Three directors of real estate firm Amrapali sent to police custody for not handing over documents for forensic audit

The judges said the company had been “playing hide and seek” with the court that had on 24 September ordered the company top officials to hand over all documents within 24 hours.

Three directors of real estate company Amrapali were taken into police custody on the orders of the Supreme Court on Tuesday after they failed to hand over account books of 46 group companies to forensic auditors appointed by the top court.

The Supreme Courts sent three directors of real estate firm Amrapali to police custody for not giving papers for audit.(HT photo)

A bench of justices Arun Misra and UU Lalit said the directors, Anil Kumar Sharma, Shiv Priya and Ajay Kumar, will remain in custody until they hand over the documents, as ordered by the court on September 12 and 26. The court was forced to call the police after the directors failed to comply with its directives.

“We are constrained to observe that it is not only deliberate non-compliance of the order but effort is being made to fritter away the documents in utter violation of the order passed by this Court. No justification could be pointed out by the learned counsel appearing on behalf of the Amrapali Group of Companies for not complying with the orders passed by this Court,” the court said in its order.

The bench added: “In the circumstances, since it is necessary to hand over the documents to the forensic auditors, considering the non-compliance evident on record, we find that there is no other way except to direct the Police to seize all the documents and to hand over the documents to the forensic auditors after seizing them from the possession of 46 Companies and their Director”.

Amrapali Group has been accused of delaying the construction of apartments and handing over their possession to homebuyers in its projects in Noida and Greater Noida in the national capital region centred on the capital.Increasingly impatient, the Supreme Court in August warned that it would order the sale of “each and every property” of the firm to recover the cost of construction of pending real estate projects, The group had earlier told the court in an affidavit that it was not in a position to complete the projects and give timely possession of flats to over 42,000 homebuyers.

Amrapali is the second real estate company based in the NCR against whose directors the Supreme Court, which has been approached by homebuyers, has ordered action in connection with non-completion of housing projects. Unitech Ltd’s directors Sanjay Chandra and Ajay Chandra have been in jail since September last year in connection with a cheating case registered against them.

“I am happy with the Supreme Court’s order as the directors of Amrapali are in police custody now. These directors were trying to fool the buyers, but after tough action from the court we hope that our flats will be delivered without further delay. The delivery of my flat is delayed for last eight years. The sad part is that these directors did not provide required details even after repeated orders from the apex court,” said KK Kaushal of

the Amrapali Dream Valley Buyers’ Group, who has purchased a unit in the Greater Noida property.

On Tuesday, the Supreme Court ordered the police to take the directors from the court to their offices and residences and other places where documents may be found.

“You may take one hour, one day or two hours to search. Let it be done,” the bench said.

Noida and Greater Noida police too was asked to participate in the searches.

If the documents are bulky, they shall be kept in a room and a key handed over to the forensic auditors. The police and the three directors will visit the statutory auditors to the company to take possession of the documents. The court fixed October 24 for the next hearing of the case

SC also restrained all eight directors of Amrapali, including the three sent to police custody, from leaving the country. Three ex-directors, Rakesh Mahajan, Iftikhar Ahmed, and Pallavi Mishra, were also stopped from travelling abroad. Amrapali’s statutory auditors, present directors and ex-directors were ordered to surrender their passports to the station house officer, Tilak Marg. The court clarified that its order did not amount to formal arrest of the directors and also that no nominee director will face the travel ban.

The court also clarified that the order did not deal with any criminal case and that the police was free to carry on its investigation if it receives any complaints. “Nothing comes in the way of Delhi Police, Economic Offences Wing, to make any criminal investigation in any case which is required to be made. Let the investigation be made”, it ruled.

This was done after the Economic Offences Wing sought permission to become a party to the case. The wing said the court’s March 27 order, saying that no coercive action should be taken in connection with Amrapali case, was coming in the way of investigating complaints against the company.

SC on September 12 appointed Ravi Bhatia and Pawan Kumar Agarwal as forensic auditors. On Tuesday, the two informed the court that they received details of only two companies and they were incomplete. The information given was only in piecemeal form, they said. “There was no satisfactory response” from the directors, the two said.

The judges turned to advocate Gaurav Bhatia, representing the three directors. “You are in great difficulty if you are not complying with this order…You are again telling a lie to this court. This nonsense will not be tolerated even for one hour. We will send them to jail from here. You must hand over whatever documents they (auditors) want with folded hands. They carry the dignity of the court. You are playing hide and seek with the court,” Justice Misra said.

Justice Lalit pointed out that the group’s accounts were finalized till 2015. “Now nobody knows where the money (collected from homebuyers) has gone. Money trail can be found only if the account books are there. Your intention is clear. You are playing hide and seek. Your intent is to defeat the object of law and interfere with the administration of justice. Your design is very clear. You are trying to buy time and in the process do something which again will be interfering in the administration of justice. You are doing it deliberately.”

Lawyer Gaurav Bhatia’s plea for another chance to comply with the order was rejected. The bench got even more angry when the homebuyers’ counsel, ML Lahoty, said the Debt Recovery Tribunal’s order on handing over some of the documents of the Group has not been complied with. The bench ordered the directors to hand over the documents to the police.

The bench also directed release of ₹20 lakh each to the forensic auditors from Amrapali Hospitality Services Private Limited.