Amrapali: Supreme Court directs NBCC to take over unfinished projects

The Supreme Court today directed the National Buildings Construction Corporation (NBCC) to take over and complete the stalled projects of the Amrapali group. The Court also directed for the group’s registration to be cancelled..The company’s registration under the Real Estate (Regulation and Development) Act thus stands cancelled..Further, the lease deed with regard to the stalled projects stands cancelled, and the same has been given to court receiver, Senior Advocate C Venkataramani. Venkatramani has also been tasked with ensuring that the title is passed and possession is given to the buyers..The homebuyers are to pay the balance sale consideration to the Supreme Court’s UCO Bank branch. The same will be kept in a fixed deposit and shall be used by NBCC for completing the construction..The Bench of Justices Arun Mishra and UU Lalit further directed the Enforcement Directorate to investigate the aspect of money laundering and diversion of funds by the Amrapali group that came to light in the report of the forensic auditors. The Court directed,.“In view of the finding recorded by the Forensic Auditors and fraud unearthed, indicating prima facie violation of the FEMA and other fraudulent activities, money laundering, we direct Enforcement Directorate and concerned authorities to investigate and fix liability on persons responsible for such violation and submit the progress report in the Court and let the police also submit the report of the investigation made by them so far.” .While coming down heavily on the authorities of both Noida and Greater Noida, the Court has directed the Centre and the State of Uttar Pradesh to take action to protect the interests of the homebuyers. The dues owed by the authorities are to be recovered from sale properties attached by the Court..The Supreme Court observed that audit reports show that there was a fraud played upon the homebuyers and the Amrapali group had siphoned off money overseas and dummy accounts were created by the Directors of the Company and provisions under the FDI and FEMA were violated. The judgment says,.“It is apparent from the report of the forensic audit submitted by Forensic Auditors that there is a serious kind of fraud played upon the buyers in active connivance with the officials of the Noida and Greater Noida Authorities and that of the banks. The money of the home buyers has been diverted.”.The Court, while holding the authorities of Noida and Greater Noida responsible, also highlighted the shortcomings of the lender Banks that led to the eventual diversion of the funds. The Court also points out that the period during which the money withdrawn was diverted is the same period for which no accounts were prepared..In addition to directing for appropriate action to be taken against the Directors of the company along with its CMD, the Court has also granted one month’s time as last opportunity to companies and Directors or other incumbents who hold any money of the homebuyers to deposit the same in the Court within a period of one month..In a significant ruling for homebuyers across the country, the Court has also directed the concerned Ministries of the Centre and the State to ensure that development projects are completed in a time-bound manner to protect the interests of homebuyers and in cases similar to the instant one, appropriate action is taken against leaseholders. The Court said,.“Concerned Ministry of Central Government, as well as the State Government and the Secretary of Housing and Urban Development, are directed to ensure that appropriate action is taken as against leaseholders concerning such similar projects at Noida and Greater Noida and other places in various States, where projects have not been completed. They are further directed to ensure that projects are completed in a time-bound manner as contemplated in RERA and home buyers are not defrauded. “.The Court has fixed the next date for hearing in the matter now on August 9..The Supreme Court had reserved its judgment in the matter on May 10 after the authorities of Noida and Greater Noida stated that they lacked the resources to complete the stalled projects. The Court then reserved its decision on the question of which developer would finish Amrapali’s projects..The Court had earlier indicated that it would give the ownership of all residential properties of Amrapali to the authorities of Noida and Greater Noida, given that the group had failed to discharge its obligations towards the homebuyers..Both the authorities had earlier apprised the Court of the dues owed by Amrapali to them along with the interests on the amount. Both the authorities were in consensus that the stalled projects should be handed over to a reputed developer and that the development can be overseen and supervised by a committee..The authorities had submitted before the Court that while repeated show cause notices were issued by them to the Amrapali group for payment of default money, only a fraction of the same has been received so far. This was submitted when the Court asked the authorities regarding the action taken by them against the default by the group..In February this year, the Supreme Court had allowed the Delhi Police to arrest Amrapali’s CMD Anil Sharma along with two other Directors on charges of cheating after complaints were filed by distressed homebuyers. The personal properties of Sharma and the two directors were also directed to be attached by the Court..In October last year, the Court had directed the police to take custody of Sharma and the two Directors..Read the Judgment: