SC reserves order on funding for Amrapali’s stalled housing projects
The Supreme Court on Wednesday reserved orders on the crucial aspect of mobilizing funds for completing the stalled housing projects of stressed real estate giant Amrapali Group.
The Receiver in a note to the court pointed out that work on these projects had hit a wall for lack of funds. He suggested a slew of steps to be taken by the Centre, the Noida and Greater Noida Authorities and the Reserve Bank of India (RBI) to resume work with immediate effect.
The Ministry of Finance, represented by Additional Solicitor General (ASG) Vikramjeet Banerjee told the Court that the Government had empowered SBI Capital Markets (SBI CAPS) for any seed capital funding of the Amrapali projects. The National Buildings Construction Corporation (NBCC) is executing these projects since July 2019 after SC ordered cancellation of Amrapali’s registration under the Real Estate (Regulation and Development) Act, in short RERA, for alleged siphoning of homebuyers’ money.
A bench of Justices Arun Mishra and UU Lalit told senior advocate Harish Salve that his client SBI Caps should bear in mind that no private player is involved in the project construction which involves the Receiver handling the projects and NBCC executing the works.
Salve sought a week’s time to discuss the matter with his client and apprise the Court on the possibility of fund release. The Court had proposed a release of Rs 500 crore during the hearing in the case last week.
Senior advocate R Venkatramani, the Receiver appointed by the Court was confident that his suggestions on home loan disbursement by banks, funds from SBI Caps, utilization of unused floor area ratio (FAR) and waiver of GST by Noida and Greater Noida authorities will be favourably considered by the bench.
“The Court is pushing all authorities and governments into quick motion as regards the funding and execution of projects. It is also looking into more than one direction for source of funding by relaxing the current criteria with regard to loans and taxes for the projects,” Venkatramani told HT.
One of the suggestions by the Receiver requires the RBI to relax rules to enable banks to release the balance loan amount of homebuyers, including those falling under the NPA category. The Centre informed the Court that a decision in this regard cannot be taken by RBI as it is best left to be considered by the individual lending banks.
The Receiver’s note also suggested GST waiver on construction that could help save close to Rs 1,000 crore and sale of unused FAR in the projects, instead of returning it to the land owning authorities. The UP land authorities opposed these suggestions. They put the onus on homebuyers to clear all pending dues of the land owning authorities.
The bench responded tersely, “You must be more accommodating with regard to charging of interest. Some relaxation you must give or else all projects will fall through.” The homebuyers disputed the claim for dues by Noida/Greater Noida authorities. Their lawyer ML Lahoty cited the Court’s judgment to show that buyers have paid up dues and are entitled to compensation on account of delayed construction. The Court asked homebuyers to be pragmatic and not be under any impression to enjoy the property without paying up any dues.