Ready to fund stalled projects of Amrapali Group: SBICAP to Supreme Court

In a relief to hassled home buyers of now defunct Amrapali Group, the SBICAP Ventures, which manages the government sponsored stress fund for the real estate sector told the Supreme Court on Wednesday that it was ready to fund the stalled projects of embattled real estate firm.

The SBICAP Ventures told the top court that it would create a Special Purpose Vehicle (SPV) with court receiver on board and would appoint a Chief Executive Officer (CEO) to take over the construction of seven stalled projects.

It said that National Buildings Construction Corporation (NBCC) which is currently constructing the stalled projects of Amrapali shall be asked to enter into an agreement to undertake construction as a real estate contractor and funding shall be done through the SPV.

A bench of Justices Arun Mishra and U U Lalit was told by counsel appearing for SBICAP Ventures that it would apprise the court about its concrete proposal by next week.
 

We have considered the affidavit filed on behalf of the SBICAP. It is pointed out in the affidavit that they are ready to do the needful for stalled project and they are in deliberation with the Receiver of this Court and another company has to be set up between the Receiver and SBI CAP which shall work in collaboration with the NBCC. The NBCC shall undertake the construction work and the funding will be done through the company for the purpose of construction, the bench noted.

It directed that a joint meeting be convened between the NBCC, court receiver (senior advocate R Venkataramani, the SBICAP and UCO Bank to do the needful.

The top court also allowed UCO Bank to also join the meeting in furnishing the information as may be required and asked the forensic auditors to provide all the necessary documents as may be required by the SBI CAP in assessing the matter.

The UCO bank, which has also earlier shown its inclination to provide loan told the court through court receiver that it can provide fund to the tune of Rs 2000 crores while keeping the unsold inventory of 5221 units as mortgage.

We have heard the learned Receiver, who has pointed out that UCO Bank is ready to take over the unsold inventory as security and ready to fund a sum of Rs. 2000 Crores in security of unsold inventory. We direct the UCO Bank to finalise the complete proposal in this regard within seven days and let it be placed before the Court on the next date of hearing, it ordered.

The top court also pulled up Surekha Group for not depositing the amount it had allegedly siphoned off from home buyers money and warned that its directors and promoters will be put behind bars, if Rs 167 crore is not deposited.

Advocate M L Lahoty, appearing for home buyers told the bench that as per the apex court's last year's verdict and findings of forensic auditor Surekha Group has to pay Rs 760 crores.

We have heard Mahesh Jethmalani, senior counsel appearing for Surekha Family, we have told him very clearly that in case order is not complied with by the next week serious consequences may follow. He seeks time to obtain instructions in the matter to deposit the amount, the bench said while directing the matter to be listed on June 10.

The court receiver informed the bench that the Government was considering an issue with respect to real estate projects on whether it can give relaxation in GST or not.

The bench said, Prima facie it is not for the Court to examine it as the same is a policy matter. Since this is primarily a policy decision, the matter is deferred.

The top court had earlier directed SBICAP Ventures Ltd, which manages government sponsored Special Window for Affordable and Mid-Income Housing (SWAMIH) fund, to take a call on financing the completion of stalled projects of the now defunct Amrapali Group.

The top court had on December 18, last year directed court receiver who has been appointed custodian of properties of Amrapali Group, to make an application to SBICAP Ventures and furnish the requisite information with regard to the projects.

 

On December 16, the top court has asked the Centre to inform it as to how much time it will take to decide on application for financing the stalled projects of now defunct Amrapali Group from the newly launched Rs 25,000 crore stress fund for the real estate sector.

The Centre has submitted that the State Bank of India has been appointed as a fund manager and it will disburse the amount based on certain norms after an application is made by a real estate entity.

The apex court in its July 23, last year verdict had cracked its whip on errant builders for breaching the trust reposed by home buyers and ordered cancellation of the registration of the Amrapali Group under real estate law RERA, and ousted it from prime properties in the NCR by nixing the land leases.

It had directed the state-run NBCC to complete the stalled projects of the Amrapali Group, whose directors Anil Kumar Sharma, Shiv Priya and Ajay Kumar are behind bars on the top court's order.

It had directed the Centre and states to ensure that real estate projects are completed in a time-bound manner as contemplated in RERA and home buyers are not defrauded, and ordered the Noida and Greater Noida authorities to give completion certificate to the home buyers of Amrapali group who are already residing in various projects.