Amrapali projects: Relief in sight for homebuyers as 6 banks form consortium to set aside funds for stalled projects
Over 40,000 homebuyers of Amrapali Group can expect relief as a consortium of six public sector banks has agreed to set apart substantial funds towards the stalled construction of the housing project being monitored by the Supreme Court and built by the National Buildings Construction Corporation (NBCC).
The six banks forming the consortium are Bank of Baroda, Punjab National Bank, State Bank of India, Bank of India, UCO Bank, and Punjab & Sind Bank.
Submitting this information to the Supreme Court on Friday, court-appointed receiver, senior advocate R Venkatraman, said, “Six public sector banks have agreed to form a consortium, the documentation of which will be completed this month and by Dussehra (which falls on October 15), the loan amount will be disbursed.”
A bench of justices UU Lalit and Ajay Rastogi recorded the statement of the receiver and requested him to apprise the court of further developments. People familiar with the development said the amount expected to be released by the consortium will be “substantial”. In addition to this, funding of ₹650 crore has already been sanctioned from the Union government-sponsored SWAMIH (Special Window for Affordable & Mid-Income Housing) Investment Fund for six Amrapali projects.
During a hearing on August 13, the top court had noted progress on funding by banks and addressed some of the concerns raised by them by passing suitable orders. The banks wanted the funds given to Amrapali to be categorized under the priority-funding sector with a reduced capital charge, among other conditions.
Tapping further fund sources, the bench directed the receiver to engage an expert and conduct valuation of five properties of the Amrapali Group and its CMD Anil Kumar Sharma in Noida and Greater Noida. For the homebuyers, advocate ML Lahoty informed the court that five private persons have expressed interest in buying the said properties, estimated to be worth over ₹19 crore. The court directed the valuation exercise to be completed by the receiver in three weeks.
The court asked the receiver whether homebuyers were paying their due instalments on time after Lahoty said the NBCC required nearly ₹200 crore to hand over possession of nearly 2,500 flats by this year-end.
The bench was prompted to pass a direction asking homebuyers to clear their dues (except those at the time of handing over possession of flat) by October 15, failing which they could be defaulters and the flats could be put to sale. But the concern of the court was put to rest after Venkatraman said, “By and large, flat buyers attached with the Amrapali projects are paying up with the exception of some who have sought exemption under medical grounds.”
However, the bench said, “Homebuyers should not be under the impression that courts will arrange the funds and we will consider putting in our money after NBCC has completed construction. They have to make payment and cannot be lethargic sitting on an armchair, thinking finances will be arranged from somewhere.”
The bench, while dealing with the issue of ‘delay possession compensation’ urged by homebuyers on account of Amrapali’s delay in delivering possession, made it clear that homebuyers cannot ask for “malai” on “lassi”. The Court said, “We are trying to salvage something for you which is possible. Do not ask for malai on lassi.”
On August 13, Venkatraman had told the court that owners of 15,748 units across Amrapali projects have not been paying their instalments. Of them, 9,538 flat buyers have not provided the customer data, a record of which is maintained by the receiver’s office.
Following this order, Venkatraman informed that many homebuyers have come up to make payments. He said that on further scrutiny, some names out of the 9,538 have been weeded out as they have either applied for refund or taken possession of flats in existing projects. He said a public notice will be issued as a final opportunity for 9,000-odd homebuyers, following which the flats in question could be included in the unsold inventory.
NBCC counsel and senior advocate Sidharth Dave informed the court that for the sale of unused/excess FAR and unsold inventory of Amrapali projects, it had floated tenders for appointing a channel partner to carry out aggressive marketing but that has been challenged before the Delhi high court. The bench allowed the NBCC to move a transfer petition to shift the petition from the high court to the Supreme Court.
Lahoty also requested the court to consider resolving the cases of homebuyers stuck under subvention schemes entered between the developer, homebuyer and banks by which the developer was supposed to pay instalments on default of delivery of flats. As Amrapali defaulted on payment and arrears became substantial, some of the banks threatened homebuyers with recovery proceedings. The court directed the concerned banks to respond within a week failing which their objections will not be considered.