SC pulls up IRP for raising demand for money from home buyers

The Supreme Court today termed as "open cheating" a prayer by Interim Resolution Professional in the insolvency proceedings of the Amrapali real estate group case, demanding additional money from flat buyers.
The IRP, in its plea, justified raising the demand for more money from the flat buyers, saying it needed funds for installing fire and electrical safety equippments in 21 towers of the Silicon City project of the company, where over 1000 families are currently residing.
The IRP has taken over charge of managing the affairs of Amrapali after National Company Law Tribunal (NCLT) admitted the insolvency proceedings against the firm on September 4 last year.

Once the NCLT admits insolvency proceedings against a company or individual, it appoints an IRP to perform a number of tasks including taking over of the management of the debtor, public announcement, invitation, collation and verification of claims and preparation of list of creditors.
"You (IRP) want to cheat them. This is open cheating. You cannot ask for more money from flat buyers. Your prayer is obnoxious. You can't raise the demand for money as all of them have already given their hard-earned money to the promoters," a bench of Justices Arun Mishra and Amitava Roy said.
Observing that the homebuyers cannot be allowed to lose from both ends, it even questioned the IRP, asking whether it was in collusion with the company.

Senior advocate Gaurab Banerji, appearing for IRP, said they needed Rs 21 crore for installing the fire safety equipments, saying "if anything goes wrong, we will be blamed."

"Recently, a fire incident had taken place in one of the 21 towers of the project in which families are residing. When we visited recently, we were subjected to abuses and threats by home buyers. It will become untenable for us to work if there is no money. Or someone else can take over the control of management of the company," Banerji told the court.
He said fire safety equipments needed to be deployed, as out of 43 towers of the Silicon City project of the Amrapali group, 21 towers are occupied.

Banerji said that Amrapali group has a total debt of Rs 2200 crore, while they had only Rs 1.5 crore in their bank account due to which it is impossible to manage the affairs.
"Without money in the account, we cannot even install basic facilities for the people residing in 21 of 43 towers of the project. If we are not given money, then someone else should be allowed to take over the control," he said.
The bench said it will be "inconsistent" with the law that flat buyers are asked to pay more amount by IRP, even when they have paid the full amount to the promoters.

Some flat buyers have even not got possession of their flats, despite having paid the full amount to the promoters, it said.
The top court directed the real estate firm to install fire and electrical safety equipments at all the residential towers within four weeks and asked the IRP not to obstruct the company from doing such work.
Senior advocate C U Singh, appearing for home buyers of the Silicon City, said the demand notice raised by IRP should be quashed as flat buyers have already paid Rs 2000 crore to the real estate firm for their homes.
He said one member each from three Residents Welfare Association (RWA) should be allowed to attend the meetings of company to represent the home buyers.

The bench said that fire safety equipments shall be installed and made functional as early as possible in phase-1 of Silicon City project of Amrapali group, situated in sector 76 of Noida by the promoter group.
The top court is hearing a batch of pleas filed by flat buyers who have sought quashing of the September 4 last year's NCLT order and said the moratorium imposed under the provisions of the Insolvency and Bankruptcy Code, 2016, is violative of Article 14 (equality before law) of the Constitution.