1015 octoct 2019

10-Oct-2019 15-Oct-2019

CREDAI Bengal Daily News Update | 15.10.19

Budget moves, credit lifeline yet to fire up the realty sector

A fund to provide last-mile loans to complete real estate projects has not yet taken off.

Major measures announced by the government in recent months to restore credit lifeline to non-

banking finance companies (NBFCs) and pull the struggling real estate sector out of its slump

have not yet had the desired effect due to delays and regulatory uncertainty, industry and

finance experts have said.

A new fund to provide last-mile loans to complete real estate projects has not yet taken off

while banks are reluctant to use the partial credit guarantee scheme announced by the finance

minister in the July budget to push more loans to the beleaguered NBFC sector.

Realty industry insiders and executives warn that the government should move quickly to set up

the Rs 20,000-crore distressed fund that will provide loans to stuck or incomplete projects to

avoid large-scale failure.

In September, the government said it will provide Rs 10,000 crore and raise another Rs 10,000

crore from other investors including private equity and sovereign funds and the Life Insurance

Corporation of India (LIC).

But the conditions under which the money will be utilised and the delay in raising it from the

private sector could jeopardise the whole scheme and worsen the slowdown in real estate,

experts said.

Newspaper/Online ET Realty(online)

Date October 14, 2019

Link https://realty.economictimes.indiatimes.com/news/industry/budget-moves-credit-lifeline-yet-to-fire-up-the-realty-sector/71577895

FUND RAISING TROUBLES

For instance, the fund is supposed to invest only in projects that are networth positive and which

have not yet been referred to the bankruptcy courts.

Real estate consultancy Anarock estimates that this will benefit 2.5 lakh housing units out of the

approximately four lakh units that are incomplete for want of cash. But since many of these

projects are in dire straits, the purpose of launching the fund will be defeated if it does not start

investing quickly.

Last mile financing normally refers to funds that are provided to projects that are more than 60

per cent complete with the aim of quick completion. Since the fund is not yet operational, many

of these projects will be forced to go bankrupt defeating the government‟s purpose, experts said.

“The projects that would get support needs to be identified based on merit and predetermined

criteria. This is expected to be time consuming and therefore the government needs to set up a

task force immediately as suggested by us earlier as delay would go against the idea of helping

homebuyers,” said Abhay Upadhyay, president, the Forum for Peoples Collective

Efforts (FPCE).

Rating agency ICRA estimates that the government will face challenges in raising the Rs 10,000

crore from private sector and other outside investors. “Given the prevailing macroeconomic

weakness, both domestically and internationally, investor ability and appetite to contribute to

the fund remains to be seen,” said Mahi Agarwal, assistant vice-president at ICRA.

PARTIAL GUARANTEE SCHEME

The government faces a different problem in implementing the partial credit guarantee scheme

for NBFCs announced in the budget. The measure was supposed to ease the liquidity crunch

and provide a cushion to banks who may be wary of lending.

Finance minister Nirmala Sitharaman said that banks would buy assets of NBFCs worth upto Rs

1lakh crore and that the government would absorb losses of up to 10 per cent of such assets

purchased. It stipulated that assets purchased should at least have an „AA‟ credit rating.

The scheme has had little impact as assets with credit rating of AA are easily purchased by

banks without any credit guarantee. The scheme has also been affected by norms in the existing

RBI guidelines on loan sell-down, rating requirement and loan origination period.

Another reason for the failure is that loans originated by NBFCs upto March 31, 2019 are only

considered, restricting the scheme‟s scope significantly. RBI‟s securitisation norms require a

minimum holding period of six months in case of loans with an original maturity of two years

and above. With the scheme kicking in from August, loans originated upto February 2019 were

eligible for direct assignment to banks. But in a tight liquidity scenario, a major chunk has

already been securitised.

_____________________________________________________________________________

Corporate Affairs Ministry mulling threshold for homebuyers to

trigger insolvency

In a move to limit the abuse of the Insolvency and Bankruptcy Code (IBC), the Corporate

Affairs Ministry is mulling the setting of a threshold for homebuyers for starting

insolvency proceedings against real estate developers, Corporate Affair Secretary Injeti

Srinivas said on Monday.

In a move to limit the abuse of the Insolvency and Bankruptcy Code (IBC), the Corporate

Affairs Ministry is mulling the setting of a threshold for homebuyers for

starting insolvency proceedings against real estate developers, Corporate Affair Secretary Injeti

Srinivas said on Monday.

Speaking to reporters, Srinivas said the ministry is also looking at a distribution formula for

financial and operational creditors to create a hybrid system of auction of properties with a

rigorous examination of resolution applicants to make the system more transparent and legal

hassle free.

"If a single homebuyer is the (insolvency) trigger because the Rs one lakh threshold has

crossed, one day default has crossed..otherwise a well-functioning company comes

to NCLT (National Company Law Tribunal, it is not a happy situation," he said.

"There is a feedback from housing and urban affairs ministry and other quarters like real

estate industry that this has to be looked at, and some threshold approached has to be followed.

In the last three years 21,000 cases have come to IBC, out of which nearly 10,000 cases have

been settled. 8,500 cases prior to admission and about 1,500 cases resolved and over 1,500

cases are ongoing. The whole issue of system getting clogged.

"These are real issues but the typical approach which will be beneficial is that cases that involve

large outstanding and where IBC is the best option should actually take recourse to IBC. Things

which are not having smaller outstanding can be better settled outside IBC. IBC is a rigorous

process with lot of phases" ," he added.

The Secretary was briefing reporters here following a meeting between Finance Minister

Nirmala Sitharaman with bankers on IBC issues.

The meeting, at which he was present, also discussed the treatment of operational creditors

under the IBC which has been a bone of contention.



Link https://realty.economictimes.indiatimes.com/news/industry/corporate-affairs-ministry-mulling-threshold-for-homebuyers-to-trigger-insolvency/71589962

"The possibility of formula-based distribution (of assets) which is fairly elaborate which can

give best option and reduce litigation and reduce time for litigation with (section) 29A getting

settled beyond doubt, the only litigation area essentially is who gets how much, if that can be

resolved in an effective manner that could be the real thing", he said.

He also said the government is considering ways to to make the IBC process more transparent

and less litigation prone

"Right now, there and both financial and non-financial considerations. The non-financial

considerations determine the eligibility and the financial considerations determine the outcome

of the bids. So, there is a feeling that the non-financial considerations can be use for shortlisting

and then for the bidding we can have auction mode," he said.

"There could be possibilities that we would examine to make it more transparent and less

litigation prone, whether we can have a hybrid system where we can have the rigorous

examination of resolution applicants's eligibility in one stage and after we shortlist all eligibles

can there be an auction platform where they actually bid..that can increase confidence in the

system," he added.

Billionaire L.N. Mittal-owned ArcelorMittal had last year won a long-drawn auction for Essar

Steel but still has not been able to take over the company. While the NCLT approved

ArcelorMittal's bid in March, some operational creditors and British lender Standard Chartered

have filed appeals in higher courts.

Essar Steel is saddled with debt of more than Rs 50,000 crore. As per ArcelorMittal's proposal,

financial creditors would receive Rs 41,987 crore against their admitted claims of Rs 49,395

crore. Operational creditors were to get Rs 214 crore initially but this was increased to Rs 1,214

crore later.

Standard Chartered would get only Rs 60 crore against its claim of Rs 3,487 crore. Standard

Chartered and the operational creditors have submitted that the financial creditors, that is banks

such as State Bank of India and Edelweiss Asset Reconstruction Company, will receive almost

90-92 per cent of their dues.

________________________________________________________________

MahaRERA to register developers, promoters' self-regulatory

organizations

According to the regulator, this will help ensuring greater professionalism among realty

developers, bring a certain level of consistency in their practices.

The Maharashtra Real Estate Regulatory Authority has proposed to register realty developers

and project promoters‟ Self-Regulatory Organization (SROs) with the authority.

According to the regulator, this will help ensuring greater professionalism among realty

developers, bring a certain level of consistency in their practices, enforcement of code of

conduct and discourage fraudulent promoters.

The registration of SRO shall be valid for a period of five years, the regulator said in a circular.

The proposed SRO is expected to have at least 500 MahaRERA registered projects of their

members and it has to be a group or association or federation of project promoters, which is a

legal entity. Details of membership fees, code of conduct, duration and qualification of

membership will be decided by the respective SROs

The SRO is expected to encourage its members to comply with the provisions of the RERA Act,

applicable rules, regulations, orders or circulars issued by the MahaRERA from time to time.

The SRO will be responsible for carrying out awareness and education activities among its

members. Any information or particulars furnished to MahaRERA by the applicant shall not be

false or misleading in any material respect, the circular added.

________________________________________________________________



Link https://realty.economictimes.indiatimes.com/news/industry/maharera-to-register-developers-promoters-self-regulatory-organizations/71589905

Realtors take luxury route to boost sales

Very recently, as part of its marketing strategy, One Mahalaxmi, a residential project by

DB Realty and Radius Developers initiated some luxury brand collaborations via

experiential events in Mumbai.

From tying up with brands ranging from Ferrari and Porsche to flying down Swiss watchmakers

to showcase the art of horology, real estate companies are increasingly looking to luxury brands

to facilitate cross platform marketing, lift sentiments and boost sales in a tepid market.

Consultants said while cities like Delhi and Pune have responded more encouragingly to such

partnerships in the past, real estate companies said the partnerships are in keeping with the

modern luxury consumers in India who are increasingly looking for bespoke experiences.

Very recently, as part of its marketing strategy, One Mahalaxmi, a residential project by DB

Realty and Radius Developers initiated some luxury brand collaborations through experiential

events in Mumbai.

An event of the company on Sunday with Navnit Motors had Ferrari displaying the New Ferrari

Portofino and GTC4Lusso T besides a partnership with Art of Time, the official retailers for

Cartier & IWC Schaffhausen timepieces in Mumbai. The company also collaborated with

Porsche Centre Mumbai for an exclusive display and test drives of its new Macan model before.

Nabil Patel, director, DB Realty said such partnerships help in giving the the real estate brand a

luxury appeal.

"There are plenty of luxury brand categories across different sectors that can accentuate a

luxury consumer's overall lifestyle. These could be wide-ranging from automobiles and apparel,

to interior design and architecture, from gourmet brands and alcohol to jewellery and

sophisticated home appliances. The possibilities are endless," he added.

Ritesh Mehta, senior director and head- West India, residential service, developer initiatives at

JLL India said there are three different kinds of tie ups emerging between luxury brands and

real estate companies: tie ups for designing and architecture, luxury spa and restaurant brands

tying up for concierge services or sports tie ups with sports stars for sports amenities and other

services.

"The best buildings are on sale and are not getting the desired price. Overall sentiments in the

luxury market are not great. Customers have been in the wait and watch mode as some

developers stood by promises while some failed miserably," said Mehta.



Link https://realty.economictimes.indiatimes.com/news/industry/realtors-take-luxury-route-to-boost-sales/71577763

"From a sales perspective, the tie ups related to sports or extra curricular amenities have been

more successful than the ones around designing and architecture. Some cities like Pune and

Delhi had more interest for such partnerships. But, just getting tie ups alone will not fetch

results or a premium. If the project overall has a theme which ties in with international concepts

or promising amenities, then there is a market," he added.

Besides working with brands in curating such experiences including with Sotheby's in London

for No.1 Grosvenor Square, the Lodha Group through a partnership with Swiss luxury

watchmaker Bovet flew down Swiss watchmakers to showcase horology techniques last year,

while earlier this year, with art gallery DAG, it flew down Catherine Grenier, director of Swiss

sculptor Alberto Giacometti's Giacometti foundation for a tete a tete on Picasso and Souza for

its potential customers.

"Brand collaborations are the future of luxury, as likeminded brands come together to create

truly unique and well-rounded experiences. We collaborate with various partner brands to host

experiences featuring art, craftsmanship, high fashion and culinary creations,” said Vinti Lodha,

advisor, Lodha Luxury.

India Sotheby's International Realty CEO Amit Goyal said luxury real estate taps the same

audience as auction houses, golf clubs, luxury car companies and luxury fashion or watch

brands. "It is the same ultra high net worth individual who consumes these products. It therefore

makes sense to collaborate with each other and create experiences that are all immersive for the

consumer," he added.

Reeza Sebastian, president, residential business at the Embassy Group which tied up with

luxury hospitality brand Four Seasons for private residences in Bengaluru said the asssociation

lends tremendous credibility to the developer. "A brand like Four Seasons has only 2500 such

homeowners around the world. There is a fair amount of limited inventory that we are talking

about and they would pick the partner based on a very high assessment of delivery capabilities.

These branded residences command an almost 40% premium over other non branded

developments. The global citizens are looking for more sophisticated offerings and unparalleled

exclusivity."

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Karnataka: Nanjangud to digitise building plan approval system

The City Municipal Council (CMC) in Nanjangud is all set to roll out the online system

for issuance of building licence.

In the offices of the Mysuru City Corporation (MCC), one will find officials dedicated to

scrutinising building plans submitted by the residents, some of whom may have to endure an

agonising wait for approval.

However, less than 25 km away, in Nanjangud taluk, the local administration has set the wheels

for digitising the entire process in motion, which will leave officials otherwise occupied with

pouring over building plans, free to handle more demanding jobs.

The City Municipal Council (CMC) in Nanjangud is all set to roll out the online system for

issuance of building licence.

As of now, there are as many as 12,000 properties within the purview of the Nanjangud CMC.

In the recent years, concerted efforts by stakeholders in the tourism industry to promote Sri

Srikanteshwara temple, and the rapid industrialisation has significantly altered this once sleepy

town.

With buildings mushrooming across the town, the CMC has, for some time now, been stretched

thin, with a disproportionate amount of time and human resource being invested in examination

and clearance of building plans that come through its doors seeking approval.

The online system will be tested in Nanjangud CMC as a pilot project, which was launched on

October 1.

Under this system, residents seeking to get new houses, or companies looking to set up their

plants, will have to enlist an engineer or architect registered with the CMC, who will, in turn

upload the plans online. The official concerned at the CMC will examine the soft copy uploaded

on the database, which will subsequently be sent to the Mysore Urban Development Authority

(Muda).

Officials at Muda will scrutinise the plan, and issue a no-objection certificate (NOC). However,

the new process does not eliminate the need for an inspection of the construction site, which

will be carried out by CMC engineers.

At the moment, there are five private architects registered officials with the Nanjangud CMC.

Nanjangud CMC assistant executive engineer R Bhaskar said that the new system held a lot of

promise for local administration.



Link https://realty.economictimes.indiatimes.com/news/technology/karnataka-nanjangud-to-digitise-building-plan-approval-system/71576696

“Firstly, it will render the entire process transparent, and secondly, it will save a considerable

amount of time, wasted when building licence has to be issued manually. This trial period will

probably last six months. We are hoping that the pilot project is a success, so that it can be

implemented in a full-fledged manner,” Bhaskar told TOI.

The CMC official added that, under the online system, residents seeking approval for building

plans can also pay the fee online.

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Pune: Building boom gone awry

Chinchwad had announced that permissions for fresh construction would be denied until

the water shortage crisis was resolved.

Life in Chinchwad city is a picture of stark contrasts. Those living in parts of the township that

are over two decades old, don‟t seem to be reliant on water tankers.

But that‟s not the case with their fellow residents in the newer neighbourhoods of Wakad,

Pimple Saudagar and Hinjewadi.

During peak summers, housing societies in these parts find water about 300 feet below ground

— over five times below normal levels that have been prescribed by water management experts.

Last year, the sitting MLA of

Chinchwad had announced that permissions for fresh construction would be denied until the

water shortage crisis was resolved. “I have asked the PCMC not to hand out building permits in

newer areas until the water issue is sorted,” Jagtap had said. But given that development

premium is a major source of cash for the corporation, the announcement didn‟t turn into action

on the ground.

Chinchwad city has grown in a circle with areas of Wakad, Hinjewadi, Punawale, Pimple

Saudagar and Pimple Gurav (all of them short on water) encircling older parts.

The city corporation said it has permission to lift 440 million litres of water per day for its 22

lakh residents from the downstream of Pawana river — a per capita outlay of 200 litres (much

higher than the corporation‟s daily target of 135 litres per person). But this number has mostly

been on paper. Come summer, residents of the several housing societies here are forced to run

pillar to post for supply from water tanker agencies.

“For us, it is still a wonder that these agencies have not run out of water for their tankers. They

fill up from a tank nearby. It‟s almost as if we‟re the only ones without a source or supply,” said

Chintan Shah, a resident of Wakad.

Many said the local governments had allowed construction without accounting for basic

amenities, such as water and drainage lines.

“In our housing society, we don‟t have a functioning drainage line. But the corporation went

ahead and gave a completion certificate, only for us to later find out that we didn‟t have a

drainage or stormwater line,” said Vijay Kshirsagar, a resident of a housing society in Pimple

Saudagar.



Link https://realty.economictimes.indiatimes.com/news/industry/pune-building-boom-gone-awry/71579536

And where projects are completed, newcomers to the city are being greeted by an increasingly

insular gated community mentality.

“There are so many societies that don‟t let out to bachelors. We are not able to guarantee a

home to bachelors, even if they pay us twice the brokerage. There are not enough houses

available for them,” said Geeta Parsi, a real estate broker in the area.

Also, wide roads in the newer areas were a big positive about three years ago, but not any more.

Recently laid roads are being dug up again for proposed flyovers or underpasses. The pace of

these roadworks have been glacial. “Commuters have been facing major problems for the past

six months. There has hardly been any progress on this stretch,” said a traffic cops stationed

near the under-construction Jagtap Dairy flyover.

In the older areas of the city, even if water is not much of a problem, residents continue to battle

deteriorating infrastructure and a garbage disposal problem that has impacted several localities.

“What Chinchwad needs is a plan. For that, the city administration needs to think longterm —

not the next six months or five years,” said Ayush Ranjan, a resident of Wakad.

_______________________________________________________________

HDFC lowers lending rates by 10 basis points to 8.25%

The rate cut by the largest mortgage lender comes following a cumulative 1.35 percent

rate reductions by the Reserve Bank since February.

Mortgage major HDFC on Monday announced a 0.10 percentage points reduction in its floating

rates, joining a growing list of lenders which are revising down their loan prices.

The move, applicable for both new as well as existing borrowers, brings down its lending rate to

8.25 percent for the salaried borrowers to the lowest bracket and at 8.65 percent on the upper

end.

The rate cut by the largest mortgage lender comes following a cumulative 1.35 percent rate

reductions by the Reserve Bank since February 2019 to prop up the sagging economy amid a

sustained period of low inflation.

Many others have also reduced their lending rates in recent past.

The nation's largest lender and HDFC's immediate competitor in the mortgage space SBI had

also cut its key rates by 0.10 percent last week.

"HDFC has reduced its retail prime lending rate on housing loans, on which its adjustable rate

home loans are benchmarked, by 0.10 percent, effective October 15," a company spokesperson

said.

The interest rate will range from 8.25 to 8.65 percent depending on the borrower.

SBI's one-year MCLR, to which the some of its home loans are linked, is now at 8.05 percent.

Since Junly, its new home loans are linked to the repo rate.

________________________________________________________________



Link https://realty.economictimes.indiatimes.com/news/allied-industries/hdfc-lowers-lending-rates-by-10-basis-points-to-8-25/71589979

Kerala government approves project management consultancy for

LIFE mission

LIFE mission had approved a consultancy charge of 1.95% for the company chosen as

PMC.

The state government has ratified the decision of LIFE mission to appoint project management

consultancy (PMC) for construction of housing complexes in three regions as part of the third

phase of LIFE mission.

LIFE mission had approved a consultancy charge of 1.95% for the company chosen as PMC. A

total of 3100 units will be built in housing complexes across 14 districts for landless-homeless

beneficiaries of LIFE mission and is estimated to cost Rs 450 crore. The mission has identified

56 spots for the construction of housing complexes in three regions.

The first region includes Kasargode, Kannur,Wayanad and

Kozhikode. Malappuram,Palakkad,Thrissur,Ernakulam, Idukki are included in the second

region. The final region includes Kottayam, Alappuzha, Pathanamthitta, Kollam and

Thiruvananthapuram districts.

Seven bids were received for the first region and eight bids each were received for other two

regions. Chennai based CR Narayana Rao (p) limited was chosen as PMC for three regions at a

consultancy charge of 1.95%. An amount of Rs 8.8 crore will be disbursed as consultancy

charge for PMC. While project officials affirm the need for a PMC, the soaring cost of mission

coupled with rising loan continues to pose challenges.

In March 2019, LIFE housing mission which had availed Rs 4000 crores loan from HUDCO to

meet the objectives went for a bridge loan citing financial constraints of HUDCO to release the

loan instalment in March. The government had given sanction to LIFE housing mission to avail

a bridge loan of Rs 425 crore from Ernakulam District Cooperative bank for meeting the

immediate requirement of fund. Recently the state government had to transfer Rs 106.41 crore

to Kerala Urban & Rural Development Finance Corporation Ltd (KURDFC) to pay the

outstanding dues of bridge loan to save the penalty.

Under phase 3, total number of beneficiaries are 3,37,416. The government planned to build 14

apartments in the land for homeless-landless beneficiaries. Later 56 sites were identified by the

government for the construction of 56 additional apartments. A pilot flat was constructed at

Adimali panchayat in Idukki at a cost of Rs 24.83 crore. This includes 217 apartments and 160

families were shifted to these apartments recently.



Link https://realty.economictimes.indiatimes.com/news/industry/kerala-government-approves-project-management-consultancy-for-life-mission/71579702

In the second phase of LIFE mission, assistance is provided to homeless beneficiaries with land

for construction of individual houses. Total beneficiaries under phase 2 are 1,84,255. Phase 1

focuses on completion of incomplete houses which had been included under old housing

schemes.

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Chennai civic body may be overcharging property tax: Source

Corporation officials said they have received a lot of complaints after the latest revision of

rates.

If you own an apartment in the city, you may need to pay a little more attention to the way

your property tax is calculated. For, the common area that includes lifts and parking could be

assessed at the rate for commercial buildings by the Greater Chennai Corporation.

Corporation officials said they have received a lot of complaints after the latest revision of rates.

This is because whatever area is mentioned as non-residential in last year‟s calculation is

directly calculated as commercial from this year, an official said.

This can mean a two- or three-fold increase in property tax. For instance, Anna Nagar resident

AYM Swamy found that he used to pay a property tax of Rs 1,368 for a six-month period for

the flat he had taken on rent at VOC Nagar main road in Anna Nagar east.

“My flat area is 1,200 square feet in which only 920 sq feet is plinth/carpet area while the

remaining 280 square feet is common area of parking place, lift, floor steps. This has been

construed as commercial area and the rate accordingly revised by more than 300%,” Swamy

said.

His property tax shot up from Rs 1,368 to Rs 5,335 for the half-year period. “I‟m a retired

person and this came as a jolt for me,” he said.

The common area is being used by everyone so charging me alone at commercial rates is not

correct, he said. He has approached corporation officials with this complaint and they have

promised to resolve the issue.

“Residents have to ensure that they enter the details properly. They can also verify the tax

assessed as it is clearly mentioned in the calculator,” a corporation official said.

In the first half of this financial year ended September 30, the corporation‟s collection of

property tax has been Rs 607.38 crore. The local body has collected Rs 201.59 crore as

professional tax. During the same period last year, the corresponding collections were Rs

320.21 crore and Rs 171.4 crore respectively.

______________________________________________________________



Link https://realty.economictimes.indiatimes.com/news/industry/chennai-civic-body-may-be-overcharging-property-tax-source/71573109

SC directs MSTC to auction attached properties of Amrapali

Group

The top court said that the funds collected through auction of properties will help in

speedy completion of stalled projects and bringing back the confidence of home buyers.

To ensure speedy disposal of attached properties of now defunct Amrapali Group of

Companies and its directors, the Supreme Court on Monday brought the Metal Scrap Trade

Corporation (MSTC) to auction them and deposit the cash with the apex court registry.

The top court said that the funds collected through auction of properties will help in speedy

completion of stalled projects and bringing back the confidence of home buyers.

A bench of Justices Arun Mishra and U U Lalit accepted the suggestion of senior advocate R

Venkataramani, appointed as court receiver by the top court for auctioning of the attached

properties of Amrapali.

The top court directed the relevant documents of the attached properties, which were with the

Debt Recovery Tribunal be given to the MSTC, which would auction the assets and deposit the

amount with the apex court registry.

The top court also asked Orissa State Housing Board to deposit Rs 34 crore with the apex court

registry, which had been deposited by Amrapali Group with it for developing a housing project.

It said that there will not be any forfeiture of any amount deposited by Amrapali as it was the

home buyers money which was diverted by the embattled real estate group.

Similarly, the top court also asked the Raipur Development Authority to deposit Rs 19 crore

with the apex court registry.

The counsel for Raipur Development Authority said that Rs 19 crore was deposited by

Amrapali Group for the lease of three land plots for development into a housing society but the

agreement was never fulfilled and the authority had to cancel the contract.

The top court took strong exception of non-compliance of its order of depositing the home

buyers' money by Surekha Group and directed that its directors Vishnu Surekha, Navneet

Surekha and Akhil Surekha will have to remain present on December 2, if they do not deposit

Rs 167 crores with the apex court registry within six weeks.



Link https://realty.economictimes.indiatimes.com/news/regulatory/sc-directs-mstc-to-auction-attached-properties-of-amrapali-group/71589907

"There are adverse finding against you all in the forensic audit and despite that you have not

complied with our orders to return the money. Forensic auditors have found that there was a

transaction of Rs 167 crore. It was home buyers money and you have to return that money or

face the consequences," the bench said.

The top court also restrained the Noida Authority from creating any rights or alienating the land

of the Amrapali Heartbeat City, of which the lease it has recently cancelled.

The court took on record the third report of forensic auditors with regard to the Heartbeat city

project of Amrapali and others.

On September 11, the top court had warned the homebuyers of now defunct Amrapali Group

that their unwillingness to pay the outstanding dues may lead to winding up of the stalled

projects due to financial crunch.

The top court cleared the modalities by which the homebuyers can be put to notice for clearing

outstanding amounts after being validated by the court receiver appointed by the apex court.

On August 26, the apex court had directed that a forensic audit report of Amrapali group be

given to the Enforcement Directorate (ED), Delhi Police and the Institute of Chartered

Accountants in India (ICAI) for taking appropriate action against the company directors and

auditors for allegedly siphoning off over Rs 3,000 crore of home buyers' money.

The bench had directed the Noida and Greater Noida authorities to set up a nodal cell to

disburse completion certificate to the Amrapali home buyers and redressal of other related

issues.

Earlier, the apex court had cracked its whip on errant builders for breaching the trust reposed by

homebuyers and ordered cancellation of the registration of the Amrapali Group under the real

estate law RERA, and ousted it from its prime properties in the NCR by nixing the land leases.

It had directed a fresh probe by the ED into alleged money laundering by realtors besides the

investigation being done by EOW of Delhi Police.

It had directed the state-run NBCC to complete the stalled projects of the Amrapali Group,

whose directors Anil Kumar Sharma, Shiv Priya and Ajay Kumar are behind the bars on the top

court's order.

It directed the Centre and states to ensure that projects are completed in a time-bound manner as

contemplated in RERA and home buyers are not defrauded, and ordered the Noida and Greater

Noida authorities to give completion certificate to the home buyers of Amrapali group who are

already residing in various projects.

The top court also termed the sequence of events in Amrapali group a "shocking and surprising

state of affairs" where such large-scale cheating has taken place and middle and poor class

home buyers were duped and deprived of their hard-earned money.

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1015 octoct 2019

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