Cracking its whip on errant builders for breaching the trust reposed by home buyers, the Supreme Court on Tuesday cancelled the registration of Amrapali Group under the real estate law RERA, and ousted it from its prime properties in the NCR by nixing the land leases.
The judgement, which is first of its kind, may have far reaching consequences and impact across the country on other realtors like Unitech and Jaypee, which are facing similar litigation in the top court from hassled home buyers for not handing over possession of flats on time despite being paid the hard earned money of people.
The apex court, which directed a probe by the Enforcement Directorate into alleged money laundering by realtors, provided relief to over 42,000 home buyers of Amrapali group with the verdict.
It directed the state-run National Buildings Construction Corporation (NBCC) to complete the stalled projects of the realtor, whose directors Anil Kumar Sharma, Shiv Priya and Ajay Kumar are behind the bars on the top court's order.
A bench of Justices Arun Mishra and U U Lalit directed the Centre and state governments to ensure that appropriate action is taken against builders who have not completed their projects in Noida and Greater Noida as well as in other states.
It directed the Centre and states to ensure that 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.
The top court also termed the sequence of events in Amrapali group a "shocking and surprising state of affairs" where such large-scale cheating has taken place and middle and poor class home buyers were duped and deprived of their hard-earned money.
The bench also directed the Institute of Chartered Accountants of India (ICAI) to initiate disciplinary action against Chartered Accountant Anil Mittal who was overseeing the accounts of Amrapali Group.
It said the high-profile realtor diverted the home buyers money in other projects, played fraud on them by not adhering to the time frame to complete projects and also failed to comply with the orders of the apex court.
"The registration of Amrapali Group of Companies under RERA shall stand cancelled," the bench said.
Ousting the real estate major from its prime properties situated in Noida and Greater Noida areas of the National Capital Region (NCR), the top court cancelled the lease deeds granted by the authorities and vested all the rights in a
court-appointed receiver -- senior advocate R Venkataramani.
Putting the Noida and Greater Noida authorities in dock for acting in collusion with the builders and overlooking their interest as well as that of the home buyers, the bench said, "We hold that Noida and Greater Noida Authorities shall have no right to sell the flats of the home buyers or the land leased out for the realization of their dues."
It said the dues payable by the group to Noida and Greater Noida authorities, amounting to over Rs 5,500 crore, shall have to be recovered from the sale of other properties which have been attached.
The bench said the banks who had advanced huge loans to the realtor by passing the norms will recover the money after sale of Amrapali properties which have been attached by the court.
Providing relief to thousands of home buyers, the top court said, "We have appointed the NBCC to complete the various projects and hand over the possession to the buyers."
It, however, reduced the percentage of commission of NBCC from ten to eight per cent for the work done in completing the project.
To enable the NBCC to get requisite funds for completing the stalled projects, the top court directed the home buyers to deposit the outstanding amount under the agreement entered with the promoters of the Amrapali Group within three months from today.
It said the amount deposited by them shall be invested in the fixed deposit to be disbursed under the court order on phase-wise completion of the projects/work by the NBCC.
The bench accepted the forensic audit reports of two auditors--Ravi Bhatia and Pawan Kumar Aggarwal--and said their findings indicate prima facie violation of Foreign Exchange Management Act (FEMA) and anti-money laundering laws.
"In view of the findings recorded by the forensic auditors and fraud unearthed, indicating prima facie violation of the FEMA and other fraudulent activities, we direct Enforcement Directorate and concerned authorities to investigate and fix liability on persons responsible for such violation, and submit the progress report in the Court and let the police also submit the report of the investigation made by them so far," the bench said.
Giving last opportunity to the directors of Amrapali Group to deposit the home buyers money they have in their possession, the bench said if its direction is not adhered to, appropriate action will be initiated against them.
It said the court receiver shall execute through authorised person on his behalf, the tripartite agreement and do all other acts as may be necessary and also to ensure that title is passed on to home buyers and possession is handed over to them.
It also directed the authorities to execute the tripartite agreement within one month concerning the projects where home buyers are residing and issue completion certificate, notwithstanding the dues.
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