Tuesday, April 23, 2024

ED Gets SC Nod To Attach JP Morgan Properties For “Proceeds Of Crime’ Worth Rs 187 Cr In Its A/c 

The Supreme Court today has allowed the enforcement directorate to attach properties of ‘JP Morgan’ in ‘Amrapali case’ after being informed that Rs 187 crore have been detected as proceeds of crime.

A division Bench of the Court comprising of Justice Arun Mishra and Justice UU Lalit, took up for hearing note of the receiver appointed for execution of the Amrapali group housing projects urging the Court to issue urgent orders to the Reserve Bank of India for an advisory asking all banks and financial institutions to disburse balance loan amounts to Amrapali homebuyers in order to ensure that funds are available to complete the stalled projects. 

The Supreme Court has been monitoring the execution and handover of the stalled Amrapali housing projects ever since an internal audit report, commissioned by the Court, found grave irregularities on part of Amrapali firms and its directors. The receiver was appointed to track the completion of the stalled projects and ensure that they are completely timely and handed over to the homebuyers.

Two notes were submitted to the Court, one by the appointed receiver Senior Advocate R. Venkataramani, and another note by Advocate ML Lahoty, who has been assisting the Court on behalf of homebuyers.

The receiver’s note informed the Court funds from sale or other disposals of all unsold inventories has been Rs. 2,220.45 Crores, funds from sale of all Amrapali properties, attached is Rs. 500 Crores, Bank loans to Home Buyers and balance receivables from all sold units is Rs. 3,870.4 Crores and receivables from unsold commercial units is Rs. 213.46 Crores.

Mr. Lahoty, through his note requested the Court Receiver to provide regular progress to the Home Buyers, information as to status of tenders, bids, progress in construction along with construction pictures to be updated on its website.

The Supreme Court had passed its landmark judgement in the Amrapali case in 2019. The homebuyers of various projects who were aggrieved by the Corporate Insolvency Resolution Process that was being initiated by the National Company Law Tribunal against Amrapali Silicon City Private Limited had filed writ petitions before the Supreme Court.

According to these homebuyers, if such resolution is started against Amrapali, the interest of thousands of homebuyers of various projects being developed by the Amrapali group will be drastically effected. Other than this, there also were allegations of funds siphoning by Amrapali group, and therefore Supreme Court had taken cognizance of the matter and ordered a forensic audit to be conducted. The Amrapali group had challenged the pleas of the homebuyers. The petitions were also challenged by the and the Banks who had financed loan to the Amrapali Group under various mortgage deeds and the Noida and Greater Noida Authorities, with whom the Group had executed lease deed for lands on which the products had to be developed. According to them, their rights over the projects should be priorities over the homebuyers. 

The Supreme Court had ordered the cancellation of registration of Amrapali Group under RERA Act, and the projects were ordered to be completed by NBCC India Pvt Ltd. The Banks were given no right to sell the flats of home buyers or the land that was leased out, to get their own dues. The Banks were asked to realise their dues only from sale of the properties of Amrapali Group. All the lease deeds that were granted to Amrapali Group were cancelled and the Court receiver was given the rights of the lessee, who had to execute all the agreements and ensure that title is passed on to homebuyers and possession is handed over to them

In today’s hearing, Sr. Advocate Venkataramani informed the Court that UCO bank has in principal agreed to disburse any loan demand for any home buyers, will fund the NPA account holders also, and NBCC will try their best to fund the stalled projects. Directions have to be given to SBI to consider the proposal, as they need to relax some of their rules about due diligence too.

He has prayed for the following directions from the Court: • UCO Bank be directed to either by itself, or through a consortium of banks, submit a final funding plan within four weeks.• Direct the Reserve Bank of India (RBI) to advise all banks and financial institutions (such as insurance companies), and employer establishments which have sanctioned home loans to Home-Buyers to disburse all balance loan amounts to the Home-Buyers whose accounts are regular.• All banks and financial institutions be directed to work out a long-term restructuring of all Home-Buyers’ loans pertaining to Amrapali Projects as well as any charges on Amrapali project held by banks and financial institutions.• Direct the RBI to keep its circulars and guidelines relating to NPA in abeyance and permit all banking and financial institutions etc. to disburse loans to NPA Home-Buyers as well, notwithstanding their NPA status.• Direct the Ministry of Finance, Government of India, to receive and process through SBI CAP the revised proposals prepared by the Receiver and the Committee for the release of reasonable Stress Funds as ‘additional reserve fund’.• Permit the Receiver and the Committee assisting him to proceed to sell or transfer the unused sanctioned FAR, permissible FAR, and purchasable FAR, as well as additional FAR due to existing or proposed Metro line• Issue directions to NOIDA , Greater NOIDA and other Public Authorities vis-a-vis proceeding with unused FARs etc. to sanction necessary plans and schemes and also to provide Power, Water, and Sewage connections to the Institution, builder and developer appointed by NBCC.

In response to Justice Arun Mishra’s query regarding construction costs, Senior Adv Siddhartha Dave appearing for NBCC informed that only three projects are left on which tenders have not been issued, and they have asked govt for funding and they will give more in the future

Justice Mishra asked ASG Vikramjit Banerjee, appearing for UOI and SBI to give 500 crores to NBCC for the projects , in response to which ASG requested him to not pass any orders before a meeting with the Finance Ministry is held. He added that he will also take into account receiver’s suggestion of relaxing guidelines for loan disbursement 

Justice Mishra stated that the Government has to take care of the funding as the people are suffering. There are no private players in this and the projects have money stuck. 

ASG Banerjee responded “The amount of money involved is public money that we are disbursing. If we have to make an exception for Amrapali then this exception has to be arrived at reasonably. There is meeting today evening itself. I will convey what you have in your mind today itself”

Senior Adv Sunil Gupta for Noida and Greater Noida authorities asked for more time to get instructions as he received the note only in the morning. He however disagreed with the receiver’s suggestion of returning the unused FARs by Noida Greater Noida Authorities, and stated that this point has never been dealt by the Supreme Court’s judgement too.

Justice Mishra asked him to obtain instructions, specially in terms of the unused FARs.

Adv Sanjay Jain appearing for ED informed the Court that they were directed to investigate affairs of JP Morgan and 187 crores have been found to be proceeds of crime. He asked for the Court’s permission to attach JP Morgan’s properties. 

“187 crores does not include any home buyers money. Its all the money on the JP’s bank accounts.”

The Court has allowed ED to do that and directed ASG to take instructions with respect to Mr. Venkataramani’s note as well, and the matter will be taken up on May 26, 2020.

Read the order here;


-India Legal Bureau


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