Corporate

Supreme Court sends 3 directors of Amrapali Group to police custody

The Supreme Court on Tuesday directed immediate police custody of three directors of the real estate group Amrapali for failure to submit necessary documents relating to accounts of all 46 group companies to forensic auditors appointed by it. The court directed the Delhi and Uttar Pradesh police to seize all necessary documents and asked the real estate group to furnish the papers to the auditors within 24 hours. The three directors, Anil Kumar Sharma, Shiv Priya and Ajay Kumar, were present in court during the hearing and will not be released until the audit documents are provided. Lashing out at Amrapali for not cooperating, a bench comprising Justices Arun Mishra and U.U. Lalit held the directors to be in gross violation of its earlier orders. Justice Mishra asked the company to comply with its orders and not play hide and seek with the court. I hope they will cooperate now, he said. On 26 September, the court had directed the National Buildings Construction Corporation (NBCC) to conduct due diligence of all Amrapali projects.

State-run NBCC was expected to float tenders to appoint contractors to complete the unfinished projects. The court had also ordered Amrapali to submit documents of properties including bank accounts and balance sheets of all 46 group companies, before the debt recovery tribunal (DRT) while appointing NBCC to develop the stalled projects on 12 September. The amount received from sale of properties would be deposited in an escrow account in the apex court and later be disbursed to NBCC for construction of stalled projects, the court held. NBCC had given a proposal for completion of 15 residential projects of Amrapali having 46,575 flats at an estimated cost of 8,500 crore in 6-36 months. The real estate group has liabilities of about 3,000 crore to official agencies and owes more than 1,000 crore to about 10 banks. The realtor needs 3,000 crore to complete its ongoing projects. Home buyers have sought quashing of the September order passed by the National Company Law Tribunal (NCLT), and said the moratorium imposed under the provisions of the Insolvency and Bankruptcy Code, 2016, is violative of Article 14 (equality before law) of the Constitution. Money owed to homebuyers should be treated on a par with debt owed to creditors specified in the code, said the petition. Homebuyers belong to the low- and middle-income groups and must be granted equal protection as other stakeholders, financial and operational creditors, it said.

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