Supreme Court nets Amrapali the biggest fraudster

VK Bahuguna

The author is a retired civil servant
On 23rd July the two Judge Bench of the Supreme Court of India consisting of Justice Arun Mishra and Justice Uday Lalit while delivering the historicjudgement on a Civilwrit petition by Bikram Chatterji and others, created yet another landmark of setting the governance back on rails and ensuring Justice to more than 42,000 Amrapalihome buyers of Noida and Greater Noida in the National Capital Region (NCR) where the executive had failed miserably. The verdict will be long remembered in the annals of Indian Jurisprudence as one of the finest judicial decision arrived at after deep study of facts and chasing the wrong doers to their grave and relentlessly unearthing the biggest real estate scam done under the very nose and connivance of officials and political leaders. Now all eyes are set on this landmark verdict. The Court was ably assisted by the senior lawyer Mr ML Lahoty, National Company Law Tribunal, Forensic auditors and the flat buyer’s crusader Amit Gupta who took lot of personal risk in pursuing the case to its logical end.

The court stated that the Amrapali group played a serious fraud upon the buyers while quoting the forensic auditors appointed by it. It was done in active and open connivance of the officials of Noida and Greater Noida Authorities. The money was diverted to personal accounts of Directors, other dummy companies, creating bogus bills and violation of the Foreign Exchange Management Act (FEMA) by obtaining investments and over valuing them to siphon off the home buyers money; for this the Court had ordered Enforcement Directorate to nab the culprits. The criminals did not stop here they also obtained loan from Banks in the name of home buyers and swindled it too. The Bank officials were in league with Amrapali and ignored their regulations and took a blind eye to the money laundering being done by Amrapali Directors. On top of that these thugs did not prepare the account from 2015 to 2018 knowing well that it is now going to be all over. The Court had castigated the Noida and Greater Noida Authorities as well as Banks for their connivance and palpable negligence. The Court had ordered cancellation of the registration of the Amrapali group under the Real Estate Regulation Act 2016 and cancelled the lease deeds signed between the builder and Authorities and vested the rights of these deeds to the Receiversenior Advocate Venkat Ramani appointed by the Court. 

In order to see that the buyers get their dream homes the Court had appointed National Building Construction Corporation (NBCC) which has been assisting the court in assessing the cost and time run up for the completion of the housing projects in limbo. It has fixed 8% as the project management charges for the NBCC to complete these projects. The Court had rightfully debarred the Noida and Greater Noida Authorities from staking any claim for their 3600 crore Rupees balance with the Amrapali group and this has been a fair decision on the part of the Court. The Authorities have been signing lease deeds only after payment of 10% of the money but never monitored it afterwards and this allowed the builders rampage of looting the unsuspecting flat buyers in tandem with Banks and Authority officials. This writer has always been raising this issue in his writings to the UP Chief Minister and in Media that these Authorities are not in business to make money out of the land acquired from farmers by invoking extra-ordinary clauses and then auction them for housing and minting money. In fact this is a very lethal concept of befooling the political leadership to create these agencies to get away with government rules and then do whatever they like to do under the grab of rules these agencies are created. The Central and State government must review the culture of constitution of such pompous bodies and put proper checks and balances else abolish them.

The best part of the Judgement is that the Buyers have been asked to deposit the balance money as per the Builder-Buyer Agreement in the Supreme Court under the supervision of Court Receiver. It further directed the Authorities to smoothly register the properties and the dues to the tune of Rs 3600 crores should be recovered by selling off the attached properties of Amrapali group.

However, this writer would like to flag a few issues. First, once the Buyers had deposited 100 % of the due amount in the Supreme Court, a Committee of Buyers need to be formed for each project to assist the Court Receiver and; this committee would also help the Receiver in auditing the work of NBCC so that payments are linked to the progress of construction. Second, the court had invoked violation of Doctrine of Public Trust by the Noida and Greater Noida Authorities and held them equally accountable for the fraud. The home buyer’s funds were utilized by Amrapali group’s directors/promoter Vis-à-vis payments to land authorities which amounts to more than 500 crore as stated byboth authorities. As per the Court order the lease has been terminated and RERA registrations of all projects (noida & greater noida) has been cancelled, the Authority had no claim on this as they failed to check the fraud and this amount should be immediately deposited with the NBCC so that they can start the work as per their project report submitted before the Court. This fund can be used "seed capital" for kickoff construction, may be an alternative to the demand of "Stress Funds" by home buyers of Amrapali.

The government of India need to use this judgement to reform the real estate sector in Indiaand UP government needs to take strict action against the officials of these two Authorities who made a mockery of the governance. This judgement may bring a new era in the real estate market by preventing frauds if the Centre and State governments across the country follow the Court orders properly in its true spirit. Well done Indian Judiciary well done.

Our Services About Tripura Call Centre Services Our Archives Find us on
Web Site Design & Development Profile of the State Telephone Directory English Articles
Domain Registration Our Governor Our Publications Bengali Articles
Tripurainfo Android App now available at Google Play Store

Click here to Install
Software Development Our Chief Minister Press Release News Archives
Content Creation & Data Management Counsil of Minister Higher Studies Info Brief News
Digital Photo Service MLA List Tripurainfo Call Centre Bengali News
Book Publication & Content Editing Who is Who Job Database Circulars/Notices
Tender Marketing Tripura ADC info Tender Information Videos
Advertising through Website Census 2011 Emergency Dial for Agartala Photo Album  
Placement & Deployment Maps of Tripura Ambulance Helpline Photo Gallery