SC asks Centre to arrange funds for stalled Amrapali projects

The Supreme Court on Thursday gave the Centre a week to indicate how much funds it could provide for completion of real estate firm Amrapali’s stalled housing projects under the distress fund corpus of Rs 25,000 crore set up to revive their construction.

A bench of Justices Arun Mishra and UU Lalit told Solicitor General Tushar Mehta that if no positive response is given by Wednesday, the court will be forced to pass orders in the exercise of its powers under Article 142 of the Constitution. Article 142 empowers the Supreme Court to pass orders for complete justice in a case before it.

The court has been monitoring the completion of the projects since July 2019 when it cancelled the firm’s registration under the Real Estate (Regulation and Development) Act. The cancellation followed a forensic audit that found the firm’s directors were allegedly illegally diverting the homebuyers’ money. The National Buildings Construction Corporation (NBCC) was given the task to complete the pending projects.

A committee comprising two forensic auditors and court-appointed receiver, senior advocate R Venkatramani, was formed to carry out auctioning of Amrapali properties and to examine possible sources of funding.

Venkatramani on Thursday told the court that despite meeting the Union finance secretary, there was no progress on part of the Centre to arrange funds for the project. He is independently in talks with SBI Capital Ventures (SBICAP), which had agreed in principle to provide ₹995 crore out of the ₹25,000 crore fund for stressed real estate projects set up by the government.

SBICAP, represented by senior advocate Harish Salve, informed the court on Thursday that certain “sticky points” on the choice of projects and mode of pricing have delayed infusion of funds and sought a week to get back with a formal proposal.

Upset over the delay in sourcing funds, the bench told Mehta, “You are not giving any fund in a Court-monitored project that we want to revive. We are trying to persuade everyone but nobody is doing anything. SBICAP is creating every kind of problem. Now they want to levy 12%interest (on the loan they would offer). SBICAP is negotiating like a private player. This is not the way they (SBICAP) should behave and are your (the Centre’s) hands tied.”

The court asked Mehta to use his good offices and ensure fund is arranged. “When distress fund is created why is it not being used?”

Venkatramani informed the court he was willing to talk with public sector banks, a consortium of which could finance the projects securing the payment against the inventory of unsold flats in various Amrapali projects. The bench allowed the receiver to proceed with the decision and present a plan by the next date.