Tightening its noose around real estate major Amrapali Group, the Supreme Court today restrained its promoters from leaving the country without its permission in a bid to secure the interests of hassled homebuyers.
A bench headed by Chief Justice Dipak Misra issued notice to the Ministry of Finance, Amrapali Group and others while seeking their reply within two weeks on a plea filed by Amrapali Silicon City Flat Owners Welfare Society.
The petitioner society has moved the apex court against an order of the NCLT that admitted Bank of Baroda's insolvency petition against Amrapali's Silicon City project in Noida.
The apex court also directed that senior advocate Shekhar Naphade along with Advocate on Record Shubhangi Tuli will participate in the meetings of the Committee of Creditors under Section 21 of the Insolvency and Bankruptcy Code, 2016 to ensure the cause of the home buyers and protect their interests.
"The home buyers are granted liberty to supply their details to advocate Shubhangi Tuli, counsel assisting senior advocate Shekhar Naphade, who shall project the case and cause of the home buyers before the appropriate authority. In the meantime the respondent-promoters shall not leave the country," the bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, said.
The direction came after senior advocate Ajit Sinha, appearing for the society, expressed apprehnsion that the promoters might leave the country while the proceedings before the National Company Law Tribunal (NCLT) was on.
The plea said the insolvency resolution process of the Amrapali Silicon City Pvt Ltd, was a "case of collusion" between Bank of Baroda and the builder as the debt claim was for 72 crores only while the share of flat owners being thousands in number is 90 per cent of the total project cost, which is much higher than the claim amount of the bank.
"By taking undue advantage of the provisions of the Insolvency and Bankruptcy Code, 2016, the Respondent no 3 (company) wants to escape the liabilities arising out of breach of contract on their part vis-a-vis consumers," the plea said.
"It is stated that thousands of people /home buyers from all over the Country had booked the flats who were not only denied their rightful prayer of getting possession of the flat booked but were also illegally and arbitrarily stopped/ restrained from invoking their statutory legal remedy available in law in view of the moratorium order passed by NCLT, New Delhi under Section 14 of the Insolvency and Bankruptcy Code, 2016," the plea, filed through advocate Ashwarya Sinha, said.
The plea has also sought direction for appointment of an independent auditor to conduct a thorough forensic audit of the Amrapali Silicon City Pvt Ltd from 2010.
In a similar petition by 100 home buyers who invested in three other projects of Amrapali Centurion Park Pvt Ltd at Greater Noida in Uttar Pradesh, the apex court had on October 6 issued notice to the Centre and the housing group.
This plea sought quashing of a NCLT order initiating insolvency proceedings against Amrapali Silicon City Pvt Ltd under the Insolvency and Bankruptcy Code, 2016 as the proceedings affected the home buyers of Amrapali Centurion Park Pvt Ltd.
Under the bankruptcy law, consumer and recovery cases and decrees passed by civil courts and consumer fora in favour of home buyers against real estate firms could not be executed once insolvency proceedings begin at the NCLT.
The plea has sought that either the home buyers are treated equally with banks and FIs, or the provisions of the bankruptcy code, which give priority to lending institutions, be held ultra vires to the Constitution as being violative of fundamental rights like rights to equality and life.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)