SC hints at throwing Amrapali out of Noida, greater Noida housing projects
09 May 2019
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The Supreme Court on Wednesday came down heavily on Amrapali Group of builders who have collected thousands of crores of rupees from home buyers and failed to hand over the proposed houses in Noida and Greater Noida months after the delivery deadline.
A bench of Justices Arun Mishra and UU Lalit took note of fund diversion by Amrapali Group and asked it to submit its response. The court asked why all of its projects should not be handed over to Noida and Greater Noida authorities for investors’ safety.
The issue concerns 46,000 homebuyers who bought flats from Amrapali.
The Supreme Court said construction work on its various projects may soon resume and that the ownership of the projects would be taken from the group and handed over to Noida and Greater Noida authorities, which would then complete the construction and hand over possession to buyers.
Telling Amrapali that "you are out now", the SC said all its housing properties would be given to the authorities "lock, stock and barrel".
The Supreme Court noted that the money received by Amrapali Group from home buyers and the money it spent on various projects left a balance amount of Rs350 crore and said if the company cannot complete the projects authorities in Noida and Greater Noida could be given the right over unfinished projects and be allowed to complete and sell these.
The apex court also said that the interest and concerns of home buyers have to be given priority and that a total amount of Rs11,500 crore invested by them in housing projects is a matter of concern because they still have not received possession.
"You (Amrapali) are purely a developer. Neither a bank nor you can claim a stake in the construction completed so far. We will first take care of home buyers` interest," SC told Amrapali. "What is your (Amrapali) legal capacity to mortgage the properties to banks? Show the court one clause in the agreement that permits you to create a third party interest. How can you mortgage the construction done out of home buyers` investment?"
The bench of Justices Arun Mishra and U U Lalit on Wednesday also modified its earlier order and asked the directors of various Amrapali Group's supplier firms, including Jotindra Steel and Tubes Ltd, a public listed company, to appear before forensic auditor Pawan Agarwal from 9 May for three days saying that non-compliance would be considered as contempt of court.
The apex court, which has been examining various options to revive the projects and protect the interests of homebuyers who have invested more than Rs11,500 crore, said handing over all projects to the authorities was the best way to end the crisis that was sparked by financial mismanagement and diversion of funds by the Amrapali group.
