Amrapali case: SC orders ED to attach corporate properties of JP Morgan

The SC has asked the Enforcement Directorate to attach the Indian properties of JP Morgan, for violation FEMA norms and also constituted a 4-member committee for speedy auction of the Amrapali Group’s assets

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The Supreme Court asked the Enforcement Directorate (ED), on January 13, 2020, to attach the Indian properties of JP Morgan, which engaged in a transaction with the now-defunct Amrapali Group to allegedly siphon-off home buyers’ money, in violation of the Foreign Exchange Management Act (FEMA) and FDI norms. The ED said it had prima facie found violations of FEMA norms by the US-based JP Morgan and that a complaint in this regard was lodged.

According to the share subscription agreement between JP Morgan and Amrapali Group, the US-based firm had invested Rs 85 crores on October 20, 2010 to have a preferential claim on profits in the ratio of 75% to JP Morgan and 25% to the promoters of Amrapali Homes Project Private Limited and Ultra Home. Later, the same number of shares was bought back from JP Morgan for Rs 140 crores by two companies – M/s Neelkanth and M/s Rudraksha – owned by a peon and an office boy of Amrapali’s statutory auditor Anil Mittal. A bench of justices Arun Mishra and UU Lalit was told by ED joint director Rajeshwar Singh, who is supervising the probe against JP Morgan, that the MNC remitted the money back to the United States.

 

4-member committee to oversee speedy auction of Amrapali properties

The Supreme Court also constituted a four-member committee, for speedy disposal of assets via auction, of the now defunct Amrapali Group to raise funds for several stalled projects. The bench constituted the committee comprising Rajiv Bhatia and Pawan Aggarwal (forensic auditors); court-appointed receiver, senior advocate R Venkatramani who will assist state-owned MSTC to auction the assets of Amrapali Group; and DK Mishra, a chartered accountant.

“The committee will look into which properties should be sold first, what is its market value and how much revenue could be generated. Each and every thing will be seen by the committee. We need funds to complete the stalled projects,” the bench said. The top court also asked National Buildings Construction Corporation (NBCC) to start the tender process for all the seven stalled projects of Amrapali in Noida and Greater Noida areas. It directed the apex court registry to pay Rs 14 crores to it, for the work it has completed so far.

 

All payments made to MS Dhoni for endorsing Amrapali Group genuine: Rhiti Sports

Rhiti Sports Management Pvt Ltd, a firm that manages leading cricketers including former Indian cricket team captain Mahendra Singh Dhoni, has told the Supreme Court that it has paid the cricketer Rs 37 crores, for endorsing the brand of now defunct Amrapali Group. It said Dhoni endorsed several brands including Amrapali Group and all the payments made were authentic and as per the contract.

Senior advocate Mukul Rohatgi, appearing for Rhiti Sports Management Pvt Ltd (RSMPL), said: “I am a sports management company working with various cricketers. My client (MS Dhoni) endorsed various clients including Amrapali Group. I was paid Rs 38 crores and out of which I paid Rs 37 crores to Dhoni, which was as per the contract. I have filed a fresh application in this regard.”

Advocate ML Lahoty, appearing for the home buyers, said that a direction needs to be passed by the court, to recover Rs 42.22 crores paid by Amrapali Group to Dhoni, for diverting their money. The bench asked Lahoty to file a response to the application moved by RSMPL and listed the matter for February 17, 2020.

 


Amrapali crisis: SC asks SBICAP Ventures to take a call on funding stalled projects, in 10 days

The SC has directed SBICAP Ventures Ltd to decide, within 10 days, on using the government’s recently-announced real estate stress fund, to complete the projects of the Amrapali Group

December 19, 2019: The Supreme Court, on December 18, 2019, directed SBICAP Ventures Ltd, which manages the government-sponsored Special Window for Affordable and Mid-Income Housing (SWAMIH) fund, to take a call, within 10 days, on financing the completion of stalled projects of the now defunct Amrapali Group. The top court directed the court receiver, senior advocate R Venkatramani, who has been appointed as the custodian of the properties of the Amrapali Group, to make an application to SBICAP Ventures and furnish the requisite information with regard to the projects.

A bench of justices Arun Mishra and UU Lalit said, “We request the receiver to deliberate with the SBICAP Ventures Ltd and furnish the requisite information. On the requisite information being furnished, the SBICAP Ventures Ltd is to deal with the same within 10 days and to submit its proposal.”

See also: NBCC gets approval to take over debt-ridden Jaypee Infratech

The SC also asked the banks, who have entered into loan agreements with the home buyers directly or through Amrapali Group, to clear their stand on the suggestion of the court receiver, that interest amount levied on defaults of the builder and home buyers, should be waived off and on disbursal of the loan amount to each home buyer in terms of payment requirement of NBCC. Among various issues, the court receiver also suggested that the legal proceedings including those in the Debt Recovery Tribunal (DRT) and cheque bounce cases be withdrawn and closed, without levying any penalties on the home buyers, considering the situation in which they have been put in the case and that the CIBIL score of home buyers be restored, ignoring their EMI defaults.

The top court also authorised the National Buildings Construction Corporation (NBCC) in consultation with the receiver, to undertake all urgent works such as lift erection, electricity, water connection and other remedial works and said that the funds required in this regard be made available on intimation to be received. It posted the matter for further hearing on January 10, 2020.

 


Amrapali crisis: SC seeks time-frame from centre, on financing stalled projects from realty stress fund

The SC has sought a timeline from the centre, on deciding to utilise the newly-launched Rs 25,000-crore stress fund for financing the stalled projects the Amrapali Group

December 17, 2019: The Supreme Court, on December 16, 2019, asked the centre to inform it, as to how much time it will take to decide on application for financing the stalled projects of the now defunct Amrapali Group, from the newly-launched Rs 25,000-crore stress fund for the real estate sector. The centre told the top court that a due procedure had to be followed, for securing funds from the stress fund announced by the central government.

A bench of justices Arun Mishra and UU Lalit asked additional solicitor general Vikramjeet Banerjee, whether there was any time limit for disposal of such applications, if made to the fund manager. Banerjee replied that he has no instruction, with regard to the time limit but in case Amrapali needs to secure funds, then it had to make an application in this regard. “We can issue directions to the court receiver appointed for properties of Amrapali but you tell us by Tuesday (December 17, 2019) morning, as how much time is needed to take a final call on the applications,” the bench said.

During the hearing, the top court also expressed annoyance over the manner in which government-owned Metal Scrap Trade Corporation (MSTC) was working, in auctioning the properties of Amrapali Group. It said that the court has to withdraw properties from Debt Recovery Tribunal (DRT), which was earlier entrusted with auctioning of Amrapali properties, as there was cartelisation and proper amount was not fetched even for prime properties. The top court also asked the NBCC to expedite completion of category-A projects of Amrapali, so that they could be sold and the amount could be used for financing other smaller projects.

 


Amrapali crisis: SC asks home buyers to pay their outstanding amounts by January 31, 2020

The Supreme Court has directed home buyers in the Amrapali Group’s stalled housing projects to pay the outstanding amounts by January 31, 2020, so that the funds can be used for completion of the projects

December 3, 2019: The Supreme Court, on December 2, 2019, directed thousands of Amrapali home buyers to pay outstanding amounts by January 31, 2020, either in installments or at one go, for speedy completion of all stalled projects. The top court asked 28 banks, who have entered into agreements directly with home buyers or through the Amrapali Group for financing homes, to disburse the pending amount within one month.

A bench of justices Arun Mishra and UU Lalit said that funds need to be channelized, to complete the pending projects of Amrapali Group, in order to provide respite to the hassled home buyers. “So far, around Rs 105 crores out of around Rs 3,000 crores outstanding amount have been deposited by the home buyers,” the bench said, adding, “We direct the home buyers to deposit the outstanding amount by January 31, 2020, either in installments or at one go.”

During the hearing, joint director of Enforcement Directorate (ED) Rajeshwar Singh informed the court that the agency has prima facie found evidence of violation of The Foreign Exchange Management Act, 1999 (FEMA) by multi-national firm JP Morgan and they have recorded the statements of the country head of the company with regard to dealings with the now defunct Amrapali Group. He said it appears that there are also violations of provisions of the Prevention of Money Laundering Act (PMLA).

The top court directed the state-run NBCC to complete the work of eight Amrapali projects – Zodiac, Sapphire-1, Sapphire-2, Silicon City-1, Silicon City-2, Princely Estate, Centurion Park Low Rise and O2 Valley having around 11,258 units in Noida and Greater Noida. It directed government-owned Metal Scrap Trade Corporation (MSTC) to auction a fleet of 86 luxury cars, attached on the court’s order from the Amrapali Group of companies, to garner funds for the pending projects. The top court posted the matter for further hearing on December 13, 2019.

 


Amrapali crisis: SC directs state-owned MSTC Ltd to auction attached properties

The SC has directed state-owned Metal Scrap Trade Corporation to auction the attached properties of the Amrapali Group, in a bid to use the funds collected, to complete the stalled projects of the Group

October 15, 2019: To ensure speedy disposal of attached properties of now defunct Amrapali Group of Companies and its directors, the Supreme Court, on October 14, 2019 directed the Metal Scrap Trade Corporation (MSTC) to auction them and deposit the cash with the apex court registry. The top court said that the funds collected through the auction of properties, will help in speedy completion of stalled projects and bringing back the confidence of home buyers.

A bench of justices Arun Mishra and UU Lalit, accepted the suggestion of senior advocate R Venkataramani, appointed as court receiver by the top court, for auctioning of the attached properties of Amrapali. The top court directed the relevant documents of the attached properties, which were with the Debt Recovery Tribunal, be given to the MSTC, which would auction the assets and deposit the amount with the apex court registry.

The top court also asked Orissa State Housing Board, to deposit Rs 34 crores with the apex court registry, which had been deposited by Amrapali Group with it, for developing a housing project. Similarly, the top court also asked the Raipur Development Authority to deposit Rs 19 crores with the apex court registry. The counsel for Raipur Development Authority said that Rs 19 crores was deposited by Amrapali Group for the lease of three land plots, for development into a housing society but the agreement was never fulfilled and the Authority had to cancel the contract. The top court also restrained the Noida Authority from creating any rights or alienating the land of the Amrapali Heartbeat City, of which, the lease, it had recently cancelled. The court took on record the third report of the forensic auditors, with respect to the Heartbeat City project of Amrapali and others.

 


Amrapali case: SC orders forensic audit report to be given to ED, Delhi police and ICAI

The SC has ordered that the forensic audit report of the Amrapali Group be given to the ED, Delhi Police and the ICAI and also disbursed Rs 7.16 crores to the NBCC, for completion of stalled projects of the Group

August 26, 2019: The Supreme Court, on August 26, 2019, directed that a forensic audit report be given to the Enforcement Directorate, Delhi Police and the Institute of Chartered Accountants in India (ICAI), for taking appropriate action against Amrapali Group’s directors and auditors, for siphoning off over Rs 3,000 crores of home buyers’ money. A bench of justices Arun Mishra and UU Lalit, also directed the apex court registry to disburse Rs 7.16 crores deposited by the Amrapali Group to the National Buildings Construction Corporation (NBCC), for completion of stalled projects of the Group.

The bench also directed the Noida and Greater Noida authorities to set up a nodal cell, for issuing completion certificates to home buyers. It also directed the authorities to depute one officer, not below the rank of deputy manager, to coordinate with the court receiver, senior advocate R Venkataramani, in dealing with the affairs of Amrapali Group. The bench posted the matter for further hearing on September 11, 2019.

 


Amrapali case: SC asks Noida and Greater Noida authorities to give completion certificates to home buyers

The SC has asked the Noida and Greater Noida authorities, to hand over completion certificates to home buyers residing in various Amrapali projects and warned that the officials will be sent to jail, if they failed to do so

August 14, 2019: The Supreme Court asked Noida and Greater Noida authorities, on August 13, 2019, to grant completion certificates to thousands of harassed home buyers, residing in various Amrapali projects, in compliance with its verdict. The top court warned that officials posted at the authorities for more than 10 years, will be in trouble, if its orders were not complied with. A bench of justices Arun Mishra and UU Lalit, was informed by advocate Ravindra Kumar, appearing for the authorities that they have started complying with the apex court’s July 23, 2019, verdict and have constituted a special cell, to hand over the completion certificates.

Kumar said the authorities do not have a project-wise list of home buyers, who are residing in the Amrapali projects. “Project-wise list to be provided to Noida and Greater Noida authorities, with respect to the people who are already staying in such projects,” the court ordered. Further, it warned: “You have to implement our orders, or you know the repercussions. Officers who are there for last 10 years are in trouble. We do not want to say much but we know has happened there. At least 20% of such employees will be in trouble. If our orders are not complied with, the concerned officials will be sent to jail.”

Kumar informed the bench that they have started providing electricity and water connections to the home buyers as directed by the court, despite there being no completion certificate. 

Counsel for the National Buildings Construction Corporation (NBCC), entrusted by the court to complete the pending projects of Amrapali Group, said that initially they were given Rs 1.5 crores and now they need Rs 7.59 crores, to start further work in the pending projects. The bench asked the NBCC to file an application and a roadmap on how it plans to go forward and it would deliberate on it, on the next date of hearing.

Additional solicitor general Vikramjeet Banerjee, appearing for the Delhi Police and Enforcement Directorate, said that they have filed their reports on the action taken against Amrapali Group CMD Anil Kumar Sharma and other directors, in compliance with the verdict. Counsel appearing for the Institute of Chartered Accountants of India (ICAI), which has been asked by the court to initiate disciplinary action against chartered accountant Anil Mittal, who was overseeing the accounts of the Amrapali Group, sought a copy of the report of the forensic auditors. The bench directed that copy of the forensic auditors be given to ICAI, to enable them to take disciplinary action against the statutory auditor of Amrapali Group.

 


Amrapali Group entered into ‘sham agreements’ with firm linked to MS Dhoni: Auditors to SC

Forensic auditors probing the Amrapali case, have informed the SC that the group entered into ‘sham agreements’ with MS Dhoni-linked Rhiti Sports Management, to divert home buyers’ money

July 25, 2019: The Amrapali Group had entered into ‘sham agreements’ with Rhiti Sports Management Pvt Ltd (RSMPL), which promotes the brand of Indian cricketer Mahendra Singh Dhoni, to ‘illegally divert’ home buyers money, the court-appointed forensic auditors have informed the Supreme Court. The forensic audit report, accepted by the top court on July 23, 2019, said that Amrapali Sapphire Developers Pvt Ltd had paid Rs 6.52 crores, out of the total amount of Rs 42.22 crores, to RSMPL during 2009-2015.

Several agreements were entered into by Amrapali Group with RSMPL, including one of November 22, 2009, under which Dhoni would make himself available to the chairman for three days, along with one representative of RSMPL, it said. “There are no documents held on record for compliance of this condition,” forensic auditors Ravi Bhatia and Pawan Kumar Aggarwal said in their report. “This clearly shows that these agreements have just been made for payment of amounts to Rhiti Sports Management Private Limited Company and are sham agreements and made just for making payments to RSMPL,” the report said.

“We feel that home buyers’ money has been diverted illegally and wrongly to RSMPL and should be recovered from them, as the said agreement in our opinion does not stand the test of Law,” the forensic auditors have said in their finding, which was noted by a bench of justices Arun Mishra and UU Lalit, in its 270-page verdict.

See also: Delhi Consumer Commission orders Unitech to refund Rs 9 lakhs to Gurugram-based home buyer

The report also dealt with an agreement for sponsorship dated March 20, 2015, under which Amrapali Group of Companies got the right to advertise as Logo Space at various places in the IPL 2015 for Chennai Super Kings. “It is observed that this agreement is on plain paper and executed only between Amrapali and Rhiti Sports Management Private Limited and there are no signatories on behalf of Chennai Super Kings to this agreement. No resolution in favour of Arun Pandey, signatory of Rhiti Sports Management Private Limited, is attached with the said agreement,” the auditors said.

Rhiti Group, in a statement, said: “With utmost respect to the orders of Supreme Court, we would only like to clarify that the observation mentioned in a forensic report are bereft of proper information or relevant documents. The company has been in possession of all information and relevant documents that can establish the clean image and that the observations made in the said report are incorrect.”

 


Amrapali case: SC cancels registration and lease of Group, appoints NBCC to complete projects

The SC, while cancelling the registration of Amrapali Group under the RERA, has appointed NBCC to complete the pending projects of the Group and ordered Noida and Greater Noida to provide completion certificates to existing residents

July 23, 2019: The Supreme Court, on June 23, 2019, cancelled the registration of the embattled Amrapali Group under the Real Estate Regulatory Authority and the lease of its properties granted by Noida and Greater Noida authorities. A bench of justices Arun Mishra and UU Lalit, appointed the National Buildings Construction Corporation (NBCC) to complete all the pending projects of the Amrapali Group. In a relief to home buyers, the court also directed Noida and Greater Noida to hand over completion certificates to the flat buyers, who are already residing in various projects of the Group.

The bench also appointed senior advocate R Venkataramani as the court receiver, in whom the rights of all the Amrapali properties will be vested, after the cancellation of the lease. The top court said Venkataramani will have the power to enter into any tri-party agreement, for sale of the Group’s properties to recover the dues. The bench noted that the home buyers’ money was diverted, in violation of the Foreign Exchange Management Act (FEMA) and the foreign direct investment (FDI) norms. It directed the Enforcement Directorate to investigate the alleged money laundering by Amrapali CMD Anil Sharma and other directors and senior officials of the Group. The court added that Noida and Greater Noida colluded with the realty group, in allowing diversion of the home buyers’ money and did not act as per the law.

 


Noida, Greater Noida Authorities express their inability to complete stalled Amrapali projects

The Noida and Greater Noida Authorities have informed the SC that they don’t have the resources or expertise to complete the Amrapali Group’s stalled projects, after the apex court indicated that it may consider this option

May 13, 2019: The Noida and Greater Noida Authorities, on May 10, 2019, told the Supreme Court that they do not have the requisite resources and expertise to construct the stalled projects of the embattled Amrapali Group and favoured handing over the properties to a reputed builder, under the supervision of a high-powered committee. They also said that they could not take any action, like cancellation of lease agreements against the Group, which regularly defaulted on payments, due to the ‘bulk of home buyers’ and ‘political weight’.

Both the authorities told the apex court that there was around Rs 5,000 crores pending from the Amrapali Group, towards the principal amount and interest component, besides the penal interest. They said that as government entities, keeping the interest of home buyers in mind, they had not cancelled the lease agreements with Amrapali, despite repetitive default of payment.

A bench of justices Arun Mishra and UU Lalit, reserved its verdict on the question of who would take over the management control and which builder should finish the stalled projects of Amrapali. The court asked the Noida Authority to explain what action it had taken against Amrapali Group, which was a ‘chronic defaulter’ in payment of lease amount. Senior advocate Debal Kumar Banerji, appearing for Noida Authority, said that under their jurisdiction, they had seven projects of Amrapali and they had an outstanding of nearly Rs 2,000 crores, while they had received only Rs 505 crores, till now.

He conceded that besides issuing repetitive show-cause notices to Amrapali Group for defaulting in payments to Noida, they have not done anything. “We have issued a series of show-cause notices, for repetitive default by Amrapali Group. We are a public sector entity and there were a bulk of home buyers involved. Had we been a private body, we could have easily cancelled their lease agreement and proceeded further,” Banerji said. “Due to the bulk of home buyers, political weight and looking at the consequences which would have followed, after cancellation of Amrapali’s lease, no strong action was taken,” he said.

The bench asked the Authority how it would proceed, if the court granted ownership rights of the properties of Amrapali?

“We do not have requisite staffs, resources and expertise in constructing the projects. In the interest of all, it would be better if the court sets up a high powered monitoring committee and asks a reputed builder or developer to construct the stalled projects, in a time-bound manner,” Banerji said.

See also: SC withdraws facilities of jailed Unitech promoters, over non-cooperation

A similar stand was taken by the Greater Noida Authority, which said that the Amrapali Group had five projects under its jurisdiction, out of which four were vacant land and no construction had taken place. Advocate Ravinder Kumar, appearing for Greater Noida Authority, said that Amrapali had an outstanding of around Rs 3,400 crores and had paid only Rs 363 crores, till now. “We have also issued repetitive show-cause notices to them (Amrapali Group) but apart from that, being a government entity and looking at the home buyers and the consequences to follow, we could not proceed further for cancellation of lease,” Kumar said.

He pointed out that in the case of another embattled reality firm, Unitech Ltd, the Authority had cancelled the leases given to them for not complying with the terms and conditions of the agreement but it had resulted in litigation and three appeals were still pending in the apex court.

The bench then said that the National Buildings Construction Corporation (NBCC) Limited could be one option. Kumar said that the Greater Noida Authority was concerned about its outstanding. He added that NBCC was also a consultant, which had a very high rate for its services. The court said that it could take care of all those issues but NBCC, being a government entity, may instill confidence among the home buyers.

The bench also asked the court-appointed forensic auditors – Pawan Aggarwal and Ravinder Bhatia – to audit three more residential projects in which Amrapali has stakes – La Residentia and Amrapali O2 Valley, situated in Greater Noida West and Heartbeat City, situated in Noida.


SC warns Amrapali that it will give ownership rights of its properties to Noida and Greater Noida Authorities

The SC has warned the Amrapali Group that they can be thrown out from their 15 prime residential properties and that it may transfer the ownership rights to Noida and Greater Noida Authorities

May 10, 2019: Observing that it would protect the rights of thousands of home buyers and push the Amrapali Group out of its projects, the Supreme Court, on May 8, 2019, said that it may consider asking Noida and Greater Noida Authorities to engage any builder or developer, to finish the stalled projects and sell the properties under their supervision. “We see that entire Amrapali Group has failed to discharge its duties towards home buyers, authorities (Noida and Greater Noida) and banks. You (Amrapali Group) have neither completed any projects, nor invested any money in the projects. We think, you are the one who should be thrown out of these properties. We will vest the rights of these properties with the Noida and Greater Noida,” said a bench of justices Arun Mishra and UU Lalit.

“We may throw you out from these properties and transfer it, lock, stock and barrel, to Noida and Greater Noida. The loans, which have been secured by Amrapali Group by mortgaging the lands to the banks, can be collected by the financial institutions from the directors of the company or the corporate guarantors,” the bench added. The court further said it will ensure that banks do not enter the premises of these properties and home buyers get the first charge on the properties.

See also: SC withdraws facilities of jailed Unitech promoters, over non-cooperation

It said that the Amrapali Group, by its own admission, took Rs 11,652 crores from home buyers and invested only Rs 10,630 crores from it for construction of the residential projects. The court also questioned how Amrapali Group could mortgage the entire projects and secure loan worth thousands of crores of rupees from banks, when it was only an agent to develop the property. It asked the counsel for Noida and Greater Noida Authorities to compile all necessary data, as to how much money had been paid by the Amrapali Group till now, what the principal lease amount was and the interest component project-wise and how much was the land given to the Group.

Senior advocate Gaurav Bhatia, appearing for Amrapali, said an amount of Rs 11,652 crores was collected from the home buyers and that Rs 10,630 crores was used for construction of various projects, besides paying Rs 998 crores to the authorities as lease amount. The bench asked Bhatia to explain the income taxes paid by a Group company – Stunning Construction Pvt Ltd – of CMD Anil Kumar Sharma and other directors, saying that tax liability of directors cannot be cleared from the company’s fund. Bhatia claimed that Sharma has returned Rs 5.5 crores, which was paid for his income tax from the accounts of Stunning Construction while the other director Shiva Priya has said that Rs 4.3 crores tax liability paid was later adjusted towards his salary dues from the Amrapali Group.

“You file an affidavit and give us each and every detail, when was your income tax paid, for which assessment year and when was that money paid back. Show us the transaction. Give all the details of the salary or emoluments given to the directors of the company. If any facts and figures are wrong, we will severely haul them up,” the bench warned. It posted the matter for further hearing on May 10, 2019.


SC expresses shock over ‘manipulation’ of its order in Amrapali case

The SC has warned of serious action over the manipulation of its orders in the Amrapali case, where the name of the forensic auditor was changed in the order

May 9, 2019: Shocked by the ‘unfortunate’ manipulation of its order in the high-profile Amrapali case, the Supreme Court, on May 8, 2019, issued a stern warning to errant registry staffers and said some more heads will roll, for destroying the institution. Taking serious cognisance of the ‘sorry state of affairs’, the apex court said: “People are trying to change orders by influencing and manipulating the court staff, which would not be tolerated at any cost.” The latest incident came to fore, when the top court pointed out that the name of the forensic auditor in its order was changed.

The top court had, in February 2019, sacked two of its staff and a case was lodged for allegedly tampering with an order which created an impression that industrialist Anil Ambani had been exempted from personal appearance, in a contempt case filed by Ericsson. A bench of justices Arun Mishra and UU Lalit, on May 8, 2019, modified its earlier order and asked the directors of various Amrapali Group’s supplier firms, including Jotindra Steel and Tubes Ltd, a public listed company, to appear before forensic auditor Pawan Agarwal from May 9 for three days, saying that non-compliance would be considered as contempt of court.

The bench said that when the court had ordered the directors of various firms to appear before Agarwal, who has been investigating the case of Jotindra Steel, how could the name of the other forensic auditor, Ravinder Bhatia, appear in the order sheet? “It is unfortunate, shocking and surprising that orders of this court are being manipulated and influenced. It is a sorry state of affairs in the Supreme Court. This cannot be tolerated. Few days back, a similar thing happened in justice RF Nariman’s court and now again this has happened,” it said. “Two persons were removed at that time. It seems that was not enough and some persons need to go out. Institution is being destroyed like this and a strong message needs to be sent to whoever is responsible,” it added.

The court said: “The said auditor, who was not involved in the case was named in the order while the other auditor who was involved and we told his name in the open court was not included”. The May 2, 2019, order of the bench stated: “It is directed that all the directors of M/s Jotindra Steel and Tubes Ltd, M/s Mauria Udyog Ltd, M/s Bihariji Properties Pvt Ltd, M/s Bihariji Developers Private Limited, M/s Bihariji Highrise Private Limited and M/s Sarvome Housing Private Limited, shall report at the office of Ravinder Bhatia, forensic auditor, along with all the documents required by them with respect to total transactions, for the next three days during 11 AM to 5 PM.”


Over Rs 9,500 crores can be recovered from Amrapali Group, forensic auditors inform SC

Forensic auditors have informed the SC that over Rs 9,000 crores can be recovered from the Amrapali Group, from flats that were sold at throw-away prices, from home buyers who had booked flats and from the sale of unsold units

May 3, 2019: Forensic auditors informed the Supreme Court, on May 2, 2019 that Rs 9,590 crores could be recovered from the embattled Amrapali Group, which has diverted Rs 3,523 crores of home buyers’ money. Of the money diverted, as much as Rs 455 crores can be recovered from persons, including directors of the realty firm, their family members and individuals holding key managerial positions.

A bench of justices Arun Mishra and UU Lalit was told by the court-appointed forensic auditors, Pawan Agarwal and Ravi Bhatia that the firm sold 5,856 flats at throw-away prices and Rs 321.31 crores could be recovered at the current market value. They also said that Rs 3,487 crores was recoverable from home buyers who had booked flats and taken the possession in 14 Amrapali Projects.

See also: Home launches pan-India, up by 3% in Q1 2019: Study

The auditors, in their eight-volume report submitted to the court, said that till now they had detected Rs 152.24 crores, which the company’s directors and their family members had taken, for paying income taxes, advances for purchase of shares and under other heads. The summary report also pointed that from 35 Group companies, persons holding key managerial positions, including directors, siphoned off Rs 69.36 crores, which was cash in hand with the firms.

“Amounts given as advances without any business transactions, which have not been adjusted, along with the amount received/paid for the non-genuine transactions, amount to Rs 234.31 crores and should be recovered from the management of the Amrapali Group of companies,” the report said, which included only the companies audited by Bhatia. The further report of Agrawal is yet to be placed before the court.

The auditors pointed out that there were 5,229 unsold flats of Amrapali in 11 different projects and can be sold for Rs 1,958.82 crores. They said that non-genuine and bogus purchases amounted to Rs 1,446.68 crores and Amrapali Group has a liability of Rs 6,004.6 crores towards Noida and Greater Noida authorities. The top court has accepted the reports of forensic auditors and sought explanation from the Group and its associates.


Amrapali’s lawyers given flats and penthouses: Forensic auditors to SC

Forensic auditors have informed the SC that the Amrapali Group gave away flats and penthouses as fees, to lawyers representing it at various judicial forums, in violation of the law

May 2, 2019: In yet another startling revelation, the embattled Amrapali Group gave away flats and penthouses as fees, to lawyers representing it at various judicial forums, forensic auditors informed the Supreme Court, on May 2, 2019. Amrapali’s lawyers accepting fees from their clients in ‘kind’, is in violation of law, they said. The bench said it is prohibited under the Advocates Act and no lawyer can accept the fees in kind.

Forensic auditors Pawan Agrawal and Ravi Bhatia, without taking any names, told the bench that some lawyers appearing for Amrapali Group in the top court, in contravention of the Advocates Act, have taken flats and penthouses from their client. “I request the lawyers, who have received the flats from Amrapali, to return the property as soon as possible,” Agrawal told the jam-packed courtroom.

Hearing a batch of home buyers’ petitions, a bench of justices Arun Mishra and UU Lalit, also ordered all the directors of Jotindra Steel and Tubes Ltd, a supplier to the Amrapali Group, to appear before the forensic auditors over the next three days. Akhil Sureka, a managing director in Jotindra Steel and Tubes Ltd, a public listed company, was found to be a director in Group companies of Amrapali, in the forensic audit. The court-appointed forensic auditors detected siphoning of over Rs 400 crores by Surekha, who according to them, was an authorised signatory of Amrapali in banks, since 2016.

Senior advocate Vikas Singh, appearing for Surekha, told the bench that he was duped by Amrapali and it owes him Rs 112 crores, for the material they have supplied for construction of projects. He said that after Amrapali Group ran into trouble, it transferred FSI (floor space index) worth Rs 80 crores to him, which was hived off to a third-party for development. The forensic auditors intervened and pointed out that this Rs 80 crores again landed back into the accounts of Group companies of the realty firm, through different companies. To this, the bench said, “You might be a creditor of first of its kind. Who, for recovering the money, invested more money into the company running in trouble? For us, it seems that you have created a cobweb of companies, to siphon off the funds from Amrapali. The FSI cannot be transferred under RERA.”

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Singh said that Akhil Surekha remained director of Amrapali companies for just 15 days in June 2016 and then exited from those firms and was even discharged from being a guarantor in the banks. The bench asked how the banks discharged him from being a guarantor and sought details of all the documents by which he was relieved. “A supplier to the company cannot be a director and authorised signatory of the same firm,” the bench said and directed all the directors to appear before the forensic auditors, with all the details of transactions and documents.

The bench also asked senior advocate Gaurav Bhatia, appearing for Amrapali Group to explain how a company named ‘Stunning Construction Ltd’ was floated, to pay the income taxes and advances amounting to Rs 234 crores to the directors and their family members and other higher officials of the Group. The hearing in the matter remained inconclusive and will continue on May 8, 2019.


SC asks Amrapali Group to explain details of transactions, agreements with MS Dhoni

After cricketer MS Dhoni moved the SC, seeking protection of his ownership over a penthouse in Amrapali Group’s project, the court has asked the company to explain its monetary transactions and agreements with the cricketer

May 2, 2019: The Supreme Court, on April 30, 2019, directed the embattled Amrapali Group to explain its monetary transactions and agreements with Indian cricketer Mahendra Singh Dhoni, who was the realty firm’s brand ambassador between 2009 and 2015. The top court said it wants the entire picture to be placed before it and also sought an explanation of each and every transaction and dealings with Dhoni. It said the Group might have ‘cheated’ Dhoni, as well and that is the reason some media houses have reported about his case.

A bench of justices Arun Mishra and UU Lalit, asked the firm to submit the details, as to how much money was transacted between Amrapali Group and Dhoni. “We want entire picture before us. How much money was transacted between you and Dhoni and what were your agreements with him. How much money you have paid for the advertisements (branding). We want entire details. You might have cheated him also, that’s why media houses have recently reported about his case,” the bench said.

At the outset, the court-appointed forensic auditors, Pawan Agrawal and Ravi Bhatia, told the bench that they had detected 24 transactions between Amrapali Group and M/s Rhiti Sports Management Pvt Ltd, which manages the endorsement and advertisement rights of Dhoni. Agrawal told the bench that in one of the transactions, around Rs 25 crores was given by Dhoni to Amrapali and there were several transactions between different group companies.

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Rhiti Sports told the court that it was an operational creditor of Amrapali Group and had entered into various agreements, for endorsement and promotion of brand ‘Amrapali’, between the year 2009 and 2015. It had said that the endorsements’ agreements and various MOUs were executed between Amrapali Group CMD for and on behalf of all the companies, partnership firms, joint ventures doing their business under the brand umbrella of Amrapali Group and M/s Rhiti Sports Management Pvt Ltd. “That the respondent builder Amrapali Group owes an amount in excess of Rs 38.95 crores, out of which Rs 22.53 crores is towards the principal amount and Rs 16.42 crores towards the interest calculated at 18% simple interest per annum,” Rhiti Sports said in its affidavit. The sports management company had told the court that two agreements were entered between Amrapali Group and Dhoni in 2009 and 2012, for three years each, for the brand endorsements of the real estate firm and it was agreed that all the amount payable to Dhoni was to be done through it only.

The bench asked senior advocates Geeta Luthra and Gaurav Bhatia, appearing for Amrapali, to furnish all the details by May 1, 2019. Dhoni, in an earlier affidavit filed in the apex court, had said that he was a creditor of Amrapali Homes Projects Pvt Ltd and had entered into a joint venture agreement with it, on June 14, 2011. Under the agreement they were to create a joint venture company to develop a residential complex in Ranchi and adjoining areas in Jharkhand, he said. Dhoni said that for creating the JV an MOU was executed between Amrapali Group CMD Anil Kumar Sharma and him and had contributed Rs 25 crores, as initial capital. He said he was guaranteed and assured payment of a minimum sum of Rs 75 crores to him, by Amrapali. In another affidavit, Dhoni had sought protection of his ownership rights over a 5,800-sq ft penthouse he had booked 10 years ago, in an Amrapali Group project.


Amrapali Group committed first-degree crime by cheating home buyers: SC

Coming down hard on the Amrapali Group after the forensic auditors informed that the Group diverted over Rs 3,500 crores of home buyers’ money, the SC has said that the fraud committed by the company ‘touched the sky’

May 2, 2019: The Amrapali Group has committed a ‘first-degree crime’ by cheating thousands of home buyers and no matter how powerful the people behind this mess, they will be booked and prosecuted, the Supreme Court said, on May 1, 2019. ‘Fate is written on the wall’ for the Group and its directors, the top court said, while declining to hear their claims of no wrong doing. The embattled real estate firm “Cheated everybody, including home buyers, banks and authorities and indulged in cartelisation, to prevent the Debt Recovery Tribunal from auctioning its unencumbered properties,” it said. “The limit of your fraud touched the sky,” the SC said.

A bench of justices Arun Mishra and UU Lalit, said it cannot believe the justification given by Amrapali, for alleged diversion of funds of over Rs 3,500 crores, looking at its dubious conduct. “You have committed a first-degree crime, by cheating thousands of home buyers. We should have cancelled the licences of statutory auditors of Amrapali, for indulging in fraudulent practise long back and sent them to jail. We are saying in open court that there are powerful people behind this mess but no matter how powerful they are, we will book them and prosecute them. We are not going to spare anybody,” the bench said.

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The hard hitting remarks of the bench came, after senior advocates Geeta Luthra and Gaurav Bhatia, appearing for the Group, said there was no wrong doing on their part and there was no diversion of Rs 3,500 crores, as claimed by the court-appointed forensic auditors. Luthra said the forensic auditors had erred on various aspects in their report, for example, they had claimed that not a single penny was invested by the directors of Amrapali but in reality, Rs 60-70 crores was put in by them. Luthra said the Group acted in a bona fide manner and in the interest of home buyers but the problems started after the company ran into litigation. The Amrapali Group claimed that they had received Rs 11,057 crores from the home buyers and they have constructed five projects in Indirapuram of Delhi-NCR and gave their possession to home buyers.

“We have to believe the forensic auditors and their report, looking at your dubious conduct. We believe them. You (Amrapali) have yourself admitted in your earlier affidavit that Rs 2,990 crores of home buyers’ money was diverted and now, you are claiming that there was no diversion. You have made a peon as your director and he purchases shares worth crores of rupees for Amrapali. Is this not correct. Your (Amrapali Group and its directors) fate is written on the wall. We are not inclined to hear your bona fide claims, looking at your dubious conduct,” the bench said.

At the outset, the bench also pulled up Bank of Baroda and other lenders, who had given hefty loans to Amrapali Group, for failing to monitor and control the diversion and usage of funds by the realty firms. The two forensic auditors – Pawan Agrawal and Ravi Bhatia – in their fresh report said, on April 30, 2019 that Amrapali had diverted over Rs 3,500 crores of home buyers’ money to different projects. The forensic auditors pointed out that the promoters of Amrapali did not invest a single penny in the real estate firm and home buyers’ money was used, for the construction of high-rise buildings. They pointed out that there were irregularities in the sale of Amrapali’s hotels in Bareilly of Uttar Pradesh and Deoghar of Jharkhand. Agrawal had pointed out that funds of over Rs 400 crores, were diverted through three companies – Bihariji Highrise Pvt Ltd, Jotindra Steel and Tubes Ltd and Mauria Udyog Ltd.


MS Dhoni moves SC, seeking protection of ownership rights of penthouse in Amrapali project

Cricketer MS Dhoni, a former brand ambassador of the Amrapali Group, has moved the SC, seeking protection of his ownership over a penthouse in the Group’s project, saying that he has been duped by the company

April 29, 2019: Indian cricketer Mahendra Singh Dhoni has moved the Supreme Court, seeking protection of his ownership rights on an over 5,500-sq ft penthouse that he booked 10 years ago, in a project of the embattled Amrapali Group. Dhoni filed an application in the court through his lawyer, after receiving a notice from the apex court-appointed forensic auditors, seeking clarification on certain aspects of the purchase.

“This application is being moved by the applicant (Dhoni), to protect his rights qua in his ownership and possession of penthouse apartment in Amrapali Sapphire Phase-1, which was agreed to be sold to him vide agreement dated August 31, 2009,” Dhoni said in the application, filed through advocate Shekhar Kumar.

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The apex court is scheduled to hear the Amrapali matter on April 30, 2019. Dhoni said the apex court had, on December 5, 2018, directed the forensic auditors to issue individual notices to home buyers who had booked the flats on a paltry sum. The former team India captain said his authorised representative has given a detailed reply to the notice sent by the forensic auditors. Dhoni said he has paid Rs 20 lakhs for the property but only some work for the penthouse has been done and he has not been given the possession.

“It is respectfully submitted here that the price paid by the applicant is certainly not a paltry amount,” he said, adding that because he was associated with the Amrapali Group as their brand ambassador, he got the penthouse at a lower price. This cannot be a ground to question the otherwise genuine agreement, he said. While the affidavit mentions no market price for the property, it is estimated that it is worth over Rs 1 crore. Dhoni said that like other home-buyers and creditors, he has also been duped by the Amrapali Group. He sought direction from the court that the allotment of the penthouse is not questioned and he be allowed to take its possession.


Amrapali forensic audit: SC irked over circulation of report before its filing

The Supreme Court has expressed annoyance over the ‘circulation’ of the forensic auditors’ report among lawyers on the embattled Amrapali Group, before it was submitted to the court

April 10, 2019: A Supreme Court bench of justices Arun Mishra and UU Lalit, on April 9, 2019, said that it was taking a ‘serious note’ of the circulation of the report of the forensic auditors on the Amrapali Group among the lawyers, even before it was submitted in the court and this should not have happened. It directed that the forensic report be kept in a sealed cover. The bench took on record the final report comprising nine volumes, submitted by the two court-appointed forensic auditors and directed them to finish their work by April 28, 2019.

The forensic auditors, Pawan Agrawal and Ravi Bhatia, told the court that they have found that over Rs 3,000 crores of home buyers’ money was diverted by Amrapali’s promoters. They said over 100 shell companies were formed by the Group, to divert the home buyers’ money. The bench said it cannot allow public interest to be jeopardised and would like to decide how to make the Amrapali Group liable for payment.

See also: Delhi builder arrested for duping people of Rs 1.2 crores, by selling them sold flats

It said the Group has a liability of over Rs 5,000 crores towards the Noida and Greater Noida Authorities and has to decide the legal question, as to how the title of their properties can be given to the home buyers. The top court said it will hear from April 30, 2019, the pleas of home buyers on whether the property titles can be given to them. It will also look into the ways their money, diverted to other ventures by Amrapali, can be realised and the stalled projects be completed. “Let us take the final call on the issue, which has been pending for long. We will not pass piecemeal orders or interim orders now. We would like to hear the issue finally and fix the liabilities. It is the home buyers who have to be benefitted from this entire issue, who have invested their money but were not given their homes,” the bench said. It said that the court has to realise the amount which has been taken away from the home buyers and added, “One who plays with the public money cannot be allowed to get away”.

The court allowed chief financial officer (CFO) Chander Wadhwa of the Amrapali Group, to deposit Rs 1.21 crores of home buyers’ money which was with him. The National Buildings Construction Corporation (NBCC), which was earlier directed by the apex court to construct the stalled project of Amrapali, told the bench that it had completed 17 flats, in two projects of the Group. The bench asked the Group to keep those 17 flats under its custody.


SC allows Delhi Police to arrest Amrapali CMD and 2 directors, on complaint of duped home buyers

The Supreme Court has allowed the Delhi Police to arrest the CMD of the Amrapali Group and two of its directors for duping home buyers and also ordered the attachment of their personal properties

March 1, 2019: The Supreme Court, on February 28, 2019, allowed the Delhi Police to arrest and interrogate in custody Amrapali Group CMD Anil Sharma and two directors, on a complaint that home buyers of their various housing projects were cheated and duped of their funds. The top court, which is seized of several pleas of home buyers, seeking possession of around 42,000 flats booked in projects of the Amrapali Group, also ordered attachment of personal properties of the CMD and directors – Shiv Priya and Ajay Kumar.

The trio, under detention of the Uttar Pradesh police and kept in a hotel at Noida since October 9, 2018, by the apex court for not complying with its orders, were in for a shock when a bench of justices Arun Mishra and UU Lalit ordered the arrest on a plea by the Economic Offences Wing (EOW) of Delhi Police, saying that it wanted to quiz them in a separate cheating case. “We had never ever stopped any agency from arresting and interrogating the directors,” the bench said, adding, “We make it clear that they (EOW) are free to arrest any or all directors”.

The bench, which had taken strong exception of diversion of monies of the home buyers by the directors and the real estate firm, directed the court-appointed forensic auditors to complete their detailed investigation on divergence of home buyers’ money by the Amrapali Group, before March 22, 2019 and listed the matter for hearing on March 24, 2019.

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The bench, which had asked the real estate firm and its directors to either deposit the diverted money or be ready for consequences, ordered forthwith attachment of personal properties of the CMD and the two directors. The attached assets also included the south Delhi-based bungalow of CMD Sharma.

At the outset, the bench inquired from the forensic auditors about the status of their probe and asked as to when they would be filing their reports. The auditors said that various firms and their officers concerned, to whom the monies were routed by the real estate major and its directors, have been evasive and were not cooperating in the forensic audit. “Can you give the list of persons and companies who are not cooperating with you?” the bench asked. On being told that there were 200 people or entities, which were evasive, the bench divided them into three groups and asked them to positively appear before the forensic auditors on March 5, 6, 7 and 8, 2019. “In case there is any violation that would be treated very seriously by this court,” the bench warned.


SC grills Amrapali CMD on home buyers’ money in his account, warns him of jail

The SC has warned Amrapali Group CMD Anil Kumar Sharma that he would be sent to jail for ‘aggravated contempt’, for not revealing the identity of one of the persons who bought Rs 140 crores of the company’s shares

February 15, 2019: The Supreme Court, on February 14, 2019, grilled Amrapali Group CMD Anil Kumar Sharma for Rs 94 crores of home buyers’ money being shown in his bank account and also warned that it would send him to jail, for his reluctance in disclosing the identity of a person, who had bought the company’s shares worth Rs 140 crores, from multi-national firm JP Morgan. The top court gave Sharma one last opportunity to return Rs 6.55 crores of home buyers’ money, which he had transferred to his daughter, by February 28, 2019 and sought explanation of Rs 94 crores shown in his bank account.

It also appointed a valuer, to ascertain the exact value of 5,229 unsold flats, including those booked by Amrapali for just Re 1, Rs 11 and Rs 12 and asked the valuer to submit its report by the next date of hearing. A bench of justices Arun Mishra and UU Lalit also brought ‘The Royal Golf Link City Projects Pvt Ltd’ under its scanner and sought its shareholding pattern, names of promoters and balance sheet. The court was informed by the forensic auditors that land for the project was purchased by Amrapali and in all possibility, it appears to be a front company of the embattled real estate firm.

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“We want to know, who paid the money for the land and how much money. Who are the promoters in the company and who are the shareholders? We also want to know what is the present valuation of the land. If it is honest investment, we will not touch it but if it’s not, then, we will take it over,” the bench told advocate Nikhil Nayyar appearing for Royal Golf Link Projects Ltd. The bench also restrained Royal Golf Link from alienating its properties till further orders.

It also asked the valuer to explain the transaction made by JP Morgan Real Estate fund and Amrapali Group and how it sold the real estate firm’s shares to two little known companies, ‘Neelkant’ and ‘Rudraksh’, for Rs 140 crores. The bench noted that ‘Neelkant’ and ‘Rudraksh’ were owned by Chandan Kumar, who was a peon in the office of the statutory auditor of Amrapali and Vivek Mittal was his relative. Counsel for JP Morgan said that there was one more person as director in ‘Neelakant’ and his name was Atul Mittal but his relation with the others was not known.

“We will seek information from Amrapali CMD Anil Kumar Sharma about Atul Mittal and send him to jail straightaway, if he does not disclose his identity and relations. This is a serious kind of fraud. How does the office boy and a small-time contractor, have Rs 140 crores money to purchase shares of Amrapali,” the bench said. The court asked Sharma about Atul Mittal, to which Sharma reluctantly replied that he was one of the relatives of company’s statutory auditor.

It asked Sharma to explain how Rs 94 crores of home buyers’ money was shown in his account and told him that if it was the company’s money, then, it should be returned by February 28, 2019. The court said that if any facts were suppressed by the company or its promoters, it would be viewed seriously and would be considered as ‘aggravated contempt’.

 


SC suspects cartelisation, as Amrapali’s five-star hotel remains unsold in auction

Taking strong exception to two prime properties of the embattled Amrapali Group finding no bidders, the Supreme Court has said that it looked like ‘cartelisation is at work’ and sought to know whether banks were a part of the cartels

February 12, 2019: The Supreme Court, on February 11, 2019 said that it was ‘shocking and disturbing’ that bankers were not coming forward to finance two prime properties of the embattled Amrapali Group, which remained unsold at an auction. A bench of justices Arun Mishra and UU Lalit said that it was earlier worried over undervaluation of the properties but strangely in the auction held on January 31, 2019, no bidders came to buy the prime properties. “It seems there is a systematic effort that properties go unsold, as no bids have come forward in the auction. Involvement of unforeseen hands cannot be ruled out. Prime facie, it appears that cartelisation is at work. Are the banks part of the cartel?” the bench said.

The top court said that banks are ready to finance projects for National Building Construction Corporation (NBCC) but they are not coming forward to finance the Amrapali properties, being sold by the Debt Recovery Tribunal (DRT) in an auction. A five-star hotel ‘Amrapali Holiday Inn Tech Park’ constructed in Greater Noida and prime land in Vrindavan in Uttar Pradesh, were put up for auction on January 31, 2019, by the DRT but no bidder had come forward to bid.

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The court allowed the NBCC to issue advertisement for the unsold flats of two Amrapali Projects – Eden Park and Castle – being constructed by it, so that funds could be raised. It said that interests of the home buyers is at the receiving end, as they are the ultimate sufferers. “There were newspaper reports recently that banks are ready to finance the projects constructed by NBCC but they are not ready to finance the bidders, who wanted to buy the Amrapali properties,” the top court said after being told no interested party came forward to purchase the properties worth hundreds of crores, as banks were not willing to finance them. The bench said that it cannot leave the situation like this and if necessary, it can pass necessary orders.

The court-appointed forensic auditor Pawan Kumar Aggarwal told the bench that he had identified 5,229 unsold flats from where around Rs 6,000 crores could be raised, by selling them. Aggarwal told the court that the Amrapali Group’s liability towards Greater Noida Authority was Rs 3,200 crores, around Rs 1,900 crores towards the Noida Authority and around Rs 2,000 crores towards banks. The bench asked the counsel for the Amrapali Group as to how they were planning to settle the liabilities, as unless they cleared the outstanding, nobody would be coming forward to put their money in the projects. “Home buyers’ interest is supreme. You (Amrapali) also have outstanding towards the home buyers, which you will have to pay. You have taken everything from them,” it said.

The forensic auditors also pointed out that multi-national firm JP Morgan Real Estate fund, which had invested Rs 85 crores in Amrapali Zodiac in 2010 by purchasing its shares and later selling them to the sister companies of the realty firm, had violated several then existing norms. Aggarwal pointed out that the shares purchased and agreement of JP Morgan Real Estate fund and Amrapali Group, were in violation of the provisions of law, as out of Rs 85 crores money received for the Zodiac project, Rs 60 crores was transferred to other projects.

“The shares purchased by JP Morgan were later purchased for Rs 140 crore by Amrapali’s two sister companies – Neelkanth and Rudraksh – which were floated by a peon and one office boy, who were working in the office of the statutory auditor of the Group,” he said.

The bench asked the forensic auditors who was the actual beneficiary in the transaction, as prima facie it did not appear to be a bona fide transaction. The auditors replied that they have written to the JP Morgan but they have not yet shared the name of actual beneficiary. The counsel for JP Morgan said that they could submit the name of the actual financier, who had invested in the Amrapali Group to the court but could not share it with other parties, as it was prohibited under the US laws. The bench listing the matter for further hearing to February 14, 2019.

 


SC allows NBCC to start work on two stalled projects of Amrapali

The Supreme Court has given a go-ahead to the National Building Construction Corporation, to complete two stalled projects of embattled real estate firm Amrapali Group

January 28, 2019: A Supreme Court bench of justices Arun Mishra and UU Lalit, on January 25, 2019, allowed the National Building Construction Corporation (NBCC) to start construction on two projects of the embattled Amrapali Group – Eden Park and Castle. The NBCC told the court that it has floated tenders for the completion of these two projects and would start construction in the month of February 2019.

The counsel for NBCC said that the total cost of the projects, would come around Rs eight crores. A NBCC official, on the condition of anonymity, described the development as just the beginning and said, “We will be starting work on the two projects soon. Work would also be taken up on other projects.”

See also: Forensic auditors find a web of 200-250 firms, where Amrapali diverted funds

The apex court said that it would like to hear in detail, various aspects of the case, including suo motu contempt, sale of unsold inventory and explanation of JP Morgan in selling of shares for Rs 140 crores, on February 11, 2019. It said that the Group’s chief financial officer Chander Wadhwa, would also have to explain on the said date, why the money of Rs 4.75 crores was transferred from his account before October 26, 2018, when he first appeared before the court. The bench asked the parties to suggest legal ways, as how the registration certificate could be given to home buyers residing in various residential projects of Amrapali, without the occupancy certificate.

 


To provide relief to Amrapali home buyers, SC favours allowing registration of flats

To provide relief to the hassled home buyers residing in flats built by the embattled Amrapali Group, the Supreme Court has indicated that it may allow them to register their residences with the authorities concerned

January 17, 2019: The Supreme Court, on January 16, 2019, observed that the flat buyers of Amrapali Group were not able to register their flats with the authorities concerned, as they did not have the completion certificate and if the need arises, it may invoke powers of extraordinary jurisdiction under Article 142 of the constitution, to direct for registration of the flats.

“Amrapali home buyers should not suffer due to want of completion certificate and ongoing litigation. We may direct the authorities to register their flats, on payment of proportional amount to the Noida and Greater Noida authorities. If the need arises, we may invoke Article 142 of the constitution, to issue directions,” a bench of justices Arun Mishra and UU Lalit told the counsels appearing for the home buyers and Amrapali.

It asked the parties to give their legal suggestions on the next date of hearing, so that directions could be passed to the authorities. Advocate ML Lahoty, appearing for the home buyers, said that it will be a big relief to the flat owners and they would submit the legal suggestion on next date of hearing.

See also: Forensic auditors find a web of 200-250 firms, where Amrapali diverted funds

He said that when Unitech’s promoters were in jail for a similar offence, the CMD and directors of Amrapali Group cannot be allowed to stay in a hotel.

Lahoty suggested that the court should direct that money be recovered from the unsold inventory of Amrapali Group and by selling the five star hotel of the company. The bench said that it was not happy with the valuation of Amrapali’s five-star hotel Tech Park, in Greater Noida, at just Rs 90 crores and would like to get it valued by an independent valuer.

“There may be some cartelisation working. We would not like that to happen. We are not happy with the value. This is a five-star hotel. We want a valuer who is directly responsible to the court,” the bench said. It also voiced concern that Amrapali’s 100-bed multi-speciality hospital in Greater Noida has not been sold till now, despite directions of the court. “We would also not like that the hospital is over-valued, because it would not allow any other party to take it over. There should be no cartelisation,” the bench said.

The court-appointed forensic auditors told the bench that they have found cases of duplicate booking of flats by the Amrapali Group, in which flats were sold twice and money was taken from both the parties. Forensic auditor Ravi Bhatia, in his report, said that as per the financial statements and the books of accounts scrutinised up to March 31, 2015, for the 23 companies of Amrapali, it was found that Rs 2,761.49 crores of the home buyers’ money has been diverted to other projects, other group companies, directors and their relatives and senior employees. The bench posted the matter for further hearing on January 24, 2019.

 


 

Amrapali flats booked for meagre sum of Re one per sq ft: Auditors to SC

Forensic auditors investigating the Amrapali Group have informed the SC that flats were booked in the firm’s projects for as low as Re one per sq ft in the name of over 500 people and companies were floated in the name of office boys, peons and drivers, in a bid to divert home buyers’ money

January 17, 2019: Skeletons kept tumbling out of the closet in the forensic audit of embattled Amrapali Group, as the court-appointed auditors, on January 16, 2019, told the Supreme Court that posh flats were booked on sums as low as Re one, Rs five and Rs 11 per sq ft, in the name of over 500 people. The audit found that 23 companies were floated in the name of office boys, peons and drivers and these firms were part of the Amrapali consortium and were made fronts, to divert home buyers’ money. The two forensic auditors told the apex court that they have issued notices to 655 people, on whose names ‘benami’ flats were booked but no one was found in 122 such locations.

The interim report of the forensic auditors, which was submitted before a bench of justices Arun Mishra and UU Lalit, said that the chief financial officer (CFO) Chander Wadhwa had transferred Rs 4.75 crores to ‘unidentified persons’ just three days before he deposed before the top court on October 26, 2018. “He (Wadhwa) had in his account Rs 12 crores, till March 2018. Then, he had transferred Rs one crore in the name of his wife. Just three days before he appeared in the court for the first time on October 26, 2018, he had transferred Rs 4.75 crores to some unidentified persons,” forensic auditor Pawan Kumar Agarwal told the bench.

See also: Forensic auditors find a web of 200-250 firms, where Amrapali diverted funds

The court also asked the forensic auditors to produce the orders of the Income Tax Department, which, during its search and seizure conducted in 2013-14, had recovered Rs 200 crores of bogus bills and vouchers besides Rs one crore from Amrapali Group CMD Anil Kumar Sharma and Rs one crore from director Shiv Priya. Another forensic auditor Ravi Bhatia told the court that the Amrapali Group had appealed against the IT order, which had deleted the paragraph which mentioned of the bogus bills and vouchers raised on account of purchase of raw materials. “You submit us both the orders of IT Department and the appellate authority. We would like to see them,” the bench said.

The top court also brought under its scanner multi-national firm JP Morgan Real Estate fund, which had invested Rs 85 crores in Amrapali Zodiac in 2010, by purchasing its share and later selling those shares to the sister companies of realty firm. The forensic auditors pointed out that the shares purchased and agreement of JP Morgan Real Estate fund and Amrapali Group, were in violation of the provisions of law.

“After investing Rs 85 crores in purchasing the shares of Amrapali Zodiac, with an agreement which was impermissible in law, they again sold those shares for Rs 140 crores to little known companies Neelkanth and Rudraksh, which were owned by Chandan Mittal and Vivek Mittal who worked in the office of Amrapali Statutory Auditors. These two companies were sister companies of Amrapali Group,” the forensic auditors said.

To this, the bench told the counsel for JP Morgan and its India in-charge that the company needs to explain lot of things and they need the reply within one week. “You have to explain within a week when did this transaction took place, what documents had you seen, when did you appoint your chief financial officer, who took the decision to sell those shares to companies like Neelkanth and Rudraksh, whether any study was conducted to see the standing of these companies in the market, who signed the documents and lastly who signed the cheques. We want each and every details in one week,” the bench said. It also warned that if there was no satisfactory reply to the questions, then, the court may direct the Serious Fraud Investigation Office (SFIO) to look into the matter. The counsel for JP Morgan, however, said that they would explain everything to the court and urged the bench not to get prejudiced with the findings of the forensic audit.

 


SC asks forensic auditors to examine trail of home buyers’ Rs 3,000 crores, diverted by Amrapali Group

The SC has asked the forensic auditors to examine the money trail of Rs 2,990 crores received from home buyers that were taken out from nine companies of the Amrapali Group, for creating assets and purchasing shares of sister companies

December 13, 2018: The Supreme Court, on December 12, 2018, asked forensic auditors to examine the trail of around Rs 3,000 crores of the home-buyers’ money, allegedly spent by the Amrapali Group on buying shares of its sister companies and asset creation. Amrapali Group CMD Anil Sharma, directors Shiv Priya and Ajay Kumar returned to the court, a total amount of Rs 1.55 crores of home buyers’ money ‘lying’ with them.

The top court grilled several accountants of the Group, as to how they have prepared the account statements, which were submitted in the court and on what basis they created the accounts this year, for financial years 2015-16, 2016-2017 and 2017-2018. It directed the forensic auditors to ascertain the numbers of flats which were ‘benami’ property, doubly booked or booked on a nominal value by the Amrapali Group. A bench of justices Arun Mishra and UU Lalit directed the Debt Recovery Tribunal, Delhi, to conduct the valuation of Amrapali’s five-star hotel Tech Park in Greater Noida and sell it by the end of January 2019.

See also: Forensic auditors find a web of 200-250 firms, where Amrapali diverted funds

It also questioned Sharma about the sub-leases granted to the family members of Amrapali directors and where the Rs 3,000 crores of home buyers’ money had gone. The bench, after failing to get a satisfactory reply, asked the two forensic auditors, Pawan Kumar Aggarwal and Ravi Bhatia, to examine the trail of around Rs 3000 crores. “More than Rs 2,990 crores were taken out from nine companies of Amrapali Group in the name of assets creation and purchase of shares of sister companies. You should examine the trail of the money, as to how and where did it go and the assets created by the fund”, the bench told the forensic auditors.

The court asked the company to file the details of the assets it created with Rs 2,990 crores and the board resolutions, which allowed Rs 1,100 crores to be spent for purchasing share capital. It directed the forensic auditors to also examine whether any siphoning of funds was done, by granting sub-leases or any favours were doled out in such transactions. The top court noted that pursuant to its last order in which one last window was given to the directors and other officials of the company to return home buyers’ money, Sharma and two directors Shiv Priya and Ajay Kumar returned Rs 1.25 crores, Rs 20 lakhs and Rs 10 lakhs, respectively. The court sought an affidavit from Sharma and the two directors, to declare that they do not have any more money of home buyers lying with them.

The bench directed Amrapali CFO Chandra Wadhwa and statutory auditor Anil Mittal, to deposit Rs 9.69 crores and Rs 27 lakhs of home buyers’ money lying with them, by January 2, 2019. It allowed the 86 luxury cars and SUVs, which were earlier attached by the court, to be brought to the corporate offices of the Amrapali Group, where car dealers can hold a physical inspection and later sell them. When Sharma was questioned by the bench about the sub-leases the company granted, he replied that the firm had received over Rs 66 crores, by granting sub-leases and denied any wrongdoing. “The forensic auditors should examine the sub-leases granted by Amrapali Group, by the next date of hearing,” the bench said, adding that the real estate firm should comply with all the requests made by the forensic auditors in 24 hours. The court posted the matter for further hearing on January 16, 2019.

 


SC orders attachment of Amrapali’s five-star hotel, malls, cinema hall, factories

Calling the Amrapali Group ‘a worst kind of cheater’, the Supreme Court has asked the Debt Recovery Tribunal to attach and dispose of the firm’s properties across India, including a five-star hotel, cinema hall, malls and factories

December 6, 2018: Continuing its crackdown on the embattled Amrapali Group, the Supreme Court, on December 5, 2018, ordered the attachment and sale of the realty firm’s five-star hotel, cinema hall, malls and factories across India, calling it ‘a worst kind of cheater’ and ‘a perfect liar’, for not complying with the court’s direction. The top court also ordered the attachment of four swanky corporate offices of the Amrapali Group, situated in Noida and Greater Noida and asked the Debt Recovery Tribunal (DRT), Delhi, to auction them.

The top court gave a window to the firm’s directors and their family members, to return home buyers’ money, if they have it, by December 10, 2018. It asked the firm to explain by next week, the diversion of around Rs 3,000 crores of home buyers’ money for other purposes. A bench of justices Arun Mishra and UU Lalit issued notice to the Amrapali Group CMD Anil Sharma and its directors, chief financial officer and statutory auditor Anil Mittal, asking them why a criminal case for breach of trust, should not be lodged against them.

“You (Amrapali Group) are a worst kind of cheater in the world. You have cheated the home buyers all along and now, you want to sell the facilities created for them. The facility area created for the home buyers is not a charity you have done to them,” the bench said, after it was told that the real estate firm wants to sell a nursery school, an open space and a nursing home, to raise funds. It gave 24 hours to the Amrapali Group, to hand over the raw data files of the business transactions of the company, including the vouchers, receipt and the required authorisation for the period of 2015-18, to the forensic auditors appointed by the court.

See also: Forensic auditors find a web of 200-250 firms, where Amrapali diverted funds

The bench pulled up the firm for repeated non-compliance with the court’s direction and not giving the data of business transactions for period of 2015-2018, to forensic auditors. “You are a perfect liar. You are a first-degree liar. You have not given specific information, what we have asked for in our earlier orders. We are not satisfied with your affidavit and you have only tried to manipulate the things. Despite our nine orders, you have not given specific information about business transactions for period 2015-18,” the bench said.

It directed the DRT, Delhi, to auction all the attached properties including the hotel, malls, corporate offices, movie hall, factories and lands across India. Among the properties the court directed to be attached forthwith and auctioned by the DRT, include a five-star hotel Amrapali Holiday Inn Tech Park at Greater Noida in Uttar Pradesh; an FMCG company called Amrapali Biotech and Mums situated in Rajgir and Buxar districts of Bihar; Amrapali Mall in Gaya of Bihar; Amrapali Mall at Muzaffarpur in Bihar; Amrapali Mall, Bareilly in UP; Hitech City movie hall at Meerut, UP; Amrapali Precast factory at Greater Noida; land in Purnia in Bihar and Bhubneshwar in Orissa; and a villa in Goa. The court also ordered attachment of a fleet of luxury cars, which were bought by the company from the home buyers’ money.

The court, while perusing the affidavit of Amrapali Group, pointed out that it had invested Rs 1,100 crores of home buyers’ money, in purchasing the shares of a sister company. “How can you do it? It was not promoters’ money. If they had put in the money with the company, then, it is understood but how can the home buyers’ money be used to purchase the shares. Give us all the details, who authorised to purchase the shares,” the bench said.

On being told that there were suspicions of ‘benami’ home buyers who have booked the flat at the paltry sum, the bench directed the forensic auditors appointed by the court to investigate the affairs of the company, to issue a notice to the owner of the flat and if no response is received, then, that property should be put on sale.

In a comprehensive affidavit placed before the apex court, Anil Sharma has admitted diversion of Rs 2,996 crores to other Group companies.

On November 13, 2018, in a massive crackdown on the Amrapali Group for ‘wilful disobedience’ of its orders, the apex court had attached the company’s 100-bed multi-speciality hospital, bank accounts, the building which houses its office, certain firms and a ‘benami’ villa in Goa. It had asked the CFO to deposit Rs 11.69 crores with its registry within three weeks. It also asked a statutory auditor Anil Mittal, to pay Rs 47 lakhs. It restrained the realty firm from alienating its companies, through which it had transactions and ordered attachment of such firms. The top court has also restrained Amrapali Group from creating any third-party rights for 86 luxury cars and SUVs purchased from the company’s funds.

The apex court had earlier warned the Amrapali Group for its repeated non-compliance and ‘hoodwinking’ of the court’s order, saying that the ‘writing is very clear on the wall’. It had also initiated contempt proceedings against Sharma and its directors, for prima facie violating the court’s order and thwarting the course of justice. The court is seized of a batch of petitions filed by home buyers, who are seeking possession of around 42,000 flats booked in projects of the Amrapali Group.

 


SC orders attachment of Amrapali Hospital, company properties, ‘benami’ villa in Goa

In a massive crackdown on the Amrapali Group for ‘wilful disobedience’ of its orders, the Supreme Court ordered the attachment of the company’s 100-bed multi-speciality hospital, bank accounts, the building which houses its office, certain firms and a ‘benami’ villa in Goa

November 15, 2018: The Supreme Court, on November 13, 2018, ordered that attachment of the Amrapali Group’s state-of-the-art, multi-speciality, 100-bed hospital situated at Greater Noida, for which funds from Ultra Home Construction Pvt Ltd were utilised. The bench also attached the bank accounts of GauriSuta Infrastructures Pvt Ltd, its director Sunil Kumar and its assets, after forensic auditors disclosed that Amrapali transferred home buyers’ money from one firm to sister companies, using it as conduit. The top court also directed attachment of towers which housed the company’s office and ‘Aqua Fortis’ villa in Goa, as no one came forward to claim ownership.

The top court also asked the Group’s chief financial officer Chander Wadhwa, to deposit Rs 11.69 crores with its registry, within three weeks. It also asked a statutory auditor Anil Mittal to pay Rs 47 lakhs. It restrained the realty firm from alienating its companies, through which it had transactions and ordered attachment of such firms. It also restrained the Amrapali Group from creating any third-party rights for 86 luxury cars and SUVs, purchased from the company’s funds.

The court sought the presence of CMD Anil Sharma and two directors Shiv Priya and Ajay Kumar, on November 19, 2018. A bench of justices Arun Mishra and UU Lalit, said that the Amrapali Group has deliberately not complied with its earlier order and committed a ‘serious fraud’, by diverting home buyers’ money from one company to other.

See also: Forensic auditors find a web of 200-250 firms, where Amrapali diverted funds

Forensic auditors Pawan Kumar Aggarwal and Ravi Bhatia, appointed by the court to look into the affairs of the embattled firm, said that home buyers’ money was given as advances, to the tune of Rs 442 crores to 15 companies and nine individuals, from Amrapali Saphire project. The report of the forensic auditors said that Amrapali Infrastructure Pvt Ltd was the main company and around Rs 2,000 crores were transferred from it, to other sister companies. Bhatia told the bench that a firm called ‘Stunning Construction Pvt Ltd’ did some ‘stunning work’ as it paid income tax returns of the companies, as well as directors and other individuals, for which it received Rs 500 crores.

The bench then asked the forensic auditors to ascertain the investment of Amrapali in its projects and the ‘ghost’ home buyers, as the properties could have been sold to such benami persons, to augment the value of company.

“They have created web of companies since 2010, to transfer funds from one project to another, to circumvent the restrictions enforced in the Companies Act,” the auditors told the bench, adding that the promoters have also tried to avoid stamp duty, by transferring the high-value property to other company. Aggarwal said that in the forensic audit they have found transactions of the Group with 27 other ‘dummy companies’ and since last year, the promoters of Amrapali have started withdrawing money from bank accounts of such companies.

The court also pulled up the Group, for filling a 3,000-4,000 page affidavit, with no requisite information and warned that the directors may be sent behind bars, for not disclosing the details sought by the court. “We are giving one last opportunity to explain everything, to the concerned directors and the Amrapali Group and comply with the orders of the court. It should also be explained as why contempt action should not be initiated against them,” the bench said. The bench posted the matter for further hearing on November 20, 2018.

On October 31, 2018, the apex court had directed the Amrapali Group to disclose the names of all the companies with which it had any kind of transactions, after forensic auditors pointed out that there may be a web of more than 200-250 such firms, where home buyers’ money was transferred. The two forensic auditors, appointed by the court to look into the affairs of Amrapali Group had said that besides 47 sister companies, they stumbled upon 31 companies, whose names were never disclosed by the embattled real estate firm. The court was also told that there may be a case of the Foreign Exchange Management Act (FEMA), as large amount of money was transferred to a multi-national company based in Mauritius.

It questioned Wadhwa as to how a group company paid his income tax amounting to Rs 2 crores, when he was earning only Rs 50,000 per month. It had also initiated contempt proceedings against Sharma and its directors, for prima facie violating court’s order and thwarting the course of justice. The court is seized of a batch of petitions filed by home buyers, who are seeking possession of around 42,000 flats booked in projects of the Amrapali Group.

 

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