SC Terms Amrapali First-Rate Liar, Orders Sale Of Several Properties

SC Terms Amrapali First-Rate Liar, Orders Sale Of Several Properties

SC Terms Amrapali First-Rate Liar, Orders Sale Of Several Properties
Amrapali Grand in Greater Noida. (PropTiger)

After Chief Managing Director Anil Sharma informed it that the company diverted Rs 3,000 crore of homebuyers’ money to expand businesses, the Supreme Court (SC) on December 5 said properties of Amrapali Group be attached and sold to refund buyers. The court also gave the company and its owners time till December 10 to arrange the money — if it can — to make the refund. Calling the company a first-rate liar, the SC directed the Delhi branch of the Debt Recovery Tribunal to auction as many as 28 properties of the realtor that include hotels, malls, corporate offices, movie halls, factories and land parcels.

At the same time, the SC also told that those who invested unaccounted money to buy units in bulk from the realtor will lose ownership, if they are proven to be benami transactions. These properties, said the top court, would be sold to raise funds to complete the company’s pending projects.

The company, forensic auditors Ravi Bhatia and Pawan Kumar Aggarwal told the SC, diverted money it collected by buyers to over 200 companies without spending even one rupee from its own pocket.

On October 9, the SC had sent three directors of the group to police custody, directing them to hand over all the documents of the 46 group companies to forensic auditors. 

Hear! Hear!

On August 2, the court had allowed the NBCC to take over company projects. However, this was done only a day after it took the state-run building company to task for contempt of court over extending help to Amrapali while the matter was sub judice.

While mincing no words as it came down heavily on insolvency-hit realtor Amrapali Group, the SC on August 1 had also sent out a strong message to the entire sector. Stating that Amrapali was playing "dirty games" with the court and misusing its “leniency” by “misdirecting” it, the SC ordered that all bank accounts and movable properties of 40 group firms be attached. On the other hand, the apex court observed that builders diverting funds collected from buyers was a "malady" and it wanted to stop that "nonsense" once and for all.

Directing the company in question to stand on its own and not on the “shoulders of investors”, the SC asked how chartered accounts of real estate companies could also siphoning of funds since "money given by the investor to complete a particular project cannot be used for other projects as it amounts to criminal misappropriation”.

“Depositors gave you the money in good faith. How can you divert the money for other purposes than construction of projects for which money was given? It amounts to criminal breach of trust,” the SC while sending a clear message to the entire developer community.

Tracking the money trail

In an earlier hearing on April 11, the company told the apex court that it would need Rs 2,000 crore to complete nine projects in Noida and Greater Noida – this is the area where the company was frantically launching new projects. These estimates were worked out after joint teams of homebuyers and company officials visited project sites on the direction of the apex court. Responding to that, the SC asked the company to give details of the money it collected from homebuyers while elaborating how much of this fund was used to complete housing projects.

While five of these projects are located in Noida (Sapphire, Eden Park, Zodiac, Silicon City-I, Silicon City-II), four are in Greater Noida (Centurian Park, Leisure Park, Gold Homes and Verona Heights).

When work on all five projects in Noida is complete, 6,917 units will be delivered. Similarly, when work on the four projects in Greater Noida is complete, the company will be able to deliver 2,753 apartments. In total, the trouble-hit company has 43 housing projects in various stages of construction.

It is worth mentioning here that in some of the Noida projects possession has already been handed over despite the fact that proper infrastructure is not in place as yet — the fire-fighting system, the lifts, the water supply, the sewage system, the power backup system, the parking lots, CCTVs, etc., are missing.

In fact, the Uttar Pradesh Power Corporation Ltd had in March stopped power supply to four of Amrapali's Noida projects over pending dues worth Rs 5 crore. The projects where power supply has been halted include Silicon City, Platinum, Zodiac and Princely Estate.

How the story unfolded

The SC, on October 27 last year, sought the response of Amrapali on a plea filed by around 700 homebuyers, who had booked their homes in its projects. A Bench comprising Chief Justice Dipak Misra and Justices A M Khanwilkar and D Y Chandrachud issued a notice to the real estate company and said it had already restrained the company promoters ─ Anil Kumar Sharma, Ajay Kumar and Shiv Priya ─ from leaving the country without its permission.

On October 13, the SC had issued a notice to the Amprapali Group, its promoters and the Ministry of Finance on another petition filed by homebuyers, and asked the promoters not to leave the country without its permission.

The lawyer representing the buyers told the court investors had neither received possession of their flats nor the refund.

The earlier plea, by the Amrapali Silicon City Flat Owners Welfare Society, was filed against an order of the National Company Law Tribunal (NCLT) that admitted Bank of Baroda's insolvency petition against Amrapali's Silicon City project in Noida in Uttar Pradesh.

Crisis scale

The group has a standing liability of Rs 1,000 crore to about 10 banks. Additionally, the group owes about Rs 3,000 crore to Noida and Greater Noida authorities, the two areas where the group has the highest number of residential projects. Also, it would require about Rs 3,000 crore to complete its various ongoing projects.

Also read: Your Developer Is Going Insolvent? You Can Claim Your Money Back

The grand spread

Here is a snapshot of the various projects of the group in the national capital region, as mentioned on its official website:

Completed projects

Among the completed projects of the group are:

Noida

Greater Noida

Ghaziabad

Also read: Your Developer Is Going Insolvent? You Can Claim Your Money Back

 

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