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SC appoints NBCC to construct stalled projects of Amrapali Group, DRT to sell its properties

Business Finance

Press Trust of India  |  New Delhi 

The Supreme Court Wednesday appointed state-run NBCC to develop the stalled projects of the Amrapali Group and directed the Debts Recovery Tribunal to sell the unencumbered commercial properties of the real estate firm.

The top court directed the opening of an escrow account in the apex court in which the amount received after the sale of properties would be deposited and later disbursed to the National Buildings Construction Corporation Ltd (NBCC) to start construction of the pending projects in Group A and B Categories.

It also directed that the documents and details including bank accounts, balance sheets of all 46 companies including Jotindra Steel since 2008 should be given to the forensic auditors.

"NBCC is appointed to develop the projects and preparation of Detail Projects Report (DPR). It can also find out the consortium of banks ready to finance the projects," the bench said and cautioned the NBCC, saying "once we put the projects in your basket, you can't shrug of the responsibility of completing them. We will bind you with it".

It granted liberty to the Amrapali Group to hold talks with banks, HUDCO and other financial institutions for financing the construction of its stalled projects.

The court noted that Rs 1,590 crore can be generated from the sale of unsold inventory and said "Dharmendra Singh Rathore, officer of the Debts Recovery Tribunal (DRT) is entrusted with the sale of properties mentioned in the list of commercial properties".

It said there may be some encumbrances of Noida and Greater Noida on these properties which shall be paid at a later stage and Amrapali should provide all necessary details, including title deeds, dues and encumbrances to the DRT officer.

The bench also questioned the Amrapali Group on why it had not filed Income Tax returns since 2015 and what were its in-house auditors doing on non-filing of returns.

Advocate Gaurav Bhatia, appearing for Amrapali, said that due to the litigations the IT returns were not filed.

"They have not filed income tax returns. We want to know each and every fact as to where the money has gone, what has been done with the money, but you (Amrapali) have kept everything in a fluid state", the bench said.

It said an auditor is supposed to act as a watchdog of the company and say "if you don't give me the required papers, then I will put down my papers".

The bench directed Rs 5 lakh to be transferred to DRT from the frozen bank account of Amrapali and said representatives of the real estate firm, Noida and Greater Noida should assist the DRT officer to sell the properties.

It directed Amrapali Group CMD Anil Sharma to withdraw his affidavit filed giving details of assets and why the properties worth Rs 847.88 crore has come to Rs 67 crore in a span of four years.

The court found that in the affidavit certain averments were made regarding lawyer M L Lahoti, appearing for homebuyers in the case, and said a fresh affidavit shall be filed within seven days.

"We are working hard so that people who have invested their money get their homes, but we are not sure that you (Amrapali) will permit us to do so. Your conduct is very unfair," it said.

The court initially said the homebuyers may be directed to pay their current dues to generate funds for NBCC to complete the stalled projects of Group A and B categories.

Lahoti said the court has been saying in every hearing that the flat buyers will not be asked to pay any money at present.

The bench said it understood that people have lost faith in the builder but the home buyers can be asked to deposit the money in the escrow account or directly in the court.

"The flatbuyers are already under great pressure due to delay in the completion of projects and to pay the pending dues they will have to take the loan," the counsel for home buyers said and urged the court not to direct the same at least for now.

Amrapali counsel said the group has proposed to the court that funds can be raised by selling commercial properties and unsold inventories and six unencumbered properties can also be kept as mortgage with the banks to secure short term loan.

The apex court had on September 6 identified 16 properties of the Amrapali Group for auctioning, preferably by the NBCC, to give the PSU an initial corpus to start work on the stalled projects. It had also ordered a forensic audit of the firm and its promoters to gauge the extent of financial wrongdoings.

The top court had also brought the Group CMD under its scanner for declaring his assets worth Rs 67 crore as against Rs 847 crore in his affidavit filed during the 2014 Lok Sabha polls, when he had unsuccessfully contested as a JD(U) candidate from Bihar's Jehanabad constituency.

The NBCC had given a proposal for completion of 15 residential projects of Amrapali having 46,575 flats at an estimated cost of Rs 8,500 crore in 6-36 months.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

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First Published: Wed, September 12 2018. 19:10 IST