Amrapali case: Authorities say they would suffer losses of over Rs 7,500 crore if SC does not recall interest rate cap order 

#Amrapali case, #Homebuyers, #Real Estate, #Supreme Court

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

Noida Authority and Greater Noida Authority informed the Supreme Court on September 20 during the Amrapali case hearing that they would suffer losses of over Rs 7,500 crore if the apex court’s order directing the authorities to cap the interest rate for delayed payments at around 8% instead of 15-23% is not recalled.

The hearing remained inconclusive and will now be taken up on October 1. The Prem Mishra issue would be heard on October 5.

The order is awaited.

“The Supreme Court is trying to strike a balance between the authorities and the builders and to ensure that no extra burden is passed on the buyers. At the same time, I think they will consider that the defaulters may not get any extra benefit over those who complied with law and paid on time. I sincerely hope that this issue gets sorted on time as a large number of buyers are directly affected by the outcome of this issue,” Kumar Mihir, advocate for homebuyers in the Amrapali matter, told Moneycontrol.

At the last hearing held on September 13, the authorities had sought recall of the order.

Advocate Ravindra Kumar representing Noida Authority had said at the last hearing that the said order was passed last June without examining all the issues.

“Not a single paisa has been paid in the last one year,” Kumar had said.

In June last year the court had said that charging a reasonable rate of 8% would enable builders to complete their projects. The court had passed the order on a plea of Ace Group of companies which had alleged that several of its projects had been stalled or become dormant on account of the high lease rent, penalty and interest charged by the authorities.

“Considering the current state of real estate and in order to give impetus to such housing projects and mainly considering the plight of home buyers and as pointed out by Noida and Greater Noida Authorities that of 114 plots allotted from 2005 onwards, most of the projects are incomplete, we direct that the rate of interest on the outstanding premium and other dues to be realised in all such cases be at the rate of 8% per annum and let the Noida and Greater Noida Authorities do a restructuring of the repayment schedule,” the court had said.

The court, however, had made it clear that if the builders failed to clear the dues within reasonable time, the concession granted will be withdrawn.

The Enforcement Directorate on September 13 had informed the Supreme Court that properties worth Rs 4.79 crore belonging to a former director with the embattled Amrapali Group, Prem Mishra, have been attached and that it is investigating other transactions by him concerning diversion of the amounts deposited by homebuyers.

Prem Mishra, a former director with the Amrapali Group, carved out a separate company and launched four real estate projects in Indore (Madhya Pradesh) after 2008. Mishra allegedly used cricketer MS Dhoni as his brand ambassador in all his projects, but never signed an agreement with him.

A bench of Justices UU Lalit and Ajay Rastogi was told by Additional Solicitor General Sanjay Jain, appearing for ED, that Mishra’s properties that had been attached were bought from homebuyers’ money that was diverted from the Amrapali Group with the help of fake invoices, bills and sham transactions.

The ED informed the court that forged bills, invoices were raised to divert homebuyers’ money and plots were bought for relatives and family members.

The court appointed forensic auditor Pawan Kumar Aggrawal, however, said that Rs 10.26 crore was outstanding against Prem Mishra and it is recorded in the forensic audit and the 2019 judgement of the court.

The court asked the forensic auditor to ascertain how much amount was diverted by the Amrapali Group to Prem Mishra and how much of it was spent in acquiring project assets. The top court asked Jain to furnish a copy of the ED’s status report and the attachment order of properties of Mishra to the forensic auditor, so that he could collate the details and submit a report within two days.

During the hearing on September 3, NBCC’s legal counsel had pointed to the top court that a writ petition has been filed in the Delhi High Court by a firm seeking to be appointed as channel partner for sale of housing units and commercial areas of various erstwhile Amrapali Projects at Noida and Greater Noida. The bench had directed that the said writ petition be transferred to the top court.

On September 3, the Supreme Court warned that the flat buyers of Amrapali Group, who are not clearing their dues as per the payment plan, will have their units cancelled and will be considered as unsold inventory.

A special bench of Justice UU Lalit and Ajay Rastogi had observed that the home buyers are under the impression that the court is facilitating construction of their stalled flats and managing funds and they are at a convenience to pay their dues, whenever they like.

They will have to strictly follow their payment plans else their unit will be cancelled and will be considered as unsold inventory,” the bench said. The bench while referring to home buyers said, “It’s like you have been given lassi (buttermilk) and now you want malai (cream) on top of that”.

The top court remarks came after senior advocate R Venkataramani, appointed as court receiver submitted that some mistakes have been noticed in the list of 9,538 flats, which are unclaimed or booked on a fictitious name or are a benami property and is being corrected and the final list will be published in two-three days.

On August 13, the top court had said that there are two categories of home buyers–first category is of 9,538 home buyers who have neither registered so far in the Customer Data maintained by the office of the Receiver, nor have made any payments since the judgment of this court in July 2019. It had noted, in its order, that there is a second category of 6,210 home buyers, who have registered themselves in the Customer Data but have not made any payment since the judgment of this court in July 2019.

State-owned NBCC has been asked to complete construction of more than 20 housing projects with an estimated investment of over Rs 8,000 crore under the monitoring of a court-appointed committee.

The Supreme Court in its July 23, 2019 verdict had ordered the cancellation of the registration of the Amrapali Group under real estate law RERA, and ousted it from prime properties in the NCR by nixing the land leases.

Amrapali Group directors Anil Kumar Sharma, Shiv Priya and Ajay Kumar are behind bars on the Supreme Court’s order.

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