Amrapali, Unitech & deferred dreams: SC ensures defaulters will have to pay

The Supreme Court on Tuesday said it would sell the personal assets of the promoters and directors of Amrapali group. It made a similar decision on Unitech.

On Tuesday, the Supreme Court came out with two rulings that sound the bugle against the directors and promoters of defaulting real estate firms. In the first case, the Supreme Court said it would first sell the personal assets of the promoters and directors of Amrapali group to secure over Rs 50 billion for construction of pending projects. The construction will be done by the National Buildings Construction Corporation India Ltd (NBCC). In the second case, it ordered auction of Unitech directors' unencumbered assets to refund money to home buyers.

The SC's latest ruling may come as a relief for the homebuyers who would hope it either fetches them their refund or the house they have already paid for.
 

Supreme Court on Amrapali

The Supreme Court on Tuesday said that the only way to secure over Rs 51.12 billion from real estate major Amrapali Group for construction of pending projects by the NBCC (India) Ltd is to sell the individual properties of the directors of the company, news agency IANS reported.

A bench of Justice Arun Mishra and Justice UU Lalit asked the realtor to file an affidavit in seven days with details of all the directors who have even served for a few months in the group and their individual properties and bank accounts. It also made it clear that it would spare the bona fide directors.

The bench said that residential projects of Amrapali in the National Capital Region seem prima facie illegal and its real estate business is like "a well-operated cobweb".

The group did furnish details of properties it offered to be auctioned, the court though said that selling them would be a difficult task "as they might be encumbered with various dues to be cleared to government authority and part of which had already been sold to investors", according to a Times of India report.

Directing it to provide detailed data of its unencumbered properties, the apex court also said the group had such huge liabilities, that after paying the authorities, taxes and secured creditors from the sale of its properties, what would remain would be a mere pittance, the Press Trust of India reported.

It also asked the group to clear the pending dues of electricity in the projects, observing that it is the company's prime responsibility to clear all arrears.

The real estate group is yet to hand over possession of flats to around 40,000 home-buyers.

On August 8, the apex court had asked the directors of the group to file details of all their movable and immovable assets along with valuation, and warned them that they would be rendered homeless if they try "to play smart."

The court had clarified that all the properties of the directors would be sold if the company failed to raise Rs 51.12 billion required to complete its unfinished housing projects and directed the company to furnish details on how it intends to arrange the money.

On August 1, the bench directed public sector undertaking NBCC (India) Ltd -- formerly known as National Buildings Construction Corporation Ltd -- to take over all the 16 unfinished projects of the Amrapali Group.

The apex court has been hearing a batch of pleas filed by home-buyers who have sought quashing of the National Company Law Tribunal order to admit insolvency proceedings against the group.

The buyers belong to low and middle-income groups and must be granted equal protection as other stakeholders, the financial and operational creditors, the homebuyers' plea said.

Supreme Court on Unitech

The Supreme Court directed a panel headed by former Delhi High Court judge Justice S N Dhingra to go ahead with sale of unencumbered assets of the directors of real estate major Unitech Ltd to refund money to hassled home buyers, news agency Press Trust of India reported.

A bench headed by Chief Justice Dipak Misra asked the panel to proceed with the sale of the firm's properties in Kolkata.

The bench, also comprising Justices A M Khanwilkar and D Y Chandrachud, directed the committee to disburse Rs 250 million to home buyers on pro-rata basis and allowed lawyer Pawanshree Agarwal, who is assisting the court as an amicus curiae, to appoint two more persons to help him in the process.

Company's managing director Sanjay Chandra and his brother are in jail for nearly a year.

The court has repeatedly refused various pleas by Unitech for the release of Sanjay Chandra and his brother from jail even though the firm said the brothers wanted to settle every penny of debt.
 

According to a Times of India report, the court also permitted auction of two plots of Unitech in Kolkata which would fetch Rs 1.16 billion. When the leaseholder of one of the plots showed interest in participating in the auction and said it was willing to purchase both plots, the SC asked for a deposit of Rs 500,000 the court registry to establish bona fide.

The court had earlier allowed the auction of Unitech properties in Agra, Varanasi and Sriperumbudur, which was expected to fetch in excess of Rs 6 billion. But amicus curiae Pawanshree Agarwal said the Agra auction had hit a hurdle and the SC-appointed committee will notify auction of the Varanasi properties soon.

Last year, the court had asked Unitech to deposit Rs 7.5 billion by December 31, 2017, but the realtor failed to do so.