SC asks Centre to consider use of stress fund for stalled Amrapali projects
SC asks Centre to consider use of stress fund for stalled Amrapali projects
Praveen Dwivedi
SC asks Centre to consider use of stress fund for stalled Amrapali projects
Photo: Samrat Roy

SC asks Centre to consider use of stress fund for stalled Amrapali projects

New Delhi: As the state-owned National Buildings Construction Corporation (NBCC) stood firm with its decision on not to invest its own money, the Supreme Court has directed the Centre to consider using its ‘stress fund’ for construction of stalled Amrapali Group housing projects. The apex court has asked the government to submit its reply on it by December 13.

The top court has also asked homebuyers to deposit their dues by the end of January. Meanwhile, the court has also given last chance to some entities, including Amrapali Group directors to deposit the money they siphoned off.

The task of construction of the buildings has been given to state-owned NBCC but the work has not started due to lack of funds. As per the information, so far, the total amount raised is Rs 180 crore.

The estimated cost for construction for all housing projects is Rs 8,500 crore and amount recoverable from homebuyers and buyers of commercial areas is Rs 3,700 crore.

Though SC-appointed forensic auditors submitted that around Rs 11,000 crore is the recoverable amount which is enough to bear the cost of the construction, the fund is not available as the process of auctioning the group’s assets is on. Also, those who benefited from diversion of homebuyers’ money are not returning the funds despite court orders.

Observing that it cannot wait for long and some way out has to be worked out to raise funds, the SC asked the Centre to consider releasing money from its Rs 25,000 crore alternative investment fund (AIF), formed recently to provide relief to developers with unfinished projects.

The bench asked additional solicitor general Vikramjit Banerjee to seek instructions from the government on how much funds could be released for the construction of Amrapali projects.

The apex court also asked the court-appointed receiver and senior advocate R Venkataramani to hold talks with private real estate companies whether they would be willing to take over some of the projects and invest money.

Venkataramani told the bench that some banks are ready to plunge in and provide funds by taking the unsold flats of Amrapali as security and assured the court that he would finalise the modalities by holding consultations with them.

The court directed banks and financial institutions to release funds to homebuyers who have taken loans but payments were stopped due to delay in construction.

As per the earlier reports of forensic auditors, there are around 5,229 unsold flats in different Amrapali projects and at least Rs 1,958 crore could be raised by selling them. They said the Group sold 5,856 flats at low prices and Rs 321.3 crore can be recovered from these flat buyers.