New Delhi: The Supreme Court has accepted the proposal by SBICAP to provide Rs 625 crore towards the construction of six identified stalled Amrapali projects from NOIDA and Greater NOIDA Group, covering around 7,000 residential units, and ensure that the unfinished projects are completed at the earliest.
The six Amrapali projects that would form part of funding arrangement with SBI Caps include Silicon Valley-1 and 2, Crystal Homes, Centurian Park Low Rise, Centurian Park O2 Valley, and Centurian Park Tropical Garden. It was debated before the Court if the project “Terrace Homes” should also be subject matter of this funding arrangement with SBI CAPS. However, based on the stats, the Court observed if the project “Terrace Homes” is included, the entire funding project would result in deficit.
A division Bench of Justices Arun Mishra and U.U. Lalit has also said that construction of the projects will be done by the National Buildings Construction Corporation (NBCC) and the monitoring of the same will be done by a court-appointed committee.
“All costs of fund management and supervision etc by SBI CAP should be within their own budgets and shall not be an additional expenditure on the Amrapali projects. The receivables from sold and unsold inventories in the six projects proposed by it being more than Rs 625 Crore+ Rs 180 Crore (interest component at 12%) shall be sufficient hypothecation to SBI CAP.” : Receiver Senior Advocate R Venkataramani submitted.
Senior Advocate Harish Salve appearing for SBI CAPS suggested that considering the magnitude of the projects, some professional expertise would be required for administration and monitoring of the projects and that SBI CAPS had assumed the charges in that behalf to be Rs.80 crores. However, the Receiver as well as Counsel for NBCC Mr. Siddhartha Dave, submitted that the arrangement with NBCC, a Public Sector Undertaking, contemplated various checks and balances at the end of NBCC and as such no separate entity for monitoring or administration of the projects would be required. The Court accepted NBCC’s submission and didn’t find it appropriate to engage the services of any outside agency.
The Court accepted Senior Advocate Salve’s suggestion that instead of the fund flow being dependent on “project milestones” which are on the expenditure basis, the funds would be released by SBI CAPS on the basis of “collection milestones”. Mr Salve’s suggestion was acceptable to both the Receiver and the Forensic Auditor appointed by this Court.
The Court has also asked court receiver and Senior Advocate R. Venkataramani to hold a discussion with Reserve Bank of India (RBI) to explore the possibility of making a consortium of banks for funding of Amrapali’s other stalled projects.
The Supreme Court has been monitoring the execution and handover of the stalled Amrapali housing projects ever since an internal audit report, commissioned by the Court, found grave irregularities on part of Amrapali firms and its directors. The receiver was appointed to track the completion of the stalled projects and ensure that they are completely timely and handed over to the homebuyers.
The Supreme Court had passed its landmark judgement in the Amrapali case in 2019. The homebuyers of various projects who were aggrieved by the Corporate Insolvency Resolution Process that was being initiated by the National Company Law Tribunal against Amrapali Silicon City Private Limited had filed writ petitions before the Supreme Court.
According to these homebuyers, if such resolution is started against Amrapali, the interest of thousands of homebuyers of various projects being developed by the Amrapali group will be drastically effected. Other than this, there also were allegations of funds siphoning by Amrapali group, and therefore Supreme Court had taken cognizance of the matter and ordered a forensic audit to be conducted. The Amrapali group had challenged the pleas of the homebuyers. The petitions were also challenged by the and the Banks who had financed loan to the Amrapali Group under various mortgage deeds and the Noida and Greater Noida Authorities, with whom the Group had executed lease deed for lands on which the products had to be developed. According to them, their rights over the projects should be priorities over the homebuyers.
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The Supreme Court had ordered the cancellation of registration of Amrapali Group under RERA Act, and the projects were ordered to be completed by NBCC India Pvt Ltd. The Banks were given no right to sell the flats of home buyers or the land that was leased out, to get their own dues. The Banks were asked to realise their dues only from sale of the properties of Amrapali Group. All the lease deeds that were granted to Amrapali Group were cancelled and the Court receiver was given the rights of the lessee, who had to execute all the agreements and ensure that title is passed on to homebuyers and possession is handed over to them.
Read the Order here;
Amrapali-Order