BIKRAM CHATTERJI & ORS versus UNION OF INDIA & ORS. on 29 June 2021

[2021] 6 S.C.R. 887

BIKRAM CHATTERJI & ORS

v.

UNION OF INDIA & ORS.

I.A. No.168186 of 2018, I.A. No. 109882 of 2020, I.A. No.114865 of2020, I.A. No.153341 of 2019, I.A. No.120307 of 2020, I.A.No.123299 of 2020 And I.A. No. 6397 of 2021

(IN RE.: LA-RESIDENTIA PROJECT)

In

(Writ Petition (Civil) No. 940 of 2017)

JUNE 29, 2021

[UDAY UMESH LALIT AND ASHOK BHUSHAN, JJ.]

Housing: Residential project – Project to be developed bythe Company concerned was widely advertised through brochuresand advertisements as ‘Amrapali La Residentia’ project, promisingdelivery of apartments within 36 months – Claim of flat buyers –Writ Petition filed in Supreme Court submitting that amounts investedby the apartment holders were siphoned away by the Amrapali Groupof Companies – While entertaining the writ petitions, Supreme Courtdirected audit by forensic auditors – Observations of forensicauditor quoted with approval by Supreme Court in its Judgmentdated 23.07.2019 – Another order dated 14.10.2019 subsequentlypassed by Supreme Court – Prayer in interim applications eitherseeking recall of Supreme Court orders dated 23.07.2019 and14.10.2019 or revisit of the issue whether the Company ought to bedeclared as part of the Amrapali Group of Companies – Tenability– Held: Not tenable, more particularly because of the developmentswith respect to the instant project – Unlike all the other projects ofthe Amrapali Group which were made over to the NBCC, thedevelopment with respect to the instant project has always been anon-going process – Further, if the instant project is now handedover to the NBCC, it would result in escalation in costs to thedetriment of the flat buyers – That apart, the interest of the AmrapaliGroup of Companies and consequently that of the flat buyers whohad invested money in other Amrapali Projects already stoodquantified at 19.75% by Orders dated 23.07.2019 and 14.10.2019

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A– Considering all the features of the matter, it would not be just andproper to hand over the development at this stage to the NBCC – Itwould not be appropriate to recall the orders dated 23.07.2019and 14.10.2019 or to revisit the issue whether the Company couldbe declared to be part of the Amrapali Group of Companies –However, directions passed to secure the amounts receivable byBAmrapali Group of Companies through the instant project –Applications under consideration accordingly disposed of.

CIVIL ORIGINAL JURISDICTION: I.A. No.168186 of 2018,I.A. No. 109882 of 2020, I.A. No.114865 of 2020, I.A. No.153341 of2019, I.A. No.120307 of 2020, I.A. No.123299 of 2020 And I.A. No.C6397 of 2021.

(In Re.: La-residentia Project)

In

Writ Petition (Civil) No. 940 of 2017.D

(Under Article 32 of The Constitution of India)

Vikramjit Banerjee, ASG., R. Venkataramani, Parag Tripathi, JoyBasu, Gopal Sankarnarayanan, Sr. Advs., Ravindra Kumar, M. L. Lahoty,Paban K Sharma, Anchit Sripat, Himanshu Shekhar, Mukul Singh, VibhuShankar Mishra, B. V. Balaram Das, Kanak Bose, Varun Sarin, Ms.EMishika Bajpai, Ashok Mathur, Raj Kamal, Maheen Pradhan, AseemAtwal, Kartavya Batra, Avish Bhati, Mohit Chaudhary, Ms. Puja Sharma,Kunal Sachdeva, Chowdhary Zulfar Ali, Ms. Garima Sharma, Ms.Vardhan Gupta, Paras Mithal, Parveen Kumar for M/S. Kings AndAlliance LLP, MS. Sunita Yadav, Abhigya Kushwah, Siddharth RajkumarFMurarka, Pradeep Kumar Dubey, Ms. Anamika Kushwaha, Ms. NanditaRao, Shashank Shekhar, Mrs. Mahija Reddy, K. N. Agnihotri, VirenderArora, Sanjay Kapur, Ms. Megha Karnwal, V M Kannan, Arjun Bhatia,Lalit Rajput, Yajur Bhalla, Vijay Kumar Diwedi, Akhilesh Kumar Pandey,Ashish Bajpayee, Deepak Samota, Shubham Bhalla, R. K. Awasthi,Prashant Kumar, Ms. Ritu Arora, Piyush Vatsa, Santosh Kumar-I, VipulGGanda, Vishal Ganda, Satyajit A. Desai, Satya Kam Sharma, SaranshKothari, Ms. Anagha S. Desai, Pradhuman Gohil, Ms. Taruna SinghGohil, Ashish Kabra, Mohammad Kamran, Ms. Ranu Purohit, Ms. TanyaSrivastava, Ms. Jasleen Bindra, Divyakant Lahoti, Parikshit Ahuja, Ms.Praveena Bisht, Ms. Madhur Jhavar, Ms. Vindhya Mehra, Kartik Lahoti,HMs. Shivangi Malhotra, Dharmendra Kumar Sinha, Amit Sinha, Subodh

Kr. Pathak, Sunil Rai, Ms. Richa Kapoor, Kunal Anand, Ms. ShalyaAgarwal, Ms. Surabhi Katyal, Ms. Monoj V George, Ranjit Philip, Ms.Bhavika, Ms. Shilpa Liza George, Syed Mehdi Imam, Mohd ParvezDabas, Uzmi Jameel Husain, Mohd. Aamir Dubas, Ms. JasmineDamkewala, Pallav Mongia, Ms. Vaishali Sharma, Dinesh ChanderTrehan, Bishwajit Dubey, Ms. Srideepa Bhattacharyya, ManpreetLamba, M/S. Cyril Amarchand Mangaldas, Janender Kumar Chumbak,Ms. Radhika, Ms. Amita Singh Kalkal, Niraj Gupta, Mohd. Fuzail Khan,Mrs. Anshu Gupta, Dheeraj Nair, Kislay Kumar, Ms. Vishrutyi Sahni,Vaibhav Luthra, Ms. Mithu Jain, Shreyan Das, Rajesh P., Rahul Malhotra,Ms. Himanshi Madan, Devendra Kumar Sing, Karunakar Mahalik, Ms.Sonam Gupta, Anurag Tandon, Ms. Anuj Bhandari, Ms. Disha Bhandari,Ms. Shobha Gupta, Ms. Medha Garg, Nirmal Kumar Ambastha, Ms.Ashmita Bisarya, Dr. Amardeep Gaur, for M/S. V. Maheshwari & Co.,Manoj Singh, Sanjay Kumar Visen, Arpit Rai, Aviral Kashyap, RohitKumar Singh, Rahul Kumar Gupta, Rohit Amit Sthalekar, O. P. Gaggar,Himanshu Shekhar, Vishnu Sharma, Ms. Rakhi Ray, Ms. GarimaPrashad, Mrs. Anil Katiyar, Mukesh Kumar Maroria, S. K. Verma, KedarNath Tripathy, Brijesh Kumar Tamber, Christopher Dsouza, M/S. Devasa& Co., Somesh Chandra Jha, Ramesh Babu M. R., Ms. Rajkumari Banju,Vipin Kumar Jai, Praveen Chaturvedi, Ms. Anannya Ghosh, AakarshanAditya, G. N. Reddy, Ms. Sneha Kalita, Mr. Prerna Mehta, B. K. Satija,D. S. Chauhan, Ashwarya Sinha, T. Mahipal, Badri Prasad Singh,Chandra Prakash, Alok Tripathi, Ms. Astha Sharma, Mishra Saurabh,Aneesh Mittal, Mrs. Niranjana Singh, Sureshan P., Anas Tanwir,Pawanshree Agrawal, Ms. Suruchii Aggarwal, M/S. Karanjawala &Co., Ms. Anindita Pujari, Kaushik Choudhury, Jasmeet Singh, PradeepMisra, Raj Bahadur Yadav, Ms. Manisha Ambwani, Mushtaq Ahmad,M. T. George, Ms. Divya Roy, Sumit Sinha, Ms. Anubha Agrawal, AdityaJain-1, Sonal Jain, Gaurav, Rajat Mittal, Ms. Indra Sawhney, Ms. BhartiTyagi, Umesh Kumar Khaitan, M/S. Shakil Ahmad Syed, Gaurav Goel,Anil Kumar Mishra-I, Shantwanu Singh, Rameshwar Prasad Goyal,Sanchit Garga, Pramod Dayal, Mrs. Swarupama Chaturvedi, Ms. MayuriRaghuvanshi, Vishal Gupta, Ms. Charu Mathur, Aman Gupta, B. KrishnaPrasad, Uddyam Mukherjee, Sanjai Kumar Pathak, Deepak Prakash,Ms. Kamakshi S. Mehlwal, Ms. T. Archana, Ashok Mathur, RishiMatoliya, Mrs. Kirti Renu Mishra, Ms. Sujata Kurdukar, AbhinavRamkrishna, Ms. Dharitry Phookan, Advs. for the appearing parties.

Pavan Aggarwal, Ravinder Bhatia, Forensic Auditors.

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AThe Order of the Court was passed byUDAY UMESH LALIT, J.

1. This Order shall dispose of following three sets of applications:-

A) I.A. No.168186 of 2018 (Z-68[*]), I.A. No.109882 of 2020 (Z-B309[*] and R-103[*]) and I.A. No.114865 of 2020 (Z-318[*]) filed by theAssociation[1] and by some applicants who have booked apartments inthe project developed by the Company[2].

B) I.A. No.153341 of 2019 (Z-233[*]), I.A. No.120307 of 2020 (I-155[*]) and I.A.No.123299 of 2020 (I-158[*]) filed by the Company; and

CC) I.A.No.6397 of 2021 (Z-342[*]) filed by Religare FinvestLimited, the creditor of the Company.

2. By lease deed dated 03.02.2011 executed between GreaterNoida Industrial Development Authority (‘GNIDA’, for short) and theCompany, plot bearing No.GH-06A SECTOR–TECH ZONE-IV, GreaterDNoida was permitted to be developed by the Company on certainconditions. It was specifically stated that the Company was a specialpurpose company incorporated by the consortium of following six entitiesagainst whose names the respective shareholding was mentioned. Therelevant clauses of the lease deed were:- E“…The registered consortium consists of following: - Whereas the above-registered consortium who jointly qualify forGthe bid and secured the allotment of said plot being highest bidder.They through its lead member M/s. Vidhyashree Buildcon Pvt.Ltd. have approached the lessor in accordance with clause C-8

* Court Volume Number

1 Amrapali La Residentia Flat Buyers Association H2 La-Residentia Developers Private Limited

of the brochure/bid document of the scheme to sub-divide thesaid plot of land with the following status of holding lease rights:- And it has been represented to the lessor that the CONSORTIUMmembers have agreed amongst themselves that M/s. VidhyashreeBuildcon Pvt. Ltd. having its registered office at H.No.195, 2[nd]Floor, Back Side, Ram Vihar, Delhi-110092 shall remain leadmember of the consortium and lessee shall solely develop theproject on the demarcated Builders Residential/Group HousingPlot No.GH-06A, Sector Techzone-IV, Greater Noida measuringan area 80026.62 sqm.”

3. The project to be developed by the Company was widelyadvertised through brochures and advertisements as ‘Amrapali LaResidentia’ project, promising delivery of apartments within 36 months.The relevant portion of the brochure was:- “Amrapali has transformed the entire concept of living with itsvarious value added residential projects. Once more living up toits reputation it is presenting a unique residential condominiumwhich is identified as Terrace Homes for its novel concept. TerraceHomes are 2, 3 & 4 Bedroom Apartments with individual terracesassigned to them. Three side open terrace that is virtually oceanof fresh air is a star feature of every apartment of this modernand architecturally improved apartment housing. The terraces arejust imitative of the lush green lawns in private villas and serves A

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as the lungs of the apartments. This heart of the apartment canbe used for multipurpose household occasions.

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Where dedication is redefined

Real Estate and construction have been redefined byAmrapali Group to such a grand extent that it has become a brandBname. Amrapali Group has successfully proved its forte in variedReal Estate verticals from Residential Housing solutions toCommercial edifices to IT parks and educational institutions. Inthe last couple of years Amrapali Group has contributed in thephenomenal growth of real estate and infrastructure industry withCmany turnkey solutions. The Group strives for quality and ensuresthe best of technology, planning, design and construction for all ofits projects. This has resulted in star projects like Amrapali Green,Amrapali Royal, Amrapali Village, Amrapali Awadh, AmrapaliVaishali and Amrapali Exotica Apartments.”

4. Relying on the promises made in the brochure and believing theDrepresentation that the project was of ‘Amrapali Group’, various interestedparties booked apartments paying booking amount running into severalcrores. It appears that 3256 apartments were to be constructed anddeveloped in three phases; 1408 apartments in the first phase, 996apartments in the second phase and 852 apartments in the third phase.

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5. Writ Petition (Civil) No.940 of 2017 (Bikram Chatterji and othersvs. Union of India and others) and other connected matters filed in thisCourt sought to highlight acts of commission and omission on part of theAmrapali Group of Companies and persons in charge of the affairs andsubmitted that the amounts invested by the apartment holders wereFsiphoned away by the Amrapali Group of Companies. While entertainingthese Writ Petitions, by Order dated 06.09.2018[3] this Court directed that46 companies including the Company be audited by forensic auditors.Accordingly, the forensic auditors considered various issues and submittedtheir reports in February and April 2019. With regard to the project‘Amrapali La-Residentia’, the forensic auditors noted:-G

“La Residentia

“La Residentia

A big project having more than 3,200 dwelling units was launchedin 2010-11 having an equity shareholding of 19.75% in the nameof Stunning Construction Pvt. Ltd.

H3 (2020) 16 SCC 375

•Stunning Construction Private Limited (‘Stunning’), anAmrapali Group Company, holds 19.75% shares in thecompany. Stunning has been a consortium partner sincebeginning and land was allotted by Noida Authorities to the5 members consortium including Stunning. The project waslaunched as an Amrapali group project and was marketedaccordingly. As per the discussion with directors of LaResidentia Developers Private Limited, they broke up withAmrapali group in 2017. 2017 is the year when writ petitionwas filed before the Honorable Supreme Court. It is informedto us that a marketing agreement was entered into betweenLa Residentia Developers Private Limited and Amrapaligroup (name of the company not known) that Amrapaligroup would market its project for a consideration of Rs.16crore. It was informed by Mr. Sanjeev Kumar (director ofLa Residentia Developers Private Limited and a very oldfriend of Mr. Shiv Priya, director, Amrapali group) that thoughthe agreement was signed but Amrapali group didn’t providea copy of the agreement. It proves that Amrapali directorwere having significant influence on La ResidentiaDevelopers Private Limited that they had an authority evennot to give a copy of the agreement to a person/entity whohas signed it.

•Out of Rs.16 Crore, which were to be paid to AmrapaliGroup as per the agreement, Rs.4 crore were paid to SaffronPromart Consultancy Private Limited, owned and controlledby CFO Chander Wadhwa) under a verbal instruction ofMr. Adikhari, GM/DG accounts of Amrapali group. It is tobe noted that directors of La Residentia Developers PrivateLimited were acting and working under the supervision ofMr. Adhikari who was a middle level management officer.It indicates that the project was conceived by Mr. AnilKumar Sharma & Mr. Shiv Priya, directors of Amrapaligroup and Mr. Sanjeev Kumar, Mr. Mukesh Kumar Royand Others were only a front.

•It is very clear that there was no contribution of funds fromthe consortium partners. Whatever funds contributed bythe consortium partners were not only withdrawn within avery short period but over and above that extra funds were A

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894SUPREME COURT REPORTS

[2021] 6 S.C.R.

Agiven to them in the name of interest free loans andadvances.

•Amrapali group companies have transferred some of theirbuyers to the company. We found that the list of unsoldinventory was sent to Mr. Anil Sharma and it was he whoBdecided that the following buyers from Amrapali groupcompanies be shifted to La Residentia. This proves that LaResidentia was under the direct control of Mr. Anil Sharmaand Mr. Shiv Priya and is an entity of Amrapali group.

•The company is also using the Brand name/trademark ofCAmrapali group on its letterheads.

•The website of the company is followingwww.amrapalilaresidentia.com.

•When we open the website of the company, advertisementpage was hiding details and it is a project of Amrapali group.”

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It was also observed:-

“As per Statement of Mr. Sanjeev Kumar, Director of LaResidentia Developers Private Limited recorded by us, he informedthat a sum of Rs.4 crores approximately, was paid as fees for useof Amrapali Brand Name to Saffron Propmart Private LimitedE(This Company is controlled by Mr. Chander Wadhwa CFO). NoBills have been provided by him.

Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFOwere in connivance with each other and payments were made byShri Anil Mittal to Chander Wadhwa CFO for sharing fees receivedFfrom Amrapali group for the work awarded to Anil Mittal. ChanderWadhwa is one of the masterminds along with the other promoters,directors behind the whole scam. He facilitated movement of fundsby creating a web of companies within and outside the group. Hisrelatives were made partner investor in LA Residentia andGHeartbeat City Projects. Funds were invested in Patel AdvanceJV (Neo Town Project Noida) and Euphoria Sports City.”

6. The aforementioned observations of the forensic auditor werequoted with approval by this Court in its Judgment dated 23.07.2019[4].

H4 (2019) 19 SCC 161 – at pages 280 and 281

6.1 It must also be noted here that with respect to another projectof Amrapali Group of Companies namely “Heartbeat City Project”,following observations were made in the aforesaid Judgment[4].

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“35. Heartbeat City Developers Private Limited The project is in the name of 3 companies namely Pebbles ProleasePrivate Limited, Three Platinum Softech Private Limited andBaseline Infradevelopers Private Limited. The Project is anAmrapali group’s project which was carved out from AmrapaliGroup of Companies while case was pending before HonorableSupreme Court. Funds were invested in the project from AmrapaliGroup through Mr. Amit Wadhwa, Mr. Amit Wadhwa was apartner of 25% each in Pebbles Prolease Private Limited andThree Platinum Softech Private Limited. Amrapali Group launchedand advertised the project as Amrapali Group project and the projectwas named as Amrapali Heartbeat City Developers PrivateLimited in the agreements. Corporate office was having the sameaddress as Amrapali Corporate Tower in Sector 62, Noida. Thepurpose of carving out the project from Amrapali is not known. Itis informed that Mr. Vaibhav Jain and Mr. Sankalp Shukla are thekey managerial persons. In the absence of accounting records,we could not proceed further on the issue.”

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6.2 In paragraphs 61 and 62 of said Judgment[4] some of theobservations pertaining to La-Residentia, Heartbeat City, StunningConstruction Private Limited were as under:- E

“… … (i). The Directors along with trust partners discreetly dividedthe projects into two parts:

(i) Projects in which home buyers funds were receivedFand funds were diverted from these projects;

(ii) Projects to which home funds were diverted. Theseprojects were subsequently separated/demerged fromAmrapali Group, e.g., Heartbeat City, La Residentia,Vinayaka Square.

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(j) . Several dummy companies were formed in the names of officeboys and peons. Technically, the allotments at the initial stagewere void ab-initio. The amount received by the Companies fromhome- buyers was more than the amount spent on constructionand for payment of the land. The sole objective of taking a loan H

Awas to divert the funds to other ventures to create assets in thename of family members and to make movies. Villas were boughtat tourist destination for fun at the expenses of the middle classand low- income group people.

(k) . Several companies were created solely for the purpose ofBrouting funds. These companies did not have any materialtransaction as per the main object for which they were incorporatedand did not have a business since their incorporation.

62. As is apparent from the report, several companies were createdonly to route the funds and transactions consisting of office boys,Cpersons with no income and dummy companies in which familymembers and relatives were inducted as members only for fewtransactions, which are as under:

(1) Jhamb Finance & Leasing Private Limited.

It was under the control of Mr. Chander Wadhwa,DCFO. It has advanced loans amounting to Rs.875crores to related and unrelated entities, which arerecoverable.

(2) Gaurisuta Infrastructure Private Limited It was alsocreated for diverted funds.

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(3) Neelkanth Buildcraft Private Limited

Similarly it was formed for the purpose of buyingshares from J.P. Morgan at exorbitant rates,consisiting of office boys and relatives of Mr. AnilMittal, Statutory Auditor.

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(4) Stunning Construction Private Limited As per findings of the Forensic Auditors, they shouldeither surrender 19.75 percent of land or 632 flats.”

The observations in paragraph 153 and some of the conclusionsGin paragraph 154 were:

“153. We have also found that non-payment of dues of the Noidaand Greater Noida Authorities and the banks cannot come in theway of occupation of flats by home buyers as money of homebuyers has been diverted due to the inaction of Officials of Noida/HGreater Noida Authorities. They cannot sell the buildings or demolish them nor can enforce the charge against homebuyers/leased land/ projects in the facts of the case. Similarly, the bankscannot recover money from projects as it has not been invested inprojects. Homebuyers money has been diverted fraudulently, thus,fraud cannot be perpetuated against them by selling the flats anddepriving them of hard-earned money and savings of entire life.They cannot be cheated once over again by sale of the projectsraised by their funds. The Noida and Greater Noida Authoritieshave to issue the Completion/ Part Completion Certificate, as thecase may be, to execute tripartite agreement and registered deedsin favour of the buyers on part-completion or completion of thebuildings, as the case may be or where the inhabitants are residing,within a period of one month.

154. Resultantly, we order as follows:

(i) The registration of Amrapali Group of Companies under RERAshall stand cancelled;

(ii) The various lease deeds granted in favour of Amrapali Groupof Companies by Noida and Greater Noida Authorities for projectsin question stand cancelled and rights henceforth, to vest in CourtReceiver;

(iii) We hold that Noida and Greater Noida Authorities shall haveno right to sell the flats of the home buyers or the land leased outfor the realization of their dues. Their dues shall have to berecovered from the sale of other properties which have beenattached. The direction holds good for the recovery of the dues ofthe various Banks also.

(iv) We have appointed the NBCC to complete the various projectsand hand over the possession to the buyers. The percentage ofcommission of NBCC is fixed at 8 percent......”

7. Thus, the project ‘Amrapali La Residentia’ was found to becoming in the second category where the funds of the home buyerswere diverted and where the projects were subsequently separated fromthe Amrapali group. It was also found that ‘Stunning ConstructionPrivate Limited’ (“Stunning” for short), one of the members of theconsortium which had set up the Company as a special purpose company,was part of the Amrapali Group. Commensurate with the shareholdingof ‘Stunning’ in the Company, the direction was issued by this Courtthat either 19.75 per cent of the land or 632 flats constituting about 19.40

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Aper cent of the total number of flats be surrendered by the Company; asthat would be equivalent to the contribution of flat buyers which wasdiverted.

8. In the subsequent order dated 14.10.2019 passed by this Court,the objections raised on behalf of the Company were noted and it wasBobserved:- “We have heard Mr. Rakesh Khanna, learned senior counselappearing for La Residentia. The finding recorded in the Judgmentdelivered by this Court that 632 flats or value of 19.75 per cent ofthe share has to be recovered from La Residentia. It is also pointedCout that some cost of construction has been incurred by the LaResidentia. While handing over the flats or for selling them thatamount has to be paid to La Residentia and the remaining amounthas to come to the Amrapali Group. We direct the La Residentiato submit an affidavit how much expenditure has been undertakenin the construction of each of the flat and total amount invested inDthe construction of 600 flats which are available for sale at present.They are injuncted from selling flats which are available. Let theaffidavit be filed within fifteen days.”

9. The present sets of applications are required to be consideredin the backdrop of the aforesaid orders passed by this Court on 23.07.2019Eand 14.10.2019.

Pertinently, when said orders were passed, an applicationsubmitted by 45 applicants being I.A. No. 168186 of 2018 (Z-68*) wasalready on record of this Court. This application was filed on 19.11.2018and after referring to the brochures circulated and advertised by theFCompany, the application had asserted that the flat buyers had bookedtheir apartments believing their project to be Amrapali group project. Itwas stated:- “6. It is of lot of significance to state that the Coloured Brochurebears the caption “Amrapali La-Residentia” and that the projectGis not only designed and propagated by Amrapali Group but alsobears the reference of all other Amrapali Group Projects whichinclude “Amrapali Eden Park”, “Amrapali Leisure Valley”,“Amrapali Sapphire” and “Amrapali Centurion Park”. Further theAllotment-cum-Flat Buyer’s Agreement bears the registeredaddress too at Amrapali Corporate Tower C-56/40, Sector-62H

NOIDA, which is the corporate office of the Amrapali Group.The Demand Letters to the Home Buyers from time to time havealso been issued and the name and bears the logo of “AmrapaliLa-Residentia” and further the payment receipts have also beenissued under the same logo and head of Amrapali. Moreover, thewebsite also indicates that it is a Amrapali Project as the web istitled as www.amrapali.in.”

The application had principally prayed:- “……

(b) pass appropriate order or direction directing delivery of thedream homes of the Applicants in Amrapali La-Residentia situatedat GH-06A, Tech Zone-4, Noida Extension at the earliest;

(c) pass appropriate order fixing liabilities of the Directors of M/s. La-Residentia Developers Pvt. Ltd. for delaying the project; (d) pass appropriate order to attach the movable/ immovableproperties and bank accounts of M/s. La- Residentia DevelopersPvt. Ltd. as well as its all Directors………”

However, the prayers made in this application were not grantedby this Court either in its order dated 23.07.2019 or in the order dated14.10.2019.

10. On or about 01.10.2019, IA No.153341 of 2019 (Z-233*) wasfiled by the Company submitting that though Stunning had 19.75 percent shareholding in the Company, the Company had always maintainedan independent legal existence and there was no direct or indirectfinancial dependence on the Amrapali Group. As regards thearrangements entered into with the Amrapali Group, it was stated:

“The Applicant has not received any money from any groupcompany of the Amrapali Group, save and except paid up capitalof Rs. 13,580/- (Rupees Thirteen Thousand Five Hundred andEighty Only) in the nature of contribution towards paid-up capital,received from Stunning. The said amount was received againstissue of 13.85% shares in the Applicant company at the time ofits inception. It is pertinent to state that even though Stunning isAmrapali Group company, there has been no inflow of funds fromStunning into the Applicant company other than the above-saidamount received by the Applicant against subscription of shares.

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The Applicant company had entered into a marketing arrangementwith Amrapali Group where it was agreed between the partiesthat Applicant company would be allowed to use the name‘Amrapali’ for marketing the Project. The brand ‘Amrapali’ atsuch time was well established in the real estate sector and sincethe Applicant was a new entrant in the business of real estatedevelopment, management of the Applicant company was of theopinion that the Project would benefit, from marketing/brandingperspective, if the name ‘Amrapali’ could be used for marketing/branding the Project.

In light of above, for allowing the use of name Amrapali andextending branding/marketing support, the Applicant company hadagreed to pay to Amrapali Group Rs.75/- per sq. ft. booked/soldin the Project, as consideration.”

The basic submissions in the application were:

“It is known to the Forensic Auditor that the Applicant is aPrivate limited company and Stunning being a shareholder, isonly entitled to profits of Applicant company (if any) in form ofdistributable dividend, which would be proportionate to itshareholding in the Applicant company. Profits as such, by wayof cash or otherwise, cannot be legally distributed amongst theshareholder.

Accordingly, Stunning as a shareholder would only be eligibleto 19.75% share in distributable dividend declared by theApplicant company after profits (if any), which are determinedat the end of the Project.

Indulgence of this Hon’ble Court is also necessary to validatethe fact that the Project land cannot be apportioned/segregatedto the extent of 19.75% at this stage of the Project.

The Applicant would like to state that the rationale applied toarrive at 632 flats is not just and proper and if the Applicantwas to comply to direction to surrender 632 flats, the numberof flats would vary for the same should be arrived at, if at all,after apportioning 19.75% of the total built up space. The flatsforming part of unsold inventory may not confirm to the 19.75%of the total built up space.

Even otherwise, this should be subject to settlement of accountsbetween Applicant and Amrapali Group, wherein the Applicantis to receive amounts from Amrapali Group.

Also, it is submitted that 632 flats of unsold inventory are undervarious stages of construction and are situated in differenttowers within the Project. While some form part of theinventory which is ready for handover, some are underconstruction and some are yet to be constructed. Accordingly,for material and actual handover of these 632 flats, completein all respects, it is necessary to maintain continuity inconstruction through regular flow of funds, which will comefrom sale of this unsold inventory. Further, so as to facilitateoverall development of the Project and handover of the unitsto homebuyers, it is imperative that these flats be sold and theamounts received from such sale be first utilized for constructionand completion of the Project.

The only viable option for the Applicant could be to offer 19.75%in profits and loss of the Applicant company (arrived at thestage of Project completion).”

Finally, the application prayed that the order dated 23.07.2019passed by this Court be recalled or in the alternative the Company bedirected to deposit 19.75 per cent of the projected profits after makingdue adjustments in respect of cost of construction and proportionatecosts towards the development of the entire project and other amountsreceivable from the Amrapali Group.

10.1 Similar submissions were thereafter made by the Companyin IA No.120307 of 2020 (I-155*), filed on 11.11.2020 and in IA No.123299of 2020 (I-158*) filed on 25.11.2020. In both these applications, it wassubmitted that the Company be allowed to raise funds through sale of632 flats, without which it would not be possible for the Company toraise finances and complete the project. In addition, certain directionswhich according to the Company were necessary to be passed for overallcompletion of the project, were also prayed for. It was submitted:

“56. That in addition to passing necessary directions to allow theApplicant to raise funds through sale of unsold inventory and alsoraise finance through bank/financial institution, the Applicant wouldrequest for kind intervention of this Hon’ble Court to consider A

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passing necessary directions, as under, which would be critical inintervening circumstances, and beneficial for overall completionof the Project:

A. To begin with, this Hon’ble Court may direct the receiverappointed by this Hon’ble Court to set up, operate and be in-charge of an escrow account wherein all receivables to the accountof Applicant company are deposited, whether received from soldand/or unsold inventory, in addition to funds receivable othersources (such as fresh finance raised from banks/financialinstitutions).

B. Further, since during the pendency of present proceedingsvalidity of statutory approvals issued by the GNIDA has lapsed.A copy of the last validated sanction plan, which expired duringNovember 2019, has been annexed herewith and marked asAnnexure L. To facilitate overall completion of the Project,intervention of this Hon’ble Court is necessary to issue necessarydirections to GNIDA to extend validity of such license/permissiontill anticipated date of completion of the Project i.e., December2022.

C. Similarly, the proposed date of completion of the Project underRERA registration has lapsed as of 15.06.2019. A copy of theRERA registration has been annexed herewith and marked asAnnexure M. To facilitate overall completion of the Project,intervention of this Hon’ble Court is necessary to issue necessarydirections to UP RERA to extend validity of such license/permissiontill anticipated date of completion of the Project i.e., December2022.

D. Intervention of this Hon’ble Court is also required in as muchas to issue appropriate directions to the UP RERA Authority torecall its orders, not take any coercive measures against theapplicant and refrain from passing any such orders till the disposalof the present proceedings before this Hon’ble Court.

E. In addition to foregoing, it is also imperative that directions areissued to the relevant authorities like GNIDA, UP RERA etc. notissue adverse rulings/orders/impositions against the Applicantcompany till anticipated date of completion of the Project i.e.,December 2022.

F. It is necessary that GNIDA be directed to revalidate statementof land dues after causing reduction in the penal interest levied onland dues over last so many years. The Applicant considers itselfeligible for such respite since similar benefit has been extendedby this Hon’ble Court to other projects/developers as well. TheApplicant also considers itself to be eligible for such relaxationsince the case of Applicant company is much different from otherprojects of Amrapali Group where GNIDA has not been paid anyamount after the initial 10% payment for the project land paid atthe time of allotment. The Applicant is all the more eligible forsuch rebate/relaxation for the reason that the Applicant companyhas repaid more than the principal amount that it originally owedto GNIDA as land dues. The amount being claimed by GNIDAas on date is highly inflated, as already elaborated upon in thepresent application.

G. It is further submitted that GNIDA be directed to continueregistering sub-lease deeds in the name of home buyers as GNIDAhas paused further registrations on account of non-payment ofland dues by the Applicant. Since land dues payable to GNIDAwould require revalidation due to undue imposition of interest (asper directions of this Hon’ble Court), it becomes necessaryregistration of sale continues in favour of homebuyers of the Project, who should not be made to suffer on this account. TheApplicant seeks necessary directions in this regard since theposition of Applicant before GNIDA is’ not, in any way, similar toother allottees/projects/developers who are before this Hon’bleCourt.

H. Intervention of this Hon’ble Court is also required particularlyto the issue of other impositions made by the GNIDA on landdues payable by GNIDA. Other than the extending relaxation onpenal interest imposed by the GNIDA, the GNIDA should also beissued necessary directions to withdraw certain undue impositionsupon the Applicant company. Many such undue and arbitraryimpositions in the name of land dues, are the reason for Applicantcompany being a defaulter before GNIDA despite having paidmore than the principle amount originally payable to GNIDA.

In this regard, it is most important to note that the Project in questionremained adversely affected between July 2011 till May 2015, for AB

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Areasons which were directly attributable to GNIDA and absolutelybeyond the control of the Applicant company.

The issues which hampered the Project during such period includedthe issue of cancellation of land allotment, farmer protests andagitation on land acquisition by GNIDA/UP State Government,Bissue’ regarding payment of enhanced compensation to thefarmers, and other related legal issues.

These issues practically detailed the progress of the Project onmore than one occasion and consequently penal obligations wereforcefully imposed by GNIDA upon the Applicant company forsuch period of disruption, rather than adequately compensatingthe Applicant company for stoppage of construction at the Project,for causes which were directly attributable to GNIDA.

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At such time, even the burden of payment of enhancedcompensation payable to farmers to end the dispute betweenfarmers and GNIDA/State Government in respect of landacquisition, was conveniently passed onto allottees of project landlike the Applicant company, which was neither anticipated noraccounted for by the Applicant company.

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With respect to this issue, the Applicant company had filed arepresentation before the GNIDA and subsequently, Applicantcompany had to move a Writ Petition before the Hon’ble HighCourt of Uttar Pradesh at Allahabad, for claiming benefits underthe ‘Zero Period Policy’. However, for lack of action on part ofGNIDA, no benefit has been extended to the Applicant companyon this account till date, by the GNIDA.

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It is therefore necessary that such benefit is now extended to theApplicant company, firstly for the reason that such benefit is longdue to come from GNIDA who has been avoiding to settle thisissue with Applicant company, and also for the reason that inabsence of such relaxation/respite/adjustment from GNIDA, theProject is unlikely to be net positive at the time of its completion.

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I. Further, necessary directions are required for the homebuyerswho should be directed to strictly pay their dues regularly. Theongoing state of affairs has resulted in homebuyers withholdingrelease of their dues to the Applicant company, such inflow offunds being critical and necessary for overall completion of theHProject. It is a matter of record that such non-payment has had a direct impact on flow of funds and pace of construction of theProject.

J. That another aspect, which if given due consideration, maylead to better profitability in the Project is in respect of loan facilityavailed by the Applicant Company from Religare (NBFC). TheApplicant Company has already repaid an Amount ofRs. 52,61,51,242/- as against principle loan amount ofRs. 50,00,00,000/-. The situation as on date is such that the saidfinancial institution in created lien over bank account of theApplicant Company so as to recover loan repayment (which ason date stands at Rs. 15,29,61,019/- as per demand of Religare),which has also led to immobilization of funds for utilization towardscompletion of Project.”

10.2 IA No.123299 of 2020 referred to the arrangements arrivedat by the Company and the association of Home Buyers as under:- “38. It is also relevant to highlight here that before any homebuyeror association of homebuyers approached this Hon’ble Court withintent to deliver the project and in relation to management of fundsand bring transparency and objectivity necessary to inspireconfidence of homebuyers with respect to fairness and effectivemanagement of affairs of applicant company qua the project, theApplicant company entered into several MOU’s withrepresentatives/ core committees of flat buyers of various towers.As per the said MOU’s the home buyers have committed tocontribute their dues to a designated bank account bearingno.510101004328980 being maintained by the applicant companywith the Corporation Bank, Ramprastha, Ghaziabad, UP (for tower20, 24, 25), in bank account bearing No.510341000674084 (fortower 28 and 29) and 510341000674092 (for tower 22) beingmaintained by the applicant company with the Corporation Bank,Sector 62, NOIDA, UP. The designated representatives ofallottees/ homebuyers are joint signatories in the bank accounts,which further enables the homebuyers to keep a strict check onthe source of funds and utilisation of such funds towardsconstruction of the project. Copy of the Memorandum ofUnderstanding entered into between the Applicant company andthe homebuyers has been enclosed herewith and marked asAnnexure P-4.

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A39. That for the foregoing paragraph, it is imperative to mentionhere that the homebuyers who have entered into MOU’s with therespondent company have contributed to a sum of Rs.3,04,66,795/-.Likewise, if all the allottees of the project come forward and gatherresources with the respondent company, the construction statusshall have a significant boost. The summary with details of fundsBreceived in such designated bank accounts and amounts spent onconstruction and related activities in terms of the said MOU’s,computation of the figure of Rs.3,04,66,795/- (1,63,74,372/- +1,40,92,423/-) which have been deposited by the homebuyers afterentering into MOU’s is annexed herewith as Annexure-P/5.”

C11. On the other hand, IA No.109882 of 2020 (Z-309*) was filedby the Association submitting that “Amrapali La Residentia Project”was in every sense a project of the Amrapali Group of Companies and,therefore, the flat buyers were entitled to similar protection as wasextended to the other home buyers vide order dated 23.07.2019 passedDby this Court. In the additional affidavit filed on 16.11.2020 (R-103*),the Association also asserted that as many as three members of theconsortium including Stunning were Amrapali Group of Companies andbetween themselves they were holding more than 65 per cent of theshare capital in the Company. The details in the form of a Chart given inthe additional affidavit were:-E

The affidavit also gave the status of construction with regard toeach of the three phases as under:

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“Furthermore, the chart reveals that out of the total 3256 units tobe provided by the Developer, out of which 632 units are offeredby the Developer towards 19.75% of Amrapali group. However,out of the proposed 632 units, the developer is handing over 181units from Phase II which is 70% complete and 415 units arebeing offered from Phase III which is a camouflage as only 40%of the same is completed according to the developer. It is submittedthat Phase III is not even anywhere near 40% completion and isactually deserted with the competition activity of both Phase IIand III are at a standstill and the Developer has siphoned off allthe monies collected by the home buyers and washed off his handsfrom the construction activity. The builder has totally failed andbuyers have totally lost faith and builder in past 10 years was ableto complete only approx. 30% of works in total project.”

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11.1 One more application being IA No.114865 of 2020 (Z-318*)was filed on 15.11.2020 by 14 applicants. This application referred tothe communication dated 18.01.2020 addressed by the Company to allthe flat buyers of “Amrapali La Residentia” Project. The text of saidcommunication was as under:

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“As you are aware of the ongoing Supreme Court on Amrapali,the Honourable Court has imposed certain restrictions on us (LaResidentia Developers Private Limited). As per the injunction wehave to surrender 632 flats to the Honourable Court, we are alsonot allowed to sell any new inventory, which has led to an extremecrunch in operational funds required to complete your flat. As aresult of this ongoing case we are unable to raise funds frommarket either due to lack of trustworthiness.”

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The applicants then submitted:-

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The applicants then submitted:-

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“5. That the above statement has put the applicants in a seriousquandary and they are faced with a peculiar problem inasmuchas to say that vide its judgment dated 23.07.2019 in BikramChatterjee and Ors. vs. Union of India and Ors. (Writ PetitionNo.940 of 2017), the Hon’ble Court has arrived at a finding that itis Amrapali that has ownership of 19.75% of the share in theproperties being built and developed by La Residentia, numberinga total of 632 flats. However, there is a great deal of uncertaintyand a complete lack of clarity with respect to the remaining 80.25%of the flats/ apartments that are part of Amrapali La Residentiaand a responsibility of the Respondent- builder. However, theRespondent-builder is conveniently trying to hide under the garbof and claim the cover of the Hon’ble Court’s judgment to washits hands off the future of 80% of the home buyers who have alsospent all their life savings and taken huge loans to invest in theapartments that were proposed to be built. Such homeowners asthe Applicants are totally stranded and are faced with completeuncertainty with regard to the future of their homes that werebeing developed by the Respondent-builder.

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11. That the Applicants fear that as bonafide purchasers/ homebuyers whose property does not fall in the 19.75% of the share inthe entire La Residentia Project, they are likely to be short-shiftedas the burden upon the NBCC is colossal and it is likely that projectsthat have a 100 per cent involvement of Amrapali are likely to getthe first preference unless a proper orders are passed by thisHon’ble Court. The promoters role, scope, responsibility, liabilityetc. need to be fixed as they say that 632 flats are dispersed in allthe three Phases of the project and unless proper directions beissued by the Hon’ble Court the home buyers are put in severeinconveniences without a room over their head.

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r. It is further submitted that the 632 units in La Residentiasurrendered to the Amrapali group are incomplete and scatteredHin various towers, on different floors many of which are not even completed. The situation is used by the builder to stall the progressof the construction citing the injunction orders of this Hon’bleCourt.”

12. Lastly, IA No.6397 of 2021 was filed on 13.01.2021 by ReligareFinvest Ltd. stating that said applicant had extended financialaccommodation to the Company and that the Company had mortgagedthe project land and 939 flats/units with the applicant and therefore theinterest of the applicant be protected.

13. Since reference was made to the order dated 28.07.2020 passedby this Court, the observations concerning Vidhya Shree Buildcon Pvt.Ltd. and those dealing with “Heartbeat City” another project of the secondcategory[5]are extracted here for ready reference:- “1. We have heard the Forensic Auditor as well as the learnedcounsel appearing for the parties at length. The first question ariseswhether the Heartbeat City Projects are of Amrapali Group, andthe second question is as to the agreement entered into by M/s.Mahagun Real Estate Private Limited with M/s. BaselineInfradevelopers Private Limited.

2. It is apparent that Heartbeat City Projects were launched inthe name of the ‘Amrapali Heartbeat’ project in 2011-2012 withMr. M. S. Dhoni, the Brand Ambassador. The Home Buyers’agreement was entered into in the name style of Amrapali Groupwith the assurance that flats will be delivered within 36 months.Most of the buyers paid their dues on time, but the constructionwas delayed.

3. Heartbeat City Projects comprise Heartbeat City 1 (for short,HBC 1) and Heartbeat City 2 (for short, HBC 2) and HangingGardens in Noida. 2 The land for the respective projects wasallotted in the name of Three Platinum Softech Private Limited,Pebbles Prolease Private Limited, and Baseline InfradevelopersPrivate Limited. The projects were launched and advertised inthe name of the Amrapali Group. Phase 3 project was started in2011-2012 in the name of Hanging Garden; however, later on,Hanging Garden project was scrapped, and the home buyers wereadmittedly shifted to HBC 1 and HBC 2 or refunded the amount.

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4. HBC 1 comprises 759 units, and HBC 2 consists of 1217 units+ shops, but construction could not progress for one reason or theother.

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5. In the Audit Report, it has been found that the land in Baselinewas part and parcel of HBC 1 and HBC 2 projects and in general,under the control of the Directors of HBC 1 and HBC 2 and waspurchased from the funds of the customers of HBC 1 and HBC 2and, is an integral part of HBC 1 and HBC 2 and, therefore,customers of HBC 1 and HBC 2 have the first and the full rightover the land rights and on the proceeds to be received from thesale of the land can be utilised for the construction of HBC 1 andHBC 2 projects. HBC 1 has nine towers and 785 units, of which,675 units were sold and Rs. 147 crores recoverable from soldunits. HBC 2 has 12 towers and 1282 units, out of which, 936units were sold and Rs. 301 crores recoverable from sold units.The cost to complete HBC 1 is approximately Rs. 167.19 croresand HBC 2 is Rs. 375.64 crores, which is recoverable from unsoldunits.

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6. Mr. Amit Wadhwa, Director of Amrapali Homes, has 25%shareholding. Mr. Akhil Kumar Surekha, who is the Director ofBihariji 3 Ispat Udyog Ltd. and JST Engineering Services Limited,Ehas 13% and 12% shareholding respectively, total 25%. Mr.Vaibhav Jain and Mr. Pankaj Jain, Directors, are holding 10% and15%, total 25% of the shareholding, whereas Cozi Habitat BuildersPrivate Limited, Maa Sharda Holding Private Limited, through itsDirector Mr. Sankalp Shukla is also holding 25% shares. Similarly,in HBC Phase II, the shareholding pattern is similar to 25% of theFgroup mentioned above of Mr. Amit Wadhwa, Mr. Akhil KumarSurekha Vaibhav Jain, Mr. Pankaj Jain, and Mr. Sankalp Shukla.

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7. In Baseline Infradevelopers Pvt. Ltd., it is stated thatshareholding of Mr. Amresh Kumar is 8.25%, Bihariji Ispat UdyogLimited through Mr. Akhil Kumar Surekha is 8.25%, B2C RealtorsPvt. Ltd. through Mr. Vaibhav Jain and Ms. Swati Jain is 8.25%,Cozy Habitat Builders Pvt. Ltd. through Mr. Sankalp Shukla is8.25%. Mr. Nishant Choubey and Mr. Santosh Choubey areholding 34% and 33% respectively. Mr. Nishant Choubey andMr. Santosh Choubey did not provide documents to the ForensicAuditors; however, they possess 67% shares.

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8. The following findings were recorded concerning HeartbeatCity in our Judgment and Order dated 23.7.2019:-

“35. Heartbeat City Developers Private Limited - Theproject is in the name of 3 companies namely Pebbles ProleasePrivate Limited, Three Platinum Softech Private Limited andBaseline Infradevelopers Private Limited. The project is anAmrapali group’s project which was carved out from AmrapaliGroup of companies while case was pending before HonorableSupreme Court. Funds were invested in the project fromAmrapali Group through Mr. Amit Wadhwa, Mr. Amit Wadhwawas a partner of 25% each in Pebbles Prolease Private Limitedand Three Platinum Softech Private Limited. Amrapali Grouplaunched and advertised the project as Amrapali Group projectand the project was named as Amrapali Heartbeat CityDevelopers Private Limited in the agreements. Corporate officewas having the same address as Amrapali Corporate Tower inSector 62, Noida. The purpose of carving out the project fromAmrapali is not known. It is informed that Mr. Vaibhav Jainand Mr. Sankalp Shukla are the key managerial persons. Inthe absence of accounting records we could not proceed furtheron the issue.”

9. Mr. Vaibhav Jain admittedly was the architect of Amrapali Groupwho was holding 25% shares. Mr. Akhil Kumar Surekha wasalso holding 25% shares in each of the projects.

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14. With respect to Vidhya Shree Buildcon Private Limited,Rs.4,00,00,000/- (Rupees Four Crores) is the debit balance in thebooks of accounts of the Amrapali Group.

15. It is apparent that a sum of Rs.242.38 crores was handedover to Mr. Pankaj Jain (current Director of Amrapali Group &brother of Mr. Vaibhav Jain), the Director of Vidhya ShreeBuildcon Pvt. Ltd.

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18. The project was launched in the name of Amrapali HeartbeatCity, and the agreement was entered into with the Amrapali Groupby the home buyers. Cheques were issued in the name of AmrapaliHeartbeat City. Letterheads of Amrapali were used for the AB

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912SUPREME COURT REPORTS

ABuilder-Buyer Agreement, and the project was mentioned asAmrapali Heartbeat City. It is true canvass to suggest that theproject was an independent project. We are unable to accept theaforesaid findings recorded in the Report of the Forensic Auditors.Probably, it was due to the fact that certain accounts were notmade available, however, in view of the findings recorded earlierBwith respect to relationship and inter se transactions of the groupsand parties, there is no iota of doubt that HBC 1 and HBC 2 areto be treated as the projects of Amrapali Group only and notindependent projects. As per the finding, the land was agreed tobe sold by Baseline as per the findings recorded in the ForensicCAuditors’ Report itself. The same is out of the money generatedby HBC 1, and HBC 2 projects and Baseline InfradevelopersPvt. Ltd. is part and parcel of HBC 1, and HBC 2 projects andthe buyers have the rights over the land and on the proceeds to bereceived from the sale of the land. We accept the said findingrecorded in the Forensic Auditors Report.”D

14. We heard Mr. Gopal Sankaranarayanan, learned SeniorAdvocate for the Association, Mr. M.L. Lahoty and Mr. Manoj V. George,learned Advocates for the applicants in the first set of applications; Mr.V. Giri, learned Senior Advocate for the Company in the second set ofapplications; and Mr. Janendra Kumar Chumbak, learned Advocate forEthe applicant in the third set.

15. It was submitted by Mr. Gopal Sankaranarayanan, learnedSenior Advocate:- a)The shareholding pattern in the tabular chart in I.A. No.F109882 of 2020 (Z-309[*]) disclosed that the Company wasone of the Amrapali Group of Companies.

b)Consequently, the entire project land would be part of theassets of Amrapali Group of Companies rather thanrestricting the share of Amrapali Group of Companies tothe extent of 19.75%.G

c)If the benefit as granted in the order dated 23.07.2019 wasextended, all the flat buyers would stand relievedsubstantially as the dues of GNIDA would stand reducedto a considerable extent in terms of the order dated23.07.2019.H

d)The entire project ought to be directly under the control ofthe Court Receiver and the construction be undertakenthrough the NBCC[6] as was directed to be done in the otherprojects of the Amrapali Companies.

Mr. M. L. Lahoty, learned Advocate appearing for the applicantssupported the submissions advanced by Mr. Gopal Sankaranarayanan,learned Senior Advocate. He invited our attention to the reports of theforensic auditors and so also to the order dated 28.07.2020 passed bythis Court in the matter concerning “Heartbeat City”. It was submittedthat the instant project and “Heartbeat City” Project stood on the sameparameters and therefore similar benefits be extended to the instantproject.

Mr. Manoj V. George, learned Advocate appearing for theapplicants in I.A. No.114865 of 2020 (Z-318[*]) highlighted the predicamentfaced by the applicants and particularly the stand taken by the Companyin its communication dated 18.01.2020.

16. Mr. V. Giri, learned Senior Advocate for the Companysubmitted:- a)Stunning was merely a shareholder in the Company andthat by itself would not make the Company a part of theAmrapali Group of Companies.

b)Beyond the amounts put in towards share capital, nothingwas invested by the Amrapali Group of Companies; norany part of money belonging to the flat buyers of AmrapaliGroup of Companies was used or utilized in the instantproject.

c)Though the Company was not a part of Amrapali Group ofCompanies, the benefit in terms of order dated 23.07.2019ought however be extended as indicated in I.A. No.120307of 2020 (I- 155[*]) and I.A.No.123299 of 2020 (I-158[*]).

16.1 In the written note filed on behalf of the Company, followingassertions were made with respect to the construction status and theescalation in costs if the project was to be handed over to the NBCC asprayed for by the Association and the applicants :- 6 NBCC (India) Limited, formerly National Buildings Construction Corporation Limited A

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A“5. CONSTRUCTION STATUS

a.Unit-wise construction status of the project: Pleaserefer: Para 35 @ Pg. 26-27 of I-158; B

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D*It is to be noted that a sum of Rs. 145 Cr. Approx. of thecurrent homebuyers is stuck in the unsold inventory.

b. Phase-wise status of project: Please refer: Para 34 @Pg. 25-26 of I-158

i. Phase-I (Comprising of 18 towers; T1- T-18, 1408 Flats):1127 Flats/units complete in all respects have been delivered tothe homebuyers and balance inventory of 313 Flats/units are atthe final stage of ‘finishing’ work.

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ii. Phase-II (Comprising 11 towers, T-19 to T-29, 996 Flats):All Flats that comprise of Phase-II inventory are also at the initialFstage of ‘finishing’ work and delivery of units has started. Handingover of the units in Phase II of the project has also started. It isalso relevant to state here that handing over of units has alsostarted in Tower-22 in which the unit of Ms. Savita Tyagi is alsosituate, who is also an applicant in one of the applications on behalfof the homebuyers.

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iii. Phase-III (Comprising 10 towers; T-30 to T-39 withabout 852 Flats): Structuring work for 704 units out of 852 unitsin ten towers (Tower 30 to 39) has been completed and ‘slabwork; for about 37 stories/floors in these ten towers is yet to becasted.”

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“6. COST ESCALATION IN CASE THE PROJECTHANDED OVER TO NBCC OR THIRD PARTY: Pleaserefer: Para 12 at Pg. 6-7 of I-155

Certain homebuyers have been seeking directions from thisHon’ble court to get the project handed over to a third party orNBCC for completion of construction. However, for the reasonsstated herein below, the same ought not to be done:

a. The per square foot construction cost that LA RESIDENTIAhas incurred till date works out to be Rs.1657/- which includedthe interest on money infused and admin expenses. Only landcost is separate from this.

b. The per square foot costing that NBCC or any third-partycontractor may apply would not be less that Rs.2,550/- per sq. ft.along with 8% consultation charges of NBCC and interest of 12%on capital infused.

c. The sale price of the unsold units has been taken at Rs.2852per sq. feet. The amount thus available from sold and unsoldinventory plus amount recoverable would be Rs. 354 Crores.

d. Introduction of a third party at this stage will not only increasethe timeline of the project, but also escalate the cost of completionof the project by at least 40-45%.”

“The effect if the construction is complete by La ResidentiaDevelopers would be:

-The construction of the project would be completedin a fixed period of time -The dues of GNIDA will be paid -The bank dues shall be paid -Pending dues of suppliers and contractors wouldbe cleared.

-There would be money available in the kitty.

In case construction is carried out by NBCC, the effectwould be:

-All the incoming monies, after deduction of theinterest and consultation charges and other charges A

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as may be applicable in favour of NBCC, wouldbe put in Amrapali’s kitty A

-Additional cost of land dues to be paid to GNIDA-No surplus funds left to pay out the various dues -No payments to GNIDA

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-No payments to the banks”

17. Mr. Janender Kumar Chumbak, learned Advocate appearingfor Religare Finvest Ltd. reiterated the submissions made in I.A.No.6397of 2021 (Z-342[*]).C

18. The first two sets of applications principally prayed that theorders dated 23.07.2019 and 14.10.2019 be recalled or revisited. TheAssociation and the applicants supporting the Association submitted thatthe Company be declared to be part of the Amrapali Group of Companiesand consequently the entire project be developed by the NBCC underDthe control and supervision of the Court Receiver. On the other hand,according to the Company, it was never part of the Amrapali Group ofCompanies and at best one of the companies of the Amrapali Groupcould be said to be a shareholder to the extent of 19.75% and that beyondsuch share capital no other amount was invested by the Amrapali Groupof Companies. Thus, according to the Company it could not be directedEto surrender 19.75% of the project land or 632 flats as was directed inthe order dated 23.07.2019. However, both the sets of applications desiredthat the same benefits as given to all the flat buyers from AmrapaliGroup of Companies be extended and the project be relieved of therequirement of paying the dues of GNIDA like other Amrapali projects.F

19. When the order dated 23.07.2019 was passed by this Court,I.A. No. 168186 of 2018 (Z-68[*]) was pending on the file of this Court.Similarly, I.A. No. 153341 of 2019 (Z-233[*]) was filed on 01.10.2019 i.e.before the subsequent order dated 14.10.2019 was passed by this Court.The prayer made in the latter application that the order dated 23.07.2019Gbe recalled was not favourably considered on 14.10.2019. On the contrary,after noting the submission made on its behalf, the Company was directedto file an appropriate affidavit indicating the expenditure required forconstructing 632 flats so that appropriate adjustments could be effected.

In the face of these developments, it would not be possible for usHto entertain the prayer made in the concerned interim applications either seeking recall of the orders dated 23.07.2019 and 14.10.2019 or revisitof the issue whether the Company ought to be declared as part of theAmrapali Group of Companies, more particularly because of thedevelopments that have taken place with respect to the instant project.

20. As indicated in the tabular charts which were part of the writtennote filed on behalf of the Company, out of 3256 flats to be constructed,1484 flats have been fully constructed and possession of 1143 flats hasalready been given to the concerned flat buyers. As per said charts, thework of construction with respect to phases one and two is at an advancedstage. Further, according to the figures indicated therein, per sq. ft. costof construction incurred by the Company has been to the tune of Rs.1657per sq. ft. whereas the per sq. ft. cost of construction by the NBCC, ifat this juncture the project is handed over to the NBCC, would be in theregion of Rs.2550 per sq. ft. along with 8% consultation charges of theNBCC. Thus, if the instant project is now handed over to the NBCC, itwould result in escalation in costs to the detriment of the flat buyers.The figures also show that as against the original liability of Rs.155.10crores, the Company has already discharged the liability towards thedues of GNIDA to the extent of Rs.117.10 crores.

21. It is true that the “Heartbeat City” Project coming from thesecond category[5] was dealt with by this Court in its Order dated28.07.2020 and was directed to be taken over by the NBCC like otherAmrapali Projects. However, the distinguishing feature as noticed inparagraph 4 of the Order dated 28.07.2020 was that there was absolutelyno progress with respect to said project. In contradistinction, the instantproject has progressed to a considerable extent. At least 1143 flat buyershave received possession while the work of construction with respect tophases one and two is at an advanced level. Further, the interest of theAmrapali Group of Companies and consequently that of the flat buyerswho had invested money in other Amrapali Projects already standsquantified at 19.75% vide Orders dated 23.07.2019 and 14.10.2019.Therefore, even if there could be some similarity with regard to thestatus of the instant project as against “Heartbeat City” Project,considering the fact situation on record, that by itself would not affordsufficient reason to entertain the submissions on behalf of the Associationand the applicants supporting the Association.

22. Even if the entire project cannot be made over to the NBCCfor the reasons stated above, another aspect of the matter that may AB

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Arequire consideration is whether the component representing 632 flatscould still be made over to the NBCC. However, that course would alsonot be feasible as those 632 unsold flats are spread over in various towers;some of them are in Phase one while the others are in Phases two andthree.

B23. An important aspect of the matter is that unlike all the otherprojects of the Amrapali Group which were made over to the NBCC,the development with respect to the instant project has always been anon-going process. In all the other projects of the Amrapali Group, eitherthere was no development right from the inception or even if somedevelopment had been initiated, the same was completely at a standstillCwhen the matters were taken up for consideration by this Court.

24. Considering all these features of the matter, in our consideredview, it would not be just and proper to hand over the development atthis stage to the NBCC as prayed for by the Association and the applicantssupporting the Association. We, therefore, do not deem it appropriate toDrecall the orders dated 23.07.2019 and 14.10.2019 or to revisit the issuewhether the Company could be declared to be part of the AmrapaliGroup of Companies. Similarly, we also do not deem it appropriate toextend the benefits as prayed for either by the Association or by theCompany. We, therefore, reject the first two sets of applications. NoEseparate orders are called for in the third set.

25. However, certain directions must be passed to secure theamounts receivable by the Amrapali Group of Companies through theinstant project.26. It is therefore directed:-F

a)The Company shall be entitled to continue with theconstruction and development of the instant project; b)632 flats which were subject matter of Orders dated23.07.2019 and 14.10.2019 shall be allowed to be sold byGthe Company to the interested persons or parties at a fairprice or value, provided :-

i)all the concerned transactions including the executionof appropriate documents or deeds are counter-signed by the Court Receiver or his nominee; H

ii)The price or value at which said flats are to be soldAis certified by the Court Receiver to be fair andappropriate.

iii)all the amounts received by way of such transactionsof sale are credited to a separate account completelyunder the control of the Receiver and/or his nominee;B

iv)the cost of construction with respect to those 632flats, upon due certification by the CharteredAccountants of the Company and to the satisfactionof the Receiver, shall be made over to the Company;andC

v)it shall however be open to the Receiver to give suchadvances towards the construction of these 632 flatsfrom and out of the amounts deposited in the accountas specified hereinabove, depending upon the stageand progress of construction.

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c)The injunction with respect said 632 flats, as directed in theOrders dated 23.07.2019 and 14.10.2019, shall standmodified to the extent indicated hereinabove.

d)The difference between the amounts received from theconcerned flat buyers for purchase of said 632 flats andEthe expenditure incurred on cost of construction shall finallybe credited to the general account maintained for the benefitof the flat buyers of the Amrapali Group of Companies.

27. Thus, all the applications under consideration stand disposedof in aforesaid terms but without any order as to costs.

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Devika Gujral

Applications disposed of.

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