Amrapali case: SC intervens in favour of buyers

Team SoOLEGAL 23 Feb 2018 11:16am

Amrapali case: SC intervens in favour of buyers

NEW DELHI: In a major relief to to 43,000 home-buyers who have booked flats with  Amrapali and were facing uncertainty because of insolvency proceedings against it ,a Supreme Court  bench of Justices Arun Mishra and Amitava Roy  ordered taking over the supervision of construction of all viable projects belonging to Amarapali group.
The court said home-buyers would deposit the remaining instalments for their flats with Amrapali projects in the SC registry, which could release the money to the realtor on completion of the projects to ensure there was no diversion of funds. The buyers could not pay home instalments as the realtor's bank accounts have been frozen as part of insolvency proceedings.

The insolvency proceedings have been initiated against the group by Bank of Baroda after the company failed back to pay loans it had taken.The  court during the hearing expressed its  concern over the interest of home-buyers being neglected in insolvency proceedings against real estate companies and questioned how money deposited by buyers could be frozen in such proceedings.

The bench said  "The bank can take anything from the company but not the buyers' money. That money is of someone else and the buyers' interest has to be protected. We are concerned only about their interest. If there is a need to settle the law on this issue then we will settle it ."

Amrapali has 170 under-construction housing projects  in Noida and Greater Noida. Because of the insolvency proceedings its bank accounts have been sealed.Further it has been restrained from disposing of its properties.

Senior advocate Ranjit Kumar and Amrapali's counsel, told the bench that the group is facing severe financial crunch and was not in a position to complete the projects. He sought the SC's permission to rope in other builders to invest and complete the projects.

Kumar said 47 towers having over 8,300 flats were almost ready but the company was in no position to arrange Rs 127 crore required to complete the work and hand those over to buyers who have to pay Rs 130 crore for getting possession of finished flats.

The bench said buyers could be allowed to deposit the money in the SC and it could be released to the company after the completion of projects. It also said the court would the hear the plea of flat buyers on a project-wise basis to ensure that their grievances were addressed without delay.

"We ask them to deposit the money before us and the money will be released to you after they get possession of their flats. Buyers must get possession of flats as soon as possible. We also have to take a practical approach in dealing with the case as there are many buyers and we will examine the issue on project-wise basis," the bench said.

The court directed the company to furnish information on how much money it had received from buyers over the years and how much of it had been invested in projects. The bench also asked it to give details  on how much of buyers' money had been frozen in the insolvency proceedings.

As Amrapali failed to give possession of flats and buyers were facing uncertainty with its sister firm facing insolvency proceedings, hundreds of buyers, who had booked homes in Amrapali's various projects in Noida and Greater Noida - including Amrapali Centurion Park-Low Rise, Amrapali Centurion Park-Terrace Homes and Amrapali Centurion Park-Tropical Garden - moved the SC.  

Tagged: Amrapali   SC   Bank of Baroda  
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