Giving respite to the 42,000 beleagured buyers of Amrapali Group, the Supreme Court on Tuesday cancelled the real estate company's Real Estate Regulation and Development) Act registration and appointed state-run National Buildings Construction Corporation Limited (NBCC) to complete all its pending projects.
A bench, comprising Justice Arun Mishra and Justice U.U. Lalit, also noted that Amrapali Group had committed a major violation of Foreign Exchange Management Act (FEMA) and foreign direct investment (FDI) norms and directed the Enforcement Directorate (ED) to register a money laundering case against the company, its CEO and Managing Director (CMD) Anil Sharma, and directors Shiv Priya and Ajay Kumar.
The court also ordered attachment of properties of the CMD and directors.
The court observed that Amrapali Group's top management diverted homebuyers' money to build their personal assets, instead of completing its housing projects. "The top management of Amrapali Group siphoned off the money to foreign countries," said the court. Noida and Greater Noida authorities were negligent in monitoring the progress of the project, the court said.
Reserving a verdict in the case, the apex court had on May 10 noted that the homebuyers had already paid the company Rs 1,100 crore, which was more than the cost of its projects. The court had asked banks and the authorities concerned, if the projects could be taken over by Noida and Greater Noida authorities for completion.
Pleading that they do not have the requisite resources and expertise to complete the construction of the stalled projects, the Noida and Greater Noida authorities asked the bench to hand them over to a reputed builder. They also requested the court to set up a high-powered committee to supervise the completion of the projects in a time-bound manner.
The court said the lenders' had no right to sell the properties, which largely constitute homes for which buyers have paid, to recover their losses and instead asked them to recover their losses from Amrapali Group's CMD and directors.
Responding to the court's query on the action taken against Amrapali Group, which was a chronic defaulter on lease amounts, the Noida authority said it had jurisdiction over seven projects of the company but had received only Rs 505 crore out of its nearly Rs 2,000 crore outstanding dues.
The Greater Noida authority told the court that it had five projects of Amrapali Group under its jurisdiction, four of which were vacant plots where no construction had taken place. "The company has an outstanding of around Rs 3,400 crore and has paid only Rs 363 crore till now," it added.
The two authorities also expressed their inability to take action like cancellation of lease agreements of the group.
Several pleas have been filed by homebuyers seeking possession of around 42,000 flats booked in projects of Amrapali Group.
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