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Last Updated : | Source: Moneycontrol.com

Supreme Court indicates it may give projects of Amrapali to Noida and Greater Noida Authorities

The apex court is expected to hear the two authorities on May 10, the next date of hearing.

In what may bring relief to thousands of homebuyers, the Supreme Court on May 8 indicated that it may transfer 'lock, stock and barrel' real estate projects of embattled real estate company Amrapali Group to Noida and Greater Noida Authorities.

The apex court is expected to hear the two authorities on May 10, the next date of hearing.

Sources told Moneycontrol that the authorities may decide to utilise the services of NBCC or other entities to complete the over 40,000 units, .


Out of the 15 projects, 11 housing projects comprising at least 40,000 units, of the embattled firm are located in Noida and Greater Noida.

"We see that entire Amrapali Group has failed to discharge its duties towards home buyers, authorities (Noida and Greater Noida) and banks. You (Amrapali Group) have neither completed any projects nor invested any money in the projects. We think, you are the one who should be thrown out of these properties. We will vest the rights of these properties with the Noida and Greater Noida," a bench of justices Arun Mishra and UU Lalit said.

“We may throw you out from these properties and transfer its lock, stock and barrel to Noida and Greater Noida. The loans which have been secured by Amrapali Group by mortgaging the lands to the banks can be collected by the financial institutions from the directors of the company or the corporate guarantors.

"We will ensure that banks do not enter the premises of these properties and home buyers get the first charge on the properties," the bench said.

It said that Noida and Greater Noida can then engage either the NBCC or any developer to finish the stalled projects and sell the properties, legal sources said.

Legal experts said if authorities are handed over the projects, they may be in a position to appropriate their dues from the land. Also, the unsold inventory ownership may be given to them which they can utilize and raise funds to complete the projects.

"We have argued all along that the mess has been created by the authorities and they should be held responsible to clear it. Homebuyers welcome the move. If this happens, it will be send a clear signal to other authorities too. Under RERA  authorities are the trustees of public property. Section 8 of RERA empowers RERA to hand over incomplete projects to authorities for completion. In this case, the Supreme Court's suggestion is in line with RERA but here it may be invoking its extraordinary jurisdiction under Article 142," said Kumar Mihir, advocate representing Amrapali homebuyers.

The apex court also asked the counsel for Noida and Greater Noida authorities to compile all necessary data as how much money has been paid by Amrapali Group till now,  the principal lease amount and interest component project wise and how much was the land given to the group.

The top court said that Amrapali Group by its own admission had taken Rs 11,652 crore from home buyers and invested only Rs 10,630 crore from it for construction of the residential projects.

Senior advocate Gaurav Bhatia, appearing for Amrapali, said that the group has till now paid Rs 998 crore to both the authorities. He said that Rs 11,652 crore were collected from the home buyers and Rs 10,630 crore were used for construction of various projects besides paying Rs 998 crore to the authorities as lease amount.

The bench asked Bhatia to explain the income taxes paid by a Group company--Stunning Construction Pvt Ltd-- of CMD Anil Kumar Sharma and other directors saying that tax liability of directors cannot be cleared from company's fund.

Bhatia claimed that Sharma has returned Rs 5.5 crore which was paid for his income tax from the accounts of Stunning Construction while the other director Shiva Priya has said that Rs 4.3 crore tax liability paid was later adjusted towards his salary dues from the Amrapali Group.

On May 2, two court appointed forensic auditors - Pawan Kumar Agarwal and Ravi Bhatia - revealed that Amrapali Group gave away flats and penthouses as fees to lawyers representing it at various judicial forums.

Hearing a batch of home buyers' petitions, the top court had ordered all the directors of Jotindra Steel and Tubes Ltd, a supplier to the Amrapali Group, to appear before the forensic auditor Pawan Kumar Agarwal over the next three days. Akhil Sureka, Managing Director in Jotindra Steel and Tubes Ltd, a public listed company, was found to be a director in group companies of Amrapali in the forensic audit.

On May 1, the apex court had said that Amrapali Group had committed a "first degree crime" by cheating thousands of home buyers and no matter how powerful the people behind this mess they will be booked and prosecuted.

"Fate is written on the wall" for the group and its directors, the top court said while declining to hear their claims of no wrong doing.

The embattled real estate firm "cheated everybody including home buyers, banks and authorities and indulged in cartelization to prevent the Debt Recovery Tribunal from auctioning its unencumbered properties", it said. "The limit of your fraud touched the sky."

"You have committed a first degree crime by cheating thousands of home buyers. We should have cancelled the licences of statutory auditors of Amrapali for indulging in fraudulent practice long back and sent them to jail."

On February 28, the apex court had allowed the Delhi Police to arrest Amrapali group CMD Anil Sharma and two directors on a complaint that home-buyers of their various housing projects were cheated and duped of their funds.

As per forensic auditors, Amrapali reportedly owes Rs 1,900 crore to Noida and Rs 3,200 crore to Greater Noida authorities.

The top court, which is seized of several pleas of home buyers seeking possession of around 42,000 flats booked in projects of the Amrapali group, had earlier also ordered attachment of personal properties of the company's promoters.

First Published on May 8, 2019 08:58 pm