Supreme Court slams Amrapali: You have committed first degree crime
A special bench of justices Arun Mishra and UU Lalit refused to hear the group and its directors’ contention against the report furnished by the forensic auditors. “Fate is written on the wall. The limit of your fraud has touched the sky,” Mishra said.Updated: May 02, 2019, 05:53 IST
The Supreme Court Wednesday noted that Amrapali Group had committed a “first degree crime” by cheating homebuyers and those behind the mess, no matter how powerful they are, would be booked and prosecuted.
A special bench of justices Arun Mishra and UU Lalit refused to hear the group and its directors’ contention against the report furnished by the forensic auditors. “Fate is written on the wall. The limit of your fraud has touched the sky,” Mishra said.
It is alleged that the real estate firm has cheated everybody, including homebuyers, banks and authorities. A report by the forensic auditors says the company indulged in cartelization to prevent the debt recovery tribunal (DRT) from auctioning its unencumbered properties. The apex court is hearing a batch of petitions filed by homebuyers who have not got possession of their flats, as per the date promised by the builder.
The fresh report by the two court-appointed auditors, submitted to the court Tuesday, said Amrapali had diverted over Rs 3,500 crore of homebuyers’ money to different projects. Although the apex court had allowed the I-T department to access the report, it had restrained the department from summoning directors of Amrapali.
During the day-long hearing, the bench remarked that it was impossible to accept the justification given by Amrapali for the alleged diversion of funds to the tune of over ₹3,500 crore. “You have committed a first degree crime. We should have cancelled the licences of statutory auditors of Amrapali for indulging in fraudulent practices long ago and sent them to jail,” the court said.
The court’s strong remarks came when senior advocates Geeta Luthra and Gaurav Bhatia, the builder’s counsels, claimed that the company had committed no wrong.
There was no diversion of funds as pointed out by the court-appointed forensic auditors, they said.
Luthra said forensic auditors have erred on various aspects in their report, like they had claimed that not a single paisa was invested by directors of Amrapali but in reality, ₹60-70 crore was put in by them.
But the bench refused to believe Luthra and said, “Looking at your dubious conduct, we have to believe the forensic auditors and their report. We believe them. You have yourself admitted that ₹2,990 crore of homebuyers’ money was diverted and now you are claiming that there was no diversion. You have made a peon your director and he purchases shares worth crores of rupees for Amrapali,” the bench said.
Luthra, however, insisted the group acted in a bona fide manner and in the interest of buyers.
The problems, she said, started after the company ran into litigation.
Amrapali Group claimed that it had received Rs 11,057 crore from the homebuyers and they
have constructed five projects in Indirapuram, in Delhi-NCR, and given possession to homebuyers.
At the start of the hearing, the court chided Bank of Baroda and other lenders, who gave loans to the embattled realty firm, for failing to monitor the usage of funds by the company.
Advocate ML Lahoty, lawyer for homebuyers, on Tuesday had pointed out how the financial institutions had failed to monitor utilisation of funds by Amrapali, as is required under the regulations.