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IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
I.A.NOS. 49238 OF 2020, 49239 OF 2020, I.A.NO.29350 OF 2020,
I.A.NOS. 166987 OF 2019, I.A.NO. 29699 OF 2020,
I.A.NOS.155624 OF 2019, I.A.NO.141062 OF 2019 AND
I.A.NO.49139 OF 2020
IN
WRIT PETITION [C] NO.940 OF 2017
BIKRAM CHATTERJI & ORS. … PETITIONERS
VERSUS
UNION OF INDIA & ORS. … RESPONDENTS
O R D E R
In Re I.A.No.49238 of 2020 seeking directions filed by NBCC (I) Ltd.
1. By way of I.A. No.49238 of 2020, NBCC has submitted that it has
established the work on the following conditions:
i. “NBCC will not be held responsible for any existing
disputes involving and in relation to the Projects;
ii. NBCC will not be held responsible for any disputes
arising from the contracts entered into by Amrapali
in relation to the Projects;
iii. NBCC will not be held responsible for any past or
present liabilities in relation to the Projects,
including on account of dues of homebuyers,
vendors, contractors, government authorities, etc.;
iv. NBCC will not be liable in relation to any disputes,
including before any Court or Arbitrator, existing
or arising at a later date, with the existing vendors,
contractors, co-developers, landowners, homebuyers, banks, financial institutions, other lenders
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and creditors and any government authority.”
2. As NBCC is appointed as a Project Management Consultant to
complete various projects, it was permitted to float the tenders and
prepare DPRs. It is submitted that NBCC has completed two projects and
floated tenders for other projects, barring three projects. However,
various home buyers are approaching different courts in different
jurisdictions across the country, making NBCC a party. The
complaints/petitions are filed against NBCC seeking reliefs, such as
refund of amounts that home buyers have paid to the Amrapali Group or
to grant possession of flats, etc. The NBCC is forced to defend itself in
different Courts being a party to the said petitions. For instance, a
summon has been received from the State Consumer Redressal
Commission, Lucknow against the CMD. The NBCC has been arrayed as
respondent No.3. A complaint has also been preferred by one of the home
buyers of the Amrapali Golf Homes, Greater Noida. They are receiving
various letters, emails, messages, calls seeking updates regarding the
progress of work being undertaken by the NBCC for their respective
projects. Reply to every home buyer is a herculean task, and much time
is being consumed in the process. The NBCC is ready and willing to
submit monthly project reports with all relevant information and
photographs in respect of each project to the learned Receiver, which can
be made available on the blog/website for the information of home
buyers, for that the NBCC has already made a request to the learned
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Receiver as such various directions have been sought.
3. NBCC is asked by this Court to complete the incomplete projects.
It is not liable for any legal action. In view of the order that has been
passed by this Court, the NBCC is immune from any such actions, and
we request the Courts/ Consumer Redressal Commission and other
authorities not to permit impleadment of NBCC as respondent and not to
issue summons to NBCC as they are doing the work under the
supervision of this Court and are not answerable to any other court,
tribunal, authorities. They are granted immunity to be sued in any other
court or commission, and they are answerable to this Court only in the
pending proceedings. Thus, they cannot be dragged in the litigation filed
by existing home buyers, previous contractors, co-developers,
landowners, banks, financial institutions, other lenders and creditors,
and any Government authorities before any other Court/ Commission or
Authority.
4. It is also made clear that NBCC is not responsible for attending to
queries made by the home buyers. They have to report the progress to
the learned Receiver, and we request the learned Receiver to put progress
reports of projects on the blog/website.
With the said directions and observations, we dispose of I.A.
No.49238 of 2020.
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In Re I.A. No.29350 of 2020 in I.A. No.13175 of 2019 filed by
Royalgolf Link City Projects Private Limited
5. I.A. No.29350 of 2020 has been filed by Royalgolf Link City Projects
Private Limited for modification of order dated 11.9.2019, by which this
Court directed that a sum of Rs.48.52 crores, which was the principal
amount received by Royalgolf Link City Projects Private Limited from the
Amrapali Group to be repaid along with 12% interest by 10.1.2020 and
the attachment of 30 villas was to continue unless otherwise ordered. An
undertaking was also to be furnished by the Chief Finance Officer as well
as by all the Directors to deposit the amount as ordered. This Court
directed that 25% of the amount be paid by 30.10.2019, 30% by
30.11.2019, and the remaining amount on or before 10.1.2020. The
interest was to be calculated until the date of the payment.
6. The Royalgolf Link City Projects Private Limited, after construction,
was to give 30 villas to the Amrapali Ultra Homes as per the Agreement
entered into between them. A sum of Rs.48.52 crores was received as the
principal amount by Royalgolf Link City Projects Private Limited. The
present application has been filed to modify the order passed by this
Court because it deposited a sum of Rs.48.52 crores, but it has extreme
hardship in depositing 12% of interest on the amount mentioned above.
It is averred that due to litigation, the goodwill of the project has been
severely affected, and construction work is considerably slowed down due
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to lack of funds. The vendors have stopped offering credit. The existing
buyers are not making payments. The average yearly collections had also
dropped from Rs.61.86 crores in the year 2018-19 to Rs.17.85 crores in
2019-2020. Despite part injunction lifted by this Court, the project could
register new sales of only 15 units, and only Rs.1.42 crores could be
recovered. The banks have also stopped making further disbursement of
the retail loans to individual home buyers. Fourteen buyers have
cancelled their units. The RERA has ordered a refund of 6 units along
with interest upon the complaints filed before it. A loan was taken at a
very high rate of 21% in order to deposit the amount. It will be difficult
to repay the loan in case interest is not waived. Home buyers' interest is
at stake as the project has been delayed for more than three years due to
the injunction of this Court. This Court vide judgment dated 23.7.2019
directed various entities to deposit the amount with the Registry and did
not direct payment of any interest, but in the case of the applicant,
interest has been ordered to be paid.
7. Having heard Shri Shyam Divan, learned senior counsel at length,
we are of the opinion that value of money increased at the hands of
Royalgolf Link City Projects Private Limited and the value of houses and
villas which were to be handed over to Ultra Homes, has also been
appreciated. Considering over all facts and circumstances of the case,
we have ordered a reasonable interest rate of 12%. As it was the money
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of home buyers, which was diverted, they must have a refund of their
money with a reasonable rate of interest. We find the hardships, which
are pointed out, are all commercial one and the Royalgolf Link City
Projects Private Limited is bound to disgorge the advantage it received
out of huge money of Rs.48.52 crores, which remained with it for a
substantial period; otherwise, it would tantamount to unjust enrichment.
It cannot be taken as a ground that in the judgment/ order dated
23.7.2019, the interest was not imposed on other entities. It has been
imposed on the facts and circumstances of the case on the Royalgolf Link
City Projects Private Limited. It is open to imposing interest and on other
persons/ entities. The question is quite open as interest was not dealt
with in the judgment dated 23.7.2019, and only the aspect of findings of
Forensic Auditors was dealt with. Thus, we find no merit in the
application, and the same is dismissed. Let interest be deposited within
six weeks, failing which appropriate action would be taken for violation
of undertaking furnished by the Chief Financial Officer and the Directors
and for violation of the order passed by this Court.
In Re. IA No.141062 of 2019 and IA No.155624 of 2019
(Release of FAR to the Noida and Greater Noida Authorities)
8. I.A. Nos.141062 of 2019 and 155624 of 2019 have been filed by the
Noida and Greater Noida Authorities respectively for issuance of direction
for return of unused FAR. The Noida Authority has prayed for the release
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of FAR of 98,445.77 sq. mtrs. as detailed in para 7 of the application.
Several other prayers have also been made. The Greater Noida Authority
also made similar prayer in the application. We are presently dealing
with the part of prayers with respect to the release of FAR.
9. It is submitted in the application that as per judgment dated
23.7.2019, directions were issued by this Court to execute tripartite
Agreement concerning projects, where flat buyers are residing within a
period of one month. The concerned authorities are duty-bound to
implement the judgment. As the Registry did not accept the review
petition, applications have been filed. The Noida Authority had allotted
a total of nine Group Housing Plots in favour of the Amrapali Group of
Companies. This Court ordered the cancellation of the lease of Amrapali
Group of Companies and the property vest in Receiver. The outstanding
dues of Rs.2,191.38 crores existed against the allotment of nine Group
Housing Plots as only partial payment has been made. This Court also
directed that the land dues can be recovered from other properties of
Amrapali Group, which have been attached. The Noida and Greater
Noida Authorities are entrusted with the task of holistic development of
the industrial area, which includes the construction of various
infrastructural projects and carrying out of municipal works, catering to
more than 15 lakhs population. The recovery of dues is necessary as it
is public money. It is submitted that as per the terms of allotment and
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lease deed, the builder was entitled to FAR at 2.75. Based on the layout
plan sanctioned by the Noida Authority, it was permissible to construct
a specified number of flats in each of the group housing plots. However,
all the flats that can be constructed within the permitted FAR are neither
under construction work nor sold. There remains unused FAR, as vacant
land, to which builder was entitled. Considering the flats that can be
constructed within the permitted FAR @ 2.75, and there are no flats
constructed on the available FAR, the unused FAR of 98,445.77 sq. mtrs.
which translates into 35,798.19 sq. mtrs. of land may be ordered to be
returned to Noida Authority. If FAR is ordered to be returned to the Noida
Authority, to some extent, the outstanding land dues can be recovered.
10. In I.A. No.155624 of 2019 filed by Greater Noida Authority, it is
submitted that there is a vacant area in square meter plot-wise within
the sanctioned FAR @ 2.75. It has also been prayed that NBCC may be
directed to complete the construction of 10,556 nos. of flats and not
11,469 nos. of flats on Plot No.GH 09, Sector Tech. Zone 4, Greater Noida.
Because of the availability of FAR @ 2.75, prayer made is to return it to
realize the dues, Rs.3,234.71 crores as on 15.1.2019, inclusive of
interest, 15% per annum with half-yearly compounding and penal
interest.
11. Learned Receiver has prayed to permit him and the Committee
assisting in proceeding to sell or otherwise transfer of unused sanctioned
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FAR, permissible FAR, and purchasable FAR, as well as additional FAR
due to existing or proposed metro line. The sale and transfer can be on
such terms as may be found profitable and expeditiously executable.
Learned Receiver shall be at liberty to invite applications from intending
purchasers by issuing public notices. Learned Receiver and the
Committee be authorized to require Noida and Greater Noida Authorities
to act in the facilitation of sale or transfer, and the authorities may be
directed to abide by instructions or compliances that may be sought by
the learned Receiver and the Committee. Learned Receiver has pointed
out that FAR's sale is necessary to complete the projects and fetch money
for incomplete projects left by the builders.
12. Our attention was drawn to a finding recorded by this Court in
judgment and order delivered on 23.7.2019 to the effect that basic
obligation was not complied with by promoter as such it was not entitled
to sell FAR. Learned Receiver pointed out that in Dream Valley Project in
Greater Noida, the authorities had sanctioned FAR @ 3.5, which include
up to 2.75 permissible FAR and 0.75 purchasable FAR. In Silicon City,
Noida, the Authority had sanctioned up to 2.75 FAR and an additional
15% FAR over and above 2.75 FAR. As this Court cancelled the leases
granted in favor of the Amrapali Group of Companies by the Noida and
Greater Noida Authorities, the rights have vested in the Receiver. The
Receiver has also attracted our attention to the findings recorded in the
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judgment to the effect that buyers have paid the dues of Noida and
Greater Noida Authorities as a component of the price for flats. Thus, the
premium and other dues payable under the lease deeds to the Noida and
Greater Noida Authorities cannot be recovered from the home buyers or
the projects in question. The directions have been issued to the effect
that Noida and Greater Noida Authorities could not sell the buildings or
demolish them nor could enforce the charge against home buyers/leased
land/projects, in the facts of the case and ultimately various directions
were issued by this Court. Relevant findings and directions are extracted
hereunder:
“122. As the basic obligations have not been complied
with by the promoters, they cannot also be entitled to FAR.
It was pointed out on behalf of Authorities that permissible
FAR is 2.75, whereas it has been wrongly mentioned and
worked out at 3.50 by the Amrapali Group. In the instant
case, we find that there is serious kind of fraud by the
promotors as such they cannot be said to be entitled to avail
the FAR to utilise it or to alienate and more so when they
have failed to complete the projects and pay the dues.
149. Because of the gross violations of the conditions of
lease deeds executed by the Noida and Greater Noida
Authorities in favour of Amrapali group of companies with
respect to various projects, are liable to be cancelled and
the rights thereupon shall vest in the Court Receiver.
150. There was no valid mortgage created in favour of
Banks and there was a huge diversion of money paid by
homebuyers which were more than required for payment of
dues of the Noida/ Greater Noida Authorities and banks.
The buyers have paid the dues of Noida and Greater Noida
authorities as a component of the price for flats. Thus, the
premium and other dues payable under the lease deeds to
the Noida and Greater Noida Authorities, cannot be
recovered from the home buyers or the projects in question.
The dues as may be ordered shall be recovered by sale of
other properties which have been created by the diversion
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of funds and have been attached by this Court. The banks
have also failed to ensure that the money was used in the
projects. As found in the forensic audit, there was no
necessity of obtaining loans from the banks and it has not
been used for the purpose it was obtained. The Authorities
and Bankers have violated the doctrine of public trust and
their officials, unfortunately, acted in collusion with
builders. The dues of the banks are also to be recovered
from the other attached properties as observed by us.
153. We have also found that non-payment of dues of the
Noida and Greater Noida Authorities and the banks cannot
come in the way of occupation of flats by home buyers as
money of home buyers has been diverted due to the inaction
of Officials of Noida/ Greater Noida Authorities. They
cannot sell the buildings or demolish them nor can enforce
the charge against homebuyers/ leased land/ projects in
the facts of the case. Similarly, the banks cannot recover
money from projects as it has not been invested in projects.
Homebuyers money has been diverted fraudulently, thus,
fraud cannot be perpetuated against them by selling the
flats and depriving them of hard-earned money and savings
of entire life. They cannot be cheated once over again by
sale of the projects raised by their funds. The Noida and
Greater Noida Authorities have to issue the Completion/
Part Completion Certificate, as the case may be, to execute
tripartite agreement and registered deeds in favour of the
buyers on part-completion or completion of the buildings,
as the case may be or where the inhabitants are residing,
within a period of one month.
154. Resultantly, we order as follows:
(i) The registration of Amrapali Group of Companies under
RERA shall stand cancelled;
(ii) The various lease deeds granted in favour of Amrapali
Group of Companies by Noida and Greater Noida
Authorities for projects in question stand cancelled and
rights henceforth, to vest in Court Receiver;
(iii) We hold that Noida and Greater Noida Authorities shall
have no right to sell the flats of the home buyers or the
land leased out for the realization of their dues. Their
dues shall have to be recovered from the sale of other
properties which have been attached. The direction holds
good for the recovery of the dues of the various Banks
also.
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(iv) We have appointed the NBCC to complete the various
projects and hand over the possession to the buyers. The
percentage of commission of NBCC is fixed at 8 percent.
(v) The home buyers are directed to deposit the outstanding
amount under the Agreement entered with the promoters
within 3 months from today in the Bank account opened
in UCO Bank in the Branch of this Court. The amount
deposited by them shall be invested in the fixed deposit
to be disbursed under the order of this Court on phasewise completion of the projects/work by the NBCC.
(vi) In view of the finding recorded by the Forensic Auditors
and fraud unearthed, indicating prima facie violation of
the FEMA and other fraudulent activities, money
laundering, we direct Enforcement Directorate and
concerned authorities to investigate and fix liability on
persons responsible for such violation and submit the
progress report in the Court and let the police also submit
the report of the investigation made by them so far.
(vii) We direct the Institute of Chartered Accountants of India
to initiate the appropriate disciplinary action against Mr.
Anil Mittal, CA for his conduct as reflected in various
transactions and the findings recorded in the order and
his overall conduct as found on Forensic Audit. Let
appropriate proceedings are initiated and concluded as
early as possible within 6 months and a report of action
taken to be submitted to this Court.
(viii) We direct various Companies/ Directors and other
incumbents in whose hands money of the home buyers
is available as per the report of Forensic Auditors, to
deposit the same in the Court within one month from
today and to do the needful in the manner as observed.
The last opportunity of one month is granted to deposit
the amount and to do the needful failing which
appropriate action shall be taken against them.
(ix) Concerned Ministry of Central Government, as well as the
State Government and the Secretary of Housing and
Urban Development, are directed to ensure that
appropriate action is taken as against leaseholders
concerning such similar projects at Noida and Greater
Noida and other places in various States, where projects
have not been completed. They are further directed to
ensure that projects are completed in a time-bound
manner as contemplated in RERA and home buyers are
not defrauded.
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(x) We appoint Shri R. Venkataramani, learned Senior
Advocate, as the Court Receiver. The right of the lessee
shall vest in the Court Receiver and he shall execute
through authorized person on his behalf, the tripartite
agreement and do all other acts as may be necessary and
also to ensure that title is passed on to home buyers and
possession is handed over to them.
(xi) We also direct Noida and Greater Noida Authorities to
execute the tripartite agreement within one month
concerning the projects where homebuyers are residing
and issue completion certificate notwithstanding that the
dues are to be recovered under this order by the sale of
the other attached properties. Registered conveyance
deed shall also be executed in favour of homebuyers, they
are to be placed in the possession and they shall continue
to do so in future on completion of projects or in part as
the case may be. We direct the Noida and Greater Noida
Authorities to take appropriate action to do the needful
in the matter. The Water Works Department of the
concerned area and the Electricity Supplier are directed
to provide the connections for water and electricity to
home buyers forthwith.”
13. Learned Receiver prayed for directions in respect of the sale of
balance FAR available within the sanctioned plan, unused FAR up to the
permissible limit of 2.75 or more and FAR beyond 2.75 up to 3.5 under
the purchasable scheme and other FAR which may be available due to
metro projects, etc.
14. A prayer has also been made to direct Noida and Greater Noida
Authorities/Other Authorities/Govt. Departments/Bodies to sanction
necessary plans. Concerning water and power, Electricity
Department/Authorities be directed to provide water, electricity & sewage
connection to the prospective Institution/Builders/Developers, who will
purchase the balance FAR as also to various Executing
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Agencies/Contractor who may be appointed by NBCC during (i) execution
of work, and (ii) after completion of work till handing over of possession
is also done.
15. We have heard the learned senior counsel appearing on behalf of
Noida and Greater Noida Authorities as well as the learned Receiver.
16. It was argued by the learned senior counsel appearing on behalf of
Noida and Greater Noida Authorities that FAR is available at 2.75, and in
some projects, FAR at 3.50 was sanctioned by the Noida and Greater
Noida Authorities. The purchasable FAR can be 0.75, as the case may
be. Considering the facts and circumstances of the case and the huge
dues recoverable by Noida and Greater Noida Authorities, the FAR
deserve to be returned in favor of Noida and Greater Noida Authorities so
that they may sell it for the realisation of their dues as the recovery of
public money is to be made and authorities require money for various
development works.
17. While passing the judgment, we have noted that the Amrapali
Group of Companies worked out the price considering the premium
payable to the Noida and Greater Noida Authorities and have realized the
money from the buyers on that basis. It was also noted that diversion of
money was permitted not only by Noida and Greater Noida Authorities
but also by the bankers and other financial institutions. The concerned
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authorities did not take timely action, and the financial institutions
resulted in projects being stalled, and now it has become tough to
complete the projects. Financial institutions/ Banks are not coming
forward to fund the incomplete projects, and the buyers who borrowed
the money from the banks have not been able to obtain possession of the
flats booked by them due to the non-completion of the projects. On the
other hand, the liability to pay the interest on the amount of loan, which
they had taken, is fastened upon them, and they have been duped by
diverting money by the builders.
18. In view of the finding recorded in the judgment delivered by this
Court on 27.3.2019, the FAR is made available only because of the
investment made by the home buyers, but for that, the FAR would not
have been available. Thus, they should have the first charge on it as they
have deposited the money which had been diverted. Thus, we find no
justification in the prayer made by the Noida and Greater Noida
Authorities to release the FAR, which was available to the erstwhile
Amrapali Group of Companies, and all the rights of the builders are now
vesting in the Receiver. A finding was recorded earlier that builders were
not entitled to release of FAR as they did not fulfil the obligation, does not
come in the way of availability of FAR to the Receiver, it can be permitted
to be sold by the Receiver and the Committee formed by this Court for
this purpose. A substantial amount has to be fetched out of the sale of
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permissible FAR, which is 2.75. Purchasable FAR, which is 0.75, as the
case may be, and due to other developments, if any other FAR is made
available, it is permitted to be sold by the Receiver and the Committee to
utilize the money to complete various projects. In case any surplus
amount of money remains after completion of the projects, appropriate
orders can be passed to release the amount to Noida and Greater Noida
Authorities after completion of projects, if the dues are not satisfied by
the sale of the property of Amrapali Group of Companies, which has been
attached pursuant to the orders of this Court. We do not find any
justification in the prayers made in I.A. Nos.141062 of 2019 and 155624
of 2019 concerning the release of FAR in favour of Noida and Greater
Noida Authorities. The prayer is resultantly rejected, and we issue the
following directions concerning the sale of FAR as prayed by the learned
Receiver:
(i) The sale of balance FAR shall be available within the Sanctioned
Plan;
(ii) The sale of unused FAR shall be up to permissible limit @ 2.75 or
more as available;
(iii) The sale of FAR beyond 2.75 up to 3.5 under the purchasable
scheme or otherwise granted in Dream Valley Project, Plot No.
GH-09, Tech Zone IV, Greater Noida, and other projects or any
increase in FAR beyond permissible/purchasable due to
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whatever reasons such as the coming up of Metro project are to
be sold & transferred under the Authority of Receiver and
Committee appointed by this Court.
(iv) The above direction will be notwithstanding any previous dues of
the Amrapali Group, their associate companies/ developers/
other contractors deployed by them, or any other
previous/present outstanding.
(v) The Noida / Greater Noida Authorities or any other Development
Authorities, where these projects are situated, will not take into
account any cost consideration and will provide additional FAR
as may be available due to existing/proposed metro line and
sanction their plans accordingly within a fixed time frame of 30
days after submission of the details and designs.
(vi) The Noida / Greater Noida Authorities / Public Authorities /
Various Service Departments / Authorities like
Water/Power/Sewage/Pollution etc. shall adhere to the advice/
request of the Receiver appointed by this Court and will consider
the same as a direction issued by this Court.
(vii) With respect to purchasable FAR, if any amount is payable to
Noida and Greater Noida Authorities it shall be paid after the sale
of the FAR.
19. Thus, I.A. Nos.141062 of 2019 and 155624 of 2019 relating to the
release of FAR are rejected. It is made clear that while passing this order,
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we have not commented on the other prayers made in the applications.
They are to be decided later on.
In Re. I.A. No.166987 of 2019 and I.A. No.29699 of 2020 in I.A.
No.166987 of 2019 filed by Vansh Consultants Private Limited.
20. I.A. No.166987 of 2019 has been filed by Vansh Consultants Private
Limited, seeking deletion of its name from the summary of Report of
Forensic Auditors contained in paragraph 60(17) of the judgment dated
23.7.2019. It is submitted that the applicant had invested Rs.10 crores
in the Amrapali Leisure Valley Private Limited. It has been mentioned in
the judgment that an amount of Rs.9.75 crores is recoverable from the
applicant. Due to some inadvertent error, the name of the applicant has
been mentioned as a debtor. Following is the summary of the report of
Forensic Audit in paragraph 60(17) :
“SUMMARY OF REPORT OF FORENSIC AUDIT
60. The summary of report submitted by
Forensic Auditors in the Court is as under:
17. Summary of amounts recoverable standing
as debit balances in books of accounts
Amrapali group of companies had several amounts lying in
debit balances in the form of advances recoverable on
account of long term loans to third parties, short term loans
given to third parties, advances given for purchase of plots,
advances given to creditors for materials/others etc.
Amrapali group of companies were mostly diverting loan
funds as well as home buyers funds to directors, key
managerial personnel, relatives, group companies and third
parties. They did construction activity only in part and
created a circle for movements of funds vide bogus expenses
or hollow transactions. Funds were given to several parties
in the garb of advances against purchase of land or for
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purchasing material for construction and booked as sundry
creditors with debit balances. However, in effect such
amounts were neither returned nor any expense was
booked against them. Such amounts are as old as 2006-07,
which have not been returned or no expense has been
booked till date. Total of such recoverable amounts to
Rs.582 crore.
Top 20 of such parties with their balances are stated
hereunder:
Name of the
Company/Entity Total
Jaura Infratech
Private Limited
34,55,00,000
Mauria Udyog
Limited
22,24,34,199
Anil Kumar
Sharma
16,34,69,224
Shiv Priya
11,53,30,097
Prem Mishra
10,26,03,947
Vansh Consultants
Private Limited
9,75,00,000
Apex Infraventure
Private Limited
7,95,05,000
Rinku Computech
Private Limited
6,69,59,467
Sapphire Digital
Printers
4,46,83,088
Heart Beat City
Developers Pvt Ltd
4,29,32,000
Rubi Creations
Private Limited
4,26,27,790
Ajay Kumar
4,05,40,931
Star Land Craft
Private Limited
4,01,85,888
Heartland City
Developers Private
Limited
4,01,22,762
Vidhya Shree
Buildcon Private
Limited
4,00,00,000
Sky Tech Buildcon
Private Limited
3,88,53,775
Skyline Tele Media
Services Limited
3,48,02,771
20
Shantinath
Enterprises
3,24,71,100
Red Star Tradex P
Ltd.
3,00,00,000
Mohabbat S/o
Abbas
2,66,99,000
Total of top 20
companies/parties
1,64,72,21,039
It can be seen from records that the recoverable are due
since long and there are mostly no movements
subsequently either in the form of booking of expenses or
receipts. Out of the amounts recoverable from parties in
case of Ultra Home Construction Pvt Ltd, 20 parties having
huge balances recoverable were called for personal
interviews. 7 parties appeared and no satisfactory
explanation was provided
(Refer Annexure X.1, Volume IV page no 1015-1019).”
21. The applicant submitted that opening balances were not correctly
entered into Amrapali Leisure Valley Private Limited's accounting
software. The correctness of accounts of the Amrapali Group of
Companies escaped the attention of Forensic Auditors. It is submitted
that the applicant was incorporated and registered with the Registrar of
Companies, Delhi. The Amrapali Group needed infusion of money; as
such, it invested Rs.10 crores with Amrapali Leisure Valley Private
Limited in March/April 2014 and invested the amount bonafide. To
secure the return on the investment of Rs.10 crores, Amrapali Leisure
Valley Private Limited also offered allotment of flats to the applicant with
a condition of assured buy-back of flats. An agreement dated 28.3.2014
was entered into between Amrapali Leisure Valley Private Limited and the
applicant to secure investment of Rs.10 crores. The buy-back process
21
was to commence within 12 months from the date of the Agreement and
to be completed within 24 months. Amrapali Leisure Valley Private
Limited initially honoured its commitment of buy-back, and later on, it
started defaulting. Amrapali Leisure Valley Private Limited requested for
replacement of some cheques from time to time. Some cheques were
dishonoured. Proceedings under Section 138 of the Negotiable
Instruments Act are pending before the Trial Court. A statement about
the receipt of Rs.8 crores has been filed.
22. Vide email dated 21.11.2018, the Forensic Auditors sought the
statement of accounts of inter-corporate deposits of the applicant with
the Amrapali Group of Companies. A reply to which was submitted on
29.11.2018 by the applicant. The Forensic Auditors made certain queries
on 30.11.2018. A reply to which was sent on 2.12.2018 by the applicant.
Thereafter, on 3.12.2018, the Forensic Auditors requested the presence
of the Directors of the company. On 6.12.2018, the Directors of the
company, along with their Chartered Accountant, visited the Forensic
Auditor's office. The Enforcement Directorate issued a letter dated
18.10.2019 to the applicant based on the judgment and facts mentioned
in the report of the Forensic Auditors. The applicant was not a party to
the petition. The applicant submitted that Rs.10 crores' investment was
not reflected in the opening balance of the Amrapali Leisure Valley Private
Limited. An amount of Rs.8 crores received by the applicant from
22
Amrapali Leisure Valley Private Limited has not been reconciled against
the payment of Rs.10 crores paid by the applicant. The applicant
company does not owe any loan to the Amrapali Group of Companies or
the home buyers. The applicant is entitled to receive money from
Amrapali Leisure Valley Private Limited. The incomplete entries in the
books of accounts of the Amrapali Group of Companies have resulted in
an incorrect appreciation of entries about the applicant company. Thus,
the prayer has been made to delete the applicant's name from the table
contained in paragraph 60(17) of the judgment dated 23.7.2019.
23. In continuation of I.A. No.166987 of 2019, I.A. No.29699 of 2020
has been filed for directions. It is submitted that the Forensic Auditor’s
report violates the principles of natural justice. The Forensic Auditors
have shown the applicant as an inter-corporate depositor. The Forensic
Auditors sent an email dated 6.2.2020 to Mr. Raj Kumar Jain, Mr. Balbir
Singh Malhotra, and Mr. Sandeep, requesting them to present for
examination on 11.2.2020 and a reminder was received on 10.2.2020.
The applicant's counsel sent an email on 10.2.2020, requesting for books
of accounts of Amrapali Leisure Valley Private Limited to be kept ready.
The Forensic Auditors called each of the Directors of the company
separately one by one. The Forensic Auditors made a fishing and roving
inquiry. The applicant submitted that the imposition of liability of
Rs.9.75 crores is an error.
23
24. We have heard Mr. Anoop G. Chaudhari, learned senior counsel and
Mr. Pawan Kumar Aggarwal, the Forensic Auditor at length. Learned
senior counsel on behalf of applicant argued that the applicant invested
Rs.10 crores in Amrapali Leisure Valley Private Limited's project between
28.3.2014 to 4.4.2014. The amount of Rs.10 crores was invested in
Vansh Consultants by M/s. Harsh International, a partnership firm of
two brothers Yogesh Jain and R.K. Jain, located in Noida SEZ, a part of
Mahak Group. To safeguard the investment and funds, Mr. R.K. Jain
was inducted as a Director in Vansh Consultants on 9.8.2014. By way
of post-dated cheques, the applicant received only Rs.8 crores so far. The
post-dated cheques of Rs.11.25 crores were dishonored; as such, five
complaints under Section 138 of the Negotiable Instruments Act were
filed. The Forensic Auditors had asked the applicant to submit the
statement of accounts of inter-corporate deposits between 1.4.2008 and
30.9.2018. The Forensic Auditors, before submission of the report to this
Court, asked the applicant for certain information, which were given on
6.12.2018. This Court asked the Forensic Auditors to clarify the position
vide order dated 13.1.2020. This is a case of an obvious error on the part
of the Forensic Auditors. The applicant cannot be an inter-corporate
depositor of Rs.10 crores as well as a debtor of Rs.9.75 crores to Amrapali
Leisure Valley Private Limited. The Forensic Auditors have failed to take
note of the credit entries, bank transfers, the return of Rs.8 crores
received by the applicant by post-dated cheques, cheque bouncing cases
24
pending before the Trial Court and debit and credit entries have not been
reconciled. It is submitted that the applicant has received notice from
the Enforcement Directorate based on the incorrect report of the Forensic
Auditors. Thus, prayer for deletion of the applicant's name from the
judgment and the report of Forensic Auditor has been made.
25. The Forensic Auditor, Shri Pawan Agrawal, pointed out in detail the
various facts in the documents submitted by the applicant itself. It was
pointed out that there was nothing to dispute the debit entries made in
the accounts of Amrapali Leisure Valley Private Limited, and on
interrogation, the facts could not be explained. Several shell companies
were created or used to divert the money of home buyers. Forensic
Auditor further pointed out that the agreement entered into between
Vansh Consultants Private Limited and Amrapali Leisure Valley Private
Limited is dubious and designed to hide actual transactions behind this
agreement. Forensic Auditor also pointed out that the tower number
given in the agreement is F2, having total 34 floors (G+33) and 102 flats.
Amrapali Leisure Valley Pvt. Ltd. has no sanction plan of constructing
any building of 34 floors. Further, there is no tower, namely, F2. The
tower and flats mentioned in the agreement were not in existence at any
point of time.
26. Forensic Auditor further pointed out that it was mentioned in the
agreement that an amount of Rs 10 crores would be returned in a year
25
and Rs. 10 crores would be paid over and above the principal of Rs.10
crores in the next two years. This has resulted into an interest of Rs.10
crores on an amount of Rs.10 crores used for a year and after refund
interest of Rs.10 crores was payable. The agreement is beyond any
financial prudence, and only an insane businessman will agree to borrow
funds at such a high interest rate of 100 percent. Forensic Auditor
pointed out that it is a case of money laundering and the agreement was
dubious. Vansh Consultants Private Limited was not having the money,
it came in bank account in order to route it to Amrapali Leisure Valley
Pvt. Ltd. The learned Auditor also pointed out from the bank statement
filed by the applicant along with the application that it did not have the
money for transaction. It was routed for the purpose. The transactions
were only a conduit to move the money. The bank account shows no
other activity. Thus, no case is made out by the applicant.
27. Considering the material on record, deficiencies pointed out by
Forensic Auditor and the books of accounts of Amrapali Leisure Valley
Private Limited, the entries made therein, there is nothing to doubt the
correctness of the report of the Forensic Auditors, who made detailed
enquiries. The Directors were heard during Forensic Audit, and we find
that no case is made out to delete the name of the applicant from the
report of Forensic Audit as reflected in the judgment and order passed by
this Court, and we find no ground to doubt the correctness of the report
26
of the Forensic Auditors. No doubt about it that queries were made with
respect to inter-corporate deposit. Merely mentioning in the letter or
query to furnish details of the inter-corporate deposit made to be
submitted by the applicant, is not decisive of the fact as to what is the
ultimate transaction of the applicant with Amrapali Leisure Valley Private
Limited. The transactions do not inspire confidence, the towers and flats
were never sanctioned. The Agreement, which has been filed concerning
the investment of Rs.10 crores, shows that it wanted to purchase the
flats. It cannot be said to be the case of simplicitor of investment made.
The rate of interest fixed was also a method to take out buyer’s money in
a dubious manner. The documents of applicant are contradicted by the
accounts maintained by Amrapali Leisure Valley Private Limited. In the
facts and circumstances of the case, we find that no case is made out to
allow the prayers made in the applications. The applications are bereft
of any merits and are hereby dismissed.
In Re. Financing of Home Buyers by Banks
28. Learned Receiver submitted that the RBI may be directed to advise
all banks and financial institutions such as insurance companies, and
employers of the establishments which have sanctioned home loans to
home buyers to disburse all balance loan amounts to the home buyers
whose accounts are regular and they will abide by instructions issued by
the Receiver in this regard. It is further pointed out that banks have
27
certain reservations regarding the funding of NPA accounts. In view of
current social and economic conditions, the Court may direct the RBI to
keep its circulars/guidelines relating to NPA in abeyance and permit all
banking and financial institutions, etc. to disburse loans to home buyers
notwithstanding the status of accounts as NPA. Banks and financial
institutions be directed to work out a long-term restructuring of all home
buyers' loans about Amrapali Projects as well as any charges on the
Amrapali project held by banks and financial institutions.
29. On the previous date of hearing, i.e., 27.5.2020, we requested
Mr.Vikramjit Banerjee, learned ASG to obtain instructions from the RBI
concerning the release of loans by the banks and other financial
institutions to the home buyers. It was clearly stated that RBI
instructions do not come in the way of releasing home buyers' loans
whose accounts are NPAs. It would be for the banks and other financial
institutions to release the loan. In the facts and circumstances,
appropriate directions can be issued by this Court, and the RBI
guidelines would not come in the way in the facts of the case. Learned
counsel appearing for the banks pointed out that they are ready to release
the loan to the home buyers. However, it would be in a phased manner
and as per the stage of construction, they would be releasing the loan to
the particular home buyer.
28
30. Considering the aforesaid and in the facts and circumstances of the
case, as projects have been stalled for the last several years, the home
buyers have obtained loans but cannot enjoy the fruits of their
investment. At the same time, if projects are not completed and home
buyers are not sure of handing over of flats, it would be difficult for them
to pay bank dues till eternity and it is in the interest of home buyers as
well as banks and financial institutions as they can recover money when
projects are completed in an effective manner. We direct the banks and
financial institutions to release loans to home buyers, whose loans have
been sanctioned, notwithstanding the fact that their accounts are
declared as NPAs. Let there be restructuring of the loan amount. It may
be released under the current norms of the RBI for releasing loans and
the rates fixed by the RBI therefor. The disbursement of further loans
may be based on the present rate of interest fixed by the RBI; this we
order in the peculiar facts of the case. It may be released stage-wise and
long-term restructuring of the loans may be done so that construction is
completed and buyers are able to repay the loan. Ordered accordingly.
In Re. I.A. No. 49139 of 2020 (Interest to be realized on the
outstanding dues by Noida and Greater Noida Authorities)
31. Learned Receiver has pointed out that there is a lack of clarity
concerning dues of local authorities/banks/lenders. It has been
submitted that proper relaxations and concessions are required to be
given concerning such dues.
29
32. In the interlocutory application filed by Ace Group of Companies,
precarious conditions in the entire Noida and Greater Noida region faced
by the developers have been pointed out. It is submitted that following
economic recession in the last decade, the entire real estate sector has
gone downwards and facing acute financial crunch and is fighting for its
survival. The projects are incomplete, there were various litigations
which created a huge financial impact and non-delivery of projects, which
reflects the pathetic condition of the real estate sector. Multiple issues
are pointed out, which are adding to the woes of the developers. It is
averred that the developers and the home buyers both are adversely
affected due to non-delivery of booked flats in the regions of Noida and
Greater Noida etc.
33. The Ace Group of Companies obtained the plots between the period
2010 and 2015 from the Authorities in the aforesaid areas. The Noida
Authority is raising additional demand at the rate of Rs.600 per square
meter, whereas Greater Noida Authority is raising demand at the rate of
Rs.1700 per square meter. Due to recession, developers operating in the
region were not able to receive the requisite amount on time from home
buyers. For one reason or the other, development work of the projects
was halted. The Authorities are levying excessive interest and penal
interest, which continues to rise exponentially, culminating into huge
dues, and in some cases, the cost of the allotted land has doubled than
30
what it was originally fixed at the time of allotment over a period of time
and that the premium of the land has enhanced manifold after adding
the interest and penal interest thereon, and other liabilities are also
fastened. There is also considerable delay in the completion of the
projects as scheduled initially. The cost of completion of the project has
thus increased manifold due to delay in construction and has also
resulted in price rise of important construction components, material,
and labour. The burden of Service Tax and other cess and statutory
charges have also increased manifold. Though various companies
managed to raise the construction, however, the cost of land originally
allotted has doubled. The real estate sector is facing financial distress
due to the various intervening factors. The rate of interest has also gone
down substantially. Due to delay, in may cases refund order has also
been passed by Consumer Forums, which is adding financial constraints
on the part of developers. They are on the verge of completely financially
drained out. It is urged that interest rate and the delayed penalty being
charged by the Authorities on the allotted plots of land is excessively
higher than the prevailing financial market scenario whereas there has
been gradual and consistent fall in the interest rates since 2010 itself.
However, the interest rates of the Authorities have remained exorbitant
contrary to the prevailing economic situation of the country. The rates of
interest charged by the Authorities are exremely high. Apart from that,
penal interest on delayed payment is also added. The rates have been
31
increased from 11% to 14% - 15% to 18% - 23% per annum.
34. It is submitted by SBI MCLR (Marginal Cost of Funds based Lending
Rate) rate of interest for three years is 7% to 8%, and in the last six
months, it has further come down to 7.85%. If the base rate of SBI MCLR
is compared with the interest rate charged by the Noida and Greater
Noida Authorities, one can easily find out that it has drastically been
reduced over the years and ranges between 7.5% to 8.15% over the last
ten years. The rate and historical data on the base rate of SBI is filed.
35. It is further averred that over a period of time in the last five years,
the Banks have also reduced the interest paid on Fixed Deposits and
currently, it ranges between 6% to 7% only. However, Noida and Greater
Noida Authorities, despite allotting encumbered and disputed land
coupled with various other issues, failed to take any step to either reduce
the exorbitant rate of interest or completely waive off the interest and
other charges on account of delay and default in paying the land dues.
The Developers and the applicants and home buyers have acquired
valuable right in the land by paying the hefty amount. The developers
have made numerous efforts by approaching the concerned authorities
for redressal of their grievances. Till date, there has been no resolution.
Neither the Authorities nor the State Government has taken the issues
seriously. The issue of the interest affects the public at large, particularly
the home buyers and the interest of banks and financial institutions as
32
well besides that of Authorities. It is not possible to pay their dues.
Presently, in the wake of COVID 19 pandemic and its outbreak in India,
there is a continuous nation-wide lockdown. There have been absolutely
no business and commercial activities in this sector, and the entire real
estate industry has come to a grinding halt causing further financial
losses and damages to the real estate sector, which is generally in a
precarious condition in the Delhi/ NCR region. Therefore, prayer has
been made that there should be a complete waiver of interest component
in the repayment of land dues of Noida and Greater Noida Authorities,
and payment schedule towards lease rent and premium may be extended.
It is further submitted that various companies have stopped production
of the construction/ building material in the wake of lockdown. Most of
the labourers have gone back to their home States resulting in shortage
of labourers. In short, it is submitted that the real estate sector is facing
a crisis, and due to various aforesaid reasons, the timeline for completion
of projects may be deferred by one more year. Due to excessive lease
rent, penalty and interest charged and levied, additional land costs
demanded, and charged on the land allotted, various projects are stalled.
Most of the projects have acquired the status of dormant projects.
36. We are considering prayer Nos.1 and 2 of the I.A. with respect to
interest to be realized on the outstanding dues by Noida and Greater
Noida Authorities.
33
37. The rates of SBI MCLR is reduced to 7.45 % in the year 2020 from
8.95% in the year 2016. It is clear that the Noida and Greater Noida
Authorities, on the outstanding dues, are realizing the dues from all such
projects, interest at exorbitant rate such as 15% per annum with halfyearly compounding and in addition are also realizing penal interest on
the amount as fixed from time to time.
38. We have noted in the judgment dated 23.7.2019 the figure given by
the Noida and Greater Noida Authorities that after 2005, 114 plots had
been allotted to various group housing societies. 81 plots were handed
over the possession on payment of 10% of the total premium. 29 projects,
out of 81 were completed. Out of the other 33 allotted earlier, 11 were
completed, and 7 obtained part-completion certificates. Thus, it is
apparent that more than 60% of projects have not been able to come up
so far. We have also noted that the Noida and Greater Noida Authorities
did not take the step of termination of leases for various reasons. A large
number of home buyers have been waiting now approximately for the last
8 to 10 years or more for completion of houses. It is not in dispute that
the real estate sector has suffered a setback at present. It contributes to
the GDP of the country. As a large number of projects have not come up,
at the same time, Noida and Greater Noida Authorities have not been able
to realize their dues from such projects which are being piled up for the
last several years, at the same time interest of home buyers has
34
intervened. Even on the plots where the land was allotted from 2005
onwards, the projects have not been completed so far, though the buyers
have paid their money. The Noida and Greater Noida Authorities are not
issuing completion certificates to such projects and they are not able to
realize their outstanding dues. For various reasons, constructions have
not been completed, including due to diversion of funds. There is a failure
to comply with the obligation to the home buyers whose money has been
invested in the partially constructed structure and partial dues have been
paid to the Noida and Greater Noida Authorities.
39. It cannot be disputed that the rate of interest, on which agreements
were entered into, has gone down by now. The present lending rate is
much below and the RBI has taken several steps to revive the economy.
In such a scenario, it would never be possible to make payment of interest
at the rate fixed by authorities and also a penal interest to be realized by
concerned authorities. The home buyers are not able to obtain fruits of
the investment and are deprived of legal title of the flats.
40. We have heard the learned counsel appearing for Noida and Greater
Noida Authorities. Learned senior counsel also drew our attention to the
following observations made by this Court in the judgment dated
23.7.2019:
"72. In our opinion, if the real estate business has to
survive in India, it has to be answerable to the public and
has necessarily to uphold the trust reposed in
35
builders/promoters. They have been paid huge amounts
not only by the home buyers but also, they have to pay a
huge amount for the public land given to them on lease by
Noida and Greater Noida Authorities for construction of
houses. The land has been given to them by the authorities
on a concessional basis by making payment of 10% amount
at the time of allotment. The builders have to be
accountable to public/home buyers as well as the
authorities and bankers. It is a matter relating to housing
needs dealing with shelter place, such an activity is of the
public importance as the real estate sector plays a pivotal
role in the fulfillment of needs of housing infrastructure."
41. It was also argued by the learned senior counsel that even if the
builder may have factored the valuation of price, including interest on the
cost of the land, the lease deed and the authorities will remain unaffected.
A prayer was made that the authorities may be given liberty to recover
their amount of interest from the builder at the contractually agreed rate
under the lease deed. It was lastly and rightly pointed out that the Court
can fix a reasonable rate of interest. Considering the present scenario,
we feel that the aforesaid submission is justified.
42. Considering the current state of real estate, the projects are
standstill, and in order to give impetus to such housing projects and
mainly considering plight of home buyers and as pointed out by Noida
and Greater Noida Authorities that 114 plots were allotted from 2005
onwards, most of projects are incomplete; we direct that rate of interest
on the outstanding premium and other dues to be realized in all such
cases at the rate of 8% per annum and let the Noida and Greater Noida
Authorities do a restructuring of the repayment schedule so that amount
36
is paid and Noida and Greater Noida Authorities are able to realize the
same. As to reasonable time frame, we would like to hear the parties. In
case of failure to pay, the concession granted shall stand withdrawn.
However, at the same time, the Noida and Greater Noida Authorities shall
also ensure that not only instalments/money are deposited, but also all
such projects are completed within the stipulated time.
...……………………J.
(Arun Mishra)
...……………………J.
(Uday Umesh Lalit)
New Delhi;
June 10, 2020.
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
I.A.NOS. 49238 OF 2020, 49239 OF 2020, I.A.NO.29350 OF 2020,
I.A.NOS. 166987 OF 2019, I.A.NO. 29699 OF 2020,
I.A.NOS.155624 OF 2019, I.A.NO.141062 OF 2019 AND
I.A.NO.49139 OF 2020
IN
WRIT PETITION [C] NO.940 OF 2017
BIKRAM CHATTERJI & ORS. … PETITIONERS
VERSUS
UNION OF INDIA & ORS. … RESPONDENTS
O R D E R
In Re I.A.No.49238 of 2020 seeking directions filed by NBCC (I) Ltd.
1. By way of I.A. No.49238 of 2020, NBCC has submitted that it has
established the work on the following conditions:
i. “NBCC will not be held responsible for any existing
disputes involving and in relation to the Projects;
ii. NBCC will not be held responsible for any disputes
arising from the contracts entered into by Amrapali
in relation to the Projects;
iii. NBCC will not be held responsible for any past or
present liabilities in relation to the Projects,
including on account of dues of homebuyers,
vendors, contractors, government authorities, etc.;
iv. NBCC will not be liable in relation to any disputes,
including before any Court or Arbitrator, existing
or arising at a later date, with the existing vendors,
contractors, co-developers, landowners, homebuyers, banks, financial institutions, other lenders
2
and creditors and any government authority.”
2. As NBCC is appointed as a Project Management Consultant to
complete various projects, it was permitted to float the tenders and
prepare DPRs. It is submitted that NBCC has completed two projects and
floated tenders for other projects, barring three projects. However,
various home buyers are approaching different courts in different
jurisdictions across the country, making NBCC a party. The
complaints/petitions are filed against NBCC seeking reliefs, such as
refund of amounts that home buyers have paid to the Amrapali Group or
to grant possession of flats, etc. The NBCC is forced to defend itself in
different Courts being a party to the said petitions. For instance, a
summon has been received from the State Consumer Redressal
Commission, Lucknow against the CMD. The NBCC has been arrayed as
respondent No.3. A complaint has also been preferred by one of the home
buyers of the Amrapali Golf Homes, Greater Noida. They are receiving
various letters, emails, messages, calls seeking updates regarding the
progress of work being undertaken by the NBCC for their respective
projects. Reply to every home buyer is a herculean task, and much time
is being consumed in the process. The NBCC is ready and willing to
submit monthly project reports with all relevant information and
photographs in respect of each project to the learned Receiver, which can
be made available on the blog/website for the information of home
buyers, for that the NBCC has already made a request to the learned
3
Receiver as such various directions have been sought.
3. NBCC is asked by this Court to complete the incomplete projects.
It is not liable for any legal action. In view of the order that has been
passed by this Court, the NBCC is immune from any such actions, and
we request the Courts/ Consumer Redressal Commission and other
authorities not to permit impleadment of NBCC as respondent and not to
issue summons to NBCC as they are doing the work under the
supervision of this Court and are not answerable to any other court,
tribunal, authorities. They are granted immunity to be sued in any other
court or commission, and they are answerable to this Court only in the
pending proceedings. Thus, they cannot be dragged in the litigation filed
by existing home buyers, previous contractors, co-developers,
landowners, banks, financial institutions, other lenders and creditors,
and any Government authorities before any other Court/ Commission or
Authority.
4. It is also made clear that NBCC is not responsible for attending to
queries made by the home buyers. They have to report the progress to
the learned Receiver, and we request the learned Receiver to put progress
reports of projects on the blog/website.
With the said directions and observations, we dispose of I.A.
No.49238 of 2020.
4
In Re I.A. No.29350 of 2020 in I.A. No.13175 of 2019 filed by
Royalgolf Link City Projects Private Limited
5. I.A. No.29350 of 2020 has been filed by Royalgolf Link City Projects
Private Limited for modification of order dated 11.9.2019, by which this
Court directed that a sum of Rs.48.52 crores, which was the principal
amount received by Royalgolf Link City Projects Private Limited from the
Amrapali Group to be repaid along with 12% interest by 10.1.2020 and
the attachment of 30 villas was to continue unless otherwise ordered. An
undertaking was also to be furnished by the Chief Finance Officer as well
as by all the Directors to deposit the amount as ordered. This Court
directed that 25% of the amount be paid by 30.10.2019, 30% by
30.11.2019, and the remaining amount on or before 10.1.2020. The
interest was to be calculated until the date of the payment.
6. The Royalgolf Link City Projects Private Limited, after construction,
was to give 30 villas to the Amrapali Ultra Homes as per the Agreement
entered into between them. A sum of Rs.48.52 crores was received as the
principal amount by Royalgolf Link City Projects Private Limited. The
present application has been filed to modify the order passed by this
Court because it deposited a sum of Rs.48.52 crores, but it has extreme
hardship in depositing 12% of interest on the amount mentioned above.
It is averred that due to litigation, the goodwill of the project has been
severely affected, and construction work is considerably slowed down due
5
to lack of funds. The vendors have stopped offering credit. The existing
buyers are not making payments. The average yearly collections had also
dropped from Rs.61.86 crores in the year 2018-19 to Rs.17.85 crores in
2019-2020. Despite part injunction lifted by this Court, the project could
register new sales of only 15 units, and only Rs.1.42 crores could be
recovered. The banks have also stopped making further disbursement of
the retail loans to individual home buyers. Fourteen buyers have
cancelled their units. The RERA has ordered a refund of 6 units along
with interest upon the complaints filed before it. A loan was taken at a
very high rate of 21% in order to deposit the amount. It will be difficult
to repay the loan in case interest is not waived. Home buyers' interest is
at stake as the project has been delayed for more than three years due to
the injunction of this Court. This Court vide judgment dated 23.7.2019
directed various entities to deposit the amount with the Registry and did
not direct payment of any interest, but in the case of the applicant,
interest has been ordered to be paid.
7. Having heard Shri Shyam Divan, learned senior counsel at length,
we are of the opinion that value of money increased at the hands of
Royalgolf Link City Projects Private Limited and the value of houses and
villas which were to be handed over to Ultra Homes, has also been
appreciated. Considering over all facts and circumstances of the case,
we have ordered a reasonable interest rate of 12%. As it was the money
6
of home buyers, which was diverted, they must have a refund of their
money with a reasonable rate of interest. We find the hardships, which
are pointed out, are all commercial one and the Royalgolf Link City
Projects Private Limited is bound to disgorge the advantage it received
out of huge money of Rs.48.52 crores, which remained with it for a
substantial period; otherwise, it would tantamount to unjust enrichment.
It cannot be taken as a ground that in the judgment/ order dated
23.7.2019, the interest was not imposed on other entities. It has been
imposed on the facts and circumstances of the case on the Royalgolf Link
City Projects Private Limited. It is open to imposing interest and on other
persons/ entities. The question is quite open as interest was not dealt
with in the judgment dated 23.7.2019, and only the aspect of findings of
Forensic Auditors was dealt with. Thus, we find no merit in the
application, and the same is dismissed. Let interest be deposited within
six weeks, failing which appropriate action would be taken for violation
of undertaking furnished by the Chief Financial Officer and the Directors
and for violation of the order passed by this Court.
In Re. IA No.141062 of 2019 and IA No.155624 of 2019
(Release of FAR to the Noida and Greater Noida Authorities)
8. I.A. Nos.141062 of 2019 and 155624 of 2019 have been filed by the
Noida and Greater Noida Authorities respectively for issuance of direction
for return of unused FAR. The Noida Authority has prayed for the release
7
of FAR of 98,445.77 sq. mtrs. as detailed in para 7 of the application.
Several other prayers have also been made. The Greater Noida Authority
also made similar prayer in the application. We are presently dealing
with the part of prayers with respect to the release of FAR.
9. It is submitted in the application that as per judgment dated
23.7.2019, directions were issued by this Court to execute tripartite
Agreement concerning projects, where flat buyers are residing within a
period of one month. The concerned authorities are duty-bound to
implement the judgment. As the Registry did not accept the review
petition, applications have been filed. The Noida Authority had allotted
a total of nine Group Housing Plots in favour of the Amrapali Group of
Companies. This Court ordered the cancellation of the lease of Amrapali
Group of Companies and the property vest in Receiver. The outstanding
dues of Rs.2,191.38 crores existed against the allotment of nine Group
Housing Plots as only partial payment has been made. This Court also
directed that the land dues can be recovered from other properties of
Amrapali Group, which have been attached. The Noida and Greater
Noida Authorities are entrusted with the task of holistic development of
the industrial area, which includes the construction of various
infrastructural projects and carrying out of municipal works, catering to
more than 15 lakhs population. The recovery of dues is necessary as it
is public money. It is submitted that as per the terms of allotment and
8
lease deed, the builder was entitled to FAR at 2.75. Based on the layout
plan sanctioned by the Noida Authority, it was permissible to construct
a specified number of flats in each of the group housing plots. However,
all the flats that can be constructed within the permitted FAR are neither
under construction work nor sold. There remains unused FAR, as vacant
land, to which builder was entitled. Considering the flats that can be
constructed within the permitted FAR @ 2.75, and there are no flats
constructed on the available FAR, the unused FAR of 98,445.77 sq. mtrs.
which translates into 35,798.19 sq. mtrs. of land may be ordered to be
returned to Noida Authority. If FAR is ordered to be returned to the Noida
Authority, to some extent, the outstanding land dues can be recovered.
10. In I.A. No.155624 of 2019 filed by Greater Noida Authority, it is
submitted that there is a vacant area in square meter plot-wise within
the sanctioned FAR @ 2.75. It has also been prayed that NBCC may be
directed to complete the construction of 10,556 nos. of flats and not
11,469 nos. of flats on Plot No.GH 09, Sector Tech. Zone 4, Greater Noida.
Because of the availability of FAR @ 2.75, prayer made is to return it to
realize the dues, Rs.3,234.71 crores as on 15.1.2019, inclusive of
interest, 15% per annum with half-yearly compounding and penal
interest.
11. Learned Receiver has prayed to permit him and the Committee
assisting in proceeding to sell or otherwise transfer of unused sanctioned
9
FAR, permissible FAR, and purchasable FAR, as well as additional FAR
due to existing or proposed metro line. The sale and transfer can be on
such terms as may be found profitable and expeditiously executable.
Learned Receiver shall be at liberty to invite applications from intending
purchasers by issuing public notices. Learned Receiver and the
Committee be authorized to require Noida and Greater Noida Authorities
to act in the facilitation of sale or transfer, and the authorities may be
directed to abide by instructions or compliances that may be sought by
the learned Receiver and the Committee. Learned Receiver has pointed
out that FAR's sale is necessary to complete the projects and fetch money
for incomplete projects left by the builders.
12. Our attention was drawn to a finding recorded by this Court in
judgment and order delivered on 23.7.2019 to the effect that basic
obligation was not complied with by promoter as such it was not entitled
to sell FAR. Learned Receiver pointed out that in Dream Valley Project in
Greater Noida, the authorities had sanctioned FAR @ 3.5, which include
up to 2.75 permissible FAR and 0.75 purchasable FAR. In Silicon City,
Noida, the Authority had sanctioned up to 2.75 FAR and an additional
15% FAR over and above 2.75 FAR. As this Court cancelled the leases
granted in favor of the Amrapali Group of Companies by the Noida and
Greater Noida Authorities, the rights have vested in the Receiver. The
Receiver has also attracted our attention to the findings recorded in the
10
judgment to the effect that buyers have paid the dues of Noida and
Greater Noida Authorities as a component of the price for flats. Thus, the
premium and other dues payable under the lease deeds to the Noida and
Greater Noida Authorities cannot be recovered from the home buyers or
the projects in question. The directions have been issued to the effect
that Noida and Greater Noida Authorities could not sell the buildings or
demolish them nor could enforce the charge against home buyers/leased
land/projects, in the facts of the case and ultimately various directions
were issued by this Court. Relevant findings and directions are extracted
hereunder:
“122. As the basic obligations have not been complied
with by the promoters, they cannot also be entitled to FAR.
It was pointed out on behalf of Authorities that permissible
FAR is 2.75, whereas it has been wrongly mentioned and
worked out at 3.50 by the Amrapali Group. In the instant
case, we find that there is serious kind of fraud by the
promotors as such they cannot be said to be entitled to avail
the FAR to utilise it or to alienate and more so when they
have failed to complete the projects and pay the dues.
149. Because of the gross violations of the conditions of
lease deeds executed by the Noida and Greater Noida
Authorities in favour of Amrapali group of companies with
respect to various projects, are liable to be cancelled and
the rights thereupon shall vest in the Court Receiver.
150. There was no valid mortgage created in favour of
Banks and there was a huge diversion of money paid by
homebuyers which were more than required for payment of
dues of the Noida/ Greater Noida Authorities and banks.
The buyers have paid the dues of Noida and Greater Noida
authorities as a component of the price for flats. Thus, the
premium and other dues payable under the lease deeds to
the Noida and Greater Noida Authorities, cannot be
recovered from the home buyers or the projects in question.
The dues as may be ordered shall be recovered by sale of
other properties which have been created by the diversion
11
of funds and have been attached by this Court. The banks
have also failed to ensure that the money was used in the
projects. As found in the forensic audit, there was no
necessity of obtaining loans from the banks and it has not
been used for the purpose it was obtained. The Authorities
and Bankers have violated the doctrine of public trust and
their officials, unfortunately, acted in collusion with
builders. The dues of the banks are also to be recovered
from the other attached properties as observed by us.
153. We have also found that non-payment of dues of the
Noida and Greater Noida Authorities and the banks cannot
come in the way of occupation of flats by home buyers as
money of home buyers has been diverted due to the inaction
of Officials of Noida/ Greater Noida Authorities. They
cannot sell the buildings or demolish them nor can enforce
the charge against homebuyers/ leased land/ projects in
the facts of the case. Similarly, the banks cannot recover
money from projects as it has not been invested in projects.
Homebuyers money has been diverted fraudulently, thus,
fraud cannot be perpetuated against them by selling the
flats and depriving them of hard-earned money and savings
of entire life. They cannot be cheated once over again by
sale of the projects raised by their funds. The Noida and
Greater Noida Authorities have to issue the Completion/
Part Completion Certificate, as the case may be, to execute
tripartite agreement and registered deeds in favour of the
buyers on part-completion or completion of the buildings,
as the case may be or where the inhabitants are residing,
within a period of one month.
154. Resultantly, we order as follows:
(i) The registration of Amrapali Group of Companies under
RERA shall stand cancelled;
(ii) The various lease deeds granted in favour of Amrapali
Group of Companies by Noida and Greater Noida
Authorities for projects in question stand cancelled and
rights henceforth, to vest in Court Receiver;
(iii) We hold that Noida and Greater Noida Authorities shall
have no right to sell the flats of the home buyers or the
land leased out for the realization of their dues. Their
dues shall have to be recovered from the sale of other
properties which have been attached. The direction holds
good for the recovery of the dues of the various Banks
also.
12
(iv) We have appointed the NBCC to complete the various
projects and hand over the possession to the buyers. The
percentage of commission of NBCC is fixed at 8 percent.
(v) The home buyers are directed to deposit the outstanding
amount under the Agreement entered with the promoters
within 3 months from today in the Bank account opened
in UCO Bank in the Branch of this Court. The amount
deposited by them shall be invested in the fixed deposit
to be disbursed under the order of this Court on phasewise completion of the projects/work by the NBCC.
(vi) In view of the finding recorded by the Forensic Auditors
and fraud unearthed, indicating prima facie violation of
the FEMA and other fraudulent activities, money
laundering, we direct Enforcement Directorate and
concerned authorities to investigate and fix liability on
persons responsible for such violation and submit the
progress report in the Court and let the police also submit
the report of the investigation made by them so far.
(vii) We direct the Institute of Chartered Accountants of India
to initiate the appropriate disciplinary action against Mr.
Anil Mittal, CA for his conduct as reflected in various
transactions and the findings recorded in the order and
his overall conduct as found on Forensic Audit. Let
appropriate proceedings are initiated and concluded as
early as possible within 6 months and a report of action
taken to be submitted to this Court.
(viii) We direct various Companies/ Directors and other
incumbents in whose hands money of the home buyers
is available as per the report of Forensic Auditors, to
deposit the same in the Court within one month from
today and to do the needful in the manner as observed.
The last opportunity of one month is granted to deposit
the amount and to do the needful failing which
appropriate action shall be taken against them.
(ix) Concerned Ministry of Central Government, as well as the
State Government and the Secretary of Housing and
Urban Development, are directed to ensure that
appropriate action is taken as against leaseholders
concerning such similar projects at Noida and Greater
Noida and other places in various States, where projects
have not been completed. They are further directed to
ensure that projects are completed in a time-bound
manner as contemplated in RERA and home buyers are
not defrauded.
13
(x) We appoint Shri R. Venkataramani, learned Senior
Advocate, as the Court Receiver. The right of the lessee
shall vest in the Court Receiver and he shall execute
through authorized person on his behalf, the tripartite
agreement and do all other acts as may be necessary and
also to ensure that title is passed on to home buyers and
possession is handed over to them.
(xi) We also direct Noida and Greater Noida Authorities to
execute the tripartite agreement within one month
concerning the projects where homebuyers are residing
and issue completion certificate notwithstanding that the
dues are to be recovered under this order by the sale of
the other attached properties. Registered conveyance
deed shall also be executed in favour of homebuyers, they
are to be placed in the possession and they shall continue
to do so in future on completion of projects or in part as
the case may be. We direct the Noida and Greater Noida
Authorities to take appropriate action to do the needful
in the matter. The Water Works Department of the
concerned area and the Electricity Supplier are directed
to provide the connections for water and electricity to
home buyers forthwith.”
13. Learned Receiver prayed for directions in respect of the sale of
balance FAR available within the sanctioned plan, unused FAR up to the
permissible limit of 2.75 or more and FAR beyond 2.75 up to 3.5 under
the purchasable scheme and other FAR which may be available due to
metro projects, etc.
14. A prayer has also been made to direct Noida and Greater Noida
Authorities/Other Authorities/Govt. Departments/Bodies to sanction
necessary plans. Concerning water and power, Electricity
Department/Authorities be directed to provide water, electricity & sewage
connection to the prospective Institution/Builders/Developers, who will
purchase the balance FAR as also to various Executing
14
Agencies/Contractor who may be appointed by NBCC during (i) execution
of work, and (ii) after completion of work till handing over of possession
is also done.
15. We have heard the learned senior counsel appearing on behalf of
Noida and Greater Noida Authorities as well as the learned Receiver.
16. It was argued by the learned senior counsel appearing on behalf of
Noida and Greater Noida Authorities that FAR is available at 2.75, and in
some projects, FAR at 3.50 was sanctioned by the Noida and Greater
Noida Authorities. The purchasable FAR can be 0.75, as the case may
be. Considering the facts and circumstances of the case and the huge
dues recoverable by Noida and Greater Noida Authorities, the FAR
deserve to be returned in favor of Noida and Greater Noida Authorities so
that they may sell it for the realisation of their dues as the recovery of
public money is to be made and authorities require money for various
development works.
17. While passing the judgment, we have noted that the Amrapali
Group of Companies worked out the price considering the premium
payable to the Noida and Greater Noida Authorities and have realized the
money from the buyers on that basis. It was also noted that diversion of
money was permitted not only by Noida and Greater Noida Authorities
but also by the bankers and other financial institutions. The concerned
15
authorities did not take timely action, and the financial institutions
resulted in projects being stalled, and now it has become tough to
complete the projects. Financial institutions/ Banks are not coming
forward to fund the incomplete projects, and the buyers who borrowed
the money from the banks have not been able to obtain possession of the
flats booked by them due to the non-completion of the projects. On the
other hand, the liability to pay the interest on the amount of loan, which
they had taken, is fastened upon them, and they have been duped by
diverting money by the builders.
18. In view of the finding recorded in the judgment delivered by this
Court on 27.3.2019, the FAR is made available only because of the
investment made by the home buyers, but for that, the FAR would not
have been available. Thus, they should have the first charge on it as they
have deposited the money which had been diverted. Thus, we find no
justification in the prayer made by the Noida and Greater Noida
Authorities to release the FAR, which was available to the erstwhile
Amrapali Group of Companies, and all the rights of the builders are now
vesting in the Receiver. A finding was recorded earlier that builders were
not entitled to release of FAR as they did not fulfil the obligation, does not
come in the way of availability of FAR to the Receiver, it can be permitted
to be sold by the Receiver and the Committee formed by this Court for
this purpose. A substantial amount has to be fetched out of the sale of
16
permissible FAR, which is 2.75. Purchasable FAR, which is 0.75, as the
case may be, and due to other developments, if any other FAR is made
available, it is permitted to be sold by the Receiver and the Committee to
utilize the money to complete various projects. In case any surplus
amount of money remains after completion of the projects, appropriate
orders can be passed to release the amount to Noida and Greater Noida
Authorities after completion of projects, if the dues are not satisfied by
the sale of the property of Amrapali Group of Companies, which has been
attached pursuant to the orders of this Court. We do not find any
justification in the prayers made in I.A. Nos.141062 of 2019 and 155624
of 2019 concerning the release of FAR in favour of Noida and Greater
Noida Authorities. The prayer is resultantly rejected, and we issue the
following directions concerning the sale of FAR as prayed by the learned
Receiver:
(i) The sale of balance FAR shall be available within the Sanctioned
Plan;
(ii) The sale of unused FAR shall be up to permissible limit @ 2.75 or
more as available;
(iii) The sale of FAR beyond 2.75 up to 3.5 under the purchasable
scheme or otherwise granted in Dream Valley Project, Plot No.
GH-09, Tech Zone IV, Greater Noida, and other projects or any
increase in FAR beyond permissible/purchasable due to
17
whatever reasons such as the coming up of Metro project are to
be sold & transferred under the Authority of Receiver and
Committee appointed by this Court.
(iv) The above direction will be notwithstanding any previous dues of
the Amrapali Group, their associate companies/ developers/
other contractors deployed by them, or any other
previous/present outstanding.
(v) The Noida / Greater Noida Authorities or any other Development
Authorities, where these projects are situated, will not take into
account any cost consideration and will provide additional FAR
as may be available due to existing/proposed metro line and
sanction their plans accordingly within a fixed time frame of 30
days after submission of the details and designs.
(vi) The Noida / Greater Noida Authorities / Public Authorities /
Various Service Departments / Authorities like
Water/Power/Sewage/Pollution etc. shall adhere to the advice/
request of the Receiver appointed by this Court and will consider
the same as a direction issued by this Court.
(vii) With respect to purchasable FAR, if any amount is payable to
Noida and Greater Noida Authorities it shall be paid after the sale
of the FAR.
19. Thus, I.A. Nos.141062 of 2019 and 155624 of 2019 relating to the
release of FAR are rejected. It is made clear that while passing this order,
18
we have not commented on the other prayers made in the applications.
They are to be decided later on.
In Re. I.A. No.166987 of 2019 and I.A. No.29699 of 2020 in I.A.
No.166987 of 2019 filed by Vansh Consultants Private Limited.
20. I.A. No.166987 of 2019 has been filed by Vansh Consultants Private
Limited, seeking deletion of its name from the summary of Report of
Forensic Auditors contained in paragraph 60(17) of the judgment dated
23.7.2019. It is submitted that the applicant had invested Rs.10 crores
in the Amrapali Leisure Valley Private Limited. It has been mentioned in
the judgment that an amount of Rs.9.75 crores is recoverable from the
applicant. Due to some inadvertent error, the name of the applicant has
been mentioned as a debtor. Following is the summary of the report of
Forensic Audit in paragraph 60(17) :
“SUMMARY OF REPORT OF FORENSIC AUDIT
60. The summary of report submitted by
Forensic Auditors in the Court is as under:
17. Summary of amounts recoverable standing
as debit balances in books of accounts
Amrapali group of companies had several amounts lying in
debit balances in the form of advances recoverable on
account of long term loans to third parties, short term loans
given to third parties, advances given for purchase of plots,
advances given to creditors for materials/others etc.
Amrapali group of companies were mostly diverting loan
funds as well as home buyers funds to directors, key
managerial personnel, relatives, group companies and third
parties. They did construction activity only in part and
created a circle for movements of funds vide bogus expenses
or hollow transactions. Funds were given to several parties
in the garb of advances against purchase of land or for
19
purchasing material for construction and booked as sundry
creditors with debit balances. However, in effect such
amounts were neither returned nor any expense was
booked against them. Such amounts are as old as 2006-07,
which have not been returned or no expense has been
booked till date. Total of such recoverable amounts to
Rs.582 crore.
Top 20 of such parties with their balances are stated
hereunder:
Name of the
Company/Entity Total
Jaura Infratech
Private Limited
34,55,00,000
Mauria Udyog
Limited
22,24,34,199
Anil Kumar
Sharma
16,34,69,224
Shiv Priya
11,53,30,097
Prem Mishra
10,26,03,947
Vansh Consultants
Private Limited
9,75,00,000
Apex Infraventure
Private Limited
7,95,05,000
Rinku Computech
Private Limited
6,69,59,467
Sapphire Digital
Printers
4,46,83,088
Heart Beat City
Developers Pvt Ltd
4,29,32,000
Rubi Creations
Private Limited
4,26,27,790
Ajay Kumar
4,05,40,931
Star Land Craft
Private Limited
4,01,85,888
Heartland City
Developers Private
Limited
4,01,22,762
Vidhya Shree
Buildcon Private
Limited
4,00,00,000
Sky Tech Buildcon
Private Limited
3,88,53,775
Skyline Tele Media
Services Limited
3,48,02,771
20
Shantinath
Enterprises
3,24,71,100
Red Star Tradex P
Ltd.
3,00,00,000
Mohabbat S/o
Abbas
2,66,99,000
Total of top 20
companies/parties
1,64,72,21,039
It can be seen from records that the recoverable are due
since long and there are mostly no movements
subsequently either in the form of booking of expenses or
receipts. Out of the amounts recoverable from parties in
case of Ultra Home Construction Pvt Ltd, 20 parties having
huge balances recoverable were called for personal
interviews. 7 parties appeared and no satisfactory
explanation was provided
(Refer Annexure X.1, Volume IV page no 1015-1019).”
21. The applicant submitted that opening balances were not correctly
entered into Amrapali Leisure Valley Private Limited's accounting
software. The correctness of accounts of the Amrapali Group of
Companies escaped the attention of Forensic Auditors. It is submitted
that the applicant was incorporated and registered with the Registrar of
Companies, Delhi. The Amrapali Group needed infusion of money; as
such, it invested Rs.10 crores with Amrapali Leisure Valley Private
Limited in March/April 2014 and invested the amount bonafide. To
secure the return on the investment of Rs.10 crores, Amrapali Leisure
Valley Private Limited also offered allotment of flats to the applicant with
a condition of assured buy-back of flats. An agreement dated 28.3.2014
was entered into between Amrapali Leisure Valley Private Limited and the
applicant to secure investment of Rs.10 crores. The buy-back process
21
was to commence within 12 months from the date of the Agreement and
to be completed within 24 months. Amrapali Leisure Valley Private
Limited initially honoured its commitment of buy-back, and later on, it
started defaulting. Amrapali Leisure Valley Private Limited requested for
replacement of some cheques from time to time. Some cheques were
dishonoured. Proceedings under Section 138 of the Negotiable
Instruments Act are pending before the Trial Court. A statement about
the receipt of Rs.8 crores has been filed.
22. Vide email dated 21.11.2018, the Forensic Auditors sought the
statement of accounts of inter-corporate deposits of the applicant with
the Amrapali Group of Companies. A reply to which was submitted on
29.11.2018 by the applicant. The Forensic Auditors made certain queries
on 30.11.2018. A reply to which was sent on 2.12.2018 by the applicant.
Thereafter, on 3.12.2018, the Forensic Auditors requested the presence
of the Directors of the company. On 6.12.2018, the Directors of the
company, along with their Chartered Accountant, visited the Forensic
Auditor's office. The Enforcement Directorate issued a letter dated
18.10.2019 to the applicant based on the judgment and facts mentioned
in the report of the Forensic Auditors. The applicant was not a party to
the petition. The applicant submitted that Rs.10 crores' investment was
not reflected in the opening balance of the Amrapali Leisure Valley Private
Limited. An amount of Rs.8 crores received by the applicant from
22
Amrapali Leisure Valley Private Limited has not been reconciled against
the payment of Rs.10 crores paid by the applicant. The applicant
company does not owe any loan to the Amrapali Group of Companies or
the home buyers. The applicant is entitled to receive money from
Amrapali Leisure Valley Private Limited. The incomplete entries in the
books of accounts of the Amrapali Group of Companies have resulted in
an incorrect appreciation of entries about the applicant company. Thus,
the prayer has been made to delete the applicant's name from the table
contained in paragraph 60(17) of the judgment dated 23.7.2019.
23. In continuation of I.A. No.166987 of 2019, I.A. No.29699 of 2020
has been filed for directions. It is submitted that the Forensic Auditor’s
report violates the principles of natural justice. The Forensic Auditors
have shown the applicant as an inter-corporate depositor. The Forensic
Auditors sent an email dated 6.2.2020 to Mr. Raj Kumar Jain, Mr. Balbir
Singh Malhotra, and Mr. Sandeep, requesting them to present for
examination on 11.2.2020 and a reminder was received on 10.2.2020.
The applicant's counsel sent an email on 10.2.2020, requesting for books
of accounts of Amrapali Leisure Valley Private Limited to be kept ready.
The Forensic Auditors called each of the Directors of the company
separately one by one. The Forensic Auditors made a fishing and roving
inquiry. The applicant submitted that the imposition of liability of
Rs.9.75 crores is an error.
23
24. We have heard Mr. Anoop G. Chaudhari, learned senior counsel and
Mr. Pawan Kumar Aggarwal, the Forensic Auditor at length. Learned
senior counsel on behalf of applicant argued that the applicant invested
Rs.10 crores in Amrapali Leisure Valley Private Limited's project between
28.3.2014 to 4.4.2014. The amount of Rs.10 crores was invested in
Vansh Consultants by M/s. Harsh International, a partnership firm of
two brothers Yogesh Jain and R.K. Jain, located in Noida SEZ, a part of
Mahak Group. To safeguard the investment and funds, Mr. R.K. Jain
was inducted as a Director in Vansh Consultants on 9.8.2014. By way
of post-dated cheques, the applicant received only Rs.8 crores so far. The
post-dated cheques of Rs.11.25 crores were dishonored; as such, five
complaints under Section 138 of the Negotiable Instruments Act were
filed. The Forensic Auditors had asked the applicant to submit the
statement of accounts of inter-corporate deposits between 1.4.2008 and
30.9.2018. The Forensic Auditors, before submission of the report to this
Court, asked the applicant for certain information, which were given on
6.12.2018. This Court asked the Forensic Auditors to clarify the position
vide order dated 13.1.2020. This is a case of an obvious error on the part
of the Forensic Auditors. The applicant cannot be an inter-corporate
depositor of Rs.10 crores as well as a debtor of Rs.9.75 crores to Amrapali
Leisure Valley Private Limited. The Forensic Auditors have failed to take
note of the credit entries, bank transfers, the return of Rs.8 crores
received by the applicant by post-dated cheques, cheque bouncing cases
24
pending before the Trial Court and debit and credit entries have not been
reconciled. It is submitted that the applicant has received notice from
the Enforcement Directorate based on the incorrect report of the Forensic
Auditors. Thus, prayer for deletion of the applicant's name from the
judgment and the report of Forensic Auditor has been made.
25. The Forensic Auditor, Shri Pawan Agrawal, pointed out in detail the
various facts in the documents submitted by the applicant itself. It was
pointed out that there was nothing to dispute the debit entries made in
the accounts of Amrapali Leisure Valley Private Limited, and on
interrogation, the facts could not be explained. Several shell companies
were created or used to divert the money of home buyers. Forensic
Auditor further pointed out that the agreement entered into between
Vansh Consultants Private Limited and Amrapali Leisure Valley Private
Limited is dubious and designed to hide actual transactions behind this
agreement. Forensic Auditor also pointed out that the tower number
given in the agreement is F2, having total 34 floors (G+33) and 102 flats.
Amrapali Leisure Valley Pvt. Ltd. has no sanction plan of constructing
any building of 34 floors. Further, there is no tower, namely, F2. The
tower and flats mentioned in the agreement were not in existence at any
point of time.
26. Forensic Auditor further pointed out that it was mentioned in the
agreement that an amount of Rs 10 crores would be returned in a year
25
and Rs. 10 crores would be paid over and above the principal of Rs.10
crores in the next two years. This has resulted into an interest of Rs.10
crores on an amount of Rs.10 crores used for a year and after refund
interest of Rs.10 crores was payable. The agreement is beyond any
financial prudence, and only an insane businessman will agree to borrow
funds at such a high interest rate of 100 percent. Forensic Auditor
pointed out that it is a case of money laundering and the agreement was
dubious. Vansh Consultants Private Limited was not having the money,
it came in bank account in order to route it to Amrapali Leisure Valley
Pvt. Ltd. The learned Auditor also pointed out from the bank statement
filed by the applicant along with the application that it did not have the
money for transaction. It was routed for the purpose. The transactions
were only a conduit to move the money. The bank account shows no
other activity. Thus, no case is made out by the applicant.
27. Considering the material on record, deficiencies pointed out by
Forensic Auditor and the books of accounts of Amrapali Leisure Valley
Private Limited, the entries made therein, there is nothing to doubt the
correctness of the report of the Forensic Auditors, who made detailed
enquiries. The Directors were heard during Forensic Audit, and we find
that no case is made out to delete the name of the applicant from the
report of Forensic Audit as reflected in the judgment and order passed by
this Court, and we find no ground to doubt the correctness of the report
26
of the Forensic Auditors. No doubt about it that queries were made with
respect to inter-corporate deposit. Merely mentioning in the letter or
query to furnish details of the inter-corporate deposit made to be
submitted by the applicant, is not decisive of the fact as to what is the
ultimate transaction of the applicant with Amrapali Leisure Valley Private
Limited. The transactions do not inspire confidence, the towers and flats
were never sanctioned. The Agreement, which has been filed concerning
the investment of Rs.10 crores, shows that it wanted to purchase the
flats. It cannot be said to be the case of simplicitor of investment made.
The rate of interest fixed was also a method to take out buyer’s money in
a dubious manner. The documents of applicant are contradicted by the
accounts maintained by Amrapali Leisure Valley Private Limited. In the
facts and circumstances of the case, we find that no case is made out to
allow the prayers made in the applications. The applications are bereft
of any merits and are hereby dismissed.
In Re. Financing of Home Buyers by Banks
28. Learned Receiver submitted that the RBI may be directed to advise
all banks and financial institutions such as insurance companies, and
employers of the establishments which have sanctioned home loans to
home buyers to disburse all balance loan amounts to the home buyers
whose accounts are regular and they will abide by instructions issued by
the Receiver in this regard. It is further pointed out that banks have
27
certain reservations regarding the funding of NPA accounts. In view of
current social and economic conditions, the Court may direct the RBI to
keep its circulars/guidelines relating to NPA in abeyance and permit all
banking and financial institutions, etc. to disburse loans to home buyers
notwithstanding the status of accounts as NPA. Banks and financial
institutions be directed to work out a long-term restructuring of all home
buyers' loans about Amrapali Projects as well as any charges on the
Amrapali project held by banks and financial institutions.
29. On the previous date of hearing, i.e., 27.5.2020, we requested
Mr.Vikramjit Banerjee, learned ASG to obtain instructions from the RBI
concerning the release of loans by the banks and other financial
institutions to the home buyers. It was clearly stated that RBI
instructions do not come in the way of releasing home buyers' loans
whose accounts are NPAs. It would be for the banks and other financial
institutions to release the loan. In the facts and circumstances,
appropriate directions can be issued by this Court, and the RBI
guidelines would not come in the way in the facts of the case. Learned
counsel appearing for the banks pointed out that they are ready to release
the loan to the home buyers. However, it would be in a phased manner
and as per the stage of construction, they would be releasing the loan to
the particular home buyer.
28
30. Considering the aforesaid and in the facts and circumstances of the
case, as projects have been stalled for the last several years, the home
buyers have obtained loans but cannot enjoy the fruits of their
investment. At the same time, if projects are not completed and home
buyers are not sure of handing over of flats, it would be difficult for them
to pay bank dues till eternity and it is in the interest of home buyers as
well as banks and financial institutions as they can recover money when
projects are completed in an effective manner. We direct the banks and
financial institutions to release loans to home buyers, whose loans have
been sanctioned, notwithstanding the fact that their accounts are
declared as NPAs. Let there be restructuring of the loan amount. It may
be released under the current norms of the RBI for releasing loans and
the rates fixed by the RBI therefor. The disbursement of further loans
may be based on the present rate of interest fixed by the RBI; this we
order in the peculiar facts of the case. It may be released stage-wise and
long-term restructuring of the loans may be done so that construction is
completed and buyers are able to repay the loan. Ordered accordingly.
In Re. I.A. No. 49139 of 2020 (Interest to be realized on the
outstanding dues by Noida and Greater Noida Authorities)
31. Learned Receiver has pointed out that there is a lack of clarity
concerning dues of local authorities/banks/lenders. It has been
submitted that proper relaxations and concessions are required to be
given concerning such dues.
29
32. In the interlocutory application filed by Ace Group of Companies,
precarious conditions in the entire Noida and Greater Noida region faced
by the developers have been pointed out. It is submitted that following
economic recession in the last decade, the entire real estate sector has
gone downwards and facing acute financial crunch and is fighting for its
survival. The projects are incomplete, there were various litigations
which created a huge financial impact and non-delivery of projects, which
reflects the pathetic condition of the real estate sector. Multiple issues
are pointed out, which are adding to the woes of the developers. It is
averred that the developers and the home buyers both are adversely
affected due to non-delivery of booked flats in the regions of Noida and
Greater Noida etc.
33. The Ace Group of Companies obtained the plots between the period
2010 and 2015 from the Authorities in the aforesaid areas. The Noida
Authority is raising additional demand at the rate of Rs.600 per square
meter, whereas Greater Noida Authority is raising demand at the rate of
Rs.1700 per square meter. Due to recession, developers operating in the
region were not able to receive the requisite amount on time from home
buyers. For one reason or the other, development work of the projects
was halted. The Authorities are levying excessive interest and penal
interest, which continues to rise exponentially, culminating into huge
dues, and in some cases, the cost of the allotted land has doubled than
30
what it was originally fixed at the time of allotment over a period of time
and that the premium of the land has enhanced manifold after adding
the interest and penal interest thereon, and other liabilities are also
fastened. There is also considerable delay in the completion of the
projects as scheduled initially. The cost of completion of the project has
thus increased manifold due to delay in construction and has also
resulted in price rise of important construction components, material,
and labour. The burden of Service Tax and other cess and statutory
charges have also increased manifold. Though various companies
managed to raise the construction, however, the cost of land originally
allotted has doubled. The real estate sector is facing financial distress
due to the various intervening factors. The rate of interest has also gone
down substantially. Due to delay, in may cases refund order has also
been passed by Consumer Forums, which is adding financial constraints
on the part of developers. They are on the verge of completely financially
drained out. It is urged that interest rate and the delayed penalty being
charged by the Authorities on the allotted plots of land is excessively
higher than the prevailing financial market scenario whereas there has
been gradual and consistent fall in the interest rates since 2010 itself.
However, the interest rates of the Authorities have remained exorbitant
contrary to the prevailing economic situation of the country. The rates of
interest charged by the Authorities are exremely high. Apart from that,
penal interest on delayed payment is also added. The rates have been
31
increased from 11% to 14% - 15% to 18% - 23% per annum.
34. It is submitted by SBI MCLR (Marginal Cost of Funds based Lending
Rate) rate of interest for three years is 7% to 8%, and in the last six
months, it has further come down to 7.85%. If the base rate of SBI MCLR
is compared with the interest rate charged by the Noida and Greater
Noida Authorities, one can easily find out that it has drastically been
reduced over the years and ranges between 7.5% to 8.15% over the last
ten years. The rate and historical data on the base rate of SBI is filed.
35. It is further averred that over a period of time in the last five years,
the Banks have also reduced the interest paid on Fixed Deposits and
currently, it ranges between 6% to 7% only. However, Noida and Greater
Noida Authorities, despite allotting encumbered and disputed land
coupled with various other issues, failed to take any step to either reduce
the exorbitant rate of interest or completely waive off the interest and
other charges on account of delay and default in paying the land dues.
The Developers and the applicants and home buyers have acquired
valuable right in the land by paying the hefty amount. The developers
have made numerous efforts by approaching the concerned authorities
for redressal of their grievances. Till date, there has been no resolution.
Neither the Authorities nor the State Government has taken the issues
seriously. The issue of the interest affects the public at large, particularly
the home buyers and the interest of banks and financial institutions as
32
well besides that of Authorities. It is not possible to pay their dues.
Presently, in the wake of COVID 19 pandemic and its outbreak in India,
there is a continuous nation-wide lockdown. There have been absolutely
no business and commercial activities in this sector, and the entire real
estate industry has come to a grinding halt causing further financial
losses and damages to the real estate sector, which is generally in a
precarious condition in the Delhi/ NCR region. Therefore, prayer has
been made that there should be a complete waiver of interest component
in the repayment of land dues of Noida and Greater Noida Authorities,
and payment schedule towards lease rent and premium may be extended.
It is further submitted that various companies have stopped production
of the construction/ building material in the wake of lockdown. Most of
the labourers have gone back to their home States resulting in shortage
of labourers. In short, it is submitted that the real estate sector is facing
a crisis, and due to various aforesaid reasons, the timeline for completion
of projects may be deferred by one more year. Due to excessive lease
rent, penalty and interest charged and levied, additional land costs
demanded, and charged on the land allotted, various projects are stalled.
Most of the projects have acquired the status of dormant projects.
36. We are considering prayer Nos.1 and 2 of the I.A. with respect to
interest to be realized on the outstanding dues by Noida and Greater
Noida Authorities.
33
37. The rates of SBI MCLR is reduced to 7.45 % in the year 2020 from
8.95% in the year 2016. It is clear that the Noida and Greater Noida
Authorities, on the outstanding dues, are realizing the dues from all such
projects, interest at exorbitant rate such as 15% per annum with halfyearly compounding and in addition are also realizing penal interest on
the amount as fixed from time to time.
38. We have noted in the judgment dated 23.7.2019 the figure given by
the Noida and Greater Noida Authorities that after 2005, 114 plots had
been allotted to various group housing societies. 81 plots were handed
over the possession on payment of 10% of the total premium. 29 projects,
out of 81 were completed. Out of the other 33 allotted earlier, 11 were
completed, and 7 obtained part-completion certificates. Thus, it is
apparent that more than 60% of projects have not been able to come up
so far. We have also noted that the Noida and Greater Noida Authorities
did not take the step of termination of leases for various reasons. A large
number of home buyers have been waiting now approximately for the last
8 to 10 years or more for completion of houses. It is not in dispute that
the real estate sector has suffered a setback at present. It contributes to
the GDP of the country. As a large number of projects have not come up,
at the same time, Noida and Greater Noida Authorities have not been able
to realize their dues from such projects which are being piled up for the
last several years, at the same time interest of home buyers has
34
intervened. Even on the plots where the land was allotted from 2005
onwards, the projects have not been completed so far, though the buyers
have paid their money. The Noida and Greater Noida Authorities are not
issuing completion certificates to such projects and they are not able to
realize their outstanding dues. For various reasons, constructions have
not been completed, including due to diversion of funds. There is a failure
to comply with the obligation to the home buyers whose money has been
invested in the partially constructed structure and partial dues have been
paid to the Noida and Greater Noida Authorities.
39. It cannot be disputed that the rate of interest, on which agreements
were entered into, has gone down by now. The present lending rate is
much below and the RBI has taken several steps to revive the economy.
In such a scenario, it would never be possible to make payment of interest
at the rate fixed by authorities and also a penal interest to be realized by
concerned authorities. The home buyers are not able to obtain fruits of
the investment and are deprived of legal title of the flats.
40. We have heard the learned counsel appearing for Noida and Greater
Noida Authorities. Learned senior counsel also drew our attention to the
following observations made by this Court in the judgment dated
23.7.2019:
"72. In our opinion, if the real estate business has to
survive in India, it has to be answerable to the public and
has necessarily to uphold the trust reposed in
35
builders/promoters. They have been paid huge amounts
not only by the home buyers but also, they have to pay a
huge amount for the public land given to them on lease by
Noida and Greater Noida Authorities for construction of
houses. The land has been given to them by the authorities
on a concessional basis by making payment of 10% amount
at the time of allotment. The builders have to be
accountable to public/home buyers as well as the
authorities and bankers. It is a matter relating to housing
needs dealing with shelter place, such an activity is of the
public importance as the real estate sector plays a pivotal
role in the fulfillment of needs of housing infrastructure."
41. It was also argued by the learned senior counsel that even if the
builder may have factored the valuation of price, including interest on the
cost of the land, the lease deed and the authorities will remain unaffected.
A prayer was made that the authorities may be given liberty to recover
their amount of interest from the builder at the contractually agreed rate
under the lease deed. It was lastly and rightly pointed out that the Court
can fix a reasonable rate of interest. Considering the present scenario,
we feel that the aforesaid submission is justified.
42. Considering the current state of real estate, the projects are
standstill, and in order to give impetus to such housing projects and
mainly considering plight of home buyers and as pointed out by Noida
and Greater Noida Authorities that 114 plots were allotted from 2005
onwards, most of projects are incomplete; we direct that rate of interest
on the outstanding premium and other dues to be realized in all such
cases at the rate of 8% per annum and let the Noida and Greater Noida
Authorities do a restructuring of the repayment schedule so that amount
36
is paid and Noida and Greater Noida Authorities are able to realize the
same. As to reasonable time frame, we would like to hear the parties. In
case of failure to pay, the concession granted shall stand withdrawn.
However, at the same time, the Noida and Greater Noida Authorities shall
also ensure that not only instalments/money are deposited, but also all
such projects are completed within the stipulated time.
...……………………J.
(Arun Mishra)
...……………………J.
(Uday Umesh Lalit)
New Delhi;
June 10, 2020.
