SC Directs JP Morgan To Transfer An Amount Of 140 Crore Along With Interest: Amrapali Case

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The Supreme Court on Thursday has directed JP Morgan to transfer an amount of 140 crore along with interest in UCO bank, from the accounts frozen by the Enforcement Directorate.

A division Bench of Justice Arun Mishra and Justice UU Lalit has also asked the banks to consider subvention scheme buyers in restructuring. 

During the hearing today, after the Amrapali Heartbeat Project was argued extensively, the Bench stated that it will protect interest of buyers and has also given time to Promoters to file reply to forensic audit report.

When counsel for UCO Bank expressed difficulty in giving loans by mortgaging unsold inventory, the court suggested them to work something out. 

The following directions have been issued by the Apex Court in the Amrapali matter: • Banks and financial institutions to restructure loans given to Amrapali home buyers and release the rest of the amount that was withheld so far. • The Reserve Bank of India to keep its circulars/guidelines relating to NPA in abeyance and permit all banking and financial institutions, etc. to disburse loans to home buyers notwithstanding the status of accounts as NPA. • The banks and financial institutions to release loans to home buyers, whose loans have been sanctioned, notwithstanding the fact that their accounts are declared as NPAs.• Floor Area Ration (FAR) of various Amrapali projects be also sold to generate more funds to be used to complete projects.

The Apex Court had previously allowed the enforcement directorate to attach properties of J P Morgan in Amrapali case after being informed that Rs 187 crore have been detected as proceeds of crime. The order was passed while taking hearing note of the receiver appointed for execution of the Amrapali group housing projects urging the Court to issue urgent orders to the Reserve Bank of India for an advisory asking all banks and financial institutions to disburse balance loan amounts to Amrapali homebuyers in order to ensure that funds are available to complete the stalled projects.

Senior Advocate Mukul Rohatgi, while appearing  for JP Morgan had informed the Court that their properties have been attached  to recover money to the extent of 187 cr as per the Court’s directions and the attachment is blatantly illegal, as JP India does not have one Penny’s worth in Amrapali. They have had no dealing with Amrapali, as they are independent and have had no investment in Amrapali. Rohatgi asked for a day to file rejoinder since the forensic auditor has not even heard him.

The Court had also issued the following important directions in its last hearing: • Directed Banks and financial institutions to restructure the loans given to Amrapali homebuyers and release the rest of amount which has not been released so far. The amount so released would be used to complete the construction.• The Homebuyers cannot enjoy the fruits of their investments.• Directions to banks& financial institutions regarding homebuyer loans• Directed that the RBI that banks be permitted to release sanctioned loans to Home Buyers notwithstanding their account being NPA. • Regarding FAR, the sale of  balance FAR through the Court Receiver has been allowed, and any increase in FAR, will be decided by the Authorities, namely Noida and Greater Noida.

The Supreme Court has been monitoring the execution and handover of the stalled Amrapali housing projects ever since an internal audit report, commissioned by the Court, found grave irregularities on part of Amrapali firms and its directors. The receiver was appointed to track the completion of the stalled projects and ensure that they are completely timely and handed over to the homebuyers.

The Supreme Court had passed its landmark judgement in the Amrapali case in 2019. The homebuyers of various projects who were aggrieved by the Corporate Insolvency Resolution Process that was being initiated by the National Company Law Tribunal against Amrapali Silicon City Private Limited had filed writ petitions before the Supreme Court.

According to these homebuyers, if such resolution is started against Amrapali, the interest of thousands of homebuyers of various projects being developed by the Amrapali group will be drastically effected. Other than this, there also were allegations of funds siphoning by Amrapali group, and therefore Supreme Court had taken cognizance of the matter and ordered a forensic audit to be conducted. The Amrapali group had challenged the pleas of the homebuyers. The petitions were also challenged by the and the Banks who had financed loan to the Amrapali Group under various mortgage deeds and the Noida and Greater Noida Authorities, with whom the Group had executed lease deed for lands on which the products had to be developed. According to them, their rights over the projects should be priorities over the homebuyers.

The Supreme Court had ordered the cancellation of registration of Amrapali Group under RERA Act, and the projects were ordered to be completed by NBCC India Pvt Ltd. The Banks were given no right to sell the flats of home buyers or the land that was leased out, to get their own dues. The Banks were asked to realise their dues only from sale of the properties of Amrapali Group. All the lease deeds that were granted to Amrapali Group were cancelled and the Court receiver was given the rights of the lessee, who had to execute all the agreements and ensure that title is passed on to homebuyers and possession is handed over to them.

The post SC Directs JP Morgan To Transfer An Amount Of 140 Crore Along With Interest: Amrapali Case appeared first on India Legal.

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