Amrapali Home Buyers Case: Supreme Court asks govt to give 500 crore loan to complete projects, orders attachment of JP Morgan properties
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Amrapali Home Buyers Case: Supreme Court asks govt to give 500 crore loan to complete projects, orders attachment of JP Morgan properties

Debayan Roy

The Supreme Court yesterday observed that the government should immediately give a Rs 500 crore loan to revive the stalled Amrapali infrastructure projects so that "work may start and then on completion the money is generated and repaid."

A two-judge Bench of Justices Arun Mishra and UU Lalit made this observation while hearing a proposal note by the receiver, Senior Advocate R Venkataramani, in the Amrapali home buyers case.

Justice Mishra stated that government must give a Rs. 500 crore loan immediately, especially considering "that there is no private player but it is NBCC who has been entrusted with the entire project".

Additional Solicitor General Vikramjit Banerjee, appearing for the Union of India and SBI Capital (SBI CAP), submitted that a meeting with the Secretary of the Union Finance Ministry would be conducted, wherein he would convey the Court's suggestion. He said,

"The amount of money involved is public money that we are disbursing. If we have to make an exception for Amrapali, then this exception has to be arrived at reasonably. There is a meeting today evening itself. I will convey what you have in your mind."

The Supreme Court, therefore, refrained from ordering the payment after the ASG's submission. The order states,

"Mr. Vikramajit Banerjee, learned Additional Solicitor General of India, to obtain instructions as to release of an amount of Rs.500 Crores by way of loan under the scheme of the Government of India to revive such projects so that work may start and then on completion the money is generated and repaid."

Supreme Court

The hearing was primarily on the list of proposals by the court-appointed receiver on how the projects could be finished soon.

One of the key submissions made by Venkataramani was that the Court must issue directions to SBI CAP to consider relaxing some of its parameters of loan disbursal.

"Some of their (SBI) rules about due diligence too needs to be relaxed," submitted the senior lawyer.

Further, the Court has also asked the government for a waiver of GST amounting approximately to Rs. 1000 crore.

In its order, the Court also noted that funding through SBI CAP - under the government’s stress funding - should be considered so that a relaxed policy may be issued for the Amrapali projects.

Attachment of JP Morgan properties

Senior Advocate Sanjay Jain, appearing for the Enforcement Directorate, called for attachment of JP Morgan's properties.

"We were directed to investigate affairs of JP Morgan. Rs 187 crores have been found to be proceeds of crime. We need permissions for attaching JP Morgans properties. 187 crore does not include any home buyers money. It's all the money on the JP's bank accounts."

In this regard, the Court has now issued directions for the said attachment of properties, holding that the earlier embargo on such attachment is "lifted".

"We lift the embargo created vide order dated December 2, 2019. not to attach the property of J.P. Morgan and its Directors. We permit the Enforcement Directorate to attach the Bank Accounts of J. P. Morgan as well as any other property belonging to J.P. Morgan and its Directors to the extent required."

Supreme Court

Senior Advocate Sunil Gupta, appearing for Noida/Greater Noida authorities to obtain instructions as to how much the interest component of the outstanding lease premium should be. The order states,

"Let him obtain instructions in respect of the rate of interest to be charged and the compounding to be made. Considering the rate of interest which has gone down in the present situation, an imbroglio has been created by divergence of funds and the findings recorded as to conduct of the Noida/Greater Noida Authority. They have to act in reasonable manner."

On the note submitted by ML Lahoty for exploring the sourcing of funds from unsold inventories, ready-to-move flats in Castle and Eden Park, 398 bogus allotments, and other unsold commercial units, the Court has directed receiver Venkataramani to appraise the action in this regard.

The Bench heard counsel for the homebuyers Lahoty on the sale of Amrapali Properties, which is likely to fetch Rs. 7881.60 crore, and also recover an amount of Rs 799 crore from the Directors, CFO, etc.

Lahoty also submitted arguments on the recovery of Rs. 860 crores from Surekha Group. The two judge bench has asked the matter to be listed next Tuesday for orders.

The Supreme Court has now directed the ASG to appear for government-owned Metal Scrap Trade Corporation Limited (MSTC) on the next date of hearing and apprise the Court about action in this regard.

Senior Counsel Venkataramani apprised the Court how National Buildings Construction Corporation Limited (NBCC) had issued tenders for all projects and that only tenders for two projects in Greater Noida remained.

The Court has been hearing a batch of petitions filed against the construction company for the delay in handing over possession of houses since 2017.

[READ ORDER]

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