In a significant development regarding the completion of pending Amrapali housing projects, the Supreme Court on Thursday directed the transfer of Rs 140 Crore, plus interest, from the account of JP Morgan, which had earlier been frozen by the Enforcement Directorate (ED), to UCO Bank.
The transfer of the cumulative amount of around Rs. 187 Crore is effectively the first step towards the actual recovery of funds which are to be pumped into completion of pending Amrapali projects.
"A finding recorded in the order passed by this Court on 23.07.2019 that there is a liability of M/s J.P. Morgan to pay Rs. 140 crores along with interest and since the money has been attached under PMLA by Enforcement Directorate, the attachment has to be continued till the decision of the matter, we consider it appropriate that let the attached money of the home buyers, which is diverted as found in the aforesaid order, be transmitted by the Enforcement Directorate to the Amrapali Account [UCO Bank A/c No. 02070210002834] maintained by the Registry of this Court and be utilized for the purpose of construction of the projects.
There is liability of M/s. J.P. Morgan to pay as per order dated 23.7.2019.
However, the effect of the order to be passed under PMLA shall be considered by this Court in accordance with law as and when it is passed.", ordered the bench comprising Justices Arun Mishra and UU Lalit.
At the outset, the Court appointed receiver, Senior Advocate R Venkataramani, informed the bench of three pertinent issues which arose from the round of meetings conducted with various stakeholders.
The first of these pertained to UCO Bank's inability to finance Amrapali Projects in its entirety. Senior Advocate Alok Kumar informed the Top Court that UCO Bank was facing difficulties in giving loans by mortgaging unsold inventory citing "preventive act of RBI". Referring to UCO Bank's affidavit to this effect, the counsel suggested that it may be possible to apportion the responsibility between all concerned banks instead of the burden being shouldered by one Bank in particular.
Justice Mishra accordingly advised UCO Bank to consult with receiver, and see if they could be part of a consortium proposed by SBI Capital (SBI Cap).
The other issue that was brought to the Court's notice was regarding the time sought by SBI Cap to finalize the action plan to finance the project. Senior Advocate Harish Salve, representing SBI Cap, submitted that they required a little more information in order to be able to come up with a final proposal with respect to financing.
"If the Receiver could consider the proposal and provide us with the relevant details in one week, we could finalize everything in 4 weeks from then. So in one plus four weeks, there will be a final plan regarding financing", stated Salve.
Justice Mishra, however, wanted the final proposal to be submitted faster, and directed the final proposal to be readied in 4 weeks (one plus three weeks).
The third aspect of consideration was regarding a conflict of common usage of water and electricity at Amrapali Sapphire I and II. Upon consideration, the Bench directed the Noida Authority to resolve the issue at the earliest.
On behalf of NBCC, senior advocate Siddhartha Dave told the Court that tenders had been received, but they were not opening the same due to the want of 10% of the cost. NBCC was assured that they would have the same, and thus the Court directed them to issue tenders for Techpark and Heartbeat City projects.
Moving ahead, Justice Mishra took serious issue with 'Deewan Housing' for submitting that they were unable to disburse housing loans to homebuyers.
"On one side you had given loans to buyers when you had a gala time with builders, and now when you are under insolvency you are looking to run way."
However, the Court acceded to their request to sit across the table with the Receiver and chalk out an action plan. Justice Mishra, in the same breath, made it abundantly clear that they "will deal with an iron hand if banks don't come clean in their acts."
As a number of intervenors continued to appear today as well, the Court authorised the Receiver to vet all homebuyers' applications prior to filing before the Apex Court.
The matter will now again be taken up on July 10.
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