- RERA Registration of the Amrapali group and its land lease deeds with Noida authorities have been cancelled.
- ED has been directed to register money laundering cases against the promoter and directors.
- Banks and Noida authorities claims over home buyers flats/ land have been rejected.
- State-run NBCC has been asked to complete the projects to the benefit of the home buyers.
Yesterday, was an extremely important day in the history of Indian Real Estate. The judgement pronounced by the Hon’ble Supreme Court of India (SC) has taken a clear stand on some of the most contended issues over the last few years.
For easy details on these issues, kindly refer to my earlier note on another similar case Jaypee Insolvency – What right does a flat buyer have? – written 2 years back.
Three questions that I had raised –
- How do we empathize with a consumer who invests his hard earned taxed money while buying his dream home?
- What do we do to the banking system that is full of inefficiencies?
- How do we punish the ever greedy developers who fleeced the actual money?
Thankfully, the judgment seem to have answered each of the above question and that too with style – leaving nothing to imagination.
Home Buyers – the biggest beneficiary in the judgement
They will finally get their dream home clear of all claims by the banks, regulators and the builder.
Unfinished projects – buyers will have to deposit their balance due payments (for completion) with court appointed receiver. The Court receiver will use this money and raised through other sources (e.g., liquidation of other assets of the Amrapali Group) to complete the stalled projects. Project execution will be done by the state run NBCC.
Finished projects – SC has directed the Noida authorities to urgently issue the Occupancy Certificates and provide permanent water and electricity supply.
Banks and authorities – reprimanded for their failures and connivances
Holding development authorities and banks accountable for deliberately overlooking the violations committed by the builder, the SC said, “It is a shocking and surprising state of affairs that such a large scale cheating has taken place and middle and poor-class home buyers have been duped and deprived of their hard-earned money and lifetime savings and some of them had taken a loan from the bank and they are not getting houses.”
SC clearly mentioned that both will not have any claim on the home buyers’ flats/ land and will have to explore alternative assets of the Amrapali group for their dues.
Builders – have been held liable for siphoning of the funds
Realising financial bungling and siphoning of money, the court has cancelled the operational licences and land leases of the Amrapali Group and has also ordered the Enforcement Directorate (ED) to register money laundering cases against CMD and other directros of the company.
I do understand that there can be procedural issues and delays in completion of the unfinished projects, especially due to the quantum and timing of the funds.
However, the judgment has surely taken a giant step in the right direction and we are surely closer to the finish line.
Consumer has been protected and culprits have been punished – total insaaf !
The judgment will set a strong precedent for an industry with delayed residential projects estimated at almost Rs 5 lakh crore !