Amrapali : Homebuyers Should Not Be Under The Impression That They Can Enjoy Benefits Without Paying Dues, Observes SC As It Reserves Orders On Various Issues

The Supreme Court on Wednesday orally remarked that the homebuyers of the stalled-Amrapali project should not be under the impression that they can enjoy the benefits without paying the dues.

This was said by Justice Arun Mishra, who was heading the bench hearing a host of issues connected with the project.

Senior Advocate M L Lahoty, appearing for the homebuyers, submitted that they should not be made to pay anymore at this point towards the construction. Referring to previous directions whereby the Court had directed the completion of the construction in a time bound manner, the counsel submitted that the homebuyers are entitled to compensation on account of delay. 

In response, Justice Arun Mishra observed :

"Homebuyers should not be under the impression that without paying they will enjoy benefits of the property. Let us do something pragmatic in a step wise manner, for now. Do not invite our wrath, Mr Lahoty".

Lahoty then clarified that he was not suggesting that the buyers would enjoy benefits without paying due consideration, but that they had already been aggrieved after putting in a great deal of money.

Earlier in the hearing, the Enforcement Directorate informed the bench that it had attached accounts of JP Morgan, in compliance with the Top Court's previous orders.

Appearing for JP Morgan, Senior advocate Mukul Rohatgi confirmed the same and contended that such attachment is illegal.

Clarifying that JP Morgan India, whose account was attached yesterday for the recovery of Rs. 187 crore, had no financial dealings with Amrapali, Rohatgi challenged the order directing such attachment.

"I'm here for JP India...I wish to submit that the attachment is blatantly illegal, as JP India does not have one Penny's worth of investment in Amrapali...I'm independent, and have no dealings with them", submitted the former Attorney General.

Justice Mishra however was of the opinion that JP Morgan is a global company with branches across the world. Since the Court is concerned with the company, its branches would be taken into account, stated Mishra J.

Rohatgi went on to refer to a previous order of the Supreme Court wherein transaction details of JP Morgan Singapore and JP Morgan Mauritius were specifically sought, in order to trace their dealings with Amrapali.

The responses of these two Branches were also cited to show that all financial dealings with Amrapali were attributable to them and not to JP Morgan India.

"I am JP Morgan India and have nothing to do with these monies. The money attached was invested by them. In fact, even they did not invest their own money, it came from investors worldwide and JP Morgan invested these monies in Amrapali", he argued.

Rohatgi further contended that the forensic auditor had not even heard JP India before taking action.

The Bench will now hear further submissions on this objection from Rohatgi next Wednesday.

The Court also asked Senior Advocate Harish Salve, appearing for SBI Cap, to seek instructions from his client with regard to releasing funds towards the commencement of construction work. This aspect will also be considered by the bench on next Wednesday.

Upon Salve's request, the Bench agreed not to pass any orders regarding the same till then.

The bench, also comprising, Justice U U Lalit, told Salve "there is no private builder now; its the receiver who is handling the projects and NBCC is doing the construction".

The Court next turned its attention to the National Buildings Construction Company(NBCC), the government enterprise entrusted with completion of pending Amrapali projects. The Court asked their counsel, Senior Advocate Siddhartha Dave, to submit a flow chart about their plan of action for the next few months.

Justice Lalit emphasized that the flow chart must detail the amount of funds available with NBCC, the finances they would require over the next three months, and how they planned to raise more funds if required.

Touching upon the issue of unsold inventories, Lalit J said,

"How do you plan to finance your activities for the next couple of months? If there are unsold inventories, it would be ideal to sell them off. If those units need to be sold, there are two ways to go about it- either you do it or we ask an agency. Let us know what you think...come back to us with this in a week."

The next issue that was notably taken up was with regard to the rate of interest being levied by Noida and Greater Noida authorities. Justice Mishra urged Senior advocate Sunil Gupta to impress upon the authorities that they needed to be more accommodating and relax the rates to an extent.

"This sector will die down if you continue to remain like this. You have to give some sort of relaxation, otherwise not one but all projects will collapse", cautioned Mishra J.

Without commenting on the pending petitions challenging the levying of interest on loans during the RBI stipulated moratorium, Justice Mishra asked Gupta to consult with the Government and see what they were willing to do about interest rates being slashed in this instance.

The Bench went on to pull up the Government auction platform, MSTC for filing an affidavit wherein it was stated that they weren't in a position to do much regarding the auction of certain attached properties.

Justice Mishra came down heavily on this and remarked-

"We should tell you to go then, and impose punishment. This is not the way to file an affidavit......We will not spare anyone like this."

After hearing several Intervention Applications in the matter, the Bench reserved its orders on three specific issues.

These issues include:

• The financing of projects by State banks
• Whether to sell off surplus FARs (Floor Area Ratio) to raise funds or first return them to the Noida/Greater Noida authorities, and
  
• Whether to grant additional compensation to the Greater Noida authorities.
  

On July 23 last year, the SC had ordered cancellation of Amrapali Group's registration under RERA and ordered a probe by the ED into allegations of money laundering, in pleas filed by several homebuyers seeking possession of around 42,000 flats booked in Amrapali Group projects. 

The apex court had then directed the ED that the investigation should be carried out impartially, properly and expeditiously within a period of three months.

The Court also directed the NBCC to take over the stalled project.

On May 22, the bench had permitted ED to attach the properties of JP Morgan.

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