SC revokes the license of Amrapali Group in huge relief for stranded homebuyers

SC revokes the license of Amrapali Group in huge relief for stranded homebuyers

The Supreme court has ordered a probe into money laundering at Amrapali.

  • Amrapali’s registration under the Real Estate (Regulation and Development) Act, 2016 has been canceled by the Supreme Court.

The order of the Supreme Court

The Supreme Court came to the rescued thousands of homebuyers and called the registration of Amrapali Group under the Real estate (Regulation and Development) Act 2016, and directed by the National Buildings Construction Corp. Ltd (NBCC) to take over and complete its stalled projects in Greater Noida and Noida.

In a landmark judgment which was meant to serve as a warning towards errant builders countrywide, Supreme Court division bench led by Justice Arun Mishra and including Justice U.U. Lalit appointed a court receiver, who would have rights to Amrapali’s properties as well as recover its dues. The receiver, senior advocate R. Venkataramani, was appointed as a court receiver to enter into a tri-party agreement to recover dues as well as pass on possession to the homebuyers.

Amrapali’s registration under the Real Estate (Regulation and Development) Act, 2016 has been canceled by the Supreme Court and directed the Enforcement Directorate for investigating the money laundering as well as the diversion of funds. It furthermore barred Amrapali from taking on any more real estate projects, for failing to deliver homes on time as well as diverting funds. The court also ordered to attach the personal properties of group chairman Anil Sharma and directors Shiv Priya and Ajay Kumar.

The court asked NBCC for completing the pending projects of the Amrapali Group at an 8% commission. Homebuyers should deposit any due amount, as per their contract, within 3 months at the UCO Bank branch of the Supreme Court.
In September, the Supreme Court had selected forensic auditors Pawan Aggarwal as well as Ravinder Bhatia to investigate into suspected wrongdoings at Amrapali Group and their initial report mentioned that over Rs 3,400 crore of homebuyers’ money had been siphoned off through the connivance of authorities of Noida and Greater Noida.  

On 28th February, the apex court permitted Delhi Police for arresting Amrapali Group chairman and managing director Anil Sharma and two other directors on a grievance that homebuyers of their several housing projects were created.

The Supreme Court states recently it was apparent from the reports of the forensic auditors that the money was diverted by directors of the real estate group through creating dummy corporations, realizing professional fees, creating bogus bills, selling flats at undervalued prices and remunerating excessive brokerage.

In the 270-page ruling, the court also canceled several deeds granted in favor of Amrapali group companies by Noida and Greater Noida authorities. It stated that the authorities would have no right towards selling the flats of the homebuyers to recover the outstanding amount. The bench held the homebuyers’ money was diverted in violation of the Foreign Exchange Management Act as well as foreign direct investment norms. It asked the Institute of Chartered Accountants of India for initiating an inquiry and take proper action against Anil Mittal, the statutory auditor for Amrapali group companies.

The Noida and Greater Noida authorities were asked to present the completion certificate as well as registered conveyance deed performed for the homebuyers within one month of completion, even if outstanding amount towards the authority are not cleared. The court has stated that the money has been diverted owing to the inaction of officials of Noida and Greater Noida authorities.

The bench also asked the Union ministry concerned, and the state government, as well as the secretary of housing and urban development towards ensuring proper action, is taken as against leaseholders regarding such similar projects at Noida and Greater Noida and different places in various states, where projects were not been completed. They are also directed to make certain that projects are completed in a time-bound manner as intended in Rera and homebuyers are not defrauded.

This was a noteworthy ruling ordered by the Supreme Court and this judgment would hopefully set a much-required precedent for rectifying the wrongs forced on helpless homebuyers held hostage through stuck projects. This remarkable judgment would also have a broad positive impact on the Indian housing market. However, this decision of the Supreme Court is not limited towards Amrapali but all the fraudulent builders, who are making money through similar tactics.


eStartIndia Team

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