Amount to be utilised for construction of stalled projects; SBICap granted four weeks to firm up proposal for financing unfinished projects.
The Supreme Court on June 18 directed JP Morgan to transfer Rs 140 crore alongwith interest into UCO Bank from the accounts frozen by the Enforcement Directorate and that the amount be utilized for construction of stalled projects of embattled Amrapali Group.
The next date of hearing is on July 10. The order is awaited.
On May 23, the apex court had given its nod to ED to attach Rs 187 crore JP Morgan India's properties in a case relating to alleged transactions with the Amrapali Group. As per the case, JP Morgan Chase unit had helped the local firm divert funds by violating India’s foreign investment rules and it had identified the amount to be proceeds of crime. JP Morgan has denied the charges.
SBICAP informed the Supreme Court that it has handed over its termsheet on June 18 and has sought certain other information from the court receiver and that it should be given some time to firm up a proposal. The bench of justices Arun Mishra and UU Lalit has granted four weeks to SBI Caps to give a proposal for financing Amrapali projects.
The spex court appointed court receiver in the Amrapali Case R Venkataramani had submitted an application to SBICAP to fund stuck projects in May. Series of meetings have taken place with the court receiver, NBCC and SBICAP on the issue.
At the Amrapali case hearing on June 3, SBICAP Ventures had informed the apex court that it would create a Special Purpose Vehicle (SPV) with the court receiver and would appoint a Chief Executive Officer (CEO) to take over the construction of seven stalled projects in Noida and Greater Noida.
SBICAP had filed an affidavit and stated that they have considered the proposal of court receiver. They had proposed a scheme where the homebuyers will be asked to pay their balance amount/ some deposit. A special purpose vehicle company shall be created with SBICAP and the receiver on board. A CEO will be appointed to oversee the projects. This company will enter into an agreement with NBCC for construction.
The Supreme Court on May 27 had reserved its order in the Amrapali case on issues such as financing of stalled Amrapali projects through the government’s stressed fund managed by SBI Cap. The Supreme Court had asked the Centre to consider infusing Rs 500 crore loan immediately into the stalled housing projects of Amrapali Group, and also consider waiver of GST to the tune of Rs 1,000 crore.
Also Read | SBICAP Ventures considering 10 incomplete projects of Amrapali: Sources
The apex court on May 22 had asked Additional Solicitor General Vikramjeet Banerjee to seek instructions on providing Rs 500 crore as loan to NBCC for completing the stalled projects of the embattled real estate firm as there is no private player involved in it.
On December 18 last year, it directed the court receiver to make an application to SBICAP Ventures and furnish the requisite information related to the incomplete projects.
The apex court on June 18 directed that the JP Morgan amount attached by ED may be transferred to Supreme Court's escrow account to be used for construction. If JP Morgan succeeds before courts, then it may ask for refund of this amount later.
Meanwhile, UCO Bank has expressed its inability to finance Rs 2000 crore to which the court receiver proposed that instead of UCO Bank alone, all the banks who had advanced finance to Amrapali projects may come forward through a consortium. The court directed the receiver to explore this mode and inform the court on the next date which is July 10.
For subvention loans, the receiver has sought a direction that his committee may be allowed to give a proposal to the banks for restructuring of loans. "Court receiver will now propose a plan along with the forensic auditors and submit a proposal before the Supreme Court," said Mihir Kumar, advocate.
To ensure that substantial funds are generated and construction of unfinished housing projects by Amrapali Group is expedited by NBCC, the Supreme Court on June 10 had directed banks and financial institutions to restructure the loans given to homebuyers.
The apex court had directed banks and financial institutions that had declared home loans taken by buyers as non-performing assets (NPAs), to release and restructure the outstanding amount due to the Amrapali homebuyers as per RBI’s guidelines. The amount would then be used to complete the construction of stuck housing units.
MSTC has been given the go ahead for the auction of attached properties. MSTC has also been directed to inform the court about the pre-existing liabilities of the attached properties so that court may pass orders regarding the same.
DHFL informed the court that it is under insolvency and due to moratorium, it may not disburse the money as directed by the court. The court said that it will consider its application on the next day to ensure that homebuyers do not face any difficulty.
As directed by the apex court, NBCC is involved in completion of 23 projects of Amrapali Housing, of which it has already completed and handed over two projects: Eden Park (Noida) and Castle (Greater Noida) comprising 618 units and valued at Rs 7.5 crore. Execution work in another eight projects -- seven in Noida and one in Greater Noida, having a total of 12,169 units and valued at Rs 618.08 crore -- is currently on.
It has also invited tenders for 11 more projects as per the directive of the court receiver. These include 10 projects in Greater Noida and one in Noida, comprising a total of 31,812 units and valued at Rs 6,815.76 crore. As per NBCC, all these tenders are likely to be finalised in June-July.
On July 23, 2019, the apex court had cracked its whip on errant builders for breaching the trust reposed by homebuyers and ordered cancellation of the registration of the Amrapali Group under the real estate law RERA, and ousted it from its prime properties in the NCR by nixing the land leases.
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