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Amrapali buyers get top court relief
Even those Amrapali homebuyers who failed to make timely deposits due to which their loan accounts were declared NPA or non-performing assets will also benefit from Supreme Court’s order.
In one stroke, the Supreme Court on Wednesday paved the way for the infusion of at least Rs 2,000 crore for the construction of stalled Amrapali Group housing projects. Two key directions passed by a bench of Justices Arun Mishra and UU Lalit made the cash infusion possible.
The first direction was to banks to release the balance of loan amounts sanctioned to Amrapali homebuyers. This direction alone has the potential of arranging funds worth over Rs. 3,000 crore.
According to a note prepared by the court-appointed receiver and senior advocate R Venkatramani, assisting the court in the execution of these projects, under the head “bank loans to homebu interestyers and balance receivables from all sold units (of Amrapali projects)” a total amount of Rs 3,870.4 crore is due.
Even those homebuyers who failed to make timely deposits due to which their loan accounts were declared NPA or non-performing assets will also benefit from this order. The court said, “We direct the banks and financial institutions to release loans to home buyers, whose loans have been sanctioned, notwithstanding the fact that their accounts are declared as NPAs. This we order in the peculiar facts of the case.”
The court further directed the banks to restructure the loans in a manner to ensure money is released upon stage-wise completion of projects. This way, the projects will stand completed and homebuyers will be in a position to repay the loans at interest rates fixed by the Reserve Bank of India.
The court expressed its concern by saying, “The home buyers are not able to obtain fruits of the investment and are deprived of legal title of the flats.”
The second key direction from the court came with regard to sale of unused floor area ratio (FAR) available under the sanctioned plan for Amrapali projects.
In addition, Venkatramani’s note made a mention of land available under permissible FAR and balance FAR, in addition to unused FAR to be sold to prospective developers. This was objected to by the Noida and Greater Noida authorities who sought return of the balance FAR.
The unused FAR with Noida Authority comprised of 35,798.19 square meters of land while the Greater Noida Authority staked claim over FAR on unconstructed plots at Plot No.GH 09, Sector Tech. Zone 4, Greater Noida.
Accepting the receiver’s suggestions, the court said, “A substantial amount has to be fetched out of the sale of permissible FAR, as the case may be, and due to other developments, if any other FAR is made available, it is permitted to be sold by the Receiver and the Committee to utilize the money to complete various projects.”
Venkatramani said, “With today’s directions, homebuyers can heave a sigh of relief. With the sale of FAR, we roughly expect anything between Rs 500-800 crore. And if the loans are released, even by a conservative estimate (after deducting people who wish to opt out of the project) we can receive at least Rs 2,000 crore. Few more milestones are to be crossed before the projects finally lift off.”
The Court directed the Noida, Greater Noida authorities to grant sanction of the plans and designs submitted by the prospective developers within 30 days of its submission. They were further directed to supply water, electricity, sewerage to the projects built on these sites after receiving the amount due to them after sale of FAR.
For the homebuyers, advocate ML Lahoty said, “The court has resolved that NPA will no more be an impediment in releasing loans. This is a significant order as several homebuyers were not in a position to pay.”
In addition to relief to homebuyers, the court also ordered relief to builders/developers who were exempted from paying exorbitant interest of 15-23% to Noida/Greater Noida authorities on plots allotted between 2005 till date and where construction was incomplete. The court reduced the interest to a flat 8% on the condition that the amount is paid and construction completed within stipulated time.
