SC directs IBA, banks to meet court-appointed receiver to chalk out proposal for financing incomplete Amrapali projects

Source:-https://www.moneycontrol.com

The Supreme Court (SC) on January 4 directed the Indian Bank Association (IBA) and representatives of other banks to meet the court-appointed receiver in the Amrapali case to ensure that funding can be raised for unfinished projects in Noida and Greater Noida.

The court’s direction came after the receiver R Venkatramani informed that he was not getting adequate response from banks regarding his proposal for financing Amrapali projects. Accordingly, the Court directed the advocates representing the banks along with their officials to meet the receiver and submit their final proposal by January 18.

The order is awaited.

The top court has been hearing the Amrapali matter every Monday.

Over 40,000 homebuyers, who had invested in housing projects more than eight years ago, are yet to receive possession of their homes in Amrapali projects.

The issue of project financing by banks for Amrapali projects is a long pending problem which needs to be sorted at the earliest. The Supreme Court being aware of the same had been repeatedly asking the banks to finalise their proposal for the same and had even roped in the Reserve Bank of India. Once this issue of funding is sorted, we are sure that the Amrapali projects will be completed and delivered smoothly,” Kumar Mihir, advocate, representing Amrapali homebuyers told Moneycontrol.

The SC also asked the receiver to go through the response filed by the promoter of the embattled firm Anil Kumar Sharma and give a report regarding diversion of funds by him within three weeks. The matter would be taken up for hearing in the first week of February.

The government’s construction arm NBCC, that is engaged in completion of the unfinished projects, informed the court that they have issued a circular regarding re-engagement of experts and R K Agarwal, if he applied, will be considered for employment as a principle expert for NBCC. The Court will take a final decision on the next date which is January 11, 2021.

Agarwal is a former senior executive director of NBCC who was overseeing the construction of unfinished Amrapali projects. He is now retired.

The court also took up the applications filed by the buyers of convenience shops in Amrapali Centurian Park. It heard the buyers and the counsels for Amrapali and directed Vinay Vishal Sahi, a director of Amrapali Group’s Centurian Park Private Ltd, to give copy of his reply to counsel of Amrapali. The said applications will now be heard on January 18.

The Court directed the affidavit filed by banks regarding the issue of transfer of Deoghar Hotel by Amrapali Group to be given to forensic auditors and listed it on January 18.

The Court directed Enforcement Directorate (ED) to file the status report regarding Prem Mishra within three days and listed the same for January 11. Prem Mishra is a co-developer with the Amrapali Group in Madhya Pradesh.

The SC also extended the time given to Odissa State Housing Board for the auction of the plots till March 2021 and directed New Raipur development authority to file its affidavit regarding the amount deposited by it till date.

A special court, on December 19, 2020, had granted the ED four-day custody of the Amrapali Group’s CFO, Chandra Wadhwa, for interrogation in a multi-crore fraud case. The central agency had moved the special court after its Lucknow branch on December 18, 2020, arrested Wadhwa from Delhi in connection with the fraud case involving diversion of money of over 40,000 homebuyers.

Amrapali directors Anil Sharma and Shiv Priya were arrested by the ED in connection with their role in the financial fraud committed by the firm in January 2020 and have been serving time in jail since. All the arrests in the case have been made under the Prevention of Money Laundering Act, 2002.

On December 15, 2020, the Lucknow bench of the Allahabad High Court had rejected the bail pleas of Sharma, along with Amrapali’s statutory auditor Anil Mittal.

The Group has allegedly siphoned off about Rs 6,000 crore of funds, collected as advances from homebuyers, who have invested in the company’s various projects across the country.

The estimated cost of completion of all these pending projects of Amrapali is approximately Rs 8,500 crore, and NBCC, with the support of the apex court, has already completed and handed over two stalled projects, while implementation of some more projects is in progress at present with the funds made available by the Supreme Court.

On July 23, 2019, the apex court had cracked its whip on errant builders for breaching the trust reposed by homebuyers and ordered cancellation of the registration of the Amrapali Group under the Real Estate (Regulation and Development) Act, 2016, and ousted it from its prime properties in the NCR by nixing the land leases.