In what could be a major relief for the homebuyers, the Supreme Court on Tuesday will deliver its verdict on whom the pending projects of the embattled Amrapali Group will be handed over. Therefore, it will be a crucial day for those Amrapali investors tomorrow. However, during its last hearing on May 10, both Noida and Greater Noida authorities had informed the court that they don't neither have the requisite resources or expertise to construct the stalled projects and favoured handing over the properties to a reputed builder under the supervision of a high powered committee.
The authorities also said that they could not take any action like cancellation of lease agreements against the group which regularly defaulted on payments due to "bulk of home buyers" and "political weight". The top court was told that there was around Rs 5,000 crore pending from Amrapali Group towards the principal amount and interest component besides the penal interest.
They said that as government entities keeping the interest of home buyers in mind they had not cancelled the lease agreements with Amrapali despite repetitive default of payment. The top court on May 8 had said that it may give ownership rights of all the 15 prime residential properties of embattled Amrapali Group to Noida and Greater Noida Authorities as it has failed to fulfil its obligations towards 42,000 hassled home buyers.
A bench of Justices Arun Mishra and U U Lalit, reserved its verdict on the question as to who will take over the management control and which builder should finish the stalled projects of Amrapali. The court asked Noida authority to explain what action it has taken against Amrapali Group which was a "chronic defaulter" in payment of lease amount.
Senior advocate Debal Kumar Banerji, appearing for Noida said that under their jurisdiction they have seven projects of Amrapali and they have an outstanding of nearly Rs 2,000 crores while they have received only Rs 505 crore till now. He conceded that besides issuing repetitive show cause notices to Amrapali Group for defaulting in payments to Noida, they have not done anything.
"We have issued a series of show cause notices for repetitive default by Amrapali Group. We are public sector entity and there were a bulk of home buyers involved. Had we were a private body we could have easily cancelled their lease agreement and proceeded further," Banerji said.
"Due to the bulk of home buyers, political weight and looking at the consequences which would have followed after cancellation of Amrapali's lease no strong action was taken," he said.
The bench said that if the court gives you the ownership rights of properties of Amrapali, then how will the authority proceed. "We do not have requisite staffs, resources and expertise in constructing the projects. In the interest of all, it would be better if court sets up a high powered monitoring committee and ask a reputed builder or developer to construct the stalled projects in a time bound manner," Banerji said.
Similar stand was taken by Greater Noida authority which said that Amrapali Group has five projects under its jurisdiction out of which four are vacant lands and no construction has taken place. Advocate Ravinder Kumar, appearing for Greater Noida authority said that Amrapali has an outstanding of around 3400 crores and has paid only Rs 363 crores till now.
"We have also issued repetitive show cause notices to them (Amrapali Group) but apart from that being a government entity and looking at the home buyers and the consequences to follow we could not proceed further for cancellation of lease," Kumar said. He pointed out that in the case of another embattled reality firm Unitech Ltd, the authority had cancelled the leases given to them for not complying with the terms and conditions of the agreement but it had resulted in litigation and three appeals are still pending in top court.
The bench then asked both the authorities as who could be the builder then and said that the National Buildings Construction Corporation (NBCC) Limited could be one of the option. Kumar said that Greater Noida authority is concerned about its outstanding, adding that NBCC is also a consultant which has a very high rate for its services. The court said that it can take care of all those issues but NBCC being a government entity may instill confidence among the home buyers.
At the outset, the bench asked the court appointed forensic auditors - Pawan Aggarwal and Ravinder Bhatia-to audit three more residential projects in which Amrapali has stakes - La Residentia, Amrapali O2 Valley both situated in Greater Noida West and Heartbeat City, situated in Noida.
On May 8, the top court had said that it would throw Amrapali out from its properties and transfer its lock, stock and barrel to Noida and Greater Noida. It had said that the loans which have been secured by Amrapali Group by mortgaging the lands to the banks can be collected by the financial institutions from the directors of the company or the corporate guarantors. The top court, is seized of several pleas of home-buyers seeking possession of around 42,000 flats booked in projects of the Amrapali group.
(With inputs from agencies)