If financial problems are not resolved, SC may have to transfer management of the Amrapali Group to the UP government: Receiver

On December 2, the Amrapali case was brought before the bench to determine the next hearing date. Now, the case will be heard on December 8.

The court receiver for the Amrapali case, Attorney General R Venkataramani, on December 2 informed the Supreme Court that if the issues pertaining to raising finance for the construction of completion of housing units are not resolved at the earliest, he would have to request the apex court to direct the state of Uttar Pradesh to take over construction and management of the embattled company.

Attorney General R. Venkataramani, the court receiver in the Amrapali case, informed the Supreme Court on December 2 that if the problems relating to raising money for housing unit completion are not resolved as soon as possible, he would have to ask the high court to order the state of Uttar Pradesh to take over construction and management of the troubled company.

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The authorities in Noida and Greater Noida are opposing Venkataramani’s efforts to raise money for the stalled Amrapali projects, and both have stated that unused FAR (floor area ratio) should not be sold, he told a bench of Justices Ajay Rastogi and Bela M Trivedi.

The proposed sale of the unused FAR has been opposed by the Noida and Greater Noida authorities, but Venkataramani has supported it, arguing that it will help raise more money. Venkataramani claimed that more money was required to finish the unfinished projects. As a result, they must sell any unused FAR because, despite payments from home buyers, the sale of unsold inventory, and bank loans, the amount raised will be considerably less than what is needed to finish the stalled projects.

After the court receiver proposed that unused and extra FAR be sold, senior advocate Ravindra Kumar, who was representing the two authorities, argued that plot subdivision is not permitted and that buyer approval is necessary.

Venkataramani informed the court that if the financial dispute is not resolved and Noida and Greater Noida continue to stand their ground, the court may call in the Uttar Pradesh government, hand over management control of the business, and release him from his duties as court receiver.

Homebuyers claimed, through their legal representatives, that the National Building Construction Corporation (NBCC) had finished building the roughly 3,000 flats that the embattled Amrapali group had left unfinished, but that the Noida and Greater Noida authorities had not yet provided electricity and water connections.

A high court panel led by former chief justice UU Lalit, which had reserved its decision on November 1 on the question of selling empty space to raise money for stalled projects, was unable to issue the decision prior to his retirement.

On November 2, 2021, the CJI Lalit and Justice Trivedi bench reserved judgment on the question of the Amrapali Group’s sale of unused FAR in order to raise money for its postponed projects. The bench was currently debating a request to raise approximately Rs 1,500 crore through the sale of unoccupied space in Amrapali projects.

On November 7, the bench presided over by Justice Lalit reported that it had received a note from Venkataramani suggesting that the management of the Amrapali group be turned over to the Uttar Pradesh government because he was encountering difficulties from Noida, Greater Noida authorities in raising money to finish the projects. The bench had ordered a new hearing on the entire matter after stating that all parties involved in the receiver’s note needed to be heard.

Real estate developers in Noida and Greater Noida suffered a setback on November 7 when the Supreme Court revoked its order from June 2020 telling the government to cap interest rates for late payments of land dues by real estate companies at 8%. The FAR issue will be heard by the new bench, the Supreme Court bench stated on November 7.

Under the direction of Amrapali Stalled Projects and Investment Reconstruction Establishment (ASPIRE) and with the Supreme Court’s approval, NBCC has taken on the completion of numerous residential projects in Noida and Greater Noida.

With a budget of about Rs 3,000 crore, NBCC has completed about 11,000 Amrapali apartments, of which 5,000 have been handed over and the remaining 26,000 are still being built.

Senior attorney Sidhartha Dave, who was representing NBCC at the hearing on November 2, had stated, “When the project was entrusted to us, we had over 46,000 flats to complete. 4,981 units have been delivered so far, and 6,877 more are finished but still need external services like electricity and water.

The Amrapali Group’s registration under the real estate law RERA was canceled, and the apex court ordered that the land leases for its prime properties in the national capital region (NCR) be terminated. The court also harshly punished negligent builders for violating the trust placed on them by homebuyers.

An investigation into alleged money laundering by the promoters of the Amrapali Group, whose directors Anil Kumar Sharma, Shiv Priya, and Ajay Kumar were ordered to be imprisoned for allegedly siphoning off home buyers’ money and providing relief to over 42,000 home buyers, had been ordered by the top court.