area, the court came down heavily on the authorities for not having filed their response to the notice issued by the court on October 2021. The court directed that the officials responsible for the issue be present before the court on the next date of hearing with the relevant documents.

The petition has been filed by Joginder Singh, president, Amrapali ZODIC Home Buyers Association.

On the issue of sale of unsold inventory, the court receiver informed the Supreme Court that flats/units amounting to Rs 107 crore had been book through NBCC-ASPIRE. In November 2021, state-run NBCC had appointed Anarock Property Consultants as the channel partner to sell embattled real estate developer Amrapali Group’s 5,000 housing units in Noida and Greater Noida.

With regard to the issue of structural stability of housing units and commercial shops raised by homebuyers Joginder Singh and Chakresh Jain, the court asked NBCC to file a response on the steps taken with respect to the structure of the projects. Noida and Greater Noida Authorities have been directed to file an affidavit in this matter.

The bench said that homebuyers also have some apprehensions with regard to the structural safety of buildings now constructed by the NBCC and it needs to be clarified that when such structural safety exercises were undertaken and that NBCC and court receiver had to address the court on the issue.

The court directed the court receiver and the authorities to consider the issue of whether the shops sold by Amrapali to multiple buyer can be sold and what is to be done with the amount that has already been paid for the shops.

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.