IE: Supreme Court cancels registration of Amrapali group for diverting homebuyers’ money

23 July 2019: The Supreme Court Tuesday cancelled the registration of all Amrapali group of companies under the Real Estate Regulatory Authority and the lease of its properties granted by Noida and Greater Noida authorities. The court also asked the Enforcement Directorate to conduct a detailed investigation against the group for diverting homebuyers’ money.

A bench of the Supreme Court headed by Justice Arun Mishra directed National Buildings Construction Corporation (NBCC) to complete the unfinished housing projects in Noida and Greater Noida and handover these to homebuyers.

The top court said Venkataramani will have the power to enter into any tri-party agreement for sale of the group’s properties to recover the dues. The bench said the home buyers’ money was diverted in violation of the Foreign Exchange Management Act (FEMA) and the foreign direct investment (FDI) norms.

The court has been dealing with a batch of petitions filed by home buyers who are seeking possession of around 42,000 flats, booked in projects of Amrapali Group. The company is responsible for the diversion of home-buyers’ money.

Amrapali faced its first major protest in 2015, when 900 families that had shifted to its Sapphire housing project in Noida complained of lack of utilities like electricity and water. In August 2016, cricketer MS Dhoni quit from his role as brand ambassador, with Sharma calling it a “mutual decision”. But two years later, Dhoni sued the group for Rs 150 crore, claiming he had not been paid for his role.

In September 2017, a bench of the National Company Law Tribunal initiated insolvency proceedings at the behest of Bank of Baroda against Amrapali Infrastructure for dues over Rs 50 crore. Following protest after protest in 2016-17, homebuyers of Amrapali’s Dream Valley project, comprising 11,000 unfinished flats, moved the Supreme Court against the decision, saying their interests wouldn’t be protected if insolvency proceedings are initiated.

In August 2018, the Supreme Court attached properties and accounts of 41 companies under the parent Amrapali Group. A month later, the apex court directed the debts recovery tribunal to begin the process of selling 16 of its properties.

In October 2018, the court sent three Amrapali directors — Sharma, Shiv Priya and Ajay Kumar — to police custody for not furnishing details of the 46 companies. “You are playing hide and seek. You are trying to mislead the court,” the bench said.

The Indian Express reported



Categories: Corporate Governance, General News, India Bankruptcy

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