The Supreme Court on Wednesday directed embattled real estate firm Amrapali to furnish details of all projects nearing completion, the total amount collected from homebuyers till date and the amount spent on construction at the next date of hearing, scheduled to be held on Thursday.
To ensure that priority be given to projects that are nearing completion, the apex court has directed the developer to submit details of the status of construction of projects nearing completion. It has also asked the developer to furnish details of the amount pending from the buyers’ side.
Lawyers present at the hearing said that depending on the project details submitted by the real estate company, homebuyers may be directed to deposit the amount due from them with the court registry and that money may be released to the builder once the builder completes the project and once the units are ready for possession.
The apex court also told the counsel representing the bank that ‘buyers’ money is not builder’s money and you cannot take buyers’ money that does not belong to the builder,” they said.
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“This is a great order, especially for homebuyers who have been waiting for years for possession of their flats. It has first decided to ask the company to identify projects nearing completion and then go step by step,” said Shwetabh Sinha, a lawyer representing homebuyers in the Amrapali case.
The embattled real estate company proposal submitted to the Supreme Court last week wherein it had sought its permission to rope in other builders to complete its various housing projects and hand over possession of flats to the hassled homebuyers was also referred to at the hearing on Wednesday.
The company, which is facing insolvency proceedings initiated by the creditor bank for not repaying the loan, said in an affidavit in the apex court that it was not in a position to complete the projects and hand over possession of flats to over 42,000 home-buyers in a time-bound manner and the properties were needed to be developed with the help of co-developers.
It claimed that many firms have expressed interest in taking over and completing these housing projects.
“Apart from the massive inventory which has been sold and is at various stages of development, the ongoing projects of Amrapali group have vacant land available (earmarked for future development) which can be developed with the assistance of co-developers and, subsequently, sold to prospective buyers.
“This would provide for the necessary liquidity and cash flows for payment to the creditors and also investments in projects that unfortunately have negative cash flows,” the company had said in its affidavit.
It urged the court to allow co-developers “to come in to construct, develop and deliver homes in certain under-construction projects of the group.”
“The plan will not only provide for speedy construction of houses but would also facilitate and ensure payments to all the creditors, including those who have already approached the NCLT for insolvency proceedings,” it said.
A bench of Justices Arun Mishra and Amitava Roy had on January 31 asked the firm to submit a comprehensive plan with a time line on how it would complete its pending projects.
It had also asked the authorities of Noida and Greater Noida, Committee of Creditors, the Interim Resolution Professional (IRP) and other parties to file their responses to the proposal submitted by the company.
Amrapali’s counsel had said at the last hearing that Galaxy Developers has come forward to develop the flats in a timely manner.
The Supreme Court is hearing a batch of pleas filed by flat buyers who have sought quashing of the September 4 last year’s NCLT order and said the moratorium imposed under the provisions of the Insolvency and Bankruptcy Code, 2016, is violative of Article 14 (equality before law) of the Constitution.
The National Company Law Tribunal (NCLT) in September ordered initiation of insolvency proceedings against Amrapali Silicon City, on a plea by Bank of Baroda. The builder had defaulted on an outstanding loan of Rs 56 crore taken from the bank.
NCLT appointed Rajesh Samson of Deloitte Touche Tohmastu India LLP as the interim resolution professional (IRP) in the case of Amrapali Silicon City Pvt Ltd.moneycontrol