SC fixes Oct 31 deadline for Amrapali defaulters to pay up or lose allotment

The Supreme Court on Monday fixed a deadline of October 31 for all dubious flat owners in Amrapali housing projects to clear their outstanding dues or face cancellation of allotment.

These defaulters were identified during the forensic audit exercise carried out at the instance of the apex court prior to its judgment of July 23, 2019 which cancelled Amrapali’s registration under the Real Estate (Regulation and Development) Act.

The bench of Justices UU Lalit and Ashok Bhushan said, “All defaulting homebuyers as identified by the forensic auditors must pay their outstanding dues before October 31, failing which the Court Receiver shall be entitled to take steps for cancellation of allotment.”

The order came on a note submitted by the Receiver, senior advocate R Venkatramani who gave a slew of recommendations as part of efforts to implement the July 23 order and expedite completion of the Amrapali housing projects.

Advocate ML Lahoty appearing for the group of homebuyers told HT, “These are not the genuine homebuyers who have defaulted on payments of installments to Amrapali. The forensic auditors had identified 5,856 flats that were undervalued and sold by Amrapali directors at unusually low prices. The auditors had demanded recovery of ₹321.31 crore from these flat owners based on the prevailing market rates.”

Venkatramani in his note further indicated to the Court that an action plan is being worked out with MSTC Limited on the auction of Amrapali properties. “Five properties have been identified which could fetch close to ₹12 crore,” Venkatramani said, adding that all luxury cars out of the 85 cars recovered from Amrapali Group and its Directors have already been sold.

As regards SBI Capital Market Ventures (SBI CAP) which had agreed to finance six Amrapali projects, the Receiver informed the Court that talks were on with SBI CAP on formalizing the modalities of disbursing the fund through a special purpose vehicle. In addition, Venkatramani pointed out that he was in talks with the Reserve Bank of India (RBI) on getting a consortium of banks to agree on putting in funds into the Amrapali projects against the security of unsold flats inventory of Amrapali. The SC judgment of July 23 recorded the total unsold inventory to be worth ₹1,958 crore spread over 5,229 flats.

“There is no impediment from our part.” RBI counsel Ramesh Babu informed the Court,

Venkatramani informed the Court that he had written twice to the RBI but is yet to hear this statement which has held up talks with individual banks, which have claimed that unless RBI gives a go-ahead, it will be difficult for banks to step in. The bench asked RBI to file an affidavit in this regard by October 5, the next date of hearing.

The Receiver in his note also pointed out that certain distressed homebuyers who wish to sell or dispose their property prior to registration of flat should be allowed to do so as this was permissible under the arrangement with their erstwhile builder Amrapali.

The Noida and Greater Noida authority opposed this request on the ground that prior to registration, there is no title that can be transferred. But the bench went with the Receiver’s suggestion and allowed “pre-registration transfer”.

The Court further asked the Receiver to go through a note prepared by advocate ML Lahoty appearing for homebuyers on pending recovery of money from persons who directly or indirectly siphoned homebuyers’ money from Amrapali group.

The note by Lahoty said, “The project consultant NBCC requires an amount of ₹8,016.88 crores to complete the 46,459 units, out of which ₹3,870.38 crore is only the dues of the homebuyers. The remaining amount of ₹4,146.5 crore is to be recovered from various other sources.”