BIKRAM CHATTERJI & ORS versus UNION OF INDIA & ORS.

[2019] 9 S.C.R. 289

BIKRAM CHATTERJI & ORS.

UNION OF INDIA & ORS.

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

JULY 23, 2019

[ARUN MISHRA AND UDAY UMESH LALIT, JJ.]

Housing:

Housing projects – By Group of companies – Proposing toconstruct approximately 42,000 flats – The projects were registeredunder RERA – Booking of flats by various home-buyers during theyears 2010-2014 – Standard Form of Allotment-cum-Flat BuyersAgreement stated that delivery of possession within 36 months –Builder got the land from Noida and Greater Noida Authorities onpaying 10% of the land price – Builders also took loans from theBanks for the project on mortgaging the land with the Banks –Home-buyers paid the amount from 50% to 100% abiding by thepayment schedule – Builders failed to deliver the flats within 36months – They did not pay the balance amount towards the land tothe Noida and Greater Noida Authorities and also failed to repaythe loans taken from the Banks – Some of the consumers filedconsumer complaint under Consumer Protection Act – Bank, forrecovery of the loan, filed company petition under s.7 of Insolvencyand Bankruptcy Code, 2016 – National Company Law Tribunal(NCLT) appointed Interim Resolution Professional (IRP) anddeclared Moratorium restricting institution of any suit against thecorporate debtor – Thereupon writ petitions u/Art.32 were filed byhome-buyers – Several orders by Supreme Court giving the builderopportunity to go ahead with project work and complete the same –Orders were not complied by the builder – Forensic audit of thecompanies of the builder directed by the Court – Court directedfreezing of individual accounts of the Directors of all the 40companies and also directed attachment of the properties in theindividual names of the Directors – Held: The Noida and GreaterNoida Authorities were grossly negligent in reviewing and monitoringprogress of the project and in collusion with the builders, failed totake action for non-payment of its dues – They illegally permitted

CDEF

Athe builders to sub-lease the land – The officials of Authorities haveacted in clear breach of public trust and have failed to act as perstatutory mandate, Regulations and terms of the Lease Deed – Themortgage of the land with the Bank was without obtaining clearNOC which was condition precedent for creation of Mortgage –Thus, no mortgage in the eye of law has been created – Moreover,Bthe money borrowed from the Bank was not utilized for the projectand the same was diverted for creation of other assets – The Bankalso failed to check whether the money, in fact was required for theproject and used for the same – Therefore, the Banks and theAuthorities can realize their money only from those assets and fromCthe Guarantors and not from investment of home buyers – Therehas been blatant violation of provisions of RERA – In thecircumstances of the case, principle of ‘fraud vitiates’ is attractedand such transaction would become unenforceable and would beagainst the public trust doctrine – It is bounden duty of court notonly to save the home-buyers but also to ensure that they are notDcheated – Therefore, the registration of the builder companies underRERA is cancelled – The Lease-Deeds in favour of the Companiesare also cancelled – Construction work in the projects is handedover to NBCC – Rights of the lessee shall vest in the Court Receiver– Real Estate Regulation and Development Act, 2016 – Uttar PradeshEIndustrial Area Development Act, 1976.

Doctrines/Principles:

Principle of ‘fraud vitiates’ – Applicability of.

Doctrine of ‘public trust’ – Applicability of.FIssuing directions, the Court

HELD : 1.1 In the instant matter, the question of largerpublic importance is involved. large–scale cheating has takenplace and middle and poor class home buyers have been dupedand deprived of their hardearned money and lifetime. By theGAmrapali Group, the buyers’ money which has been obtained hasnot been invested in the construction activities, rather it has beendiverted to great extent. Money obtained from the banks hasalso not been invested in the projects and has been divertedelsewhere to acquire other assets. This is not only with respect

to the Amrapali builders that projects have not been completedas reflected in the affidavits of Noida and Greater NoidaAuthorities. More than 70% of the projects have not beencompleted which were initiated way–back in the year 2008–09and were supposed to be completed within 3 years. [Para 69][531-F-G]

1.2 If the real estate business has to survive in India, ithas to be answerable to the public and has necessarily to upholdthe trust reposed in builders/promoters. They have been paidhuge amounts not only by the home buyers but also, they have topay huge amount for the public land given to them on lease byNoida and Greater Noida Authorities for construction of houses.The land has been given to them by the authorities on aconcessional basis by making payment of 10% amount at the timeof allotment. The builders have to be accountable to public/homebuyers as well as the authorities and bankers. It is matterrelating to housing needs dealing with shelter place, such anactivity is of the public importance as the real estate sector playsa pivotal role in the fulfilment of needs of housing infrastructure.[Para 73] [532-F-H]

2.1 It is apparent from the report of the forensic auditsubmitted by Forensic Auditors that there is serious kind offraud played upon the buyers in active connivance with the officialsof the Noida and Greater Noida Authorities and that of the banks.The money of the home buyers has been diverted. The Directorsdiverted the money by the creation of dummy companies, realizingprofessional fees, creating bogus bills, selling flats at undervalueprice, payment of excessive brokerage, etc. They have obtainedinvestment from J.P. Morgan in violation of FEMA and FDInorms. The shares were overvalued for making payment to J.P.Morgan. It was adopted as device for siphoning off the moneyof the home buyers to foreign countries. In view of the huge moneycollected from the buyers and comparable investments made inthe projects, there was no necessity to obtain loan from banks.The amount so obtained was not used in the projects. Themortgage deeds in favour of the banks were not permissible dueto non-payment of dues of the Noida and Greater NoidaAuthorities. The Noida and Greater Noida Authorities issued

Aconditional NOCs. to create mortgages subject to payment ofdues which were not paid. They issued such NOCs in collusionwith builders. It was incumbent upon the bankers also to obtainclear unconditional NOCs. which were not obtained and to ensurethat the dues were paid to Noida and Greater Noida authorities.They permitted diversion of money immediately after sanctioningBof the loan and also in day to day transactions of Amrapali groupof companies. [Para 146] [580-D-H; 581-A]

2.2 No accounts were prepared w.e.f. the years 2015-2018and money withdrawn was diverted during the said period. TheStatutory Auditor, failed in duty and was part of fraudulentCactivities as found in the Forensic Report. The money obtainedfrom banks was diverted to unapproved uses such as for thecreation of personal assets of Directors, creation of assets inclosely held companies by the Directors along with their partnersand relatives, for personal expenses of Directors, to give advancesDwithout carrying interest for several years. There was total non–monitoring by the bankers. The money laundering was resortedto by Amrapali Group/ Directors. [Para 147] [581-B-C]

2.3 The statement filed on the expenditure of Rs.10,000crores is nothing but scrap of paper not supported by the booksEof account, supporting documents. It has to be outrightly rejectedas there is an attempt made on siphoning off, apparent from thereport of the Forensic Auditors also. [Para 142] [578-F-G]

2.4 The diversion of huge amount of Rs. 2,996.20 croreshas been rightly detected on Forensic Audit. The ForensicFAuditors have given the details in their report along with reasons.As to other amounts with respect to advances which arerecoverable, the explanation that there is surrender of sharesetc. is not supported by books of accounts. There is no basis tocontend so. No proper explanation has been given on behalf ofAmrapali Group. The finding as to the diversion of home buyers’Gfunds is based on the figures worked on the basis of minuteaccounting as reflected in the auditors’ report. There is no properanswer to each and every entry which have been gone into by theAuditors. General and broad submissions have been made whichare flimsy and have no legs to stand. [Paras 143, 144 and 145]H[579-F-H; 580-A-B]

3.1 The public trust doctrine imposes on the State and itsfunctionaries mandate to take affirmative action for effectivemanagement, and the citizens are empowered to question itsineffectiveness. The land of the farmers had been acquired forthe purpose of housing and infrastructure needs, by the StateGovernment and handed over to the concerned authorities forconstruction. They are bound to ensure that builders act inaccordance with the objective behind the acquisition of land andthe conditions on which allotment had been made. It was dutyof concerned officials; they are not only enjoined to ensure thatthe rights of the home buyers are protected but also the interestsof the authorities; and bankers. The public authorities are duty–bound to observe that the leased property is not frittered awayalong with the money of the home buyers. Affirmative action wasclearly enjoined upon them not only under the statutory provisionsof various enactments but also under the public trust doctrine.[Para 73] [533-A-D]

Noida Entrepreneurs Association v. Noida & Ors. (2011)6 SCC 508 : [2011] 8 SCR 25 ; Natural ResourcesAllocation, In re, Special Reference No.1 of 2012(2012) 10 SCC 1 : [2012] 9 SCR 311 ; Association ofUnified Tele Services Providers & Ors. v. Union of India& Ors. (2014) 6 SCC 110 : [2014] 9 SCR 780 – reliedon.

3.2 In the instant case, it is apparent that there are colossaldues of Noida and Greater Noida Authorities. There were severaldefaults in making the payment of the premium amount, leasemoney, even the money payable to the farmers as compensationfor land acquisition has not been paid by the builders, though thebuilder has realised from home buyers the amount payable toauthorities of Noida and Greater Noida as component of theprice payable by them. [Para 76] [535-F-H; 536-A]

3.3 The transfer of the plot by the lessee was only onfulfilment of certain conditions. The dues of lessor towards thecost of land were to be cleared in accordance with the scheduleof payment. It was specifically provided in lease deed conditionNo.(ii)(c) that the lessee shall use the allotted plot for construction

Aof group housing/flats/plots. Condition No.(ii)(c)(iii) deals withthe part transfer of the plot. It lays down normally the permissionfor part–transfer of the plot shall not be granted under anycircumstances. The lessee shall not be entitled to complete thetransaction for sale, transfer, assign or otherwise part withpossession of the whole or any part of the building constructedBthereon before making payment according to the schedulespecified in the lease deed of the plot to the lessor. By way ofsub–lease of the plot, the transfer of plots could not have beenmade by the lessee. The lessee was required to start constructionwithin 12 months from the date of possession. The date ofCexecution of lease deed was to be treated as the date of possession.The lessee was required to complete the construction of minimum15% of the total FAR of the allotted plot as per the approvedlayout plan and get occupancy/completion certificate within 3 yearsfrom the date of execution of the lease deed. Cancellation oflease deed was also provided in the case of violation of directions,Dor rules, regulations or in case of the default on the part of thelessee for breach or violation of terms and conditions of theregistration/allotment/lease and/or non–deposit of allotmentamount. [Paras 78, 80 and 81] [536-E-F; 538-D-F; 540-B-D]

3.4 The lease deed/allotment was to be governed by theEprovisions of the U.P. Industrial Area Development Act, 1976and by the rules and/or regulations made or directions issuedunder the Act. The lessor was required to monitor theimplementation of the project. In larger public interest the lessorwas also given right to take back possession of the land/buildingFby making payment at the prevailing rate. [Para 82] [541-C-E]

3.5 Once the Noida and Greater Noida Authorities knewvery well that there were defaults, they could not have allottedfurther land to the Amrapali group without insisting for paymentof its dues. Secondly, it was not open to the authorities to permitGthe sub–leases of plot of land executed by builders, therebyallowing the leaseholder to earn huge amount without makingpayment of the amount due to them. The officials of the authoritieshave acted in clear breach of public trust. They have permittedthe defaulting leaseholders to earn the amount by sub–leasing

its land of which dues had not been cleared. Thus, apparently,the officials of the authorities acted clearly in collusion with thebuilders and overlooked the interest of the Authorities and homebuyers while permitting the sub–leases of plot of land to begranted. The action of the officials of the authorities has theeffect of causing unjust enrichment of builder from the land heldby the concerned authorities. It was wholly an illegal exercisepermitted. [Para 77] [536-B-D]

3.6 The leases had been granted by Noida and Greater NoidaAuthorities subject to the provisions contained in U.P. IndustrialArea Development Act, 1976. Section 13 of the U.P. IndustrialArea Development Act, 1976 deals with imposition of penaltyand mode of recovery of arrears, which states that where anytransferee makes any default in the payment of any considerationmoney or instalment thereof or any other amount due on accountof the transfer of any site or building by the Authority or any rentdue to the Authority in respect of any lease or where any transfereeor occupier makes any default in payment of any amount of fee ortax levied under the Act, in addition to the amount of arrears, afurther sum not exceeding that amount shall be recovered fromthe transferee or occupier by way of penalty. Under Section 13–A, any amount payable to the Authority under Section 13 shallconstitute charge over the property and may be recovered asarrears of land revenue or by attachment and sale of property inthe manner provided under the provisions of Uttar PradeshMunicipal Corporations Act, 1959 (Act no.2 of 1959). Section 14provides for the resumption of any site or building and forfeitureof whole or any part of the money if any paid in respect thereof.[Para 95] [549-B-E]

3.7 Public trust doctrine requires an affirmative action,which was envisaged not only statutorily but under the Schemealso. The Authorities were required to ensure that projects werecompleted within the stipulated period, otherwise, the verypurpose of the grant would stand frustrated and colossal loss ofpublic money. Amrapali Group did not pay even the amount dueto be paid to the landowners on the part of land acquisition, it didnot pay premium annual lease amount interest to Authorities.

AThey have violated every condition, but still, Authoritieswere bent upon to condone everything. This reflects absolutedereliction of duty cast upon the Authorities. [Para 96][550-B-C]

3.8 Thus, the officials of the Noida and Greater NoidaBauthorities have acted clearly in breach of public trust and apartfrom that, they have failed to act as per the statutory mandate,the regulations and the terms of the lease deed. [Para 78][536-E-F]

4.1 With respect to the creation of mortgage deed in favourCof bankers etc., Noida Authority has submitted that everymortgage permission is granted by the Noida Authority to theindividual company of Amrapali group wherein provision is madethat Noida Authority has first charge/priority over all other chargesincluding those created in favour of banks and financialinstitutions. One of the conditions on which permission toDmortgage was that permission to mortgage was to be effectiveon making full payment of the premium and up to date annuallease rent of group housing plot and after execution of the sub–lease deed in favour of the allottee of the dwelling unit, the allottee/sub–lessee was to be governed by the terms and conditions ofEallotment/lease deed of the plot to be executed and sub–leasedeed to be executed in favour of the allottee/sub–lessee. Sinceat no point of time, payment of premium due had been made andup to date annual lease rent had not been paid, no mortgage couldhave been created in favour of the bank in view of specificcondition. [Paras 83 and 84] [542-B-C; 543-C-E]F4.2 In order to create mortgage, it was necessary to obtainclear NOC in order to create effective mortgage deed. As thathas not been done so far, no mortgage in the eye of law has beencreated in favour of the bank. It was not open to the bankers tomortgage the land in view of the conditional permission to createGmortgage, the mortgage created in violation of condition cannotbe said to be effective in accordance with law as the land wasowned by the concerned authorities and the lessees had right tomortgage only subject to fulfilment of conditions imposed by thelessor/authorities. [Para 84] [543-F-G]

4.3 Issuance of conditional NOC was with ulterior motive,there was no reason to issue such conditional permission,subject to which mortgage could have been made. They couldnot have issued any conditional permission for creation of amortgage also without payment of amount due, permission hasbeen issued obviously for being misused, in collusion with theofficials of the bank and Authorities. It was incumbent upon theconcerned authorities not to issue such an NOC for mortgageand it was incumbent upon the bank officials in order to create avalid mortgage to ascertain from the Noida and Greater NoidaAuthorities that the condition imposed by them as conditionprecedent to create mortgage had been fulfilled and to obtainclear NOC. But that is how in illegal manner the public money isobtained from banks for the purpose of construction activity andthen it was not used for that purpose, and there was diversionof money. [Para 85] [544-B-E]

4.4 The banks not only have failed to ensure that mortgagewas effected in accordance with the law, but also they have failedto check whether money was in fact, required for the projectsand was used for purpose it was lent. Money borrowed from bank,in fact, was not required for completion of these projects as themoney paid by the buyers was enough for that purpose, but thatwas also diverted and the money obtained from the banks wasalso not utilised for the purpose it was taken and it was well withinthe knowledge of the bankers and Authorities that the funds werebeing diverted, but they remained mute spectators. It has beenobserved in extensive detail in the forensic audit report that theBanks did not monitor utilisation of funds and acted as mutespectator to diversion which was almost happening evidently inall banking transactions. [Paras 85 and 86] [544-G-H; 545-A-C]

4.5 There was negligence on the part of Bank of Barodaand merely proceeding before the Court to recover the amountis not going to serve the purpose. More so, in view of the findingof the Forensic Audit that there was no necessity of obtaining theloan from the Bankers as Amrapali Group had sufficient moneyfrom the home buyers, which has also been diverted and has notbeen utilised in the construction activities. Other assets have

Abeen created with the help of the same and the borrowings havebeen used in order to siphon off the money by making paymentof some unusual amount not only to J.P. Morgan, but also to IPFIISingapore in violation of the FEMA Rules and FDI Rules as foundby the Auditors in the respective cases. [Para 93] [548-D-F]

B4.6 The Noida and Greater Noida Authorities and theBankers have permitted diversion of funds of home–buyers andthe possession of other assets by Amrapali Group. The buyers’money had been diverted, which was meant for construction onpayment of dues of Authorities in case they were paid timely bythe Amrapali Group to the Authorities and to the BanksCsubstantively liability would have been cleared. But by theirinaction and rather conniving, the buyers were cheated by theAmrapali Group. [Para 97] [550-D-E]

4.7 Whatever complete/incomplete structures are there,the Authorities are claiming that buyers have no right and theyDhave the first charge on the structure as they have to recoverthe amount, only thereafter if anything is left out, can be paid tothe buyers. In case the submission is accepted, it would amountto playing further fraud upon the fraud. It was incumbent uponthe Authorities as well as the Banks to prevent the fraud. Now,Eif Banks, as well as the Authorities, are permitted to recover theamount from the home–buyers’ investment, in that case, it wouldbe equally unjust and would be against the conscience of the lawand nothing would be left for buyers not even brick and thestructures have come up by investing their money. Law neverpermits unjust gain based upon fraud. The principle “fraudFvitiates” is clearly attracted and such transaction would becomeunenforceable and would be against the public trust doctrine.Therefore, it is the bounden duty of the Court to act as parenspatria not only to save the home–buyers but also to ensure thatthey are not cheated. [Para 97] [550-F-H; 551-A-B]G

4.8 The kind of fraud that has taken place not only inAmrapali Group of Companies but at large as more than 70 percentof the various projects have not come up, is alarming to the Courtsto take affirmative steps with the direction to prevent such frauds,restore the money of home–buyers and to punish incumbents

responsible for such act. At the same time to ensure that buildingsare completed. [Para 98] [551-C-D]

4.9 In the peculiar facts and circumstances of the case, ithas to be secured and recovered by way of selling other attachedproperties and the one, which have been created out of thediverted funds of the home–buyers and property of guarantorsetc. The banks’ borrowings have to be taken care of in similarmanner. The money payable to the Authorities had been divertedand huge amount of buyers’ money had not been invested in theprojects neither any part of the money of bank borrowings, infact, were spent in the construction as found by the ForensicAuditors. The promoters are held accountable for the diversionof the money paid by the buyers as component of price of flatseven on account of payment to Authorities. [Para 123] [567-D-F]

4.10 The stand of the Noida is clear that without paymentof land dues no mortgage could be effected. Thus, in fact in theeye of the law no mortgage could be created as there was nopermission to mortgage unless the dues were paid and thus thebank could not have mortgaged the property before clearance ofthe dues of the Noida Authority, and secondly, the mortgage waspermissible for the purpose of financing the investment in theproject. As matter of fact, when this was the stipulation, it wasthe banker’s duty to ensure that money made available wasinvested in the project. [Para 126] [568-E-F]4.11 The Forensic Auditors’ report makes it apparent thatBankers have failed to ensure and oversee that the money wasinvested in the projects. It was diverted elsewhere as rightlyfound by the Forensic Auditors. Thus, no charge can be said tohave been created by bank loans on the projects as the money, infact, it has not been used in the projects as such home buyerscannot be saddled with liability and also the projects. The moneyborrowed from banks was used to create other assets worththousands of crores. Thus, the banks can realise their moneyfrom those assets and from guarantors and not from theinvestment of home buyers, not from the buildings in which loansgranted by banks have not been invested. Home buyers are notdirect party to the bank loan, thus it was the duty of the bankers

Aand Noida authorities, if they wanted to impose their charge, toensure that no fraud takes place and money is invested in theprojects for the purpose for which it has been taken not only themoney paid by the home buyers but obtained from the banks anddue to be paid to Noida authorities, is not usurped illegally bypromoter/builder. Though it was realised as part of the componentBof the price of flat from the home buyers, by the promoters/builders its illegal diversion was permitted by Amrapali Group inconnivance with the officers of the authorities and the bank. Thus,the very condition of investment in the project by bankers, subjectto which the mortgage was permissible, had been violated. Thus,Cit cannot be said that any charge of the banks has been createdon the projects. The charge would be on the property which hasbeen purchased/created by dubious methods. It would beinequitable to fasten the charge against the investment made bythe home buyers whereas they have not been benefited and rather

have been cheated by the promoters for which bankers, as wellDas authorities, have to share the blame. [Para 127] [568-G-H;569-A-E]

4.12 Though the home buyers may not be secured creditor,they have right to be treated in accordance with the law, fairlyand they cannot be subjected to fraudulent action by theEpromoters, that too in connivance with the bankers and officialsof the Noida and Greater Noida authorities. [Para 128] [569-F-G]

4.13 No doubt about it as submitted on behalf of Amrapaligroup of companies, that the provisions of RERA are forprotecting the interests of promoters also. No doubt about it thatFthe RERA intends to protect the interests of the promoters andhome buyers both. However, in the instant case, we have giventhe opportunity to the promoters to deposit the 10% of the amountin December 2017 and January 2018 but orders have met withnon–compliance with all impunity. Thereafter on the assuranceGof the Amrapali Group that it would undertake the constructionwork and joint plan was submitted after great wastage of timeand energy and then order dated 17.5.2018 was passed that wasalso not complied with. It was passed on condition that sum ofRs.250 crores to be deposited which was also not deposited bythe Amrapali group to show its bona fide. The Group neverH

intended right from the beginning to complete the constructionwork, has been rightly observed by Forensic Auditors. Thereafter,we have assigned the work to the NBCC. But at the same time,the effort has been made by Amrapali Group/ its Directors to sellthe property which has been created by diversion of home buyers’funds. Incorrect facts have been stated and suppressions havebeen made in various affidavits filed in this Court that the certainproperties are not encumbered. Various applications are beingfiled one after the other by the encumbered holders with respectto several properties that they have the charge over the saidproperty. [Para 129] [570-A-E]4.14 That apart, several attached properties have been putto sale by DRT under the orders of this Court. In most of thecases, no buyers have turned up and/or the price offered byforming cartel are too low. The property cannot be sold at throwaway price. Amrapali group is instrumental in not allowing theproperties to be sold. There appears to be some invisible handholding buyers out and even the bankers are not coming up tofinance the purchasers, is the genuine grievance pointed out atthe Bar. Be that as it may. Entire gamut of facts indicates thecontumacious conduct of Amrapali Group, proper and correctdisclosures on oath have not been made, even encumbrancesare not being specified clearly in spite of repeated orders. Theyhave sold several valuable properties during pendency ofpetitions as pointed out by the Forensic Audit Report. In theaforesaid circumstances, under the provisions of the RERA theirinterest cannot be protected. [Para 130] [570-E-H; 571-A]

4.15 Considering the serious kind of fraud unearthed onthe forensic audit, formation of dummy companies, violation ofnorms of foreign investment, violation of FEMA, siphoning offthe money of home buyers, making payment of dividend withoutprofits and methodology had been devised of valuing the shareson an unreasonable higher basis so as to siphon out the money ofthe home buyers to J.P. Morgan etc. The creation of large numberof assets with the help of money of the home buyers. Right from2015, no construction activity has taken place. Account bookshad not been maintained and money has been transferred

Acontinuously. No audit was made. Money was taken out frombanks, and fake purchases have been made. Thus, they are notat all entitled for any indulgence under the provisions of theRERA. In view of their unholy conduct, defying description, theircontumacious fraudulent conduct totally disentitles them and theyare required to be dealt with as sternly as possible so as to makeBit exemplary one that such fraudulent actions do not recur infuture, in real estate business in India. [Para 130] [571-A-D]

4.16 There was no force majeure condition or any legalimpediment and as such the period from 2011 to 2015 cannot betreated as moratorium period vis-à-vis the dues of Noida andCGreater Noida authorities. The submission made as to thefarmers’ agitation etc. is too vague and 30% of the projects havecome up; whereas 70% have not yet come up, out of the projectsin Noida and Greater Noida alone. [Para 141] [577-F-G]

5.1 The Real Estate (Regulation and Development) Bill,D2013 (RERA) was intended to standardise business practices andtransactions in the real estate sector. It intends to ensureconsumer protection. It intends to regulate transaction relatedto both residential and commercial projects. It is apparent fromthe aims and objectives of RERA that the Act ensures greaterEaccountability towards consumers and significantly reduce fraudand delays. Accountability standards have been laid down whereduties cast upon promotors as well as the effort has been madeto make consumer also responsible. [Paras 104 and 105] [554-F;557-E]F5.2 In view of the provisions of the RERA Act, in the instantcase, it was necessary to deposit the amount in the account. Ablatant violation of the provisions of RERA has been done by theAmrapali Group. Since RERA contemplates timely completionof projects once registration has been granted under Section 5and extension of registration under Section 6, it is only in theGevent of force majeure in case there is no default on the part ofthe promoter, registration can be extended in aggregate for theperiod not exceeding one year. Force majeure shall mean caseof war, flood, drought, fire, cyclone, earthquake or any othercalamity caused by nature. The registration granted under

Section 5 is valid for period declared by the promoter.[Paras 109 and 110] [559-G-H; 560-A-B]

5.3 Section 7 provides that the Authority may on receipt ofa complaint or suo motu or on the recommendation of thecompetent authority revoke the registration granted underSection 5 in case promoter makes default in doing anythingrequired by or under the Act or the rules or the regulation madethereunder; the promoter violates any of the terms of approvalgiven by the competent authority; the promoter is involved inany kind of unfair practice or irregularities. It is also independentlyprovided that in case the promoter indulges in any fraudulentpractices, the registration can be revoked. Upon revocation ofthe registration, the promoter shall be debarred from accessingthe website in relation to that project under Section 7(4)(a). UnderSection 7(4)(b), the Authority shall facilitate the remainingdevelopment works to be carried out in accordance withprovisions of Section 8. [Para 110] [560-B-D]

5.4 It is clear that RERA intends for completion of theproject in case any fraud is committed by the promoter and theactivity is not completed, the home–buyers cannot be left in lurch,allowing the prayer on behalf of Bankers as well as by theAuthorities would amount to unfair treatment of home buyers inthe facts of this case. It is too late for them to submit that homebuyer has no rights in the teeth of the provisions contained inthe RERA, which intends to prevent fraud. [Para 111] [562-B]

5.5 Once registration lapses on non–completion of projectwithin the time stipulated or it is revoked the consequence ensueas enumerated in Section 8 of RERA, the Authority is enjoinedupon the duty to consult with the appropriate Government totake such action as it may deem including the carrying out of theremaining development works by competent authority or by theassociation of allottees or any other manner as may be determinedby the Authority. The development work has to be completedand cannot be left in between. [Para 112] [562-C-D]

5.6 As per the provisions of Section 11, the promoter shallbe responsible to obtain the completion certificate or the

Aoccupancy certificate. He shall also be responsible for providingand maintaining the essential services on reasonable charges,till taking over of the maintenance by the association of theallottees. The promoter shall enable the formation of anassociation or society or co–operative society or federation ofallottees. He shall pay all outgoings until he transfers the physicalBpossession to the allottee. After he has executed an agreementfor sale for any apartment, plot or building, he may not mortgageor create charge on such an apartment, plot or building and ifany such mortgage or charge is made or created thennotwithstanding anything contained in any other law for the timeCbeing in force, it shall not affect the right and interest of the allottee.[Para 113] [562-H; 563-A-C]

5.7 It is apparent that after the transfer of conveyance deed,the title vests in the allottee and of the common area in theassociation of the allottees or the competent authority as the caseDmay be. No title remains with the promoter. In case promoterfails to complete or is unable to give possession of an apartment,plot or building, he shall be liable on demand to the allottees. Incase the allottee wants to withdraw from the project, withoutprejudice to any other remedy available, the promoter has toreturn the amount received in respect of that apartment, plot,Ebuilding with interest in this behalf including compensation inthe manner as provided under the Act. [Paras 116 and 117][564-E-G]5.8 It is apparent that RERA intends protection of home–buyers and aims at completion of the buildings. The buildingsFhave to be completed. The task has already been assigned toNBCC by the Court for completion of buildings as the promoters/builders have failed to complete the building within the time fixedand the time which could have been extended. Now, more than10 years have passed and buyers were given the assurances thatGthey would get flats within three years period by the promoter/builder. The maximum time fixed in RERA has also expired andextension could not have been beyond 1 year. It is clear thatcommon areas as provided under Section 17 have to be ultimatelyhanded over to the Association of Allottees or the CompetentAuthority as the case may be. Thus, any sub–lease, alienation orH

transfer affected by the promoter of the common areas as definedin the RERA and otherwise reserved under the plan shall bevoid and inoperative. [Paras 120 and 121] [566-F-H; 567-A]

5.9 The contention on behalf of the Bank is that theagreement of promoter/builder with home buyers is unregisteredas such, no right has been created in the immovable property inview of the provisions contained in section 49 of the RegistrationAct. The contention ignores and overlooks the provisions ofRERA which intends to prevent such frauds on home buyers andensure completion of projects and that of the agreement betweenpromoters and buyers. There are various rights under theagreement as well as under the RERA. The agreement enteredinto at the time of allotment is the basis of the investment in theprojects made by home buyers, it cannot be said to be scrap ofpaper. It is their valuable investment which is required to beprotected and cannot be permitted to be taken away by builderor secured creditors in an illegal manner. The provisions ofsection 17 of the Registration Act no doubt provide that adocument of title requires compulsory registration, no doubtregistered document has to be executed that also has to be takencare of by the Court so as to protect the interest of home buyers.[Para 132] [571-G; 572-A-B]

5.10 The two expressions of the provisions of Section11(4)(g) of RERA Act are significant. Firstly, which the promoterhas collected from the allottees. Secondly “which are related tothe project”. In the instant case dues of the Noida/Greater Noidaauthorities have been collected from the allottees by thepromoters but the authorities have permitted diversion of saidamount by not taking any action in view of the chronic defaultright from the beginning. Though they knew that the promoterhad booked the flats, even the permission to grant sub–lease ofthe plot had been granted in totally illegal manner without paymentof dues of premium and lease rent etc. Conditional permission tothe mortgage was issued without payment of the premium leasemoney etc. so as to perpetuate the fraud being done by thepromoters. The mortgage created ought to have been objectedin view of the conditions subject to which it could have been done.

ABC

AObviously, it was done by Amrapali Group in connivance withofficials of Authorities including the bankers. Thus when theauthorities have themselves permitted fraudulent action moneyhas been diverted, which has been paid by home buyers forpayment to Authorities also, as premium was component of priceand as bankers have also permitted diversion of loan amount,Bmostly on same day, it cannot be said in the facts of the case, thatany amount of the bankers or that of authorities remains investedin the project. The sine qua non is the expression “which arerelated to the project” would mean that that amount recoverablefrom the allottee is the one which has been invested in the project.CA third person can be held liable for the money payable to securedcreditors in case it has been invested in the project, in case ithas not been spent in constructions, same cannot be permittedto be realised from the project/home buyers, the investment ofhome buyers cannot be frittered away and to fasten liability uponthe innocent buyers/allottees in that event would tantamount toDperpetrating yet another fraud on them. Accountability, as perlaw, has to be fastened on promoters/builders and all concerned.It would amount to total deprivation of money of home buyerswithout any fault on their part or legal liability. It would amount tofastening liability upon them once over again by misuse of theEprocess of law. The provisions of the first and second chargecannot come to the rescue of Authorities/Bankers. Under Section11(4)(g) the promoter has to pay all outgoings which he hascollected from the allottees, the payment of outgoings includesland cost, ground rent, charges for water or electricity,maintenance charges etc. As per the proviso to Section 11(4)(g),Fthe promoter shall continue to be liable, even after the transferof the property, to pay such outgoings and penal charges, if any,to the authorities. Outgoings which have been collected by thepromoter can be and have to be recovered in the facts andcircumstance of the case from them as intended by sectionG11(4)(g) of RERA. [Para 133] [572-E-H; 573-A-E]

5.11 The Bank’s plea is that the provisions of section11(4)(h) of RERA provides that the promoter, after he executesan agreement for sale for any apartment, plot or building, cannotmortgage or create charge on such an apartment, plot or

building, as the case may be, and if any such mortgage or chargeis made or created then it shall not affect the right and interest ofthe allottee who has taken or agreed to take such apartment,plot or building, as the case may be. The provision has non–obstante clause. As the provision has given an overriding effectby non–obstante clause, the provision is no help to the banks asthe agreement had been by promoters with home buyers enteredinto earlier in point of time to the creation of the mortgage. Therecould not have been any mortgage created subsequently and evenif validly created, it would not affect the right and interest of theallottee as intended by RERA. Thus, the right and interest of theallottee are safeguarded by virtue of the provisions contained insection 11(4)(h). As the project was pending, the provisionintends to confer right on the allottee and save the allotteesand also their interests from such liability. Even if the provisionis held not applicable on the ground that RERA came into forcelater, since there was no valid mortgage as held by this Court, itwas incapable of affecting the right or interest of the allottee.Had it been ensured that the money due to Noida and GreaterNoida authorities was paid by the promoters to the authorities,the fraud of siphoning of money would not have taken place tothe extent it has been done. Moreover, the money borrowedfrom banks has not been invested in the projects. In fact, projectsrequired no funding. It would be iniquitous to charge the allotteeswith the bankers’ money. Thus, in the peculiar facts andcircumstances of the case, it is held that rights or interests of theallottees are not at all affected by the mortgage created by thebankers or by the dues of the Noida or Greater Noida authorities.[Para 134] [573-F-H; 574-A-D]

5.12 Section 4(2)(1) of the RERA requires the promoter todisclose the prior encumbrance. Therefore, the RERAcontemplates the creation of encumbrance even before theproject is registered and such plot can be offered to allottees.Basically, declaration is required under section 4(2)(l)(A) thatthe land is free from all encumbrances or as the case may be,details of the encumbrances, if any, on such land, should bedisclosed. The intention is that the allottee should know about

CDEF

Athe encumbrance if any. The provision does not espouse the causeof the bank in any manner whatsoever. [Para 135] [574-E-F]

5.13 It is not correct that in view of the provision of section19(4) of RERA, the right of the allottees is restricted to onlyreceiving the compensation from the promoters. The provisionsBof Section 8 of the RERA which provides for completion of thedevelopment projects by the competent authority or by theassociation of allottees or in any other manner, as may bedetermined and the association of allottees shall have the firstright of refusal for carrying out the remaining development workis the wholesome provision contained in the second proviso toCsection 8. To claim compensation is at the option of the allottee ifthe allottee wants to go out. That is an additional right, not theonly right conferred under the RERA. He cannot be left in lurchbut is entitled to claim the refund if he so desires. It is his optionto claim the refund along with interest and compensation whichDis to be determined under the RERA. The rights of the allotteesare not restricted to only receiving the compensation. [Para 136][574-G-H]

5.14 As regards the plea that the RERA recognises andprotects interests of the lenders and does not in any manner takeEaway rights under any of the existing statutes such as T.P. Act,Debt Recovery Tribunal Act, SARFAESI Act, it is apparent froma perusal of RERA, which is special Act, that certain rightshave been created in favour of the buyers. The provisions ofRERA have to prevail. When it comes to the question ofprotection of rights of buyers even if RERA had not been enacted,Funder aforesaid laws in the facts of the case, different view couldnot have been taken. However, there is no dispute that the bankerswould have the right to recover their dues. The provisions ofRERA are beneficial to the home buyers and are intended toinsulate them from fraudulent action, ensures completion of theGbuilding and it is the duty of the court to protect and ensure thehome buyers’ interest and at the same time to hold themresponsible for the duties enjoined upon them under the saidstatute. The home buyers are not observed from the dischargeof their liability if any. At the same time, they have the right of

enforcement of their right for compensation due to undue delayin completion of the project. [Para 137] [575-D-F]

5.15 In case the authorities are making allotment of plotsat paltry sum of 10% and giving the builders 8 years period tomake payment of premium with moratorium of 2 years then theperiod runs to 10 years and the project is to be completed within3 years. It is clear that the authorities have to be very vigilant forsecuring their interests otherwise in every case even if thepromoter has completed the project and realised the chargesfrom the home buyers and has not deposited the amount due tothe authorities, in case no action is taken by the Authorities, canit be taken after 10 years against home buyers. The authoritieshave to blame themselves for their inaction and have to wait forthe realisation of dues by sale of other properties and as againstguarantors etc. The projects have to be completed as mandatedby Section 8 of RERA. [Para 139] [576-C-F]

5.16 No part of the building can be directed to bedemolished. Buildings have to come up and completed even theones which are at the nascent stage as mandated by RERA. Nodoubt about it that in case of failure to pay the dues the onus ofpayment of land dues has to be passed on to the buyers on pro–rata basis but in the instant case they have already paid thesubstantial amounts, huge amount has been permitted to bediverted by the authorities and bankers as such they have to waitfor recovery and cannot act in manner further detrimental tothe interests of the home buyers. [Para 140] [577-B-C]5.17 There is duty enjoined under the RERA, there has tobe Central Advisory Council as well as the role of the StateGovernment is not ousted in order to protect against such frauds.The Central Government and the State Government are directedto take appropriate steps on the time–bound basis to do theneedful, all other such cases where the projects have remainedincomplete and home buyers have been cheated in aforesaidmanner, it should be ensured that they are provided houses.[Para 141] [578-C-D]

A6. As the basic obligations have not been complied with bythe promoters, they cannot also be entitled to FAR. In the instantcase, there is serious kind of fraud by the promotors as suchthey cannot be said to be entitled to avail the FAR to utilise it orto alienate and more so when they have failed to complete theprojects and pay the dues. [Para 122] [567-B]B

7.1 There appears to be non-issuance of the completioncertificate, whereas the buildings are being occupied, completioncertificate is directed to be issued. This Court has to monitorthe payment of dues of the Authorities and Banks and thatoutstanding are not going to create hurdle in the execution ofCthe registered document/conveyance deed in favour of homebuyers. It has to be executed by the concerned Authorities aswell as by the Court Receiver and by the home buyers. Theamount which is due on the part of home buyers has to bedeposited in the account, which has been opened, in the UCODBank by this Court. It has to be utilised firstly for the purpose ofcompletion of the buildings and for providing other facilities andthe home buyers of incomplete projects also have to deposit theoutstanding amount on their part in the aforesaid account openedin the UCO Bank and out of that amount, it has to be disbursedas per the orders to be passed by this Court for the purpose ofEconstruction and outstanding if any, shall be used for the purposeof payment of compensation to home buyers for the period ofdelay as per the agreement or as may be determined ultimatelyand other dues. [Para 124] [567-F-H; 568-A-B]

7.2 In the facts and circumstances of the case, it would beFabsolutely improper for the Authorities to deny issuance ofoccupancy or completion certificate, especially on the ground ofnon–payment of dues. The facts indicate that 9000 families areresiding for the last several years out of the sheer necessity ofshelter place and they have not been provided with electricityGconnections and other facilities due to non–issuance of occupancycertificate by the concerned authorities. Most of them have paidthe entire amount to the builders. The payment to be made toconcerned Authorities had also been collected by the builder fromhome buyers as component of price of flat, but has not been

deposited with the concerned Authorities and the home buyers’money had been diverted, which was more than the dues of theAuthorities and the Banks taken together. Had timely actionbeen taken by the Authority, no amount could have been divertedand the position would have been different as it stands today.The concerned Authorities have to issue occupancy certificateas well as completion certificate with respect to the projects inwhich home buyers residing without insisting for the payment oftheir dues. This Court has to monitor the payment of the dues tothe Authorities as well as the Bankers, from guarantors and otherproprietors. The innocent buyers cannot be made to suffer for nofault on their part. [Para 101] [553-C-E]7.3 Once Authorities have allowed 9000 home-buyers tooccupy the premises without terminating the lease on the groundthat occupation is illegal. Obviously, builders have put them inpossession, they are not the encroachers and they have investedtheir valuable saving and have no other shelter place to live.They cannot be deprived of their houses and cannot be left withoutbasic necessities of life like water, electricity, etc. The concernedAuthorities are responsible to provide electricity, water, and allother basic amenities to buyers as they have the right to occupythe premises. In the peculiar facts of the case, the Court hasdirected the Authorities to provide basic necessities forthwith.The Central Government and Government of Uttar Pradesh arealso directed to ensure that everything is done to protect theinterest of the home-buyers without obliging the builders.Obliging the builders by making certain concessions by theGovernment would amount to perpetrating further fraud andunjust enrichment of builder. The case poses challenge to thelaw enforcement agencies to act in tandem to book such culprits.[Para 102] [553-E-H; 554-A]

7.4 It is also apparent from the provisions of the Act of1976 as well as RERA and also the case set up by the Authoritiesthat partial occupation certificate can also be issued. Thecompletion certificate can be issued partially also as per theprovisions of Uttar Pradesh Apartment (Promotion of

AConstruction, Ownership, and Maintenance) Act, 2010.[Para 123] [567-C-D]

8.1 Because of the failure on the part of the Builders tofulfil the obligations towards the buyers and the serious kind offraud which has been played by them upon the home buyers, theBregistration of Amrapali group of companies under the Real EstateRegulation and Development Act, 2016 deserves to be cancelled.[Para 148] [581-D-E]

8.2 Because of the gross violations of the conditions of leasedeeds executed by the Noida and Greater Noida Authorities inCfavour of Amrapali group of companies with respect to variousprojects, the lease deeds are liable to be cancelled and therights thereupon shall vest in the Court Receiver. [Para 149][581-E-F]

8.3 The criminal cases have also been registered by theDpolice. The Court proposes to monitor the progress of theinvestigation. For violations of FEMA and FDI norms, theEnforcement Directorate is directed to make investigation inaccordance with the law and submit reports quarterly to thisCourt. Money laundering aspect is also to be looked into byconcerned authorities. [Para 151] [582-B]

8.4 It has been found in the Forensic Audit Report thatthere are several recoverable from various companies as well asfrom individuals, Directors and other incumbents. It is directedthat as per the findings recorded by the Forensic Auditors, themoney be deposited in this Court on time–bound basis andFother needful be done as observed by the Auditors. As the Courthas approved the report, let the concerned companies/ Directors/individuals take steps in compliance with the observations andfindings made by Auditors to refund the amount and or to doneedful as suggested within one month. [Para 152] [582-C-D]

8.5 It has also beem found that non–payment of dues of theNoida and Greater Noida Authorities and the banks cannot comein the way of occupation of flats by home buyers as money ofhome buyers has been diverted due to the inaction of Officials ofNoida/ Greater 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 investedin projects. Homebuyers money has been diverted fraudulently,thus, fraud cannot be perpetuated against them by selling theflats and depriving them of hard–earned money and savings ofentire life. They cannot be cheated once over again by sale ofthe projects raised by their funds. The Noida and Greater NoidaAuthorities have to issue the Completion/ Part CompletionCertificate, as the case may be, to execute tripartite agreementand registered deeds in favour of the buyers on part–completionor completion of the buildings, as the case may be or where theinhabitants are residing, within period of one month. [Para 153][582-E-G]

8.6 The home buyers are directed to deposit theoutstanding amount under the Agreement entered with thepromoters within 3 months from today in the Bank account openedin UCO Bank in the Branch of this Court. The amount depositedby them shall be invested in the fixed deposit to be disbursedunder the order of this Court on phase–wise completion of theprojects/work by the NBCC. The percentage of profit ofNBCC is fixed at 8 percent. As it is Government Undertaking,NBCC has to ensure that DPR is prepared reasonably andthe work to be completed as expeditiously as possible.[Para 154 iii and 125] [583-D; 568-B-C]

8.7 The Institute of Chartered Accountants of India isdirected to initiate the appropriate disciplinary action against Mr.Anil Mittal, CA for his conduct as reflected in various transactionsand the findings recorded in the order and his overall conduct asfound on Forensic Audit. Let appropriate proceedings initiatedand concluded as early as possible within 6 months and areport of action taken to be submitted to this Court. [Para 154vii] [583-F-G]

8.8 Concerned Ministry of Central Government, as well asthe State Government and the Secretary of Housing and UrbanDevelopment, are directed to ensure that appropriate action istaken as against leaseholders concerning such similar projectsat Noida and Greater Noida and other places in various States,

Awhere projects have not been completed. They are furtherdirected to ensure that projects are completed in time–boundmanner as contemplated in RERA and home buyers are notdefrauded. [Para 154 ix] [584-B-C]

8.9 Shri R. Venkataramani, Senior Advocate is appointedBas the Court Receiver. The right of the lessee shall vest in theCourt Receiver and he shall execute through authorized personon his behalf, the tripartite agreement and do all otheracts as may be necessary and also to ensure that title is passedon to home buyers and possession is handed over to them.[Para 154 x] [584-D]C

8.10 The Court also directs Noida and Greater NoidaAuthorities to execute the tripartite agreement within one monthconcerning the projects where homebuyers are residing and issuecompletion certificate notwithstanding that the dues are to berecovered under this order by the sale of the other attachedDproperties. Registered conveyance deed shall also be executedin favour of homebuyers, they are to be placed in the possessionand they shall continue to do so in future on completion of projectsor in part as the case may be. The Noida and Greater NoidaAuthorities are directed to take appropriate action to do theEneedful in the matter. The Water Works Department of theconcerned area and the Electricity Supplier are directed toprovide the connections for water and electricity to home buyersforthwith. [Para 154 xi] [584-E-G]

CIVIL ORIGINAL/APPELLATE JURISDICTION : WritGPetition (Civil) No. 940 of 2017.

(Under Article 32 of the Constitution of India)

With

Writ Petition (C) Nos. 947, 971, 942, 1041, 1018, 1116, 1144, 1156,1206, 1242 of 2017, 8, 58, 21, 52, 91, 56, 57, 74, 134, 131, 160, 164, 182,199, 226, 245, 281, 306, 298, 246, 267, 288, 460, 353, 378, 742, 829, 1397of 2018, S.L.P.(C) No. 1879 of 2018, SMC (Crl.) No. 4 of 2018.

Maninder Singh, Vikramjit Banerjee, ASGs, Ms. V. Mohana, VikasSingh, Gaurav Bhatia, M. G. Ramachandran, Shyam Divan, Ms. VibhaDatta Makhija, Krishnan Venugopal, K. S. Namdar, S. B. Upadhyay,V. K. Shukla, Debal Kr. Banerji, Ms. Geeta Luthra, P. N. Mishra, RakeshKhanna, Siddartha Dave, K. K. Rai, Rakesh Munjal, Neeraj KishanKaul, Nikhil Nayyar, V. Shekhar, Sr. Advs., Biswajit Dubey, Uday Khare,Ms. Ruchi Choudhary, Ms. Ashita Chawla, Ms. Srideepa Bhattacharyya,Aditya Marwah, Ms. Surabhi Khattar, Manpreet Lamba (for M/s. CyrilAmarchand Mangaldas), Vibhu Shanker Mishra, Mukul Singh, B. V.Balramdas, Ms. Ankita Sharma, Ms. Nikita Capoor, Prashant Singh,Arvind Kumar Sharma, Raj Bahadur, Vikrant Yadav, Mrs. Misha Rohatgi,Ekant Luthra, Nakul Mohta, Lalit Mohan, Johnson, Manoj Singh, AbhishekSharma, Utkarsh Jaiswal, Himanshu Shekhar Tripathi, Rohitash KumarSharma, Gaurav Goel, Paras Choudhary, Vishal Gupta, Arpit Rai, AviralKashyap, Ms. Akansha Goyal, Rishi Matoliya, Ms. Sumati Sharma,Kumar Mihir, Ms. Shayaree Basu Mallik, Sukant Vikram, Hitesh KumarSharma, S. K. Rajora, Rajesh Kumar Gupta, Krishnam Mishra, ParamK. Mishra, Nishant Kumar, Ms. Anisha Upadhyay, Shashank Singh, RohitPandey, Ms. Yamini Raman Acharya, Varad Dwivedi, Ms. Manju Jetley,Balraj Dewan, Vishnu Sharma, Sourav Roy, Ms. Anupama Sharma,Prashant Kumar, Ashutosh Kumar, Gaurav Majumder, Abhay Kumar,Alok Kumar Aggarwal, Ms. Anushruti, Ms. Pavni Poddar,Ms. Gauri Goburdhan, Ms. Shivani L. Lohiya, Ms. Asmita Nanda, SahilModi, Ms. Anshul Duggal, Pranav Vashishtha, Kushagra Nigam,Ms. Kritika Singh, Gaurav Goel, Manoj Singh, Altamish Siddiki, Abhishek,Prateek Yadav, Anshul Duggal, Niraj Gupta, Fuzaail Khan, J. Abbas,Ms. Shefali Jain, Mrs. Anushree Gupta, Prakash, Umair Ahmad Siddiqui,Mohd. Waqous, Zeeshan Khan, Kabir Dixit, S. S. Ray, Manmeet Singh,Anugrah Robin Frey, Ankrit Gupta, Ms. Rakhi Ray, S. K. Pandey,Anshul Rai, Chandrashekhar A. Chakalabbi, Awanish Kumar,Ramkrishna Veerendra (for M/s. Dharmaprabhas Law Associates),Mohd. Ehraz Zafar, Divyam Dhyani, Vivek Narayan Sharma, AbhishekAggarwal, Atul Sharma, Manmeet Singh, Mishra Saurabh, Anshuman

ADwivedi, M. L. Lahoty, Paban K. Sharma, Anchit Sripat, HimanshuShekhar, Sukant Vikram, Joby Varghese, Arif Eqbal, Abhinav Ankit,Ms. Indrani Mukherjee, Ms. Tatini Basu, Ms. Rajkumari Banja, NitinBajpai, Syed K. Ali, Rohit Sharma, Atul Agarwal, Rounak Nayar, AnshulChowdhary, Kumar Dushyant Singh, Shadan Farsat, Ms. Jahnavi Sindhu,Ms. Shruti Narayan, Ranjan Kumar Pandey, Sandeep Bist, Ram Krishna,BAnuj Tiwari, Shikhar Srivastava, Ritwik Sahah, K. K. Bhatt,Ms. Khushboo Khauja, Ms. Shobha Gupta, Joyshree Barman, TahirAshraf Siddiqui, Amit Goel, Ms. Ruchi Goel, Ashwani Bhardwaj,Ali Chaudhary, Azeem Kalebude, Jamnesh Kumar, A.D.N. Rao,A. Venkatesh, Rahul Mishra, Rohit Kumar Singh, Ms. Stuti Mishra, Ms.CPrerna Mehta, Ms. Gargi Khanna, Rajul Shrivastav, Mohit D. Ram,Ms. Suman Tripathy, Pran Prasoon, R. P. Goyal, Naresh Kaushik, ManojJoshi, Rahul Kaushik, Vardhman Kaushik, B. Purushothama Reddy,Rahul Sharma, Omung Raj Gupta, Devik Singh, Lakshay Juneja, Ms.Lalita Kaushik, Ms. Priyanka Das, Somiran Sharma, Ms. Sheena Taqui,Ms. Ragini Pandey, Gudipati G. Kashyap, Ms. Apoorva Pandey, Ms. T.DArchana, Rajinder Wali, B. K. Satija, Anurag Tandon, Ms. Sonam Gupta,Kumar Sudeep, Somesh Chandra Jha, Ms. Neha Chaudhary, Sunil K.Khatri, Ms. Shaila Arora, Badri Prasad Singh, Arvind Kumar, ManishS. Verma, Ms. Astha Sharma, Shivam Sharma, Ms. Dimple Nagpal,Abhigya, Ms. Sunita Yadav, Ms. Sheetal Rajput, Vivek Narayan Sharma,EPragyan Mishra, Ms. Mohika Jain, Mohd. Zaheb Husain, Dr. SheshMain Pandey, Rajeev Kumar Jha, Satyabrata Panda, Shashwat Panda,Manoranjan P., Tejaswi Kumar Pradhan, Dinesh K. Garg, Abhishek Garg,Dhananjay Garg, Deepak Mishra, Ramdhir Kumar Sinha, Vijay Kumar,Thomas Oommen, Aniruddha P. Mayee, Vivek Srivastava, Ravi BhushanUpadhyay, Gajanand Kirodimal, Ms. Anisha Mathur, Saarthak Bansal,FMs. Manju Jetley, Mrs. Veera Kaul Singh, Ms. Vijaya Singh, Ms. AkanshaSingh, Ms. Aishwarya Mishra, T. K. Joseph, P.K. Jayakrishna, SandeepJha, Ram Ekbal Roy, Binay Kr. Das, Manoj Sharma, Kapil Kaushik,Roopansh Poorohit, E.R. Sumathy, Ms. Savita Aggarwal, Ms. KapnanaKalra, Sanjay Kumar Visen, Ms. Ritu Rastogi, Ms. Sasmita Tripathy,GSanjeev Singh, Ms. Anandita Singh, Ms. Amisha Agarwal, DushanshoPolo, Ms. Pallavi Pratap, Ms. Shikha Shrivastav, Ms. Shweta M.,Ms. Neena Singh, Nitin Jain, Aneesh Mittal, Abhishek Agarwal, AtulSharma, Arunav Tewari, Ms. Mona K. Rajvanshi, Aneesh Mittal,Ms. Shreya Sharma, Manish Kumar Saran, Sukant Vikram, R. Sathish,Mrs. Indra Sawhney, Amit Pawan, Rameshwar Prasad Goyal, PrithviHPal, Shishir Pinaki, Shovan Mishra, Raj Kamal, D. K. Sharma, MaheenPradhan, Varun Tyagi, Siddhant Sharma, Mayank Sharma, MrigankPrabhakar, Ms. Jyoti Sharma, Gopal Jha, Binay Kumar Das, G. Balaji,A. P. Mohanty, P. K. Pattnaik, Raghavendra Shukla, Robin Singh Solanki,Kumar Mihir, G. C. Tyagi, Kailash Prashad Pandey, Ashok Kumar Singh,Ms. Jasmine Damkewala, Ms. Sangeeta Singh, Prakash Ranjan Nayak,Suchit Mohanty, Mrs. Vandana Kaushal Nee Mohanty, Sibo SankarMishra, Ms. E. R. Sumathy, Dr. Alok K. Sharma, Naresh Kumar,Ravindra Kumar, Rabin Majumder, Akhilesh Kumar Pandey, AbhimanyuBhandari, Ms. Nattasha Garg, Somesh Tiwari, Naveen Kumar,T. Mahipal, Ms. Atishi Dipankar, Ajit Sharma, Satish Pandey, ShashankSingh, Krishanu Mishra, Param Kumar Mishra, Kabir Dixit, AishwaryaSinha, Ms. Priyanka Sinha, Alok Kumar Singh, Gaurav Goel, MukeshKumar Maroria, Jaibir Singh Nayar, Akash Nayar, Ms. Sucharita Ganguly,Siddhartha Jha, Ms. Rashmi Singh, Ashwani Bhardwaj, Tahir AshrafSiddiqui, Kaushal Yadav, Sanand Ramakrishnan, Ritesh Agrawal,Raj Kamal, Mrs. Anil Katiyar, R. R. Rajesh, Raj Bahadur, Gaurav,Sanjeev Bhatnagar, M. K. Verma, Prakash Kumar Singh, PawanshreeAgrawal, Dharmendra Kumar Sinha, Ms. Astha Sharma, S. K. Verma,Ms. Prerna Mehta, Ms. Amita Singh Kalkal, Divyakant Lahoti,Dr. Shashwat Bajpai, Sharad Agarwal, Rohit Amit Shekdhar, AbhinavShrivastava, Rahul Gupta, Ms. Sana Kamra, S.S. Ray, Vaibhav Gulia,Ms. Praveena Gautam, Aman Gupta, Dhananjay Garg, RameshwarPrasad Goyal, Pawan Bhushan, Talha Abdul Rahman, Kunal Mimani,Ms. Vishrutyi Sahni, Dheeraj Nair, Ms. Sonam Gupta, Smarhar Singh,Virender Goswami, Gautam Narayan,. Ms. Soni Singh, Shamik Saha,Manu Nair, Kuber Dewan, S.S. Shroff, Pradeep Misra, Daleep Dhyani,Suraj Singh, Ms. Pallavi Pratap, Avneesh Arputham, Ms. AnuradhaArputham, Sureshan P., Badri Prasad Singh, Aakarshan Aditya, SomeshChandra Jha, Ms. Sujata Kurdukar, Roopansh Purohit, Gautam Das,Lalit Rana, C.M. Gopal, Sunil Kumar Sethi, Ms. Subasini S.,Ms. Kamakshi S. Mehlwal, Ms. Charu Mathur, Anil Kumar Mishra-I,Aditya Jain, Ms. Indra Sawhney, Mohit D. Ram, Ashwani KumarUpadhayay, Prashant Kumar Umrao, Veer P. Singh, Raghvendar Shukla,R.D. Upadhyay, Sumit Sinha, Ms. Payal Kakra, Sushant Chaturvedi,Ajay Pratap Singh, Ms. Anindita Pujari, Ms. Arti Singh, Ms. Pooja Singh,Kumar Dushyant Singh, Mrs. Gargi Khanna, Ranjan Kumar Pandey,Mishra Saurabh, Mrinal Harsh Vardhan, Abhimanue Shrestha, AnoopPrakash Awasthi, Ms. Anannya Ghosh, Brijesh Kumar Tamber,

AMs. Shobha Gupta, Sanjay Kumar Visen, Sudhansu Palo, Abhitosh PratapSingh, Mrs. Swarupama Chaturvedi, Ms. Aparna Trivedi, Ms. HimaLawrence, Vikram, Anurag Rana, Ms. Nikita Tyagi, Ravindra SadanandChingale, Brijesh Panchal, Vinod Yadav, Sudhir Naagar, Mushtaq Ahmad,Ms. Suruchii Aggarwal, Ms. Abhigya, B. K. Satija, S.R. Setia, VikramPatralekh, Ms. Kriti Sondhi, Braj Kishore Mishra, M/S Vibhu ShankerBMishra And Co., Ms. Puja Sharma, Anup Kumar Mishra, BalwinderSingh Suri, Ms. Garima Sharma, Ms. Srishti Gupta, Ms. Aaryav Mehra(for M/s. Kings and Alliance LLP), Ambhoj Kumar Sinha, P. K.Jayakrishnan, M/S. V. Maheshwari & Co., Manoj Saxena, Nitish Massey,Mrs. Mona K. Rajvanshi, Sibo Sankar Mishra, Ram Lal Roy, AbhishekCRajput, Praveen Jain, Annam D. N. Rao, Shri Gaichangpou Gangmei,Ms. Dharitry Phookan, B. Krishna Prasad, Radhakanta Tripathy,Ms. Chandan Ramamurthi, Joby P. Varghese, Nikilesh Ramachandran,Ms. Roohina Dua, Ejaz Maqbool, Kaushik Choudhury, Kedar NathTripathy, E. C. Vidya Sagar, Rajesh Kumar Gupta, Alok Kumar, SomyaYadava, Snigdha Singh, Ashutosh Jain, Chirag Babbar, Ketul Hansraj,DBalaji Srinivasan, Aneesh Mittal, Ms. Shreya Sharma, Abhijit Sengupta,Kumar Neeraj, Mrs. Lalita Kaushik, Arun K. Sinha, Raj Singh Rana,Pankaj Kumar Singh, Anupam Dwivedi, Ms. Bharti Tyagi, ChandanKumar, Somiran Sharma, Ms. Arti Singh, Prasenjit Keswani, KabirShanker Bose, Raghvendra Pratap Singh, Ankit Anand, Arvind Gupta,EDr. Sumant Bharadwaj, Ms. Mridula Ray Bharadwaj, Rakesh KailashSharma, Ms. Tamanna Goyal, Ms. Iti Aggarwal, Chander Prakash (forM/s. D.S.K. Legal), Binay Kumar Das, Chandan Kumar, Ms. RiturajChoudhary, Tarun Vaid, Siddharth Bansal, Shekhar Kumar, K. PaariVendhan, Ms. Vandana Sehgal, Ms. Gunjan Ahuja, Abhinav Shrivastava,Somanatha Padhan, Sarvam Ritam Khare, Sanjay Kumar Dubey, ArvindFKumar, Anil K. Chopra, Neeraj Shekhar, Ms. Charu Ambwani, RajeshMahale, Vishal Gupta, Ravinder Kumar, Advs. for the appearing parties.

Applicant-in-person.

The Judgment of the Court was delivered by

GARUN MISHRA, J.

1. These writ petitions pertain to the projects of various companiesof Amrapali Group in the Noida and Greater Noida.

2. It is submitted on behalf of the petitioners that in 2011 in Noidaand Greater Noida various real estate projects for housing were started.H

In the various projects, the Amrapali Group of Companies proposed toconstruct approximately 42,000 flats. Various brochures were publishedand it was assured that the delivery of possession shall be made in 36months and other world-class amenities were also promised.

3. Various home buyers booked their apartments during the period2010-2014. The buyers signed the Standard Form of Allotment-cum-Flat Buyers Agreement and even after payment of 40 to 100 percent oftotal consideration, they are faced with the threat of forfeiture of hugebooking amount. The agreement contained specific terms as to interest.Under Clause 14 of the agreement, the builder authorised itself to financeloan from any financial institution by way of mortgage/charge/securitization of receivable of the land and flats and the allottees willhave no objection in this regard. Clause 15 also authorised the builder tokeep full authority over the flat depriving the allottees of any lien orinterest despite payment of entire amount thereof.

4. The builder under Clause 19(a) was obliged to complete theflats of M/s. Amrapali Centurion Park Private Limited within 30 monthsfrom the date of commencement of excavation/signing of the agreement,which may vary for plus/minus 6 months. Under Clause 19(c), builderfixed paltry sum of Rs.5 per square feet super area per month for theperiod of delay, which would include any/all damages, compensation,claims for delayed possession.

5. The buyers invested their life savings and some of them hadobtained the loan from the Bank. Most of the buyers have made thepayment to the extent of 50 percent to 100 percent abiding by the paymentschedule. The dreams of the buyers of obtaining house were given seriousjolts when M/s. Amrapali Silicon City Private Limited and M/s. AmrapaliCenturian Park Private Limited, respondent Nos.3 and 4 hereinrespectively were found in serious breach of their obligation to deliverthe flats within 36 months. They did not pay the amount either to theNoida or Greater Noida Authority and also to the Banks. Several reviseddates of possession were fixed unilaterally, but they failed to deliver theflats. The Amrapali Group has failed to comply with its obligation underthe subvention scheme, the tenure of which was approved by the bank/financial institution. The builder had failed to comply with theabovementioned scheme as the buyer making the payment of EMIs tothe banks, thereby causing double loss. Some of the consumersapproached the National Consumer Dispute Redressal Commission (for

Ashort, ‘the NCDRC’) by filing Consumer Complaint No.213 of 2017under Section 12(1)(c) of the Consumer Protection Act, 1986.

6. The Bank of Baroda had filed Company Petition No. (IB)-121(PB)/2017 before the National Company Law Tribunal (for short,‘the NCLT’) under Section 7 of the Insolvency and Bankruptcy Code,B2016 for triggering the Corporate Insolvency Resolution Process in thematter of M/s. Amrapali Silicon City Private Limited, respondent No.3.The NCLT appointed the Interim Resolution Professional (in short, the‘I.R.P’). Moratorium was also declared thereby restricting the institutionof any suits against the corporate debtor including execution of anyjudgment, decree or order; transferring, encumbering, alienating orCdisposing of by the corporate debtor any of its assets or any legal interesttherein; and any action to foreclose, recover or enforce any securityinterest created by the corporate debtor in respect of its property underthe Securitisation and Reconstruction of Financial Assets andEnforcement of Security Interest Act, 2002 (for short ‘the SARFAESIDAct’). The order of NCLT has direct bearing on the home buyers ofM/s. Amrapali Centurian Park Private Limited, respondent no.4, whichis virtually owned by M/s. Amrapali Silicon City Private Limited with98.84 percent shareholding. Both the companies are run by the almostsame set of Directors including Mr. Anil Kumar Sharma and Mr. ShivPriya. Thus, in order to secure the interest of home buyers, in the instantEpetitions under Article 32, plethora of intervention applications havebeen filed.

7. It is submitted on behalf of petitioners that home buyers haveput their lives at stake by paying their lifetime savings and hard-earnedmoney in the purchase of flats. As such, they cannot be categorised asFordinary financial creditors to rank pretty low in the order of priorityunder Section 53. Corporate builder heavily counts upon the home buyersas stakeholders to sustain in the market. Section 53 of the Insolvencyand Bankruptcy Code, 2016 is irrational and violates the rights of thehome buyers guaranteed under Article 21 as by subjecting the homeGbuyers to the liquidation proceedings of discriminatory nature. The verysurvival of home buyers has been seriously jeopardised. Not only theyare going to lose the entire money with accrued interest, but they alsobecome financially crippled for all time to come even close to the dreamof new home, let alone purchase it. There is no equal protection under

the Insolvency and Bankruptcy Code, 2016. The moratorium imposedby NCLT directly affecting not only the home buyers of M/s.AmrapaliCenturion Park Private Limited, but also similarly situated lakhs of homebuyers in various other projects. They cannot be deprived of their legalrights. Similar plight has been averred by the other buyers in the otherseveral projects.

8. The matter projects the issue of larger public interest. The realestate business has developed and it mainly survived by the moneyinvested by the buyer for the purchase of the house. They have theright to obtain houses. The facts of the instant case project that Noidaand Greater Noida have allotted huge plots to the builders by charging asum of approximately 10 percent and in most of the cases, thereafter nomoney has been paid. The large number of projects which have comeup not only in Noida and Greater Noida, but most of them have not beencompleted by the builders/promoters and they have siphoned buyers’money in large scale. No action has been taken by the Noida and GreaterNoida Authorities against builders for cancellation of leases due to violationto fulfil their obligation. Bankers have financed to builder certain loan onthe condition to invest in the projects, but they have also permitted themoney to be used as for other purposes as apparent from the reportof the Forensic Audit in the instant case which had been submitted byAuditors - Mr. Pawan Kumar Aggarwal and Mr. Ravinder Bhatia. Thefacts which are projected in the Forensic Auditor Report speaks foritself.

9. Before we consider the Forensic Audit, it would be appropriateto refer to certain orders which were passed from time to time by thisCourt. This Court on the application filed by petitioner - Bikram Chatterji,passed an order on 22.11.2017, directing builder to deposit 10 percent ofthe dues to Noida Authorities. This Court also directed that the phase inrespect of which Occupancy Certificate and No Objection Certificate,if granted, the possession of flats shall be handed over to the respectiveflat buyers. Liberty was granted to flat owners to complete the finishingwork. Thereafter, an order was passed on 31.1.2018, requesting thebuilder to deposit amount as ordered on 17.11.2017. It was also pointedthat in several places firefighting devices were not installed though theplaces were occupied by thousands of families of Phase-I of SiliconCity of Amrapali in Sector 76, Noida. Directions were issued to do theneedful. We also directed to submit the proposal within one week with

Arespect to all the projects, which were incomplete. On 22.2.2018, thefollowing order was passed by this Court:

“Applications for impleadment(s) is/are allowed to the extent ofintervention only.

IN W.P.Nos.160,91,164 of 2018 AND D. NO. 6636 OF 2018

Issue notice on the petition as well as on the prayer for interimrelief returnable within two weeks.

Dasti, in addition, is also permitted.

IN W.P.(C) Nos. 942/2017 AND 8 OF 2018

Heard learned senior counsel for the parties.

Pursuant to the order passed on 21.02.2018, Mr. Ranjit Kumar,learned senior counsel assisted by Mr. Gaurav Bhatia and AlokAggarwal, appearing on behalf of the promoters of Amrapali Grouphas produced compilation ‘A’ before this court on behalf of thesaid promotors disclosing the particulars of the on-going projects,stages of the work vis-a-vis the towers involved, the likely time tocomplete the remaining works and the cost of constructiontherefor.

Mr. Ranjit Kumar, learned senior counsel, has in particular drawnthe attention of this court at pages 4 & 5 of the compilation ‘A’which deal with 19 towers as mentioned therein of Amrapali LeisureValley Developers Pvt. Ltd. (Leisure Park). In the chart, on thesetwo pages of the compilation amongst others the number of units,saleable area, the proposed/likely time to complete the finishingwork, the total balance amount payable by the home buyers andthe total expenditure to be incurred in completing the work, havebeen indicated. As this chart reveals the likely time to completethe work and to deliver possession in accordance with the law,ranges from 3 to 15 months. According to the respondent, anamount of Rs.87.28 crores is required to complete the finishingworks in fairness as mentioned therein.

When enquired by this court as to the guarantee for theimplementation of the arrangements proposed for all practicalpurposes, Mr. Ranjit Kumar, on instructions, has submitted that toensure that the works are completed by the time as proposed 12

developers in addition to the Galaxy group have given their lettersto collaborate with the respondent promoters for the said purposesas testified by the documents available in compilation ‘B’.

Learned counsel appearing for the home buyers, however, haveexpressed some reservation contending that the arrangements asproposed do not inspire confidence in view of the past experienceand have pleaded that unless the 13 developers who undertake tocollaborate with promotors of Amrapali Group are tied down withnecessary conditions, the very executability of the project wouldbe doubtful. To this Mr. Ranjit Kumar, learned senior counsel hasurged that adequate undertakings would be given by the promotersof Amrapali Group as well as the other developers.

Having regard to the rival submissions made and the attendantfacts and circumstances and also considering the predominantinterest of the home buyers, we are of the view that it would be inthe fitness of things to permit the promotors of Amrapali Group toimmediately start the finishing work as proposed in the units ofthe towers as listed at pages 4 & 5 of Compilation ‘A’ on the basisof the arrangements as proposed.

In order to examine the bonafide of the proposal and the progressof the works that would be achieved, list these matters on 27thMarch at 2 P.M. By then the promotors of Amrapali Group wouldfurnish to this court complete details of the proposals in all respectsmade by the collaborators/developers and ensure completion ofthe projects/finishing work as indicated in chart.

We part with the belief that the respondents-developers would betrue to their assurances to this court and also to the home buyers.Needless to say that all promotors of Amrapali Group shall furnishtheir undertaking by 7th March 2018. Further orders in this regard,as considered necessary, would be passed on the next date i.e. on27.03.2018.

In response to the prayer made on behalf of the developers thatthe insolvency proceedings before the NCLT ought to be stayed,we on this stage leave the parties to make the appropriate prayeras advised before the said Forum.”

A10. Keeping in view the predominant interest of the home buyers,vide above order we directed the Amrapali Group to complete the projectsand the finishing work as assured, but it was not done as apprehendedby the home-buyers. This Court vide order dated 15.3.2018, directed tosubmit joint proposal with respect to providing project wise informationof the stages of various building. Thereafter, on 27.3.2018, learned seniorBcounsel appearing for Amrapali Group stated that they are ready toundertake the completion of the projects of Amrapali Group and werequested the I.R.P. of Amrapali Group not to proceed any further, inview of the assurances given by the Amrapali Group to undertake works.This Court on 10.5.2018 has passed an order for installation of lifts in theCTowers and also to make certain lifts functional. We also asked thepromoters/ developers to submit the statement of the total price of theflats, the total amount paid to the builder by the flat buyers, the totalamount spent by the builder on the construction and how the remainingpart of the money paid by buyers has been utilised. It also transpiredfrom documents that money had been transferred to certain otherDcompanies, thus, this Court has asked for the details of the compositionof the transferee company including the names of the Director and forwhat purpose money was transferred and how it is to be retrieved andhow projects are to be completed.

11. On 17.5.2018, this Court passed the following order:E

“1. Heard learned counsel for the parties.

2. Pursuant to our request made to the learned counsel, theyhave sat together and joint statement has been filed forcontaining the proposal for completion of the various projects.A joint meeting had been conducted between the lawyersrepresenting the buyers and builder of Amrapali Group and therepresentatives of Greater Noida and Noida. The proposalsare in the form of four baskets with independent timelines andthe co-developers had been chosen to undertake the completionof the projects and remaining work at the site. The independentproposals given by Amrapali along with the proposed co-developer had been placed before the concerned lawyersrepresenting the flat owners in those projects and lawyers ofNoida and the representatives of Greater Noida and broadconsensus has been reached.

3. The following are the basket-wise proposals:

FIRST BASKET

I. SAPHIRE – PHASE-I IN NOIDA :

In relation to Saphire Phase-I, consisting of 1033 units, thetime given is of 10+2 months for completion of the project.

II. SAPHIRE-PHASE-II :

It consists of 1308 units and the time sought for completion ofthe project is 12 to 15 months.

The promoter of the Saphire Phase I & II projects is M/s.CAmrapali Saphire Developers Pvt. Ltd. The developer chosenby the promoter is M/s. Galaxy Dreamhome Developers Pvt.Ltd. With respect to Saphire Phase II project, as agreed to bythe promoter, the relevant agreements entered into with co-developers to be placed within one week. The documents shallbe filed afresh, even if the same had been filed earlier, dulyDsupported by an affidavit. Let the undertaking of concernedpromoter/co-developer be also placed on record within sevendays.

III. LEISURE PARK :

This project comprises of 2993 units. There are three categoriesof this project, namely:

i) The first category comprises of the following 19 towers with1665 units and the time limit of 15 months is fixed :

1. E1 2. E2 3. E3 4&5. E4 (Two Towers)6. B2 7. B3 8. B4 9. B510. A1 11. A2 12. A3 13. A414. A5 15. A6 16. F1 17. F218. F3 19. F4

ii) The second category comprises of 3 towers, i.e., towersC1, C2, and F5. There are 411 units and time limit, as agreedto for completion is up to 22 (twenty-two) months.

(iii) The third category (River view) comprises of 7 towers,i.e., D1 to D7. There are 917 units in this category and time, asagreed to for completion is 29 (twenty-nine) months.

The co-developer of the first basket is M/s. Galaxy DreamhomeDevelopers Pvt. Ltd.

SECOND BASKET

PRINCELY ESTATE :

The promoter of the project is M/s. Amrapali Princely EstatesPvt. Ltd. There are 1919 units. Out of these, minor work isrequired to be carried out in 1600 units, possession of whichhave already been handed over to buyers and some workremains in three other towers, being towers N, O and P, whichcomprise 319 units. Time agreed for completion of same is 12months and it has been proposed that M/s. Kanodia BusinessPvt. Ltd. will be the co-developer.

It is also agreed to that as there is no water tank, no lift in threetowers, i.e., N, O & P, the work of water tank and lifts in thesetowers shall be completed within six months from today.

As the inhabitants are already occupying certain portion up tothe fifth floor, let arrangements be made, as agreed to, forwater tank on priority basis. Adequate provision for electricityconnection shall also be made within three months from today.

We defer the order with respect to Amrapali Silicon project, asagreed to.

THIRD BASKET

Amrapali-the promoter has proposed certain projects incategory-A, namely, Zodiac, Platinum, Titanium and Eden Parkin this basket.

The promoter of the Zodiac is M/s. Amrapali Zodiac DevelopersPvt. Ltd., whereas the promoter of Platinum and Titanium isM/s. Ultra Home Construction Pvt. Ltd. and of Eden Park,the promoter is Amrapali Eden Park Developers Pvt. Ltd. Thefollowing agreement has been reached with respect to theaforesaid category ‘A’ projects :

A.1. ZODIAC :

Zodiac comprises of 2230 units. It is agreed that the work inthe said units shall be completed within 12 months. The co-

developer is M/s. India Infoline Limited (IIFL) & M/s. GalaxyDreamhome Developers Pvt. Ltd.

A.2. PLATINUM & TITANIUM :

(a) Platinum comprises of 888 units, and (b) Titanium comprisesof 54 units. The work in the said units shall be completed within7 months. The codeveloper being M/s. IIFL or M/s. GalaxyDreamhome Developers Pvt. Ltd.

Let the requisite undertaking by the concerned promoter andco-developer be filed within seven days in this Court.

A.3. EDEN PARK :

Eden Park comprises of 316 units. The work shall be completedwithin 7 months. The co-developer is M/s. Galaxy DreamhomeDevelopers Pvt. Ltd.

Let the promoter and co-developer to file requisite undertakingwithin 7 days from today.

CATEGORY PROJECTS :

The following are category ‘B’ projects :

B.1. CENTURIAN :

A. CENTURIAN PARK:

Centurian Park comprises of low rise 600 units. The work shallbe completed within 10 months.

B. TERRACE HOMES :

Terrace Homes comprises of 3481 units. The work shall becompleted within 21 months.

C. TROPICAL :

Tropical comprises of 1240 units. The work shall be completedwithin 30 months.

D. O-2 Valley :

O-2 Valley comprises of 800 units. The work shall be completedwithin 12 months.

The proposed promoter is M/s. Amrapali Centurian Park Pvt.Ltd. and co-developer is M/s. IIFL.

It appears that earlier M/s. Sahi Developers Pvt. Ltd. wasappointed as co-developer under Joint DevelopmentAgreement. There is some interse dispute with respect to thework undertaken by the said codeveloper and the promoter.Be that as it may. The co-developer M/s. Sahi DevelopersPvt. Ltd. to file the details of the investment made by it in theprojects. Let the promoter also file reply to the same andappropriate orders would be passed by this Court with respectto the interest of M/s. Sahi Developers Pvt. Ltd. However, wepermit the new codeveloper M/s. IIFL to be appointed for thesaid project so that owing to the interse dispute between thepromoter and co-developer, the project may not be delayed.

B.2. GOLF HOME :

This project consists of two parts : (i) Golf Homes; and (ii)Kingswood.

(i) Golf Homes :

Golf Homes consists of 4210 units. The work shall be completedwithin the period of 6 months to 22 months and possessionshall be handed over as soon as the project is completed.

(ii) Kingswood :

Kingswood comprises of 1596 units. The work shall becompleted within nine months to 22 (twenty-two) months.

The promoter of Golf Homes and Kingswood projects is M/s.Amrapali Smart City Developers Pvt. Ltd. and the co-developeris M/s. IIFL.

B.3. TECH PARK :

Tech Park project is located in Greater Noida. The promoteris M/s. Ultra Home Construction Pvt. Ltd. and the co-developeris M/s. IIFL The work shall be completed within the time limitof 18-24 months.

PROJECT COSMOS KOCHI :

In COSMOS KOCHI, the project at Kochi, the time limit forcompletion is fixed from 9 to 18 months. The promoter of theVananchal ‘Kochi’, the project is M/s. Ultra HomeConstructions Pvt. Ltd.

In VANANCHAL CITY, Ranchi project also, the promoter isM/s. Ultra Home Constructions Pvt. Ltd.

The co-developer for both the Vananchal projects is M/s. IIFL.

FOURTH BASKET

I. DREAM VALLEY :

The promoter of Dream Valley is Amrapali Dream Valley Pvt.Ltd. This project comprises of Dream Valley Villa and Enchante,with respect to which proposal has been filed.

a) Dream Valley (Villa): This project comprises of 379 units.The work shall be completed within 6-15 months in phase-wise manner.

b) Dream Valley-2 (High Rise): This project comprises of 8302units. The work shall be completed within 9-35 months.

c) Enchante: This project comprises of 1508 units. The workshall be completed in phase-wise manner within 42 months.

The co-developer is M/s. Galaxy Dreamhome Developers Pvt.Ltd. Requisite undertaking by the promoter and the co-developer shall be filed within seven days.

II. LEISURE VALLEY :

a) Leisure Valley Villas– which comprises of 887 units, thework shall be completed within 6-15 months.

b) Verona Heights & Jaura Heights– comprise of 4964 unitsand the work shall be completed within 42 months.

c) Adarsh Awas Yojna- comprises of 1904 units and the workshall be completed within 30 to 42 months.

The promoter of the projects is M/s. Amrapali Leisure ValleyPvt. Ltd. and the co-developer is M/s. Galaxy DreamhomeDevelopers Pvt. Ltd.

III. HEARTBEAT CITY 1 & 2 :

a) In Heartbeat City-1 project, the number of units is 759plus shops. The time limit is 10-18 months; and

b) In Heartbeat City-2 project, the number of units is 1217plus shops. The time limit is from January 2020 to December2020.

The promoters of these projects are M/s. Pebble Prolease Pvt.Ltd. and M/s. Three Platinum Softech Pvt. Ltd. The co-developer is M/s. Galaxy Dreamhome Developers Pvt. Ltd.

The aforesaid period wherever fixed includes the period ofmobilization and reflects the outer limit. Let undertaking ofpromoter and developer be filed within seven days with respectto all the projects.

4. It is apparent from the admission made by the promoter thatthe money to the extent of Rs.2765 crores, out of the six projectsin question, has been transmitted to other projects. Though wewere inclined to direct the promoter to deposit the said amountin this Court, we are not doing this at this juncture, because ofthe singular reason that the various promoters of the projectshave shown their willingness to complete these projects byengaging the services of the co-developer. It is made clearthat co-developer is the agent of the promoter. No right orinterest shall accrue to the co-developer and liability towardsthe buyer shall remain with the promoter.

5. At this stage, we deem it appropriate to direct that an escrowaccount has to be opened. The said account has to be openedin the UCO Bank, Supreme Court Branch, situated in thepremises itself. At this juncture, we deem it appropriate to directthe promoters to deposit sum of Rs.250/- crores (RupeesTwo Hundred Fifty Crores) in the said escrow account, andmoney shall be deposited on or before 15th June 2018.

6. proposal has also been submitted on behalf of thepromoters of the aforesaid projects to sell some of theunencumbered property, details of which have been given atpage 28 of the affidavit dated 16.5.2018. Out of the aforesaidproposal, we find that the properties mentioned at serial

numbers 11 and 15 are of high value. The unlaunched part ofM/s. Amrapali Leisure Valley Pvt. Ltd., land of project is inGreater Noida, is held on the basis of the leasehold interestfrom the Greater Noida Industrial Authority, the realizable valueis shown to be is Rs.917.29 crores (Rupees Nine HundredSeventeen Crores Twenty Nine Lakhs). There is no bank loanbut however, there appear to be some dues to the GreaterNoida Authority on this particular property. The distress salevalue is shown at Rs.491 crores (Rupees Four Hundred Ninety-One Crores). The property mentioned at serial number 15 is apart of the unlaunched property of Amrapali Centurion Park(Commercial) held on leasehold basis from the Greater NoidaIndustrial Authority and its distress value is Rs.246 crores(Rupees Two Hundred Forty-Six Crores).

7. There are some other commercial properties, which are inthe form of hotels and other commercial properties comprisingof malls, etc. and those can also be sold for completion ofprojects. As and when concrete proposal is submitted beforeus for sale, the same shall be considered and appropriate orderswould be passed in this regard. However, the amount of Rs.250crores (Rupees Two Hundred Fifty Crores) has to be depositedby 15th of June, 2018 without fail, in the escrow account to beopened with the UCO Bank of this Court.8. There are certain outstanding dues of the buyers. It wouldbe open to the buyers to deposit the said amount in the saidescrow account. However, as soon as the projects arecompleted, we propose to give them reasonable time to depositthe outstanding dues. As soon as the promoter and co-developerare in position to hand over the possession, the buyers shallhave to deposit the outstanding amount in the escrow accountto be opened in the UCO Bank, within three months time fromthe date of issuance of offer of possession.

9. We also propose to form Committee to submit periodicalreports of the progress of the construction, to this Court,consisting of the following members:

i. Architect of the developer;

ii. Structural Engineer of the developer;

iii. Chartered Accountant appointed by the developer; aswell as –

iv. Architect of buyers

v. Structural Engineer of buyers

vi. Chartered Accountant appointed by the buyers and apartfrom the above members, we appoint Mr. M.L. Lahoty,learned Advocate, as member of the said Committee, soas to coordinate the effective functioning and to submit anappropriate periodical report in this Court. We appoint onenominee each of Greater Noida and Noida Authority, to bethe member of said Committee.

10. There are certain unsold units in the various projects thathave to be firstly adjusted by making swapping as agreed to,after that the remaining available units may also be permittedto be sold. In this regard, proposal would be submitted as andwhen swapping process is completed and the details of propertyto be sold and amount of offer by the prospective buyers, beindicated by this Court. The proposal will be submitted forconsideration so that appropriate orders may be passed by thisCourt. Let the Committee constituted by us also to supervisethe swapping part.

11. Eight weeks’ time is granted to the buyers for the purposeof applying for swapping and decision shall be taken within 15days from the date of application for the purpose of swappingis filed before the promoters. In case there is any difficulty inswapping, the Committee is authorized to take care of thegrievances and to guide the promoters as well as the buyers.

12. As there are certain dues of Noida and Greater NoidaAuthorities and that of the secured creditors and operational/unsecured creditors, let the proposal be submitted by thepromoters in this regard, on or before 07.07.2018. We alsoplace on record that approximately sum of Rs.4,300-4,900/-crores will be required for completion of the various projectsas pointed out by promoters.

13. There are certain ‘C’ category projects. With respect tothose projects also, as they are not taken care of during

swapping or there may be certain buyers not willing forswapping or certain amount may be required to be refunded tothe buyers, who are not intending to purchase now and notopting for swapping or/and is not feasible, to take up thoseprojects. The promoter shall also file its proposal with respectto such buyers who want their money to be refunded. Let thatproposal be also filed after swapping is done indicating thereinas to how many persons require to refund the money. Thebuyers in ‘C’ category projects only who are intending to obtaina refund, may also submit their proposal to the concernedpromoter in the meantime, within one month from today.

14. The promoters with respect to Silicon Valley have appliedfor connection for electricity, sewerage, and water, as per theorder passed by this Court on 10.5.2018. The aforesaid orderis carried out punctually. The promoters of Silicon Valley hasundertaken to make the payment of dues onwards.

15. The joint statement that has been filed has been signed inthe Court by the learned counsel for the promoters as wellas by learned counsel for the authorities and the flatbuyers, is placed on record and made part of this order as“Annexure-A”.

16. The aforesaid Committee constituted by us is also requestedto evaluate the work undertaken by M/s. Sahi Developers Pvt.Ltd. so far and submit report in the 1 st week of July 2018.

17. Let nominations be made by the developers, flat buyersand authorities within seven days from today, under intimationto this Court.

18. The matter has been heard in part and requires furtherhearing. List on 18.7.2018 at 2.00 p.m.

19. It is agreed to, that with respect to essential amenities, theorder passed by this Court on 10.5.2018 shall also apply toSilicon City Phase I project and in case inhabitants are there insome towers, the same shall apply to Silicon City Phase-IIproject also.”

The aforesaid order was passed on the basis of the joint proposal,which was in the form of four baskets with independent timelines,submitted in this Court.

A12. It was also mentioned in paragraph 4 of the above order thatadmission has been made by the promoters/builders that the money tothe extent of Rs.2,765 crores, out of six projects has been transferred toother projects. Though we were inclined to direct the promoter to depositthe said amount in this Court, we refrained from directing as the willingnessto complete the projects was shown by engaging services of co-Bdevelopers and builder assured that it would undertake the work. It wasproposed to sell certain unencumbered properties of Amrapali Group forpayment of these projects, however, this Court directed to deposit anamount of Rs.250 crores in the escrow account to be opened in theUCO Bank, Supreme Court Branch on or before 15.6.2018. This orderCwas again not complied with and the work was not undertaken andinability was shown to deposit the amount in the escrow account asordered. When the case was listed on 18.7.2018 in this Court, learnedcounsel appearing on behalf of promoters was to place progress report,but in order to wriggle out of the compliance of order, totally different

stand was taken in this Court and it was stated that notice datedD13.7.2018 has been issued by the Ministry of Housing and Urban Affairs,which was placed on record, indicating that High-Level Committeehas been created by the Government of U.P. to redress the issues ofhome buyers and the affected parties of incomplete/stalled house projectsin the Noida/ Greater Noida/Yamuna Expressway under the ChairmanshipEof Secretary, Ministry of Housing and Urban Affairs. It was submittedon behalf of Amrapali Group that meeting was held today and prayedthat something concrete is likely to happen within ten days. We deferredthe hearing up to 1.8.2018. However, at the same time, we directed thebuilder to file the accounts with effect from 1.4.2008 till date under thecertificate of Chartered Accountant and also list of all assets in aFsealed cover in this Court. As matter of fact, there was no complianceof the order dated 17.5.2018 of this Court, but the totally indifferentstand was taken so as to wriggle out of their obligation under said orderwas passed by this Court on the basis of the joint statement.

13. This Court has passed an order on 1.8.2018, wherein it wasGobserved that in order to scuttle the hearing in this Court, it was statedthat the meeting was held on the very same day. The order passed bythis Court on 17.5.2018 to deposit Rs.250 crores had not been compliedwith. There was also an admission made by Amrapali Group that therewas diversion of more than Rs.2,765 crores from six projects. This

Court observed that money could not have been diverted. That wouldprima facie tantamount to criminal breach of trust. We directed thatthe individual bank accounts of the Directors of all the 40 companies befrozen and ordered attachment of the properties in the individual namesof Directors and also put restriction on the alienation of the propertiesin the names of individual Directors etc. Following order was passed bythis Court:

“1. On 17.5.2018, we have passed detailed order in these casesafter hearing learned counsel for the parties for several days. Weneed not reiterate the directions, statements, representations madeto this Court and the orders which we have passed. Order dated17.5.2018 is clear in this regard. As per the order passed by thisCourt, certain obligations were imposed and certain directions wereissued which were to be complied with by the group of companiesas well as the co-promoters, etc., as mentioned in the aforesaidorder. The compliance has not been reported an effort was madeto wriggle out of order passed on 17.5.2018.

2. When the matter was taken up on 18.7.2018, compliance ofthe order was not reported and on the other hand, letter dated13.7.2018 signed by Mr. Akhil Saxena, Deputy Secretary to theGovernment of India, was placed on record. The letter is extractedhereunder :

“No.D.17024...sicGovernment of IndiaMinistry of Housing and Urban Affairs

Nirman Bhawan, New DelhiDated July 13, 2018

Meeting Notice

Subject: Meeting to discuss the issues of homebuyers andaffected parties of Noida/Greater Noida/Yamuna Expresswayscheduled to be held on 18.07.2018 at 11:00 A.M. - 1.00 P.M.- regarding.

The undersigned is directed to state that High-LevelCommittee has been constituted by the Government of UP toredress the issues of homebuyers and affected parties ofincomplete/stalled housing projects in the Noida/Greater Noida/

Yamuna Expressway under the Chairmanship of Secretary,Ministry of Housing and Urban Affairs.

2. In this regard the Chairman of the Committee and SecretaryMoUHUA will hold meeting with the developers/promoters(Amrapali Group Jaypee Infratech Limited, Three Group ofCompanies and Unitech Limited) on 18 July, 2018 at 11:00 A.M.- 1:00 PM in Room No.123-C, Conference Room, 1st Floor,Nirman Bhawan, New Delhi. You are requested to kindly makeit convenient to attend the meeting personally. You may alsobring the details of the housing projects promoted by yourcompany along with your specific plans as to how earliest youcan deliver the flats/houses to the home buyers who have madepayments towards the same to your company.

3. line in confirmation on email, [REDACTED] be highly appreciated.

(Akhil Saxena)Deputy Secretary to the Govt. of IndiaTel No.23062280

1. Shri Shiv Priya, ED, Amrapali Group, C-56/40 Sector-62,Noida-2301307.

2. Shri Nirmal Singh, Three Group of Companies, TechBoulevard Central Block, Plot No.6, Sector 127, Noida-201307.

3. Shri Manoj Gaur, Jaypee Infratech Limited, Sector 128,Noida-201304 (U.P.), India.

4. Dr. Ramesh Chandra, Chairman, Unitech Limited, 6,Community Centre, Saket, New Delhi-110017.

Copy to :

1. Sr.PPS to Secretary, Ministry of Housing and Urban Affairs.

2. PPS to Additional Secretary (Housing), Ministry of Housingand Urban Affairs.

3. PS to Economic Adviser (Housing), Ministry of Housingand Urban Affairs.

4. Deputy Secretary (Housing), MoHUA

(Anil Saxena)Deputy Secretary to the Govt. of IndiaTel. No.23062280"

3. In order to scuttle the hearing in this Court on 18.7.2018 onwhich the case was listed, it was reported to us that meeting washeld on that very day which was presided over by the Secretary,Ministry of Housing, who is the Chairperson of the Committeeand Secretary MoUHUA. Thereafter, pursuant to the said meetingit was stated today that NBCC India Limited, Government ofIndia enterprise, has invited “Expression of Interest” for jointdevelopment in real estate with respect to the development ofresidential and commercial real estate projects in Delhi and NCRregion, inclusive of the Amrapali Group for which we have alreadypassed orders on 17.5.2018.

4. In case the Committee constituted by the Government of UttarPradesh wanted to take up the matter of Amrapali Group in viewof the order dated 17.5.2018, it was necessary for them to seekthe express permission from this Court, as this Court was in seisinof the matters, before transacting any business in this regard. Butthat has not been done and when the order of this Court stands, itwas not at all appropriate or permissible to take up the matter bythe Committee and intermeddle with the order passed by this Courtwhen the matter is pending in this Court. The action has cleareffect on rendering order passed by this Court ineffective. In thecircumstances, we deem it appropriate to direct the presence ofthe Secretary to the Ministry of Housing and Urban Affairs andthe Chairman of the NBCC India Limited and to file their affidavitin this Court and produce entire record so as to show how theyhave convened the meeting and acted in the manner in the matterpending in this Court, without permission of this Court beforedealing with the matter of Amrapali Group. Let them be presentbefore this Court tomorrow, i.e., on 2.8.2018, at 2.00 p.m. to explaintheir stand.

5. Mr. Anil Kumar Sharma, Chairman and Managing Director(CMD) of Amrapali Group of Companies were personally present

338SUPREME COURT REPORTS[2019] 9 S.C.R.

Ain this Court. He has stated that there are 40 companies in theAmrapali Group of Companies. They are as follows:

1. Ultra Home Pvt. Ltd.

2. Amrapali Silicon City Pvt. Ltd.3. Amrapali Zodiac Developer Pvt. Ltd.B4. Amrapali Sapphire Developer Pvt. Ltd.5. Amrapali Princely Estate Pvt. Ltd.6. Amrapali Eden Park Developer Pvt. Ltd.7. Amrapali Smart City Developer Pvt. Ltd.8. Amrapali Smart City Pvt. Ltd.9. Amrapali Leisure Valley Pvt. Ltd.C10. Amrapali Leisure Valley Developer Pvt. Ltd.11. Amrapali Centurian Park Pvt. Ltd.12. Amrapali Dream Valley Pvt. Ltd.13. Amrapali Homes Project Pvt. Ltd.14. Hi-Tech City Developer Pvt. Ltd.D15. Sangam Coloniger Pvt. Ltd.16. Shalimar Coloniger Pvt. Ltd.17. Amrapali Infrastructure Pvt. Ltd.18. Amrapali Aerocity Pvt. Ltd.19. Amrapali Mahi Developer Pvt. Ltd.20. Amrapali Buddha Developer Pvt. Ltd.E21. Amrapali Hospitality Pvt. Ltd.22. Amrapali Biotech Pvt. Ltd.23. Amrapali Health Care Pvt. Ltd.24. Amrapali Hospitality Pvt. Ltd.25. Amrapali Power & Cement Pvt. Ltd.F26. Stunning Construction Co. Pvt. Ltd.27. Kapila Build Home Pvt. Ltd.28. Gaurisuta Infrastructure Pvt. Ltd.29. Gaurisuta Infra Solution Pvt. Ltd.30. MSB Software Pvt. Ltd.31. MVG Techno Consultant Pvt. Ltd.G32. Noida Text Fab Pvt. Ltd.33. Navodya Properties Pvt. Ltd.34. AHS Joint Venture35. Amrapali Homes36. Amrapali Grand37. HIMS Pvt. Ltd.H

38. Amrapali Spring Valley Pvt. Ltd.

39. Amrapali Patel Platinum

40. Amrapali Media Vision Pvt. Ltd.

6. The order passed by this Court of depositing 250 crores ofrupees has not complied. There is an admission already made byAmrapali Group that there was diversion of more than 2765crores of rupees from six projects to other projects. In thecircumstances, we direct the Bank accounts of all the aforesaid40 companies be frozen forthwith. We forthwith attach the entireimmovable properties of these 40 group of companies. They shallnot be entitled to deal with the same in any manner whatsoeverwithout the express permission of this Court.

7. There was diversion of the funds, prima facie it is apparentthat when the money was paid by the buyers for the purpose ofinvestment in the particular project, it could not have been diverted.That would prima facie tantamount to criminal breach of trust.We are not expressing any final opinion in this regard at thismoment. However, at the same time, we propose to take call onthis after hearing the parties on this aspect. However, so as tofurther ascertain the extent of internal and external diversion fromall the projects. The names of all the Chartered Accountants ofall the aforesaid 40 companies be disclosed to us and their reportsfrom 2008 till today be placed on record by tomorrow.

8. The individual Bank accounts of the Directors of all the 40companies are also freezed and they shall not be entitled to operatethe same with immediate effect. Let details of all Bank accountsbe furnished by tomorrow of companies and their Directors andof personal accounts of Directors. The properties in the individualnames of the Directors are also attached and the same shall notbe disposed of or alienated in any manner without the expressorder of this Court.

9. Let the matter be listed tomorrow, i.e., on 2.8.2018 at 2.00 p.m.Mr. Anil Kumar Sharma, Mr. Shiv Priya and Mr. Ajay Kumar ofAmrapali group of companies to remain personally present in thisCourt tomorrow, along with the aforesaid officials.”

14. It was stated by Secretary, Ministry of Housing and UrbanAffairs that he was not aware of the order passed by this Court on

A17.5.2018, appointing promoters and time frame and stated that he neverintended to violate the order passed by this Court. On 2.8.2018, we haverecalled the order dated 17.5.2018, considering the dubious and unfairconduct of the Amrapali Group of Companies and on each and everyday they have been shifting their stand. Earlier, they have filed affidavitsmaking certain representations and now want to wriggle out of it. FollowingBorder was passed on 2.8.2018, recalling the order dated 17.5.2018:

“1. Pursuant to the order passed yesterday, i.e., on 1.8.2018, Mr.Durga Shankar Mishra, Secretary, Ministry of Housing and UrbanAffairs, has stated that Committee has been constituted by theGovernment of Uttar Pradesh under his chairmanship to look intothe problems of three lakhs home buyers of Noida, Greater Noida,and Yamuna Expressway. The Committee has been constitutedso as to take policy decision so as to solve the problems of thehome buyers. On 25.6.2018, the first meeting of the then ChiefExecutive Officers (CEOs) of the Noida and Greater Noida, realestate representatives, etc. was held and thereafter, second meetingwas held on 10.7.2018, which was attended by 32 persons, interalia including certain representatives of the Flat Owners WelfareAssociation, Joint General Manager, ICICI Bank, AGM of theBank of Baroda, General Manager of HDFC Bank and Chairmanof CREDAI had also attended the meeting. Thereafter, no meeting

of the Committee has been held. However, discussion with theChairman of representatives of the four builders, i.e., AmrapaliGroup, Jaypee Infratech Ltd., Three Group and Unitech Limitedwas held on 18.7.2018, along with details of the housing projectspromoted by their companies and with the specific plans as toFhow earliest they could deliver the flats/houses to the home buyerswho have made payments towards their companies. It was alsostated by the Secretary that he was not aware that this Court haspassed an order on 17.5.2018 appointing promoters etc. and thetime frame within which the projects have to be completed. Hehas also stated that he never intended to violate the orders passedGby this Court. The statement made by Mr. Mishra is placed onrecord.

2. It was also submitted that NBCC issued advertisement on30.7.2018 and the Chairman of the NBCC has informed us thatthe said advertisement was not issued specifically for AmrapaliHGroup of companies. Similar advertisements have been issued

earlier too. However, it was stated by the Chairman that they areready to undertake the Amrapali Group projects and to completethem, after making the detailed study of the stage and investmentwhich is required to be made in the projects that are incomplete.

3. Pursuant to the directions issued by the Court, Amrapali Grouphas placed on record the account numbers and other details of 38of Amrapali Group of companies only, but not that of the personalaccounts and the accounts in names of its Directors, as per theorder passed by this Court on 1.8.2018. They have furnished thedetails of 38 companies out of 40. They are contained in Annexuresmarked as X-1 and X-2.

4. We direct the Registry to apprise the concerned Banks alongwith the text of the order and the account numbers so furnished.Let the copy of the order be sent to the Banks for its duecompliance.

5. It was stated that the personal Bank accounts in the names ofthe Directors of aforesaid 40 companies are in the process ofcompilation and that the account numbers shall be furnished tothis Court by Monday, i.e., 6th August 2018. On the accountnumber being furnished, the Registry is directed to intimate theorder to the said Banks also regarding the order passed by thisCourt on 1.8.2018.

6. Two applications, i.e., I.A.Nos.82917/2018 and 92775/2018 inW.P.(C)No.942/2017 have been filed by the Amrapali Silicon CityFlat Owners Welfare Society and Heartbeat City for modificationof order dated 17.5.2018. It was also pointed out that one of co-developer, IIFL, has backed out, thus, it was not possible to complywith the order dated 17.5.2018 and same requires modification.The sum of Rs.250 crores has also not been deposited. Anapplication has been filed so as to waive that requirement also.When we see the conduct of the promoter on the various stages,it is apparent that on 18.7.2018 on behalf of the promoter it wasstated before us that the Committee has been constituted by theGovernment of Uttar Pradesh under the Chairmanship of theSecretary, Ministry of Housing & Urban Affairs, as such we shouldwait for the outcome of same. Yesterday, i.e., on 1.8.2018 it wasstated before us that NBCC is now considering to take over theentire project of Amrapali Group as it has issued an advertisement

for the purpose and as such the Court should stay in our hands. Inthe circumstances, it is apparent that the Amrapali Group doesnot intend to abide by order dated 17.5.2018 and its conduct isdubious. Thus, we have no hesitation in recalling the order dated17.5.2018 permitting Amrapali Group to complete the projects.We hereby recall the order entrusting the project to the AmrapaliGroup of companies for completion, along with co-promoters, andwe place it on record that the conduct of Amrapali Group ofcompanies is wholly unfair and on each and every date they havebeen shifting their stand before us and it was absolutely improperon their part to do so. They have violated our order also. Theyhave earlier filed affidavits making certain representations andnow want to wriggle out of that. Be that as it may. We recall theorder dated 17.5.2018 under the aforesaid circumstances.

7. In the circumstances, as the Chairman of the NBCC is presentbefore us and has shown willingness to undertake the projects,the matter cannot be left at that. Let the NBCC complete theprojects, let it undertake the study and work out the details. Thoughthe time of 45 days was prayed, considering the urgency of thematter, we grant 30 days’ time, as the people are deprived ofbasic necessities of life, and they are residing in some incompletebuildings. We appreciate the gesture of the Chairman of NBCC,

who has assured us to complete the projects as may be directedand to submit proposal in this Court within 30 days. Let proposalbe submitted in 30 days before us.

8. In the circumstances, we direct the promoters and also requestMr. M.L. Lahoty and two other representatives to be nominatedby home buyers to assist and submit the details and all requisitedocuments to the Chairman, NBCC as also to the Chairman ofthe Committee. Noida authority and Greater Noida authority shallalso furnish to them all the documents which are in their possession.Let promoter, Noida authority, Greater Noida authority and buyersfurnish all the documents/pleadings they have submitted to thisCourt, within three days from today.

9. We also place on record the appreciation to the offer made bythe Chairman, NBCC, and also by Mr. Mishra, Chairman of theCommittee. Let them make an endeavour to form policy and tosolve problems of other groups of companies also. However, the

matters are pending in the Court, they have to appraise this Courtof their proposals and only thereafter to take steps in this regard.

10. Mr. Anil Mittal, the Chartered Accountant of Anil Ajay &Company, who is the statutory auditor for most of the companies,is present in the Court. Similarly, Mr. Ravi Kapoor, the CharteredAccountant of Serva Associates is also present in the Court. It ispointed out that the information furnished by them is contained onpage 6 and 7 of the compilation Annexure X-1. It is stated by Mr.Anil Mittal that his engagement as statutory auditor has begun inthe year 2008 and continued up to 2015. He was the auditor from2008 and has also stated before us that after 2015 no papers havebeen given to him. It was stated by Mr. Gaurav Bhatia, learnedcounsel, that at present S.N. Dhawan & Company is doing theaudit of the Company.11. Since we find that various documents have been placed onrecord indicating transfer/diversion of the fund by the AmrapaliGroup itself, the Amrapali Group has admitted that out of the sixprojects, there was transfer/diversion of Rs.2765 crores. Thoughit was submitted that the amount was transferred to other projects,in our opinion, this was clearly diversion of funds. The amountgiven by the home buyers for the completion of their projects/houses could not have been diverted before the completion of theprojects. We request the auditors to find out how much moneyhas been so transmitted/diverted to other projects and how it hasbeen used. Let projectwise information of all projects be furnished.The Amrapali Group of Companies shall furnish the requisiteinformation and documents and shall cooperate with the statutoryauditors. Let the auditor certify how much money has beendiverted from which project and how it has been used in otherprojects, including the projects of Heartbeat city. The internalauditor is requested to assist Mr. Anil Mittal in this regard.

12. It was stated before us that the bank accounts of AmrapaliHealthcare Pvt. Ltd. have also been frozen and it is necessary torun the hospital to keep the accounts operational. Considering thefact that the hospital requires money on day-to-day basis, weorder de-freezing of account of Amrapali Healthcare Pvt. Ltd.only. However, at the same time, we direct that let the details ofthe bank account(s) of it be placed before us right from 2008 till

date. Interim order dated 1.8.2018 to continue unless otherwiseordered.

13. For the purpose of assessing the proposal to be submitted bythe NBCC and to pass requisite orders in this regard, we fix thehearing on 4.9.2018 at 2.00 p.m. Let the aforesaid reports beBsubmitted by Mr. Anil Mittal and Mr. Ravi Kapoor, CharteredAccounts before 4.9.2018.

For further order of other IAs. and arrangement of funds to beprovided to NBCC and regarding furnishing of accounts, let mattersbe listed on 8.8.2018 at 2.00 p.m. Personal presence of Secretary,Housing and Urban Affairs and Chairman, NBCC, is dispensedwith.”

15. There are various order sheets indicating how the wrong andincomplete information had been submitted on behalf of Directors ofAmrapali Group of Companies.

D16. The National Building Construction Corporation Ltd. had beenappointed by this Court to complete the construction vide order dated12.9.2018.

17. Vide order dated 8.8.2018, this Court had directed the Directorsof various companies including the Managing Directors to file affidavitsEregarding immovable properties and moveable properties and theirvaluation. We had earlier asked the statutory auditors of Amrapali groupof companies to conduct the audit. However, it was pointed out on4.9.2018 that there was the necessity of appointing independent auditorsso as to conduct forensic audit. On 6.9.2018 this Court directed theforensic audit. Following order was passed on 4.9.2018 :F

“We have heard learned counsel for the parties. proposal hasbeen submitted by the NBCC in the booklet form. Let it be placedon record along with an affidavit of responsible officer of theNBCC. Let copy of the same be circulated to the learned counselappearing for the parties.

Let Amrapali Group of Companies file response to the NBCC’sproposal for completion of the project.

We have heard Sh. Gaurav Bhatia about the property which canbe sold. He has attracted our attention to the affidavit of Shri Anil

Kumar Sharma in terms of the Court’s order 10.5.2018 filed withrespect to I.A. No. 7366 of 2018 in W.P. No. 942 of 2017.

He has submitted that Saleable Area Commercial is described atpage 20 of the affidavit. The value is given as per the developmentmodel, not the Distress Sale Value. Let Distress Sale Value bealso stated on affidavit and with respect to the fact that what arethe encumbrances and also the dues of Noida/Greater NoidaAuthorities as against the property as mentioned at page 20 of theaffidavit.

He has also attracted our attention to the list of encumberedproperty on page 27 of the affidavit and list of unencumberedproperty on page 28.

Let affidavit be filed specifically stating with respect to the natureand extent of encumbrances with respect to encumbered propertyand how much is the amount due and what are the documentsexecuted.

With respect to list of the unencumbered property also mentionedat page 28 there are certain dues of Noida/Greater Noida Authoritythat may be clearly specified and let affidavit also specificallystate that these properties are otherwise unencumbered properties.Affidavit in detail be filed in this regard too.

With respect to the audit, the accounts for three years have notbeen made available to statutory Auditor as pointed out by Mr.Anil Mittal of Anil Ajay & Co., appointed by this Court.

Mr. Maninder Singh learned senior counsel has urged that thereis the necessity of appointing independent auditors so as to conducta forensic audit. He has prayed for time to suggest the names inthis regard. It was also pointed out by the learned counsel appearingfor the Bank of Baroda that certain audit exercise has beenundertaken on behalf of the Bank of Baroda with respect to thetransaction entered into with Bank of Baroda which was thesubject matter of other proceedings. Let the names of Auditor besuggested so as to conduct deep and pervasive forensic audit ofthe Amrapali Group of Companies.

Suggestions be made on the next date of hearing.

AMr. Shyam Diwan and Mr. Siddharth Luthra learned senior counselhave pressed I.A. Nos. 124711-124712 of 2018 and I.A. No. 36562of 2018. These I.As are to be considered after forensic Audit isconcluded and report is received.

List on 6th September 2018.”B

18. This Court appointed Mr. Ravi Bhatia of M/s. Bhatia & Co.and Mr. Pawan Kumar Aggarwal of M/s. Sharp & Tannan Company toconduct the forensic audit, which was ordered to be conducted witheffect from the year 2008 till date, to be completed within two months.On 12.9.2018, list of properties was submitted which was to be sold byCthe Debt Recovery Tribunal, Delhi, (DRT) and the details of properties,title deeds and maps were to be submitted to the DRT. This Court directedstatutory Auditor, Mr. Anil Mittal, to hand over the original records ofAmrapali group of companies vide order dated 12.9.2018. This Courtalso directed remaining records from 2008 till date, be handed over within10 days. Amrapali group of companies were also directed to hand overDthe documents required by the forensic auditors. The matter was takenup by this Court on 26.9.2018. Considering the non-cooperation of theDirectors, the following order was passed by this Court on 26.9.2018 :

“Heard the learned counsel for the parties.

EIt was pointed out by Mr. M.L.Lahoty, learned senior counselthat there are certain existing Directors, namely, Mr. AnuragSanghai, Mr.Vinay Vishal and Mr.Sankalp Shukla, particulars oftheir properties, etc. have not been filed as ordered by this Courtand there are several other existing or former directors whosenames have not been disclosed. Let the names of all the directorsFbe disclosed without remiss before the next date fixed along withdetails of asset etc. as already ordered by this Court.

It was also pointed out by Mr. Lahoty in I.A. No.116688/2018that ‘O’ 2 valley particulars have not been disclosed by the groupof companies. Let reply to the said I.A be filed by the AmrapaliGGroup of companies and details of ‘O’ 2 Valley be also disclosed.

It was also pointed out that DRT has initiated the proceedings andhas directed the production of the original documents, sanctionedplans and other relevant documents available with Amrapali Groupof Companies. It was also submitted that valuation has also been

ordered. We direct the Amrapali Group of companies and theDirectors viz. Mr. Anil Kumar Sharma, Ms. Shiv Priya, andMr.Ajay Kumar to submit Maps clearly delineating anunencumbered portion of their properties and other details whichhave been asked by the DRT. Let them be present before theDRT on each and every date until and unless it is specificallydispensed with by the DRT. Let the order of DRT be compliedwith by the Amrapali Group of the company before 4.10.2018.

With respect to the handing over the documents by the StatutoryAuditors as well as by the Amrapali Group of companies, we noteit regrettably that order passed by this Court has been violatedand the documents have not been handed over in spite of clearand categorical direction to hand over the documents to forensicauditors within ten days. However, it was pointed out by Mr.Gaurav Bhatia, learned counsel that statutory auditors are goingto hand over the document, etc. w.e.f. 2008 to 2015 by tomorrowto the forensic auditors. Let all the necessary documents whichmay be in possession of Amrapali Group of companies in additionto statutory auditors be also handed over from 2008-2015 andalso all the papers of Amrapali Group of companies 2015-2018 bytomorrow. We make it clear that the documents with respect to2015-2018 shall be handed over by the Amrapali Group companies

along with all the original documents necessary to do audit shallbe handed over to the forensic auditors by tomorrow. Let accountbooks in whatever status they are, at present, be also handedover.

We request the forensic auditors to send their representative onthe next date of hearing to apprise us of compliance of this order.

Before IRB certain proceedings are pending for recovery of duesand inter alia, there are dues of Bank of Maharashtra, etc also aspointed out including that of Bank of Baroda.

Let the details of all the outstanding dues of secured and unsecuredcreditors project-wise and in total be submitted in this Court in atabular form. Let total outstanding dues be stated, including thatof Noida and Greater Noida authorities supported by affidavit.

Mr. Anoop Kumar Mittal, Chairman of the NBCC and Ms. PinkyAnand, ASG are present. It was pointed out on behalf of the

ANBCC that detailed project report has to be prepared of Group AProject within 30 days and Group and Projects within 60days. It was also pointed out that tenders may be permitted to befloated by NBCC Group and projects. The NBCC is permittedto float the tenders and also to go ahead with the preparation ofthe DPRs and also to submit detailed proposals, terms, andBconditions in this Court as prayed by them. Existing architects ofAmrapali Group of Companies to ensure cooperation with theNBCC. Non-cooperation shall be viewed seriously by this Court.

Let DRT go ahead with the process of finding out theencumbrances. We also permit the Bank of Maharashtra and allCother such creditors who may have charge on the unencumberedproperty to state their claim before DRT.

Let reply be filed in IA No.139255/2018, 117300/2018,95140/2018,135446/2018, 138400/2018.

DAll applications for impleadments to the extent of intervention areallowed.

List on 9.10.2018.”

19. On 9.10.2018 when despite the orders dated 12.9.2018 and26.9.2018, orders were not complied with, records were not handedEover and there was utter violation of orders passed by this Court, wedirected the Police to seize all the documents and to hand them over tothe Forensic Auditors from the possession of 46 companies and theirDirectors. We directed all the Directors to surrender their passports andhand them over to the Police. The observations made by this Courtwere being misused by Amrapali group of companies, “No coerciveFaction will be taken by any authority with respect to the building wherecompletion is going on under the order passed by this Court”. As observedon 27.3.2018, we clarified that the observations did not deal with anypolice investigation in any criminal case or in FIR which may have beenregistered with the Delhi Police, EOW, to make investigation in anyGcase which is required to be made. Police was free to make aninvestigation. On 10.10.2018 this Court directed the concerned policeofficers to seal all the seven premises situated at Noida and GreaterNoida. On 11.10.2018 certain directions were issued so as to facilitatethe forensic audit. After audit work was over for the day, on prayer

made by learned counsel on behalf of the three Directors of Amrapaligroup of companies, they were permitted to stay overnight in Hotel ParkAscent but they shall not be allowed any access to the mobile phone orthe facility of telecommunication without permission in writing of thepolice. This Court also directed issuance of formal notice on the suomoto contempt.

20. On 24.10.2018 the forensic auditors were present. They havedisclosed as to diversion of funds of more than Rs.100 crores to firmknown as GauriSuta Infrastructures Pvt. Ltd. in which Ashish Jain andVivek Mittal were the Directors. They are stated to be the relatives ofthe Statutory Auditors. We directed the personal presence of ChanderWadhwa, CFO of Amrapali group of companies on the next date. On26.10.2018 the Forensic Auditors submitted an interim report. It waspointed out that the tally data of 23 companies, reserves and surplusfigures as appearing in the tally data does not reconcile with the reservesand surplus as appearing in the last signed financials. The difference hasalso been pointed out in tabular form. There were several advances,investments, utilisations, advances made to suppliers and payments madeto Mr. Anil Sharma and Mr. Shiv Priya, Directors of the company forprofessional charges, etc. It was also pointed out that in spite of repeatedreminders, groupings have not been supplied. Grouping is process toindicate the process between the stage of trial balance, balance sheet,and profit and loss account. All files had not been handed over and Mr.Anil Mittal, the Statutory Auditor had sent one file late in the evening.This Court ordered that in case documents were not handed over, thesame shall be viewed seriously and the incumbents punished suitably.The last opportunity was granted to hand over the requisite documentsto the Forensic Auditors. We directed Statutory Auditors to comply withthe requisition made by the Forensic Auditors. It was also noted by thisCourt that sum of Rs.242.38 crores had been handed over to GaurisutaInfrastructure Private Ltd., Vidhyashree Buildcon Private Ltd., MannatBuildcraft Private Ltd. This Court observed in para 5 thus :“5. It has also been pointed out by Shri Pawan K. Aggarwal in hisreport that so far with respect to four companies, namely, GaurisutaInfrastructure Pvt. Ltd., Vidhyashree Buildcon Pvt. Ltd., MannatBuildcraft Pvt. Ltd. And Jhamb Finance & Leasing Pvt. Ltd.,only it has been noticed that sum of Rs.242.38 crores has been

handed over to them and in most of these firms Shri Ashish Jainand Shri Vivek Mittal are the Directors. Beside, it was statedbefore us by Shri Anil Mittal, statutory auditor, that his nephew-Vivek Mittal joined as Director on the request made by ShriChander Wadhwa, CFO, to create company and he has in turnasked Shri Ashish Jain, an employee of his client, to join as anotherDirectory of at least 10 companies, created at the request of theCFO and Amrapali Group of Companies. It is shocking state ofaffairs that the statutory auditor himself was responsible for thecreation of companies in an aforesaid manner. Shri Anil Mittalhas also stated before us that he was aware that the money wasflowing to the said companies through bank statements. However,on specific query made by this Court to him, he has admittedthat this fact of flow of money was not reflected in the auditreport, which was signed by him in the audited Balance Sheet, inspite of knowing the fact that money has flown out of the accountsof the Amrapali Group of Companies to aforesaid companies.”

About the creation of companies consisting of his nephew asDirector on the request made by Mr. Chander Wadhwa, CFO for askingAshish Jain, an employee of his client, to join as another Director. TheCompany agreed at the request of the CFO and Amrapali group ofcompanies.E

21. Since the CFO did not reply to the questions put by the ForensicAuditors to him, his conduct has been noted by this Court thus:

“6. We regretfully also note the conduct of the CFO, who ispersonally present before us today. His questions and answershave been placed on record by Shri Pavan K. Aggarwal, ForensicAuditor, along with his report and today we find that Shri ChanderWadhwa has contradicted his version which he had made to theForensic Auditor. He has apologized for making wrong statementsto the Forensic Auditor and has assured us that in future he willrender all cooperation to the Forensic Auditors rightly, honestlyand diligently. He has admitted today that there was appointmentorder as CFO and there was an authorization in writing issued tohim for dealing with the banks. He has virtually contradicted theentire statement which he had made and has feigned ignorance tothe Forensic Auditors. Be that as it may. We give him the last

opportunity to come out clean and live up to the reputation of aprofession of Chartered Accountant. Let him cooperate withthe Forensic Auditors, supply entire information correctly, trulyand diligently. In case any remiss is found, it is made clear notonly to him but also to the statutory/internal auditors that we willbe compelled to take appropriate action as against them in theaforesaid factual situation, including the one for the professionalmisconduct.”

22. It was further pointed out by the forensic auditors that therewere 23 more groups of companies to whom money had been divertedand these companies had been created by Amrapali group of companies.This Court directed disclosure of these companies in the order dated26.10.2018 thus:

“7. Shri Pavan K. Aggarwal has also pointed out to us that thereare 23 groups of companies to whom the money has been divertedand these companies have been created. Let the names of thecompanies be disclosed to the Amrapali Group of Companies andwe direct the police to seize all the documents of these 23companies to which money has been diverted and be handed overto the Forensic Auditors.

9. We also direct the Directors of other 23 companies, whichhave been identified so far by the Forensic Auditors, to file theirdetailed affidavits in this Court, disclosing the amount received bythem, dates of receipt, for what purpose and how it is utilized andinvested by them.”

23. We had also directed Mr. Chander Wadhwa, CFO to fileaffidavit pointing out appointment order, authorisation, authority to signany voucher and his entire role in the organisation thus:

“13. Let Shri Chander Wadhwa, CFO, file his affidavit in thisCourt placing the appointment order; authorization made to himfrom time to time; his authorization letters; details of attendance,if any, at the Board meetings; authority to sign any voucher; andhis entire role which he has performed in the organization. Besides,it was also stated by Shri Chander Wadhwa, CFO, that he wasone of the Directors of the Amrapali Development UK Ltd. andSaffron LLP, Delhi. Let the details of the Articles of Association

Aof these companies be placed on record and the presentcomposition of the Directors and the entire transactions be disclosedon affidavit, along with the documents of these companies andreturns, if any, which have been filed, be also handed over to theForensic Auditors and affidavit be filed in this Court in this regard.

B14. It was also stated by Shri Chander Wadhwa that his nephewis one of the Directors in M/s. Rinku Computech, one of theshareholders of the Amrapali Biotech India Pvt. Ltd. His disclosureon affidavit be also made by Shri Chander Wadhwa.”

24. We also issued other directions to ensure that laptops andCcomputers were made available to forensic auditors. On 31.10.2018 thisCourt noted that certain transactions of Amrapali group to Zodiac/J.P.Morgan, Mauritius/Singapore by the creation of various companies. Wedirected the bank statement of J.P. Morgan from 2008 till date to befiled. With respect to the money received from the Indian companiesand in particular from Amrapali group of companies, all monetaryDtransactions of J.P. Morgan, Mauritius and Singapore with Amrapali groupof companies be disclosed with details on affidavit. We directed theAmrapali group of companies/statutory auditors as well as Anil Mittal,Ravi Kapoor and S.N. Dhawan and CFO to disclose the names of allthe companies in which their family members or acquaintance wereEincluded as Director and all the transactions inter alia family membersand relatives. It was also pointed out by Mr. Chander Wadhwa, CFOthat though his salary was Rs.15,000 per month, car worth Rs.43 lakhswas given to him by the company in lieu of his services. It was alsopointed out that an amount of Rs.2 crores has been paid on account ofChander Wadhwa’s tax liability by Amrapali group of companies. FurtherFdirections were also issued to make the disclosures. This Court has notedthe conduct of non-compliance of the order vide order dated 13.11.2018thus:

“4. This Court has drawn suo moto contempt on 12.10.2018 andthat is listed on 20.11.2018. In spite of the aforesaid observationGmade in the order dated 26.10.2018, still there is gross disobedienceof the directions issued by this Court and in the affidavit filed incompliance of the order dated 26.10.2018, the various disclosuresas ordered have not been made. Besides that, there is failure tohand over to the forensic auditors, the relevant material as pointedHout by them.

5. The names of all the related companies have also not beendisclosed with which the transactions have taken place. No suchstatement has been made categorically in terms of the order passedby this Court on 31.10.2018 and absolutely vague averments havebeen made. This tantamount to deliberate noncompliance of theorders of this Court despite several opportunities having beengranted.

7. An affidavit has also been filed by Mr. Anil Sharma of AmrapaliGroup of Companies in which names of the companies whichwere ordered to be disclosed have not been disclosed and nostatement has been made as ordered on 31.10.2018. It is grossviolation of the orders passed by this Court. There are certainaverments in the affidavit which shows that certain propertieshave been sub-leased, out of Dream Valley, Centurian Park,Amrapali Leisure Valley. The subleases have been created. Fulldisclosures have not been made as to subleasing since earlieraffidavits were contrary to it, it was shown as unencumbered

property. we direct the Directors of Amrapali Group of Companiesto disclose entire transaction and relevant documents as well asGreater Noida Authorities to file the documents about sub-leases,who is holding the land as on today, its considerations, how it hasbeen used, how much consideration was received and where theamount is lying, and the sub-lease deeds be also placed on record.We order that there shall not be any further alienation of the sub-leased property by anyone.

8. Statements of various bank accounts have also not beenfurnished besides other particulars. Learned counsel has againsurprisingly prayed for three weeks’ further time to furnish thedetails though sufficient time had been given. No direction is beingcomplied with. The Directors are filing the affidavit on each andevery date making improvement as the forensic audit progresses.They are not making full disclosures and concealing the facts andhave not mentioned in the affidavit what they are ordered to do. Itis clear that they are obstructing the course of justice to the bestof their ability. This state of affairs cannot be continued any further.For non-compliance of the directions issued from time to time, wehave already drawn suo moto contempt and as subsequent orders

have also been violated. For the purpose of taking the contemptproceedings to further logical end, before this Court passes anyfurther order, we give an opportunity to the Amrapali Group ofCompanies and Directors to furnish their reply as to why theyshould not be punished for the contempt and the violation of theorder passed by this Court from time to time by November 19,2018. The case will be taken up for considering non-complianceof the order and for filing the wrong affidavits before this Court,on 20.11.2018 along with the suo moto contempt that has beenregistered vide order dated 12.10.2018.

9. We have two affidavits. One of Anil Mittal and another ofChander Wadhwa. Both are passing liability on each other forcreating certain additional companies. None want to own theresponsibility. We require Amrapali Group of Companies and theirDirectors to file reply to the affidavit, filed by their CFO ChanderWadhwa and Anil Mittal. Let the copies of affidavits of ChanderWadhwa and Anil Mittal be furnished to the Advocate on Record,

Amrapali Group of Companies. Let para-wise and point-wise replybe submitted as to what has transpired in the Court, as recordedin order-sheets, including what they have stated in their affidavits.

12. It was also pointed out that Computech Pvt Ltd. is in possessionof substantial amount. The forensic auditors are in the processof examining the details. However, at this juncture pursuant tofindings of forensic auditors, it was pointed out by Mr. Vikas Singh,learned counsel appearing on behalf of Chander Wadhwa, CFOthat sum of Rs.7.58 crore from Rinku Computech Private Limitedand Rs.4.1 crore is lying with Chander Wadhwa, said amount isout of the transactions with the Amrapali Group of Companies.He has volunteered to deposit the amount within three weeksfrom today. Let it be deposited in the account opened with theRegistrar of this court, within three weeks.

14. From the forensic auditors’ report, it is prima facie clear thatAmrapali Healthcare Private Limited, as pointed out in Annexure11 is created out of funds belonging to the Amrapali group. That isextracted hereunder:

Annexure-11A

Amrapali Healthcare Private Limited(As per Audited financials 2015-16)Details of Asset

(Figures in crore)

Sl. No.AssetBook valueAddress1.Land0.53Amrapali HospitalP2, NH-34 Omega 1, Greater Noida, Uttar Pradesh-2013102.Building4.43Amrapali HospitalP2, NH-34 Omega 1, Greater Noida, Uttar Pradesh-201310

Date of transactionArea (sq. meters)-Constructed area-

Sl. No.Shareholder’ % holdingNo. of sharesName1.Ultra Home 99.89 %93,85,260Constructions Private Limited2.Swapnil 0.03 %2500Shikha3.Suvash 0.08%7500Chandra KumarTotal100 %93,95,260

* In FY 2016-17 the shares of Ultra Homes Construction Pvt.Ltd. are transferred in the name of Gaurisuta Infrastructure Pvt.Ltd.

Details of Inter Corporate Deposits

(figures in crore)

Sl. No.Name of companyAmount1.Ultra Home 5.36Construction Private Limited2.Others0.32

List of Present Directors

Sl. No.NameBegin Date1.Swapnil Shikha27/11/20122.Suvash Chandra 27/11/2012Kumar

It has also been pointed out that this hospital is, in fact, owned tothe extent of 99.89 percent by Ultra Home Constructions PvtLtd. and funding has been made by the said company. It is one ofthe companies out of the Amrapali Group of Companies involvedin the case. Thus, it is apparent that this property has to be sold asit has been purchased out of money of buyers, in order to makeavailable the money for the construction of the buildings.

17. It is case where we find ourselves in situation that themoney of Greater Noida and Noida Authorities has not been paid,buyers have also been duped. Other financial institutions have notbeen paid. Construction has not been completed. Money paid bybuyers has been diverted for the creation of various companiesand assets have been created. All these assets are accountableand have to be sold as it is not the independent investment madeby these directors. It is patent and blatant fraud which appearsto have been played, the way in which the money has beentransacted and creation of companies has taken place inconnivance with the CFO, statutory auditors. It was also pointedout that there are various related companies in which money hasbeen transferred. We restrain all monetary transactions out ofbank accounts or any kind of alienation of the property held bythe related group of companies where the money has beensiphoned and has been used for the creation of the assets. Anytransfer made in any manner shall be illegal, void and inoperative.20. It is also necessary in order to find out the actual amountinvested in building activities, out of the funds collected. It alsoappears that certain companies were created only for the purposeof purchasing raw materials. Whether actual transactions ofpurchase have taken place is required to be ascertained. Let allthe vouchers of the purchase, Bills, orders, etc., which are inpossession of Amrapali Group of Companies and the estimates ofvarious raw materials for each and every building without which

construction of building is not possible to be undertaken to bepositively handed over to the forensic auditors within week. Wealso request the forensic auditors to propose how the actualvaluation of the buildings constructed so far by the Amrapali Groupof Companies on the spot can be made so as to ascertain theactual investments made and extent of diversion. Let the estimateand quantities of the bills be also furnished by Amrapali Group tothe forensic auditors along with the names of all the suppliers andmode of payment. They may also collect information/documentsfrom suppliers.”

Certain directions were also issued to DRT to make the valuationto sell the property. Other facts were also noted.

25. On 20.11.2018 this Court had noted non-compliance of variousorders passed by this Court from time to time. Various sub-leases hadalso been created. We issued the directions vide order dated 20.11.2018as under:

“3. It appears that various sub-lessees have been created. It wasinformed to us by the learned senior counsel appearing on behalfof the Amrapali Group of Companies that certain structures havebeen raised by the sub-lessees. We have asked them to discloseall the information on affidavit, but the order still remainsuncomplied. Various directions in this regard have been issued inparagraph 7 of the order dated 13.11.2018. There are variousother directions issued time to time also and compliance thereof isstill wanting, though time fixed is over.

4. In the circumstances, we give one last opportunity to theAmrapali Group of Companies, particularly to all the Directors ofthe company and also those who have filed reply in the SuoMotu Contempt. They have to file their further affidavits incompliance with the aforesaid directions as to what they havedone and to make the disclosure as envisaged in various orders.”

We had also directed that any non-cooperation with the ForensicAuditors shall be viewed seriously. Statements of accounts of bankswere also ordered to be issued by the banks. In order dated 5.12.2018this Court observed that let the Amrapali group of companies and theirDirectors Mr. Chander Wadhwa, CFO and Mr. Anil Mittal to explain asto why criminal action be not initiated against them on the basis of

Aaffidavits, various documents and the statements made in this Court onvarious dates and why their conduct as projected in the case be notreported to the ICAI to inquire. We directed the production of details ofimmovable properties as well as the movables etc. This Court also notedthat DRT has pointed out that there was non-cooperation and non-compliance on the part of Amrapali group of companies. It was alsoBpointed out to this Court that certain buyers/companies who have bookedthe flats by making payment of paltry amount for the purchase ofseveral flats/plots, did not appear to be genuine buyers. We have directedthe Forensic Auditors to look into this issue. We also directed all theDirectors of companies, their relatives, family members, Mr.ChanderCWadhwa, CFO and statutory auditors who were in receipt of money ofhome buyers, to deposit the same in this Court. The last opportunity wasgiven to do so.

26. On 12.12.2018 in para 4 we have observed thus:

“4. Pursuant to our order dated 05.12.2018, Mr. Adhikari DeviDPrasad, Mr. Bhuvan Pant, Mr. Prasanna Kumar Rout, Mr.Jagannath Sharma, Mr. Tarun Kumar Sharma, and Mr. SunilKumar and also Mr. Anil Sharma, Director, Amrapali Group ofCompanies are present in the Court. We generally asked themhow the accounts for the period 2015 to 2018 were preparedEby them and submitted in the Court. They have stated that itwas based on tally data which was given to them. In addition,Mr.Prasanna Kumar Rout, who worked as an Accountant withAmrapali Sapphire, stated that he made the entries up to August2018 in the tally data on the basis of the documents/voucherswhich were made available to him. Mr.Jagannath Sharma, whoFis Chartered Accountant and partner in L.D.R. Companystated that they have prepared the balance sheet on the basisof the tally data provided to them for the years 2015 to 2018.However, when cross-checked with the Forensic Auditors, theCourt was informed that the data from 2015 to 2018 has notGbeen made available fully to them. It was also pointed out thatthere should be supporting documents/material to make theseentries other than the Bank statement when these statementshave been prepared that should also be clarified by AmrapaliGroup and supplied to the Forensic Auditors.”

We also directed details of unsold apartments and flats of theprojects to be submitted in this Court. It was also pointed out that themethodology has been adopted by creating sub-leases as mode ofsiphoning off the amount of the buyers. This Court noted the followingfacts and issued the requisite directions:

“8. Mr. Lahoty, the learned counsel, also pointed out that themethodology which has been adopted for creating the subleaseswas, by and large, mode of siphoning the amount. He has giventhe following details as Annexure E, which is extracted below:-

“CREATION OF SUB-LEASES

I. Amrapali Centurian Park: (Current Status: 228646 Sq. Mts.)

As per the lease deed, Lessor here is Greater Noida Authority

1. Lessee here is Amrapali Centurian Park Pvt Ltd (Total Area –2,72,916 Sq Mts)

2. Sub- Lessee of Amrapali Centurian Park here are:

o Hawelia Builders Pvt. Ltd (Hawelia Valenova Park – 14920 SqMts)

o DSD Homes Pvt Ltd (Novena Green – 14760 Sq Mts)

In DSD Homes, Mr. Nishant Mukul(brother in law ofChairman Mr. Anil Sharma) Ex-Director of Amrapali Group wasalso director.

o Elegant Infracon Pvt Ltd (Elegant Villa Phase I, III, & IV -14590 Sq Mts)

In the Elegant Infracon following are consortium partnerswith shareholding:

Vidhyashree Buildcon Pvt Ltd (26%)Nishant Creation Pvt Ltd (19%)Anjali Buildcon Pvt Ltd (20%)Agrawal Associates (Promoters) Ltd (5%)Elegant Infracon Pvt Ltd (19%)Stunning Construction Pvt Ltd (11%)

Vidhyashree Buildcon is one of the companies as mentioned inan order dated 26.10.2018 page 13, point 5, to whom sum ofRs.242.38 crores has been handed over. Mr. Pankaj Jain (current

[2019] 9 S.C.R.

Adirector of Amrapali Group) was also director in VidhyashreeBuildcon Pvt Ltd.

Sushma Bajaj & Kulbhushan Bajaj (Current directors ofAmrapali Group) are also directors in Nishant Creation Pvt Ltd.

Mukesh Kumar Roy (DIN: 2175661) who is presently directorof Amrapali Group (listed in 46 companies LA Residentia) is alsodirector of Anjali Buildcon.

In Anjali Buildcon Mr. Sanjiv Kumar (DIN: 03136323)is alsoone of the directors, who is the director of New Tech La Palaciato whom Shri Balaji Hi-Tech Construction Pvt Ltd (A sublesseeCof Amrapali Dream Valley) has further transferred the sub-leaseof said project.

Stunning construction is one of the Amrapali Group Companylisted in 46 companies.

Rs 46 Crs (Approx) amount which is to be paid bysublessee/s

II. Amrapali Dream Valley: (Current Status: 260307)

As per the lease deed, Lessor here is Greater Noida Authority.

1. Lessee here is Amrapali Dream Valley Pvt Ltd (Total Area –E354298 Sq Mts)

2. Sub- Lessee of Amrapali Dream Valley Pvt Ltd here are:o M/s Shri Balaji Hi-Tech Construction Pvt Ltd (Total Are – 12479Sq Mts)

o M/s K.V. Developers Pvt Ltd (Total Area – 19986 Sq Mts)o M/s J.M. Housing Ltd (Total Area – 33537 Sq Mts)o M/s Samridhi Reality Homes Pvt Ltd (Total Area – 27989)o Sum Total Area is 93991 Sq Mts

Shri Balaji Hi-Tech Construction Pvt Ltd one of Amrapali GroupGcompany(Sr.53 Page 2913 of an affidavit by Mr. Anil Sharma asAffidavit Submitted in terms of order dated 26.09.2018, 31.10.2018.submitted on 12.11.2018, where Mr. Ajay Kumar & Mr. MukeshKumar Roy were directors.

Shri Balaji Hi-Tech Construction Pvt Ltd has further transferredthe sub-lease to new company namely New Tech La Palacia

Pvt. Ltd, which has applied for revised sanction plan dated21.01.2013 and it’s not yet approved. (page 18 of GNOIDAaffidavit)

In New Tech La Palacia Mr.Sanjiv Kumar (DIN: 03136323)is director who is also director of Anjali Buildcon (one of theshareholders of Elegant Infracon Pvt. Ltd. who is sub-lessee ofAmrapali Centurian Park.

Rs. 91.89 Crs (Approx) amount which is to be paid bysublessee/s

III. Leisure Valley: (Current Status: 396124.20 Sq. Mts

As per the lease deed, Lessor here is Greater Noida Authority.

1. Lessee here is Amrapali Leisure Valley Pvt Ltd (Total Area –419519.20 Sq. Mts.)

2. Sub- Lessee of Amrapali Leisure Valley Pvt Ltd here are:

a. M/s Start Landcraft Pvt. Ltd. (Total Are – 23395 Sq Mts)

Rs.3.2 Crs. (Approx) amount which is to be paid by sublessee/s”

9. We have directed Mr. Anil Sharma, Director of Amrapali Groupof Companies and other Directors to explain the sub-leases andplace the documents regarding the creation of subleases on record.Mr. Anil Sharma stated before us that approximately sum ofRs.66 Crores has been received by the creation of these sub-leases and that amount has been accounted for in the accounts ofconcerned Amrapali Group of Companies. With respect to themoney utilization in an aforesaid manner, companies, names ofDirectors, relationship and activity made by sub-lessee so far, letdetails be filed on an affidavit. We also request the ForensicAuditors to look into this aspect and submit report before us onthe next date of hearing along with other aspects mentioned in theabove-quoted details filed on behalf of the flat buyers.”

27. The directions were also issued to DRT to make furthervaluation of Tech Park (Hotel) in Greater Noida. On 25.1.2019 we issuedcertain directions. On 11.2.2019 we directed M/s. J.P. Morgan to disclosethe names of the investors and beneficiaries who invested in the MauritiusFund which had invested in Amrapali INR Rs.85 crores. On 14.2.2019,dues were pointed out against individuals and Directors also. Against

ADirectors there was report of loans and advances to the extent ofRs.161.51 crores as noted in the order. We issued certain directionswith respect to M/s. Golf Link City Projects Private Ltd. as well as M/s. Royal Golf Link City Projects Pvt. Ltd. We directed Mr. Anil KumarSharma to deposit an amount; whereas the non-compliance made byAmrapali was also pointed out by the buyers which had been noted. AsBinability was expressed on behalf of M/s. J.P. Morgan to explain valuationreport dated 23.10.2013 submitted by Mr. Sudit K. Parikh & Co.,Chartered Accountants, they were ordered to explain the valuation reporton the basis of which Rs.140 crores had been withdrawn by M/s. J.P.Morgan. It was also pointed out in this connection that the shares ofCAmrapali Zodiac were ultimately purchased for Rs.140 crores by M/s.Neelkanth and M/s. Rudraksha Forensic auditors pointed out that twopersons namely Chandan Kumar, is peon of Mr. Anil Mittal, statutoryauditor and was working in his office and one is Vivek Mittal, nephew ofMr. Anil Mittal, who was doing petty jobs of sub-contractors, getting amonthly income of Rs.15,000. They were stated to be Directors in theDcompanies, i.e., M/s. Neelkanth and Rudraksha. They were not havingany capacity to give Rs.140 crores to M/s. J.P. Morgan. This Court hasnoted the facts thus:

“As inability was expressed on behalf of M/s. J.P. Morgan aswell as other counsel to explain the report dated 23.10.2013Esubmitted by Mr. Sudit K. Parikh & Co., Chartered Accountants.In the circumstances, so as to find out the basis of the valuation, itis necessary to call Mr. Sudit K. Parikh [Address : Ballard House,2[nd] Floor, Adi Marzban Path, Ballard Pier, Fort, Mumbai – 400001] to explain the valuation report on the basis of which Rs. 140Fcrores had been withdrawn by M/s. J.P. Morgan. Let the Registrysend communication to Mr. Sudit K. Parikh to appear beforethis Court on the next date of hearing.

It was pointed out that shares of Amrapali Zodiac were ultimatelypurchased for Rs.140 crores by M/s Neelkanth and M/sGRudraksha. It is pointed out by forensic auditors that there aretwo persons, namely, Chandan Kumar, who is peon of Mr. AnilMittal, Statutory Auditor, and working in his office and anotherone is Vivek Mittal, who is the nephew of Mr. Anil Mittal, and isdoing petty jobs of sub-contractors and having monthly incomeof Rs.15,000/-. It is stated by the learned counsel appearing on

behalf of M/s J.P. Morgan that in one company, Chandan Kumarand Atul Mittal were Directors. M/s Neelkanth and M/s Rudrakshaare the private limited companies in which the abovementionedpersons are named as Directors. They are not having the capacityto give an amount of Rs,140 Crores to be paid to M/s J.P. Morgan.

This is serious kind of fraud apparent from the aforesaid facts.On being asked, Mr. Anil Kumar Sharma has shown reluctanceto disclose about Atul Mittal, who was the Director of M/sRudraksha along with Chandan Kumar. It is apparent that it wasnot fair transaction of sale. That fact is required to be gone into.Let Mr. Anil Mittal and Directors of Amrapali Zodiac and Mr.Anil Sharma explain the situation by filing their personal affidavitsfrom where the money came to be paid to M/s J.P. Morgan, whomanaged the money and how the companies were framed andfor what purpose.”

28. On 28.2.2019, this Court considered IA No.35430/2019 filedby Deputy Commissioner of Police, EOW, Delhi Police, seekingpermission to take into custody various Directors namely Anil KumarSharma, Shiv Priya, and Ajay Kumar. This Court has passed the followingorder:

“I.A.No. 35430 of 2019

This application has been filed by the Deputy Commissioner ofPolice, Economic Offences Wing, Delhi Police, seeking permissionto arrest and take into custody various Directors, namely, AnilKumar Sharma, Shiv Priya, and Ajay Kumar. They are presentlyin the custody of Noida Police vide our order dated 11.10.2018.We make it clear that the Delhi Police is free to arrest/take intocustody any or all the other Directors of Amrapali group ofcompanies. Any order passed by this Court, in this case, shall notcome in their way to do so.

Let the Police investigate the entire gamut of the scenario of thevarious projects, as projected in this case and various orders passedand investigate the entire matter. Prima facie, we find that thecase requires serious investigation in the facts projected by theDirectors, CFO, and the statutory auditors.

The Police are directed to investigate the role of Mr. Anil Mittal,Statutory Auditor, and Mr. Chander Wadhwa, CFO as well. The

APolice may interrogate them and find out their criminality, if any,in the matter.

Let various order sheets of this Court as well as the affidavits ofMr. Chander Wadhwa and Mr.Anil Mittal and Directors ofAmrapali Group of Companies indicating the operational methodsBof diversion of funds and creation of companies be also furnishedto the Deputy Commissioner forthwith.

The application is allowed.”

This Court also issued other directions with respect to the personswho were called by the Forensic Auditors but did not report. OtherCdirections were also issued.

29. On 9.4.2019 we requested the parties to address this Courthow to protect the interests of the buyers so that they can get cleartitle after completion of the projects. In view of the dues of Noida andGreater Noida authorities and other secured creditors, such as banks,Detc. how to work out equities in the circumstances and requested theparties to address this Court. Amrapali group of companies to addresshow much investment they have made in the project and what they havedone with the money of the buyers and to inform us as to diversion ofthe money of home-buyers, how to secure it and why they should not beEsuitably dealt with in accordance with law for what they have done. Inview of the aforesaid facts projected in various affidavits of the Directorsand the interim report of forensic auditors. This Court listed the case forhearing on various issues. We have heard Forensic Auditors, Mr. KrishnanVenugopal, learned senior counsel and Mr. M.L. Lahoty, learned counsel,on 30.4.2019. Thereafter, we further heard the matter on 1.5.2019. TheyFconcluded the arguments. Mr. C.A. Sundaram learned senior counselwas also heard and the learned counsel on behalf of Bank of Maharashtraand Bank of Baroda as well as Ms. Geeta Luthra and Mr. Gaurav Bhatia,learned senior counsel on behalf of Amrapali group. On 2.5.2019 and on8.5.2019 certain directions were issued. On 10.5.2019 arguments werefurther heard and the case was reserved for orders.G

SUBMISSIONS

30. Mr. M.L. Lahoty, learned counsel appearing on behalf of 49,575home buyers submitted that under section 8 of the Real Estate Regulationand Development Act, 2016 (for short, ‘the RERA’) and also in view ofHthe provisions contained in sections 13 and 14 of the U.P. Industrial

Area Development Act, 1976 (for short, ‘the Industrial DevelopmentAct’), the lease deeds granted by Noida and Greater Noida authoritieswere ordered to be cancelled. In the lease deed also, there is specificstipulation as to cancellation clause in case of cancellation and imposingpenalty and for such other actions against the builder in case of default.Home buyers further submitted that after payment of first 10% of thelease premium, Amrapali Group has not paid any of the 20 half-yearlyinstalments from 2010 onwards. The Noida and Greater Noida authoritieshave been liberal, and not taking any stringent action against AmrapaliGroup which had been mandated by virtue of the provisions contained inthe lease deed. The dues of Noida and Greater Noida authorities cannotbe treated at par with the dues of home buyers. Home buyers furthersubmitted that so far as the dues of the banks are concerned, they arenot placed on any better footing and Forensic Auditors in their reporthave stated that but for the connivance of the bank officials, the act ofmoney siphoning on such large scale would not have taken place. Bankshave failed to monitor utilisation of the borrowed funds and they actedas mute spectators to the diversion of funds by Amrapali Group ofCompanies, its Directors and officials. Mr. Lahoty, on behalf of homebuyers further submitted that the Reserve Bank of India has issued MasterCirculars from time to time since 2014 onwards as to the obligations ofthe Banks and specifically directed that banks must necessarily monitorthe ‘end use’ of the loans granted by them and call for periodical reportsthereof. In the case of diversion and siphoning of loan funds, banks mustinvariably take action against defaulters. Reliance has been placed onRBI’s Master Circulars of July 2009, 2014 and 2015. In case after thecancellation of the leases, they are not able to construct, they may enterinto an arrangement with any reputed builder like NBCC or L&T, etc.A roadmap thereof need be drawn to be monitored by MonitoringCommittee which duly represents the interest of the home buyers, mayalso be directed to be constituted which will not only oversee the workbut also oversee the construction activities and also submit report tothis Court so that the needs of the home-buyers are finally achieved. Afurther audit of connected companies may be ordered. Bank accountswith Bank of Baroda are operationalised towards maintenance andelectricity as families are residing in 21 Towers have been regularlydepositing the electricity and other dues in their accounts which havebecome defunct after the discharge of IRP vide order dated 8.8.2018passed by this Court. The amount be utilised for pending bills from August

Ato October 2018 towards electricity and maintenance services bynominating Joint Signatory in place of IRP.

31. Mr. Krishnan Venugopal, learned senior counsel appearingfor home-buyers has urged that there is the distinction between mortgageand charge as mortgage involves the transfer of interest, whereas, inBcase of charge, there is no transfer of interest. He has further urgedthat non-production of relevant documents despite the court order, leadsto presumption of an adverse inference. As Amrapali Group has failedto comply with the court’s order, an adverse inference may be drawnagainst them. He has also pressed into service public trust doctrine andsubmitted that the State or the public authority which holds the propertyCfor the public or which has been assigned the duty of grant of largesse,etc. acts as trustee, and therefore, has to act fairly and reasonably,promote public good and public interest. Public trust doctrine is part ofthe law of the land. The doctrine is facet of Article 21 of the Constitution.The action has to be bona fide. Public property cannot be transferred toDprivate property in case it affects the public interest. General welfareand common good are to be kept in view by the public authoritiesexercising public power and discharging public duty.

32. Mr. Krishnan Venugopal, learned senior counsel further urgedthat in view of the findings recorded by the Forensic Auditors, section 8Eof the RERA has to be invoked. He further submitted that even thoughAmrapali was defaulting on payments of lease rents, authorities continuedto allot further plots to them. The first lease had been granted on 1.5.2007and the last on 30.7.2010. Despite default, they continued to issuepermission to mortgage/NOCs for that purpose between 24.12.2009 and27.2.2013, in spite of the fact that there was no payment of premiumFand advance annual lease rent up to date. The authorities have acted inbreach of clause 7 of the conditions of the lease deed, they failed tomonitor the progress of the project to protect the interest of the public.

33. In reference to banks, Mr. Venugopal submitted that bankswere giving loans to finance Amrapali, in spite of the fact that they wereGdiverted to other accounts and not utilised for construction. Banks donot even have effective mortgages because of NOCs. clearly, state thatthey would become effective only when Amrapali makes up to datepayment of the premium and advance annual lease rent, and under theconditional NOCs., the banks were required to obtain confirmation fromHthe authorities as to payment of premium and lease money for themortgage to become effective. The banks have not handed over copiesof mortgage deeds despite orders. Moreover, the banks have secondcharge after all dues of the Noida and Greater Noida authorities arerealised. The authority’s ownership rights over the plots are paramount.The public sector banks are also subject to public trust doctrine to theextent that they are custodians of public funds and are beneficiaries ofthe Banking Companies (Acquisition and Transfer of Undertaking) Act,1970 and Banking Companies (Acquisition and Transfer of Undertaking)Act, 1980 passed in pursuance of the Directive Principles under Article39(b) and (c) of the Constitution. The facts demonstrate the collusionbetween Amrapali Authorities and the banks. The home buyers whoinvested their hard-earned money, cannot be cheated and deprived oftheir money as well as their houses. Authorities cannot seek to recoverany additional amount from the home buyers. They must be directed tocomplete the construction by realising only the remaining dues from homebuyers under their agreements with Amrapali, by selling off unsoldinventory of flats, etc. available with it and by selling off excess landallotted to Amrapali. The Committees of home buyers must be set up foreach project to monitor the quality and progress of the construction aswell as the costs involved so as to ensure that contractors do not engagein fraud or inflate construction costs in the course of completing theprojects.

34. On behalf of the home buyers Association, it was submittedthat by promoters of the real estate sector in India from 2008-2009,home buyers have been promised the houses of which they have beendeprived of on large scale in spite of the fact that they have paid asubstantial amount of money. Construction has not progressed and moneyhas been diverted elsewhere. There is charge of the money of thehome buyers must be treated as the highest priority. They have paidtowards dues of Authorities also which amount has been diverted. Banksand authorities have failed to discharge their duties. Banks have grantedloans to the projects in some cases which were not sanctioned even onthe date of grant of loan. For example, Phase III of Amrapali AdarshAwas Yojana Project. Banks have released the complete paymentamounts to the builder without the construction having been reachedeven 10 to 20%. As such lending was not permissible. The currentscenario is that the construction of the various projects is stalled and thehome buyers are without any hope of the promised homes. Certainincumbents who have taken loan are compelled to repay the loan and

Amoney has been siphoned out. As such appropriate relief be granted tohome buyers in view of the facts found in the report of the ForensicAuditors.

35. On behalf of the home buyers, reliance has been placed onthe provisions contained in section 4(5) of the U.P. Apartments (PromotionBof Construction, Ownership, and Maintenance) Act, 2010 (for short, the‘U.P. Apartments Act, 2010’). It is provided that the completion of theconstruction works of building as whole or the completion of anindependent block of such building, as the case may be. The completioncertificate can be issued for the blocks which have been completed.Noida and Greater Noida authorities are not issuing NOC for the reasonCthat payment of land dues has not been made by the builder, for whichauthorities are also responsible. The non-payment of dues by the buildershould not come in the way as more than 9000 home buyers are alreadyresiding in the buildings. Most of them have paid the entire amount to thepromoter. Others are waiting for the completion of buildings.

36. On behalf of Noida Authority, learned senior counsel submittedthat public trust doctrine is not attracted to the facts in the instant caseas there is no breach of trust. The decision to transfer lease at 10% wasthe carefully thought out policy of Noida approved by the StateGovernment. It was applied uniformly to all and not restricted only to theEAmrapali Group. It was submitted that allotment of group housing plotsis made by Noida authority in accordance with the prevailing policiesand rates which have kept changing with times. In 2007, the allotteeswere required to pay 10% of the total premium of the plot as reservationmoney, before formal allotment letter was issued. Then, further amountof 30% had to be paid within 60 days from the time of allotment. Thus,F40% premium was required to be paid. Balance 60% had to be paid ineight half-yearly instalments along with interest.

37. It was further submitted on behalf of the Noida Authority thatprimarily on account of the global recession in the world economy, in theyear 2008 decision was taken to revise the rate of allotment money toG10%. Thus, the total sum of 20% was to be paid before handing overpossession. In the year 2009, the rate of allotment money along withregistration money was revised to 10% of the total premium for thepossession to be handed over. However, steps were taken to provide (i)facility of re-scheduling of payments in case the allottees intended toHcomplete his project as per agreed policy; (ii) to exit the project; (iii)

moratorium of two years on payment of balance premium; (iv) facilityof sub-division of plots of area larger than 10 acres so as to make thelarger projects financially viable.

38. It was also submitted on behalf of Noida Authority that after2005, total of 114 plots had been allotted to various group housingsocieties. 81 have been handed over the possession on payment of 10%of the total premium. 29 projects, out of these 81, have been completed.Out of other 33 allotted earlier, 11 had been completed, and 7 haveobtained part-completion certificates. Noida Authority, being responsiblepublic organisation, has been diligent in pursuing Amrapali Group, it hasnot taken the drastic recourse of terminating the lease deed as that wouldentail demolition of the existing structures as per the provisions of thelease deed. In terms of the lease, home buyers have no title or legalrights to possession of the flats they are occupying. As the projects havebeen completed to some extent, it would have been unfair to leave thehome buyers in the lurch. The occupancy certificate is issued inaccordance with the provisions of the New Okhla Industrial DevelopmentArea Building Regulations, 2010 (for short, ‘the Regulations of 2010’).Clause 20.0 of the Building Regulations requires the allottee to submit anotice of completion of the building, inter alia, with structural safetycertificate, NOCs from the Fire Department, Explosives department andEnvironment department. No building erected, re-erected, can be occupiedin whole or in part unless occupancy certificate is issued by the CEO ofthe Authority as per clause 20.1.1 of the Regulations. The lessee/promoteris entitled to allot the dwelling unit on sub-lease basis. However, he hasto make the payment of premium of the plot to Noida authority whenpermission to transfer built-up flats or part with possession of the wholeor any part of the building which has been constructed is granted. Thephysical possession of flats can be given to home buyers only afterexecution of sub-lease deed and sale deed has also to be registeredbefore actual physical possession of the flat is handed over as requiredunder the provisions of Registration Act, 1908. The declaration requiredto be made under section 12 of the U.P. Apartments Act, 2010 is also tobe filed.39. It was further urged on behalf of the Noida Authority that theNoida Authority had the first charge including those created in favour ofbanks and financial institutions. The mortgage could have been effectedin favour of Banks/financial institutions recognised by the RBI, National

AHousing Bank, HUDCO, New Delhi and the charge of such institutionshall be the second charge on the dwelling units, thus, being financed.The permission to mortgage shall be effective only on making full paymentof premium and up to date annual lease rent of group housing society.An intimation shall be given to the Authority about the creation of thecharge by way of mortgage. The mortgage permission shall be grantedBas per the terms of the lease only on payment of dues of authorities.

40. It is submitted that it is open to the authority to cancel orterminate the lease. In the case of misrepresentation, suppression orviolation of the conditions of lease and in the case of default and at thetime of cancellation, an amount equivalent to 25% of the total premiumCof the plot shall have to be forfeited and possession of plot shall have tobe resumed by Noida Authority with structure thereon. In the instantcase, no dues certificate had not been issued by the Noida authority norany sub-lease deed has been executed. The possession by various homebuyers in respect of constructed flats is contrary to the provisions of theDlease deed. The builder could not have handed over the possession.

Any occupation of flats by the home buyers without compliance ofmandatory provision of occupancy certificate and without payment ofstatutory dues, both to Noida Authority and to the Collector of Stampsand without execution of tripartite sub-lease deed may not be termed aslegal and as such which could have resulted in their eventual eviction.E

41. It was further submitted on behalf of the Noida Authority thatpursuant to order dated 27.11.2017 passed by this Court, on depositing10% of the dues to issue completion certificate such NOC could not beissued and the order passed by this Court has not been complied with bybuilder/promoter as such possession could not be handed over. In spiteFof reiterating the aforesaid direction of this Court on 31.1.2018, it hasnot been complied with by the promoter/leaseholder. It is submitted bythe Noida Authority that its dues to Amrapali group exceed Rs.2191.38crores till 30.4.2019. It is in public interest to ensure payment of premium/lease money with penal interest etc. so that the development of theGvarious projects at Noida is not impeded. Prayer has been made that inwhatever manner practicable and by whatever scheme this Court maythink fit and proper, aforesaid dues of the authority may be secured andordered to be recovered.

42. On behalf of Greater Noida Industrial Development Authority,Hit was submitted that its dues were Rs.3,234.71 crores as on 15.1.2019

in respect of 5 group housing plots of Amrapali group. These dues interalia comprise of the amounts payable against the premium plus the penalinterest for default, additional compensation and interest thereon, thelease rent and interest thereon and time extension charges for each ofthe five plots. Title in the flats can pass only by way of execution of aregistered instrument. However, before that procedural requirementspointed out on behalf of the Noida Authority have to be complied with.Once completion certificate is issued, the rights in the flat will pass on tothe flat buyers and then they would contend that the dues of the authorityshould be recovered from the builders who have defaulted in makingpayment and not the flat buyers. On the basis of that privity of contract,they would contend that the liability to make payment of the premiumand other dues payable to Greater Noida authority, by lessee/builder isbetween them and they are not parties to the lease deed.43. It is further submitted on behalf of Greater Noida Authoritythat even with regard to the issuance of completion certificate for partof the projects, the existing policy is that against the part-paymentreceived, completion certificate would be issued in the same proportionminus 10%, so that the financial interest of the authority is protected.Therefore, sub-lease deeds too would be executed up to 90% of theproportion in which part-payment has been received. It was furthersubmitted by the Greater Noida Authority that section 19(10) of RERAalso provides for taking over of physical possession after issuance ofcompletion certificate. The provisions of the U.P. Apartments Act, 2010are also similar as well the provisions in the lease deed.

44. It is further submitted on behalf of Greater Noida Authoritythat FAR admissible is 02.75 only and not 3.50. The differential FAR of0.75 is not purchasable. The calculations made by Amrapali based onFAR of 3.50 is itself wrong. FAR has not yet been purchased by Amrapaligroup by depositing the charges and submission of consent of two-thirdsof the apartment owners. Under section 4(2)(1)(D) of RERA, 70% ofthe amount received from home buyers is to be put in separate accountto be maintained in scheduled bank and is to be used towardsconstruction and land cost. The land dues payable to Greater Noidaauthority constitute an encumbrance as provided in section 4(1)(b) ofthe U.P. Apartments Act, 2010. As per section 11(4)(c) of RERA, it isthe duty of the promoters to certify that all dues and charges have beenpaid. Thus, it follows that money received from the flat buyers is to be

Aspent on construction and payment of land dues. Therefore, payment ofland dues cannot be denied to it. Land dues are in the nature of publicmoney. Amrapali group is bound to pay it. The amount is payable ininstalments as such same is interest bearing for availing the facility ofpayment in instalments as such the land cost payable increases. In caseof default, penal interest follows. There was no order passed by theBAllahabad High Court for staying construction on the leased plots.Amrapali Group was in possession of the allotted land and was proceedingwith the construction. For 4 years, it has prayed for zero periods ofinterest to which the group is not entitled. It would lead to unjustenrichment by Amrapali as they have realised dues from home buyersCand have not paid to the Authority. The order passed by the NGT withrespect to Okhla Bird Sanctuary case was not applicable to the land inquestion. The dues payable to the authority are recoverable as the arrearsof land revenue. The authority has the first charge. The permission tothe mortgage was conditional one, it has not been complied with, in

particular, conditions B, and D. The mortgage had to be renewedDevery year and is subject to the payment of land premium, etc. TheGreater Noida authority has written numerous letters to Amrapali groupof companies to make the payment of its dues. In the case of Unitech,yet another Group, the Authority has cancelled the allotment which wasquestioned in this Court. As the cancellation of the allotment in case ofEAmrapali could have led to greater complications as construction hadcommenced with third-party interest created. It would have openedfloodgates to litigation. As such cancellation of lease deeds was notresorted to.45. Ms. Geeta Luthra and Mr. Gaurav Bhatia, learned seniorFcounsel appearing on behalf of Amrapali group of companies, have urgedthat Amrapali group started its activities in the name of M/s. Ultra HomeConstruction Pvt. Ltd. in the year 2003 with the purpose of providinglow-cost housing to projects in Indirapuram (Ghaziabad) Noida, Lucknow,Indore, Bhilai, and more than 15,000 flats were handed over by thedevelopers to flat owners in 5 different housing projects in IndirapuramGand Greater Noida. The balance sheets of Amrapali group of companiesat 2007-08 shows that it had carried forward the money earned by thecompany to launch the projects after 2009-10 upon allotment of plots byNoida and Greater Noida authorities in their respective areas. Immediatelyafter the allotment of land, the work was started and the Allahabad HighHCourt quashed acquisition. It had to be stopped as per the order passed

by the Allahabad High Court. When in 2016 Amrapali group again startedto infuse capital and manpower, proceedings were initiated in NCLT byBank of Baroda as against Amrapali Silicon City Pvt. Ltd. and M/s.Ultra-Home Constructions Pvt. Ltd. There were legal impediments/forcemajeure conditions in completing the projects within the period given inthe flat buyer agreement. The Allahabad High Court finally decided thematter in Gajraj Singh & Ors. v. State of U.P. on 21.10.2011. ThePatwari Village issue was pending before this Court till 2015. On14.5.2015 this Court finally decided the matter in the case of SavitriDevi v. State of U.P. It was an order passed by the National GreenTribunal with respect to Okhla Bird Sanctuary which also hindered thework. Higher compensation was ordered to be paid by the AllahabadHigh Court in 2011. The period of litigation ought to have been treatedas zero periods for the purpose of payment of dues by Noida and GreaterNoida authorities. Amrapali Silicon City was affected on account oflitigation and land acquisition issues. The work of Leisure Valley, DreamValley, and Leisure Park were also affected. There was an issue of theapproach road with the farmers with respect to Sapphire Housing Project.Other projects were also affected due to farmers’ agitation, want ofproper roads, etc. The authority was required to give electricity, sewerand water connections. Proper facilities were not extended timely.

46. It was further submitted on behalf of Amrapali Group that aHigh-Power Committee has been constituted by the State of U.P. Asum of Rs. 2,715 crores are to be paid to the authorities including theinterest and purchasable FSI costs. The outstanding of banks is Rs.985crores. It was submitted that the projects are viable in case some reliefis granted towards land dues of authorities and dues of the banks. Thejoint inspection indicated that substantial construction had been carriedout. The cost of construction to complete the launched projects, as perNBCC is Rs.6827 crores; whereas the cost as per Amrapali group isRs.5630 crores. Calculation of NBCC is wrong. The projects are dividedinto 3 categories: (i) where the allottees were living; (ii) advanced stageof construction; and (iii) work is at nascent stage. The amount defaultedby buyers is Rs.511 crores, total receivables from them are Rs.5,332crores. The encumbered and unencumbered assets can be sold tocomplete the project. The valuation worked out by the DRT comes toRs.7,353 crores considering the maximum permissible FAR of 3.50. Theorder may be passed in respect of amounts due from Raipur andBhubaneswar Housing Board which are recoverable from them to

Adeposit in Court. Certain suggestions have also been made on behalf ofAmrapali group for arranging the required funds. That home buyer maybe directed to pay the cost. Unsold inventory of the launched projects onsale would generate Rs.1,922 crores. In case of any shortfall, there canbe sale of unencumbered assets of the company. Reputed buildersmay be engaged for undertaking the construction of the various projects.BAmrapali has spent Rs.10,630 crores as against Rs.11,652 crores receivedfrom home buyers. As per the affidavits dated 16.5.2018 and 3.12.2018,the total cash outflow is Rs.395 crores utilised by the group in the creationof assets whose current valuation as per DRT is Rs.1200 crores. TheNoida and Greater Noida authorities have partial registration policies asCprovided in Building Regulations and the Act and an appropriateCommittee may be constituted for supervision. Amrapali group shallextend all help in the building of the projects.

47. With respect to the report of the Forensic Auditors, it hasbeen submitted that there is no undervaluation in booking the flats. TheDvalue of flats depends upon the situation etc. as the flats were booked atdifferent times, they have different prices as per the prevailing market.In certain cases, the customers took possession of various Towers inpartially unfinished conditions and managed the pending work bythemselves. In some projects, lifts were installed by the customers’associations. In some other cases, interiors of the flats were finalised byEthe customers themselves. Amrapali group reduced the value of suchflats in their books accordingly.

48. With respect to other amounts recoverable from KMPA/relatives/Directors, as per the affidavit submitted by Shiv Priya on20.11.2018, Rs.4.3 crores were paid towards his taxes. The same hasFbeen adjusted against the salary due of Rs.4.4 crores from variousAmrapali group of companies. Salary of Rs.1.6 crores is recoverable byShiv Priya from Amrapali group of companies. As per the affidavit ofMr. Ajay Kumar, Rs.1.21 crores were paid by the company towards histaxes out of his outstanding salary up to 31.3.2015. Though his salary forGthe financial years 2016-18 is still to be mentioned in the books of accountson account of his due salary. sum of Rs.25 lakhs has been paid by himto Ultra Home Construction Pvt. Ltd.; in addition, sum of Rs.25 lakhspaid to Yogesh Chand is duly debited in his ledger and as mentioned inhis affidavit.

49. With respect to Amrapali Infrastructure Pvt. Ltd., it wassubmitted that an advance to Directors of Rs.113.54 crores was used bythe Directors to purchase shares of Ultra Home Construction Pvt. Ltd.Ideally, the shares should have been issued in the name of AmrapaliInfrastructure Pvt. Ltd. The money moved from Amrapali InfrastructuresPvt. Ltd. to Ultra Home Construction Pvt. Ltd. Precast Factory’svaluation is Rs.179 crores. Mr. Anil Kumar Sharma has surrendered theshares in favour of Amrapali Infrastructure Pvt. Ltd. to the extent ofINR 73.2 crores. Mr. Shiv Priya has surrendered the shares in AmrapaliInfrastructure Pt. Ltd. during 2018-19 of Rs.35.1 crores.

50. With respect to Amrapali Hospitality Services Pvt. Ltd., itwas submitted that the company gave Rs.6.62 crores to Directors asadvances out of which Rs.6.55 crores were given to Mr. Anil KumarSharma and his family. In the financial year 2017-18, Rs.2.25 croreswere used by Mr. Anil Kumar Sharma for payment of housing loan ofJay Pee Green Property. Rs.1.25 crores were deposited with this Courtby way of Demand Draft, Rs.0.85 crores were paid to settle the bankloan of Leisure Valley Villa and Rs.0.5 crores were transferred forpayment of TDS liability of Amrapali hospital.51. With respect to Hi-Tech City Developers Pvt. Ltd., the Auditor’sreport indicates that sum of Rs.4.24 crores was given as an advanceto Mr. Anil Kumar Sharma in 2009-10 which was used by him forpurchasing shares of Ultra Home Construction Pvt. Ltd. Ideally, theshares should have been issued in the name of Amrapali group ofcompanies. No transfer of money was there. Mr. Anil Kumar Sharmahad surrendered shares in favour of Amrapali Infrastructure Pvt. Ltd.,during the year 2018-19 but this has not been reflected in the books ofthe company. With respect to cash in hand, there is no consistency in thereport of the auditors. Only Rs.9 crores were available in cash in variousgroup companies. The entire amount was spent on payment of wagesdue to various labours at different times. With respect to other recoverableadvanced to various parties amounting to Rs.234.31 crores, the detailsare not available in the report. These advances are against genuinebusiness transactions. There is possibility that such expenses have notbeen booked and squared off.

52. With respect to the diversion of home buyers amount to theextent of Rs.3,500 crores and bogus billing of Rs.1500-1600 crores, outof the total amount received from home buyers of Rs.11,652 crores

Awould leave INR 6,652 crores for carrying out the existing constructionat sites. The total sum available for construction purposes comes toRs.4,352 crores, after deducting the amount of payment to the authoritiesand banks of Rs.1,000 crores and Rs.1,300 crores respectively. Withrespect to non-genuine purchases from suppliers, though sum of Rs.554crores was given to the income-tax authorities, on appeal the error hadBbeen corrected by the income-tax authorities. There was an error in thereport of the forensic auditors. The report of the forensic auditors as tonon-existing companies is also not correct. It is further submitted thatGaurisuta Infrasolution Pvt. Ltd., which manufactures PVC doors andwindows had business transactions with Amrapali group, payment/Cadvances were made to them. It is fact that parties are related. It doesnot mean that all transactions are dubious. Law does not prevent suchtransactions. The short term and long-term loans to third parties werenot for diverting loan funds and home buyer funds to group companies.

53. With respect to Auditors’ list of 27 companies formed for theDpurpose of routing the cash of the companies, were formed beforedemonetisation. With respect to J.P. Morgan Property MauritiusCompany-II, Amrapali Zodiac Developers Pvt. Ltd. transferred moneyto another company to buy-back stake in J.P. Morgan but did not do itdirectly as share buy-back rules did not permit such transactions. It maybe maximum violations of the Companies Act but is not diversion ofEmoney. With respect to FEMA, it is submitted that again it is violationof ECB guidelines but again it was not case of diversion of money.Money was needed for construction, therefore, arrangement with J.P.Morgan was made.

54. With respect to doubt of Forensic Auditors as to the genuinenessFof interest paid by Amrapali Silicon City Pvt. Ltd. to IPFFI and claiminginterest @ 17% which is very high, it was submitted that rate of interestdepends upon the money lending transactions and is not illegal orprohibited in law.

55. With respect to charging for professional services and fee byGDirectors, it was stated that person rendering professional servicesshould have membership of professional bodies and have somecertificate of practice. lot of companies pay professional/consultingfee to outsiders to assist them in their business. Amrapali group has alsopaid salaries and consultation fees to Directors as they were providingH

their expertise and skill. Ultimately prayer had been made to evolvesome mechanism for completion of housing projects.

56. On behalf of Royal Golf Link City Projects Pvt. Ltd., it issubmitted that loan of Rs.50 crores or Rs.48,52,05,100 was paid byUltra Home Constructions Pvt. Ltd. to Royal Golf. Interest @ 9%amounting to Rs.5,83,42,977 has been paid to Ultra Home. Subsequently,the agreement has been entered into to repay Rs.50,46,78,022 by31.3.2017 or in lieu thereof 30 Villas have to be allotted by Royal Golf toUltra Homes. This Court has attached 30 Villas allotted to Ultra Home.It is ready to give 30 Villas by 30.4.2021 or to refund the amount ofRs.48,46,78,022 in 4 equal quarterly instalments in full and final settlementof all claims of Amrapali group.

57. On behalf of Bank of Baroda, it has been submitted thatForensic Auditors have made adverse comments without any basis. Bankof Baroda had deployed suitable methods to monitor the utilisation offunds. No diversion of funds was permitted by Bank of Baroda.Monitoring of the loan was done and before sanction of the loan, the networth of the promoters/Directors of ASCPL was ascertained. Bank ofBaroda relied upon letter dated 29.7.2010 from Noida to ASCPL. Theterm loan agreement was executed amongst ASCPL, Bank of Baroda,Bank of Maharashtra and Oriental Bank of Commerce “Consortium”for term loan of Rs.300 crores. After execution of due documents anddeeds of corporate guarantee issued in favour of Bank of Baroda,corporate guarantees were submitted by Ultra Homes Construction,Jotindra Steels and Tubes Ltd. along with Vidhyashree Buildcon. Pvt.Ltd. RoC search report of guarantors was also obtained. NOC of Noidadated 21.2.2012 for mortgaging the project site to procure term loanfrom the consortium was also obtained. detailed project report wasissued by Solomon Consulting Pvt. Ltd. There was the appointment ofindependent lender’s Engineer and thereafter accounting was done, post-disbursal of loan by Bank of Baroda. The money was released on thebasis of lenders Engineers advice of Rs.49 crores out of Rs.55 crores.Thus, there was no lack of due diligence and considering the progress ofconstruction, steps had been taken by the Bank of Baroda to protect itsinterests after the account became NPA. Active steps were taken torecover the amount. The similar mechanism had been adopted forAmrapali Infrastructure Pvt. Ltd. With respect to Ultra HomesConstruction Pvt. Ltd., also loan of Rs.75 crores was sanctioned out

Aof which Rs.65.84 crores were disbursed for the construction anddevelopment of an Integrated Information Technology Park, (IT Park),Hotel, Commercial complex, service apartments and residential complexon Plot No.59, Sector Knowledge Park-V, Greater Noida, which wereexecuted by Mr. Anil Kumar Sharma, Mr. Ajay Kumar, Mr. Shiv Priyaand Mr. Madan Mohan Sharma. Amrapali Zodiac Developers Pvt. Ltd.Bwas granted loan of Rs.75 crores. It was not utilised for payment ofthe cost of land or for payment of construction cost. The amount hasbeen repaid and the account has been closed. The money may havebeen routed through various suppliers and contractors. The remittanceof money is nothing but an example of due conduct of business. WithCrespect to the release of the corporate guarantee of M/s. Jotindra Steeland Tubes Pvt. Ltd., it is submitted that they were unable to infuse sharecapital as required and seemed unable to do so in the future as well. Theshares due to M/s. Jotindra Steel and Tubes Pvt. Ltd. were also allottedto M/s. Ultra-Homes Construction Pvt. Ltd. Thus, the Bank of Barodagranted the request for release of the corporate guarantee in favour ofDM/s. Jotindra Steel and Tubes Pvt. Ltd. Amrapali group had the right tomortgage the property as per the mortgage deed. There was no bankcharge on the property mortgaged by Amrapali group. As per clause 15of the mortgage deed, the buyer shall have no right after paying allamounts. The developer shall continue to have full authority over the flatEunless registered deed is executed in favour of the allottee. It is alsosubmitted that the home buyers are not secured creditors. The homebuyers were to acquire the premises on sub-lease basis which was neverintended or stated anywhere that sale would take place. The allotteeshall not have any lien or interest on the flat unless sub-lease deed isexecuted. Therefore, they are not secured creditors, they have no right,Ftitle or interest or lien on the basis of allotment from flat buyer agreement.It is further submitted that the agreement does not create any rights inpraesenti with promise to enter into future agreement. It does notcreate any right, title, interest or claim in the immovable property. In theabsence of registration of document under the Registration Act, no rightsGare created in the immovable property in question under section 49 ofthe Registration Act.

58. With respect to RERA provisions, it has been submitted byBank of Baroda that section 11(4) of RERA deals with the interactionbetween repayment to secured creditors and rights of allottees. Sub-Hsection (h) of section 11(4) states that the promoter shall not create

mortgage or charge after an agreement to sell has been executed.Therefore, the promoter is permitted to create such mortgage or chargeprior to the execution of an agreement to sell. Section 4(2)(1) of RERArequires the promoter to disclose the prior encumbrance to the real estateauthority. Under section 34(b) it is required to publish and maintain awebsite of records. Section 19(4)(1) of RERA provides that if thepromoter fails to complete or is unable to give possession of an apartment,plot or building, the rights of allottees are restricted to receive thecompensation from the promoter. The rights of allottees under section19 of RERA can be contrasted with the right of the mortgagee whosecured creditors under section 58 of the Transfer of Property Act, 1882.The RERA is restricted to protect the rights and interests of the allotteesfrom the promoters and developers. RERA recognises and protects therights of the lenders and does not in any manner take away any rightunder the existing statutes like the T.P. Act, SARFAESI, etc. RERA hasnot brought any change in the nature of the rights of home buyers. TheBank is entitled to receive its money along with interest in the event offailure to repay by builder/ promoter.

IN RE: FORENSIC AUDITORS

59. The Forensic Auditors have submitted their report runninginto eight volumes. It has been observed that the Amrapali Group wasstarted in 2003 by Mr. Madan Mohan Sharma. Later on, it was managedby his son Mr. Anil Sharma. He gradually expanded his team and Mr.Shiv Priya, Mr. Ajay Kumar, Mr. Nishant Mukul, Mr. Chander Wadhwa,Mr. Mohit Gupta, Mr. Adhikari Das, and others joined in. By 2010, theAmrapali Group was leading real estate development firms, promisingto offer luxury and comfort. In the beginning, the Amrapali Group hasconstructed and completed certain projects and earned the goodwill ofthe general public in the real estate business. The Amrapali Group usedunfair means to promote themselves. It made false promises to lure thepublic to invest in its projects, purposefully delayed construction, cheatedhome-buyers for the title of flats and trapped home-buyers in rentalreturns. The Amrapali Group floated several companies. The publicinvested their hard earned money in Amrapali projects and theshareholders used these funds to infuse capital in other companies/entities. Home buyers were cheated by making false promises/claimsfor example selling of flats which were not even part of the master planof projects or unapproved in the master plan, double booking of the same

Aflat by different customers. The homebuyers funds were diverted toother companies/directors through payment of professional fees, by wayof booking of bogus bills of Rs.837 crores, by selling flats as undervaluedprices in book and received differential market value in cash, by payingcommission and brokerage on bogus booking of flats and by way ofgranting inter-corporate deposits of Rs.3,000 crores to related entitiesBand Rs.500 crores to unrelated entities/trusted partners for ultimatelydiverting funds to unapproved uses.

SUMMARY OF REPORT OF FORENSIC AUDIT

60. The summary of report submitted by Forensic Auditors in theCCourt is as under:

1. Brief Introduction

Amrapali Group started its operations in the year 2003 in Delhi. Itwas started by Mr. Madan Mohan Sharma who managed it for abrief period. Thereafter the operations of the Group were managedby his son - Mr. Anil Sharma. Gradually, he expanded his teamand Mr. Shiv Priya, Mr. Ajay Kumar, Mr. Nishant Mukul, Mr.Chander Wadhwa, Mr. Mohit Gupta, Mr. Adhikari Das and othertrusted partners/executives joined in. The Group was intothe business of construction of residential complexes, townships,offices, commercial complexes. The Group built good reputationin the public and launched several projects in various cities inIndia. By 2010, the Group was leading real estate developmentfirms in India and particular in North India, promising to offerluxury and comfort in every project that it takes up. Subsequently,Mr. Mahender Singh Dhoni became brand ambassador of theGroup.

To achieve good standing in the eyes of public, the Group usedunfair means to promote themselves. The Group made falsepromises to lure public to invest in its projects, purposefully delayedconstruction, cheated homebuyers over title of flats, trappedhomebuyers in rental returns, sold flats at exorbitantly low pricesand recovered market price in cash from them, among other unfairmeans adopted by them. The Group floated several companiesthrough its directors, staff, trusted partners which wereincorporated solely to divert homebuyers funds. The Groupcollaborated with external parties like JP Morgan in contravention

of FEMA and distributed returns along with principal amount, eventhough it did not book gains within the business of the company.Similarly, it collaborated with several other third parties and investedin other projects and built cycle of returns in the form ofunaccounted cash. The Group treated moneys received fromhome buyers as its own capital and used this money for investingin exclusively personal purposes, for example in constructingAmrapali hospital, hotels, malls, making movies etc. The Groupbooked bogus expenses and routed funds to trusted partners.The Group also used homebuyers funds for building personalproperties, investment in mutual funds, expenses in daughter’swedding, purchase of luxury cars, watches, building luxurioushouses for directors etc. The Promoters diversified to differentverticals i.e. Education, Entertainment (in making movies), FMCG,infrastructure, Shopping Malls, technology parks, hotel etc. fromthe diverted Home Buyers funds. The Promoters didn’t investany paisa in such verticals and the whole empire was created outof the diversion.

The Promoters created web of more than 150 companies (PageNo. 16-19 Volume I) for routing the funds and creating assets.About 100 Companies were under the supervision and control ofpromoters used mainly for the purpose of diversion of funds. TheDirectors and Shareholders of these Companies were benami andwere the trusted junior employees of promoters. CFO and theStatutory Auditors.

It is observed that the Company, i.e. management, CFO, theStatutory Auditors and key managerial persons deliberately andfor reasons best known to them did not prepare the accounts till31st March, 2018 or thereafter as nobody wanted to let anybodyknow where the funds moved from 31.3.2015 onwards. In absenceof Book of Accounts, we are constrained to report that themanagement deliberately withdrew the Bank Balances for makingpayments to some person and brought down the huge bank balanceto negligible amount.

The management has diverted the Home Buyers’ funds from oneCompany to another Company in very clever, pre-planned andclandestine manner. The management could not have done thiswithout the full support of its CFO and the Statutory Auditors. As

per the submissions made, many companies were controlled byCFO and the Statutory Auditors to which huge funds have beentransferred. It can therefore, be easily said that both CFO andthe Statutory Auditor were Master Mind behind these types ofplanning for diversion and the misuse of funds. It may be importantto mention here that funds were transferred from one Companyto another and to third and to fourth and so on thereby absolutelyconfusing any person to find out the real trail where the moneyhas gone, since there are more than 100 Companies through whichthese funds have been routed over the period.

2. HISTORY OF ALLEGATIONS

Bank of Baroda and several other banks filed petition beforeNCLT under section 7 of the Code for triggering CorporateInsolvency Resolution process in the matter of Amrapali GroupCompanies.

Homebuyers filed petition seeking construction and possession ofaround 42000 flats booked in Amrapali Group

On 6th September 2018, Supreme Court appointed Mr. P KAggarwal and Mr. Ravi Bhatia as joint forensic auditors to auditinto the matter.

ACCOUNTING PACKAGE

The group was using Tally till March, 2015 for all of its groupcompanies.

In April 2015, it introduced Far Vision an ERP which was notimplemented properly. The opening balances were not properlyentered.

In November 2016, the group left half way Far vision and startedrecording partial transaction in tally.

To avoid the traceability, of the transactions, the Promoters andCFO and Adhikari (G.M Accounts) recorded the financialtransactions up to March 2015 in Accounting Package tally, thenshifted to FARVISION from April 2015 and continued till March

2016, and thereafter partially recorded transaction in tally and afor few companies in FARVISION and thereafter in tally. Thiswas intentionally plan. The companies of the group stopped gettingthe annual accounts prepared and filing returns to Roc and Incometax.

3. Auditors

The Following Firms carried out the Audit of the Group Companiesduring the period:

Anil Ajay & Co.

BSR & Co.

Deloitte Haskins & Sells

SN Dhawan & Co.

Chander Wadhwa & Associates

Manoj Usha & Co.

Agarwal Seth & Co.

Kumar Chopra & Associates

4. Non genuine purchases from suppliers

Purchase bills have been accounted for in the books of accountswithout receipt of physical goods and purchase bills have beenaccounted for of suppliers who do not exist. There was an IncomeTax search and seizure on 9[th] September, 2010 and 7[th] August,2013. During the search held on 7[th] August, 2013, it was held bythe Income Tax Authorities that purchases are being made frombogus suppliers without receiving the goods physically. The totalamount of purchases from such suppliers as observed by theIncome Tax department amounted to Rs.842.42 Croresapproximately..

In order to confirm the genuineness of these suppliers and fewother suppliers we have sent written communication/ letters byspeed post to them in order to confirm the transactions with theAmrapali Group of Companies. Most of these letters have beenreceived back with the remarks “No such firm exists at the specifiedaddress”.

In addition to above, there is no system of calling quotations forpurchases and there is no internal control with respect to inventory.

[2019] 9 S.C.R.

We have spotted out further certain non-genuine supplies as perdetails given below:

(i) M/s S Promotors

There have been sales to M/s S Promoters amounting to Rs.21.15 Crores during the period 2013-16 from one Company ofAmrapali Group and the same goods were re-purchased intoanother Company of Amrapali Group at margin of 5%approximately.

These transactions seem to be mere accommodation entries, whereall purchase/ sales are recorded on single day only. Further, itwas also explained that M/s S Promotors have made the salesagainst Bank Letter of Credit which has been discounted by themfrom their bankers. This seems to be case of manipulation withthe banks also since there is no movement of goods but entrieswithin the Amrapali Group only.

Further, it is observed the balance outstanding of INR 5.11 Croresdue to the S Promotors as on 31[st] March, 2016, has been adjustedagainst payment made by home buyers directly to the SPromotors and by allotting flat to M/s S Promotors. However,the authorized representative of the S Promotor has refutedthis fact vehemently and asserted that it has not received anypayment from the home buyers of the Amrapali Group, nor it hasreceived any flat. Thus, the flat allotted to S Promoters onpaper needs to be attached and put to sale. Moreover, sum ofINR 1.06 crores as 5% of the margin earned by M/s S Promotersneeds to be recovered from him as they have neither receivedgoods nor supplied any good and only acted as Billing agent forwhich they need not be claiming INR 1.06 crores as their margin.

(ii) Kanodia Cements

While scrutinizing the purchase bills of this supplier it was notedthat the slips of Weigh Bridge in the case of purchase of Bajritrucks show time interval of 4-5 Minutes only. This doesn’t seemto be possible that full truck of Bajri takes only 4-5 minutes toenter into the site and come back on the weigh bridge again withempty truck in 4-5 minutes. No satisfactory explanation has beenfurnished by the management regarding this issue. Sample of suchinstances have been enclosed below:

Net Timeof Time of AChallan Time No. Truck No. weight Date Gross tare takenin KgWeightweight6524HR74A-533130,7202/3/201518:3118:365 Min6477HR74A-349932,1202/3/201518:3418:395 Min6437HR74A-533129,23023/2/201518:0818:124 MinB6435HR74A-8194 31,02023/2/201517:55 18:00 5 Min6429HR74A-8194 30,64022/2/201515:50 15:55 5 Min6289HR74A/533129,15017/2/201515:08 15:13 5 Min6291HR74A/819430,24017/2/201515:0015:055 Min6250HR74-914430,71012/2/201518:2518:305 MinC6176HR55T/575430,09015/2/201515:5415:584 Min6265HR74A-819429,49015/2/201515:5215:564 Min6179HR74A-162028,2708/2/201516:3916:434 Min6261HR74A-819430,93014/2/201517:3217:364 Min6220HR38T-2855 33,7808/2/2015 15:43 15:48 5 MinD6227HR74A-5331 29,2909/2/2015 15:09 15:13 4 Min6172HR55T-5896 29,6407/2/2015 16:56 17:00 4 Min6210HR74A-819429,5607/2/201516:5917:023 Min6169HR55T 589630,9106/2/201515:3215:364 MinE6170HR55T 833931,2706/2/201515:3515:372 Min6263HR74A 168030,09014/2/201519:0919:134 Min

As these bills of Kanodia Cements are prima facie held to bebogus, the entire sum of INR 11.69 Crores booked as purchasesfrom Kanodia Cements should be recovered from them or fromthe Management for inflating their purchase by debiting bogusinvoices.

Bogus expense and cash surrendered in income tax search

Cash has been surrendered by the Amrapali group in the firstIncome Tax search conducted on 9[th] September, 2010. No sourceof this cash has been explained by the management.

According to the Balance sheet of Amrapali Sapphire DevelopersPrivate Limited examined by us, cash surrendered is shown asmiscellaneous income in the profit and loss account during 2010-11 amounting to Rs.1.39 Crores.

It is further submitted that in the second search conducted byIncome tax Authorities on 7[th] August, 2013, the Amrapali grouphad surrendered an additional income of Rs.125 crores.

Both these facts clearly depict that Amrapali group was havinginflow of unaccounted cash collected from either the Home Buyersor collected cash from Bogus purchases made or by advancingmoney to various parties and taking cash from them.

While scrutinizing the Audited Financial Statements of theCompanies for the Financial Year 2013-14, it is observed that noadditional income has been shown. There is only jugglery ofaccounting transactions where sales have been shown by way ofpart completion method and the relevant cost is also debited tothis part completion sale by changing the Accounting Method whichwas being followed by the Amrapali Group of companies in theearlier years. This method of accounting was changed for 2financial years only i.e. for Financial Year 2012-13 and FinancialYear 2013-14. This method was changed just to make adjustmentin accordance with the letter of surrender. In fact, there is nosurrender of additional income, it only amounts to preponement ofsale being shown in these years instead of it in the later years.

Cash has also been surrendered in the first search conducted on9th September, 2010 and no source of this cash has been explainedby the management. This clearly explains that there was flow ofun-accounted cash from various sources to the Amrapali Groupof Companies.

note was also stated in the Audited Financial Statements forthe financial year 2010-11 as follows:

“Note 6 (A) During the F.Y. 2010-11 Income Tax Search &Seizure operation conducted by the Income Tax Departmenton the company and company has surrendered total incomeof Rs. 13,893,500 i.e. Rs. 10,043,500 for the F.Y. 2009-10and Rs. 3,850,000 for the F.Y. 2010-11. Accordingly, the totalincome includes the above said income.”

Thus, it is can be easily inferred that the company has been regularlytaking cash from its various home buyers but not recording thesecash entries in the Books of Accounts. (Volume –I PageNo. 205)

It is unclear how the surrender of Rs.125 crore made during theFinancial Year 2013-14 has been accepted by the Income TaxAuthorities. In fact, no additional income has been shown on thissearch.

Moreover, against the additions relating to Bogus Purchases madein the Assessment order for the Financial Year 2013-14, theCommissioner of Income Tax (Appeal), Central Circle has deletedall these additions.

We are informed by the management that no further appeal hasbeen preferred by the department before the Income tax AppellateTribunal as they have no idea of the same so far.

The bills booked and payments made were just accommodationentries. Many of the parties are not traceable and when werequested the Amrapali Group Management to produce thepersons/entities to ascertain the veracities of the claims, they didn’tco-operate.

It appears Prima-Facie that the bogus invoices were booked andcash was taken from these parties. We are of the opinion that ifwe confront the recipient of the purported charges then lastrecipient would flatly deny.

It is pertinent to note that Shri Ajay Kumar Aggarwal of BSBKGroup in statement recorded under section 132(4) of the IncomeTax Act has admitted that he provided accommodation/bogus bills.

Till the date of writing this report the amount so identified forbogus bills is Rs.837.2 crore. Further, the supplies by JotindraSteel and Tubes and Mauria Udyog Ltd, having common directorswith Amrapali Group Companies, are prima-facie bogus by natureand are under examination amounting to Rs.450 crore.(Refer Annexure No. S 4 Page no 2827 Supplementary report).

Land Development Charges

sum of Rs.7.3 crore has been debited to this account on 31stMarch, 2013 for which the supporting relevant documents are notmade available to us for our verification. This amount needs to berecovered from the Directors as there is no supporting evidenceor voucher and it is just book entry.

[2019] 9 S.C.R.

Total bogus expenses as on date of report have been ascertainedto be Rs. 842.42 crore.

Double booking of expense

It has been observed that brokerage amounting to Rs 0.25 crorewas paid twice; once to HDFC Realty and again to Mr. AlokRanjan c/o SSS Enterprises on account of same flat bookings inAmrapali Sapphire Developers Private Limited during the FY 2019-10. Mr. Sanjay Kumar, proprietor of SSS Enterprises has alreadyconveyed to GM Finance of Amrapali Group by way of speedpost that fake bill for brokerage has been raised under his nameby Mr. Alok Ranjan. This amount of Rs.0.25 crore should berecovered from Alok Ranjan/ the Management for booking ofdouble expense. (Volume 1 – Page no 213)

Unsupported Cash Payments

The Company has made unusual cash payments by transferringthe cash to the site cash during the financial year 2016-17 by wayof vouchers which are not supported/authenticated by the sitecash in charge. It seems that all these entries have beenmanipulated to use the cash to decrease the balance as on 08/11/2016 being the date of demonetization. Some instances are asunder:

Financial Year Particulars Amount 30/04/16 Wages Paid 2,754,35031/05/16 Wages Paid 2,637,05030/06/16 Wages Paid 2,655,90031/07/16 Wages Paid 2,645,45031/08/16 Wages Paid 2,643,95030/09/16 Wages Paid 2,659,45031/10/16 Wages Paid 2,683,35030/11/16 Wages Paid 1,259,63006/06/16 Transferred to site cash 3,000,000012/05/16 Transferred to site cash 4,100,000

The above are only from one company which is tip of the icebergand actual amounts may be much higher.

Further cash payments are being made to number of partiesamounting to Rs.20,000 or less which are not supported by payee’sreceipts on daily basis. Thus, these payments are not genuine.(Volume I- Page 223)

It is observed that the cash balance available on 8[th] November2016 was partly deposited into bank and huge amounts were notdeposited into bank and was used for payments to staff, suppliers,vendors etc. It is worthwhile to mention that it was not permittedto use Specified Bank Notes (SBN-500, 1000 denominationNotes) for making payments to these parties.

Further there has been an Income tax Survey on 17/11/2016. Weunderstand Income Tax Authorities have recorded the statementof Directors and also taken the Inventory of Cash in hand as onthat date. copy of the statement recorded and detail of inventoryof Cash in hand is not made available to us.

Gold bar purchased from Yashika Diamonds

It has been observed that the Group Companies purchased Goldbar, other forms of gold worth Rs.5.88 crore. The same hasbeen booked as festival expenses. This does not seem to be anormal business transaction but in the nature of personal expenses.Thus, this amount should be recovered from the management ofthe company.

5. Negligence and non- monitoring by bankers

In view of our detailed report attached, we wish to submit herethat the whole process of transfer of funds from one Company toanother Company to third Company and so on and so forth onthe same dates would not have been possible without active supportby the Bankers. The Bankers, in our opinion, turned Blind Eyeto the various transfer of funds from one account to another forreasons best known to them. They didn’t inquire the huge transferof funds from various accounts which were being routed everyday. Had they been slightly more vigilant to monitor and controltransfer of funds, the Management would have not dared to launderthe money from one Company to another according to their whimsand fancies and the Bankers are solely responsible for thenegligence on their part.

Banks did not do any monitoring that whether the funds disbursedwere used for approved purposes or not. The loan sanctioned asterm loan were diverted on the very same day of receipt. Theland payment were not paid etc.

Bank of Maharashtra – Term Loan has been released byBtransferring the amount to the Current account during the financialyear 2009-10 to 2012-13. There has been no monitoring by thebank to ensure the end use of utilization of the funds.

This amount was paid from the Current account for other thanbusiness activities of this Company.

It is observed that there was no monitoring done by the officialsof Bank of Maharashtra, Andhra Bank and other banks byreleasing of term loan to the Company. Even basic checks asrequired by the Bank were forgone and not ensured by the BankOfficials regarding the end utilization of the term loan funds forthe purpose for which they were granted. It seems that the Bankofficials overlooked all these important aspects and granted theseloans to them without going into any technical requirements asrelating to release of Term Loan facilities to borrower. Thebanks acted as mute spectator to unapproved diversionwhich was almost happening evidently in all bankingtransactions.

Optionally Convertible Debentures

ICICI Prudential Asset Management Company Limited had givena sum of INR 74 crores approximately on account of debenturesissued by Amrapali Sapphire Developers Private Limited duringthe financial year 2011-12. These debentures carried interest rate@ 17% Per annum.

There has been gross non-compliance of Investors cum-shareholders agreement dated 16th Day of December, 2010 withrespect to following:

a.Non appointment of directors

b.Non operation of bank account by joint signatory of investorc.Non utilization of funds as per clause no. 7.5 of Investmentcum Shareholders Agreement dated 16th December, 2010.

d.Sale of flats at less than Rs 3,420 per square feet of saleablearea and many other clauses of this agreement neither followednor ensured by the Investor.

It is very clear that Debenture Subscription Agreement andInvestment cum Shareholders Agreement both dated 16[th] dayDecember, 2010 were merely sham documents which were nevercomplied with and both i.e. Amrapali group of Companies andICICI Prudential Asset Management Company Limitedwere in connivance with each other in diversion of fundsfor non-specified purposes.

Foreign investment

The company has received the sum of Rs. 140 Crores duringthe financial year 2012-13 from IPFFI Singapore PTE Limitedunder Foreign Direct Investment Scheme. As per FEMA rulesthis amount was to be invested in Real Estate construction projectsonly.

The amount received in Axis Bank of Rs.85 Crores wastransferred to Amrapali Centurian Park Pvt. Ltd. (ACPPL) asunder:

On 7.8.2012On 8.8.2012On 18.8.2012

-Rs.5 Crores-Rs.50 Crores-Rs.30 Crores —————————Total=Rs. 85 Crores

————————

ACPPL on receiving Rs.85 Crores, allotted Equity Shares worthRs. 85 lakhs to ASCPL and balance Rs.84.15 Crores were treatedas Share Premium Account. There is no Valuation Report availableas to how this share premium of Rs. 84.15 Crores has beencalculated. This transfer of fund by ASCPL to ACPPL isabsolutely violative of FDI Rules and Agreement.

The Second amount received in BOB Escrow Account wastransferred from 8.8.2012 to 28.9.2012 on various dates in theAccount of BOB, Sansad Marg Branch, and New Delhi and alsoused for payment of Term Loan Instalments of OBC and Bank ofMaharashtra for repayment of their Term Loan instalments.

AIt will therefore, be observed from the above, that the Company(ASCPL) did not use money for the project for which it wasreceived from IPFII Singapore but transferred Rs.85 Croresto Amrapali Centurian Park Pvt. Ltd. and Rs.55 Crores torepay Bank Loan Instalments and Repay the outstandingcreditors provided for in the books and standing in theBbooks. The said payments made by ASCPL are, therefore,in contravention of FDI norms and rules and for which themoney was brought in India.

Moreover, ASCPL has paid interest of Rs.58.81 Crores @17% (which is highly abnormal rate) so far to IPFII,Singapore during the last 3 years.

- Year 31.3.2013Rs.14.41 Crores Paid- Year 31.3.2014Rs.22.20 Crores Paid- Year 31.3.2015Rs.22.20 Crores Paid

————————

Total = Rs.58.81 Crores

————————

a)It is very clear that all such violations are being made withthe knowledge of the IPFII Singapore and they are inConnivance with the ASCPL.

b)As per Schedule 4 of the agreement CCD’s (CompulsoryConvertible Debenture) were subject to the following termsand conditions.

1)On expiry of 5 years from the date of allotment, theCCD shell be fully monetarily and compulsorilyconverted into class shares of the company

2)The CCD’s shall be converted into such number ofclass shares arrived that by dividing the aggregateface value of CCD’s by Rs.2,734.30.

But these CCD’s were not converted into class sharesas per agreement but entered into another agreement toextend the term of CCD’s from 5 years to 7 years. By thisway , The fund has continued to be creditor otherwise

after conversion to equity, it will not be eligible for interestand principal.

Current liabilities not payable

Security deposits from contractors and intercorporate depositsaccepted from non group companies are in the nature of unsecuredloans. There have been no business transactions with the companyexcept movement of funds. The list of such liabilities is underpreparation which are not payable.

Inter-corporate deposits accepted by the Group are Non-Interest-bearing unsecured loans. There are no business transactions withthese companies. It is not understood as to why person will giveinterest free loans without any considerations. Thus, we are ofthe view that these are accommodation entry only in lieu ofconsideration given to them indirectly by the management.

Hence, we are of the view that all the aforesaid amounts are notpayable.

In our opinion, this is case of Money Laundering as the genericterm of Money Laundering is defined to describe the process bywhich Criminals disguise the original ownership and control theproceeds of the criminal conduct by making such proceeds tohave derived from legitimate source.

Money Laundering is the process of concealing the origin of moneyobtained illegally by passing it through complex sequence ofBanking transfers or commercial transactions. The main processis accounting for the proceeds without raising the suspicion oflaw enforcement agencies. In the instant case too, Amrapali Groupof Companies have defied all laws to transfer small and bigamounts from one account to another to third and so on and soforth on single day with the connivance of the Bank officialsand financial institution officials and thereby Committed act ofMoney Laundering on large scale.

6. Lands allotted to consortium and flats sold to homebuyers

Several companies were formed with consortium partners whichwere just dummy companies and were part and parcel of Amrapaligroup. To comply with the condition of minimum 3 partners, thesecompanies were created in the names of office boys and peons.

Technically the allotments at the initial stage itself were void ab-initio. In most of the companies, the amount received fromhomebuyers was sufficiently more than the amount spent onconstruction and for payment of land. Had the promoters paidamount received from homebuyers to the authorities on time therewould not have been any liability of land dues. Further there wasno need to avail any loan from banks, Private equity funds as wellas from investors. The sole objective of taking loan was to divertthe funds to other ventures to create assets in the name of familymembers, make movies, to satisfy the ambitious desires of familymembers and to build hospital. Villas were bought at touristdestinations for fun at the expense of middle class and low incomegroup peoples abodes. Many parties joined them in the looting ofhard earned money of homebuyers to take their share of the cakein the form of unbelievable return on investment, profits, land, FSIand flats and facilities at throwaway prices. Bogus expenses werebooked and the promoters were having no fear of the law of theland. They could execute many transactions of transfer ofproperties, booking of expenses, funds transfer, even when thepetition was accepted and was pending for disposal before theHonourable Supreme Court. Companies in which land was allottedto consortium partners are as under:

Amrapali Leisure Valley Pvt Ltd

Amrapali Centurian Park Pvt Ltd

Amrapali Homes

Amrapali Grand

Amrapali Eden Park Developers Pvt Ltd -Iftikar Ahmedand Rakesh Mahajan jointly hold 49% in the said company

(i)There is no substance in the nature of transactions carriedon by the company. The funds are merely routed fromone entity to another for hidden objective.

(ii) Banks were financing not the construction activity but loansand advances to third parties.

(iii) Mr. Rakesh Mahajan and Mr. Ifthikar Khan were grosslyinvolved in the wrongdoings in the company’s project and

equally conspired in the delay and diversion of homebuyers funds and they being 49% shareholders and activedirectors in the company should be held responsible forthe deficit in completion of the project amounting to Rs.20crore.

Further, Amrapali Infrastructure had given an advance of Rs.1.5crore to Nirala Infracity Ajmer Pvt Ltd - project controlled byRakesh Mahajan and Iftikar Ahmed. This amount is recoverablefrom Nirala Infracity Ajmer Pvt Ltd.

7. Companies created solely for the purpose of routing funds

The intention of Amrapali Group was to divert funds to otherprojects/income sources in the name of family members of thepromoter and the trusted employees, friends of the promoters aswell of the executives, auditors and their relatives. For this purpose,several companies were incorporated for routing funds. Thesecompanies did not have any material transaction as per the mainobject for which they were incorporated and did not have businesssince their incorporation. These companies did not have anyemployees also. These companies are shell companies used onlyto route interest free funds from one company to another. List ofsuch companies identified so far is as under:

a) Jhamb Finance & Leasing Private Limited - The companydidn’t have any operations/income/expenses except for FY 2014-15 and had only movement of funds from one related party/interested party to the other. It means the company was usedmerely for routing the funds and not for doing any business.

Since incorporation, loans (liability) and loans & advances (asset)increased as under, without booking of any expense/income:

As onLoans (liability) Loans & advances (asset)Amount (RS. ) Amount (RS. ) 1[st] April 2014 83,00,000 1,12,39,917 1[st] October 2014 35,33,00,000 34,67,39,917 31[st]March 2015312,93,32,906313,11,55,39231[st]March 2016859,77,32,906863,58,50,77631[st] March 2017 877,57,22,906 883,24,00,776

AIt is pertinent to note that starting from the FY 2015-16, the loansgiven and taken increased three folds without having anycorresponding increased on the income and assets side on accountof interest. Whereas starting from FY 2015-16, the employeesstarted leaving the organization and the construction at sites wasat standstill. The directors in the company are having no knowledgeBor an iota of idea about the transactions carried out. The company’soperation were under the controlled and supervision of CFOChander Wadhwa.

Further, it received Rs.18.95 crore from Suspense- unidentifiedpersons/parties and paid Rs.24.41 crore to Suspense- unidentifiedCpersons/parties, leaving balance payable of Rs.5.46 crore toSuspense- unidentified persons/parties. The said transactions ofRs.18.95 crore details were not made available to us.

b) Gaurisuta Infrastructure Private Limited – It lent andreceived funds from several parties without doing any business.DDetails of Rs.25 crore received from third parties are as under:

S.no.Name of party Amount Since date 1 Ams Powertonic Pvt Ltd 50,00,000 07-05-2012 2 Anuj Buildcon Pvt Ltd 50,00,000 10-05-2012 E3 Asv Garments Pvt Ltd 50,00,000 07-05-2012 4 Bij Buildcon Pvt Ltd 50,00,000 10-05-2012 5 Carona Infra Projects Pvt. Ltd. 2,20,00,000 Received on various dates FFrom 16-05-2013 to 16-09-2014 6 Charuvilla Apartment Behl 8,31,000 08-07-2011 7 Financial World Pvt. Ltd 57,00,000 11-07-2012 G8 Function Distributors Pvt. Ltd. 50,00,000 03-08-2012 9 Green Value Agro Farm Pvt. 30,00,000 01-08-2012 & Ltd 03-08-2012 10 Infotech India Pvt Ltd 1,00,00,000 03-07-2012

A11 Kabir Enterprises Pvt Ltd 50,00,000 06-06-2012 12 Ladli Ji Enterprises Pvt Ltd 2,00,00,000 15-05-2012 13 Leisure Buildcon Pvt Ltd 50,00,000 25-04-2012 14 M/S Naksha Properties 84,00,000 19-04-2012 BPvt.Ltd 15 M/S Shravni Infrastructre 3,20,00,000 Received on various dates From 19-04-2012 to 11-07-201316 M/S Soulful Heart Solutions 22,00,000 Received on Cvarious dates From 19-04-2012 to 17-07-201317 Ram Rahim Trading Co. 70,00,000 01-08-2012 & Limited 02-08-2012 18 Randhir It Solutions Pvt Ltd 50,00,000 07-05-2012 D19 Rayan Garments Pvt Ltd 1,40,00,000 26-04-2012 & 07-05-2012 20 R N Sangahi 24,37,480 11-04-2011 ; 02-07-2011 & 18-12-2012 21 S Corrugators Pvt Ltd 20,00,000 01-08-2012 E22 Sadbhavana Properties Pvt Ltd 4,00,00,000 08-06-2012 23 SpbPropcorn Pvt. Ltd. 50,00,000 25-04-2012 24 Technicare Biomed India Pvt 40,00,000 25-04-2012 Ltd F25 Utkarsh Properties Solution 28,00,000 26-04-2012 ; 16-09-2014 & 17-09- 2014 26 Vendure Agents Pvt Ltd 50,00,000 01-08-2012 27 Zarf Infra. Development Pvt 1,45,00,000 Received on Ltd various dates GFrom 26-04-2012 to 04-08-2012 28 Zoom Building Materials Pvt 1,00,00,000 10-05-2012 & Ltd11-05-2012TOTAL 25,08,68,480

The above companies were used for the purpose of moneylaundering and required detailed investigation. Further theamount as shown above is not payable to the party as indicatedagainst. None of the parties as above has lodged any claim so fartherefore it strengthens our charge.

As on 31[st] March 2017, the company is having interest free loansand advances amounting to Rs.703 crore without any movementwith paid up share capital of merely Rs.0.01 crore and thedirectors are employees and junior employees of statutory auditors.The company is used as conduit in diverting home buyer fundsto Amrapali Healthcare (Noida Hospital) and buying shares indifferent group companies from the funds of home buyers. Theentire shareholding should be attached and be made up for sale.

c) Neelkanth Buildcraft Private Limited - It was formed inthe year 2013 having capital of Rs.0.01 crore for the specificpurpose of buying shares from JP Morgan. Mr Chandan Kumar,director of Neelkanth Buildcraft Private Limited is an office boyin the office of Statutory Auditor of Amrapali Group, Mr AnilMittal and the other director Mr Vivek Mittal is nephew of StatutoryAuditor Mr Anil Mittal & does small time jobs.

d) Stunning Construction Private Limited – The Company isholding 19.75 % shareholding in LA Residentia Developers Pvt.Ltd. is consortium partner in the project since beginning. LAResidentia project has 3200 flats LA Residentia should surrendereither 19.75% of land or 632 flats. It was formed only for paymentof Statutory dues of Amrapali Group of Companies, its directorsand their relatives including senior employees of the AmrapaliGroup of Companies. The company was under the direct controlof CFO Chander Wadhwa and Company Secretary Pankaj Mehta.The amount of taxes paid by the company on behalf of promoters,directors, executives and their family members is Rs.17.43 crore(net) and gross up is Rs.24.9 crore is recoverable from promoters,directors, executives and their relatives.

e) Kapila Buildhome Private Limited – The company did notundertake any business. sum of Rs.392.68 Crores was advancedas loan or advances to the various group Companies. Further, itaccepted non-interest bearing inter corporate deposits from

non group companies with whom no other transactions wereundertaken. We are of the view that these are accommodationbook entries only in lieu of consideration given to them indirectlyby the management. List is as stated hereunder:

Name Amount In Date of AcceptanceRs. Ample Hotels and Resorts 20,000,00020/04/12Justify Vanijya Private Limited4,000,00022/06/12Ladli ji Enterprises Private 5,900,00025/04/12Limited Madhav Fincap Private Limited 15,000,00024/04/12Pan Realtors Private Limited 100,000,0023/08/100Total 144,900,000

The above companies were used for the purpose of moneylaundering and required detailed investigation. Further the amountas shown above is not payable to the party as indicated against.None of the parties (except PAN Realtors that also when werequested them otherwise they were silent for last 8 Years) asabove has lodged any claim so far therefore it strengthens ourcharge.

f) Rudraksh Infracity Private Limited- Shri Chandan Kumar,an office boy and employee of CA Anil Mittal, Statutory Auditorand Shri Atul Mittal, relative of CA Anil Mittal were inducted inthe board. The basic purpose of this Company was only for moneylaundering and was incorporated to receive Funds from MannatBuildcraft Private Limited. After receiving money (Rs.25 Cr.)from Mannat Buildcraft Private Limited, the same was transferredto J.P. Morgan Investments for purchase of Equity Shares ofAmrapali Zodiac Private Limited at an exorbitant price. Thereare no transactions before or after these transfers of money andthe same have been camouflaged to make it look with businesstransactions on the basis of the Valuation Report.It was also observed that there are no transactions at any dateduring the period but the bank account has only been used fordiversion of funds.

g) Mannat Buildcraft Private Limited - Shri Pankaj Mehta isCompany Secretary of Amrapali group of Companies and nowPartner of Mr. Chander Wadhwa, CFO in Saffron ConsultantsLLP and Mr. Ashish Jain who is also Partner of Mr. ChanderWadhwa, CFO in Saffron Consultants LLP, were inducted in theboard. The basic purpose of this Company was only for moneylaundering (Rs.120 Cr.) and was incorporated to receive Fundsfrom Amrapali Zodiac Developers Private Limited.

The whole racket of money laundering and receiving money fromthese Companies i.e. Mannat Buildcraft Private Limited, RudrakshInfracity Private Limited and Neelkanth Buildcraft private Limitedare the brain child of Mr. Chander Wadhwa, CFO and Anil Mittal,Statutory Auditor of Amrapali Group of Companies. Both theseCompanies are controlled by both of these persons and had beenformed only for this Money Laundering Business. There are notransactions before or after these transfers of money and thesame have been camouflaged to make it look with businesstransactions on the basis of the Valuation Report.

h) Amrapali Magadh Developers Pvt Ltd - The company hasnot carried out principal business activities. There is no bankaccount. The purpose of creating the company is not clear.The shareholders paid the share application money in cash. Thecompany is dormant company & did not have any significanttransaction.

i) Amrapali Mahi Developers Pvt Ltd - The company receivedshare capital in cash and all the expenses were paid in cash only.Mr. Mahendra Singh Dhoni, husband of Ms. Sakshi Singh Dhoni(director of company) was the brand ambassador of Amrapaligroup and have carried out number of transactions with respectto endorsement of Amrapali group’s projects. He entered inagreements with other group company.

j) Amrapali Spring Valley Pvt Ltd- the company is created fordiversion of funds and Rs.186 crore was diverted from AmrapaliSmart City Pvt Ltd to buy shares of Ultra Home Construction PvtLtd and shareholders are promoter directors without doing anyinvestments.

Most of the above companies will qualify to be NBFC, whichwas reported neither by the management nor by the statutoryauditors (except Jhamb Finance & Leasing Pvt Ltd). It isrecommended that RBI shall investigate the affairs andcompliances of the above companies.

Amrapali Media Vision Pvt Ltd was also incorporated with apurpose to route funds for making movies to satisfy the ambitiousdesires of directors/family members. Most of the marketing andadvertisement business of the group companies was given to thecompany with profit margin on the cost. The group could havedone this advertisement directly. But because there was need tomake movies, the funds were diverted to the company directly inthe form of loan as well by availing the services indirectly fromthese companies. The Company was freely availing funds ofhomebuyers from other group Companies in the form of ICD andspent it on making movies.

Hawthrone Intellect Management Solutions Pvt Ltd –Company was providing Management Consultancy Services(Recruitment Services) and taking nominal professional fee. Inturn, the Company has incurred more expenses in the last fewyears on account of Salary, Wages and other administrativeexpenses thereby resulting in net loss to the Company which hasaccumulated to INR 2.33 Crores as on 31.03.2015.

All these entries seem to be in nature of dubious entries and novoucher are available. This amount of loss of 2.33 Crores needsto be recovered from the Directors as they have wiped of theamount of the Home Buyers funds diverted as Home BuyersMoney to the Company.

Apart from the above companies, there were several companieswhich were incorporated by employees, auditors of Amrapaligroup. Shareholding as well as investment/assets of thesecompanies shall be attached

8. Companies created for building assets

The following companies were created by the Group for buildingassets from homebuyer funds without contribution of any rupeeby promoters and their relatives. The shareholding is held by the

group companies and/or by shell companies and/or the trustedpartners including individuals.

Ultra Home Construction Pvt Ltd- Shareholders did not bringcapital of their own, but used funds of home buyers in other entities/projects to pay for allotment of shares in UHCPL. Mr. Anil KumarSharma was allotted shares at premium for an amount ofRs.22,82,40,810 on 4th Nov 2010 and Rs.25,84,05,470 on 2ndMarch 2011 by adjusting receipts from Amrapali InfrastructureLtd which further received from Amrapali Sapphire DevelopersPvt Ltd, which received from homebuyers. Few instances arehereunder:

Received in Amrapali Transferred to Transferredto Ultra Sapphire Developers Pvt Amrapali Home Construction Ltd primarily from home Infrastructure Ltd Pvt Ltd buyersINR 5.47 crore as on 4[th]INR 2 crore on 5[th]INR 2 crore on 5[th]March 2010 March 2010 March 2010 INR 1.90 crore on 5[th]INR 2 crore on 8[th]INR 2 crore on 8[th]and 6[th] March 2010 March 2010 March 2010 INR 1.13 crore on 8[th]INR 2 crore on 9[th]INR 2 crore on 9[th]March 2010March 2010March 2010

Amrapali Homes Projects Private Limited –It has beenobserved that Mr. Prem Mishra was given INR 12.40 crore (underseveral ledgers) for purchase of land since 1st April 2008, out ofwhich INR 10 crore are still receivable from him. The projectwas sold by Prem Mishra to various parties and received amountin his name. We are yet to complete the audit of Prem Mishra inIndore project. The company transferred funds to and fro withseveral parties which do not have any substance. It has severalsmall and big debit balances as on date.

Amrapali Biotech India Pvt Ltd – Land & Building, Plant &machinery, factory at Rajgir (Bihar)

Amrapali Healthcare Pvt Ltd – Hospital at Noida

Noida Texfab Pvt Ltd – Amrapali International Institute ofHotel management, Noida

Neelkanth Buildcraft Pvt Ltd – bought shareholding from JPMorgan in Amrapali Zodiac developers Pvt Ltd.

MVG Techno Consultants Pvt Ltd – Tower at Noida

Amrapali Infrastructure Pvt Ltd – recast factory at GreaterNoida

Sangam Colonisers Pvt Ltd- The Company has received anamount of Rs.10.51 crore as advance against plots. However,despite repeated requests we have not been provided with thecomplete data base reflecting Number of Plots, Name of the buyers,Amount of Sale Consideration, Amount Received, AmountOutstanding, Unsold plots etc. Hence, we are not in the positionto comment upon the same. As informed to us during the courseof audit, the remaining portion of the land available with theCompany has been attached by Hon’ble Supreme Court of Indiaand put to auction by DRT.

Navodaya Properties Pvt Ltd – Building corporate tower 2,Noida

Amrapali Power & Cement Pvt Ltd – Land from Charu Raiyet to be identified, Land from UPSIDC yet to be identified.

Amrapali Buddha Developers Private Limited – Shoppingcomplex cum Mall at Gaya

MSB Software Technology Private Limited – Tower 1, Noida

Gaurisuta Infrasolution Private Limited –Flats in AmrapaliSilicon City Private Limited, booking of bogus expenditure ofRs.1.07 crore.

Amrapali Hospitality Services Private Limited- Hotel atDeogarh, Jharkhand

Mums Mega Food Park Private Limited- FMCG Factory atBuxar, Bihar, Land Building and Plant & machinery

RudrakshInfracity Private Limited - bought shareholding fromJP Morgan in Amrapali Zodiac developers Pvt Ltd.

MannatBuildcraft Private Limited - bought shareholding fromJP Morgan in Amrapali Zodiac developers Pvt Ltd.

Serious Observation

Our investigation reveals that this company has been used toperpetuate fraud enabling JP Morgan Investments to sell itsshares of Amrapali Zodiac Pvt. Ltd. to other Group Companies

of Amrapali group namely, RudrakshInfracity Pvt. Ltd. andNeelkanth Buildcraft Pvt. Ltd. at valuation amounting to INR140 crores which is not justified. This company has been used asa tool to transfer the money to other Amrapali Group companies.The following persons seems to be involved in this organized fraud:

i. Amrapali Zodiac Developers Pvt. Ltd.

ii. RudrakshInfracity Pvt. Ltd.

iii. Neelkanth Pvt. Ltd.

iv. JP Morgan Investments

v. MannatBuildcraft Private Limited

vi HDFC Bank

Chander Wadhwa, Adhikari dash and Anil Mittal incorporated 27Additional companies identified so far, which may be many more,and became consortium partners from the funds of the homebuyers. In the process, they appointed peons and junior employeesof auditors office as directors who were totally unaware of thetransactions. These companies were used for depositing cashduring demonetisation. The companies were formed/acquired forrouting funds and were not in any business. These were shamcompanies whose share capital was mostly subscribed in cashand the transfer of shares was also in cash leaving no audit trail.

9. Misuse of funds by directors involved in scam

The directors and executives colluded with each other and divertedhomebuyers funds. Directors received huge amount of money inthe form of salary as well as professional fee, both together. Aperson could have been either in whole time employment of thecompany or render services as consultant. However, personcannot enjoy salary income and earn professional income at thesame time and also both cannot be earned at the same time fromsame company. But directors of Amrapali group withdrew sumsusing all possible ways, be it salary, professional fee, reimbursementof expenses, use of luxury cars or loans and advances to self/relatives/self controlled entities/trusted partners or booking of billsof self controlled entities/trusted partners.

Further professional fee was booked without any agreement orproof of service. It had no correlation with the amount of work

done by the directors. Professional fee was booked as per wishand desire of directors and did not have any fair basis. Therewere standing instructions to transfer company funds to theindividual directors bank accounts when the balance was reachingto the specified set minimum balance limit.

The Professional fee paid to the directors, relatives of directors,and senior managers was unique way of diverting money. Hugeamounts were paid without any agreements at the whims andfancies of the directors and managers. Moreover it was tax freeand the tax liability was discharged by another group company.The whole of professional fee received by the directors (asstated hereunder) is recoverable from them. (Volume –II, Pageno 416-417).

Name of director Professional fee received (as per affidavit) Anil Kumar Sharma 29,13,23,580 Shiv Priya 26,43,64,571 Ajay Kumar 5,76,90,240 Suvash Chandra Kumar 5,11,21,752 Amresh Kumar 68,11,110 Total 67,13,11,253

Professional fee was under disclosed to the tune of is Rs.33.4crore (Anil Kumar Sharma 8.75 cr + Shiv Priya 24.65 cr) inaffidavits filed on 3[rd] Dec 2018 (Volume –II, Page no 414-415).The Difference was found of from the affidavit file and the taxreturns.

It shall be noted that directors did not share company wise receiptsin the affidavit and also books of accounts of directors were notprovided.

Directors along with their trusted partners and relatives cheatedand did criminal breach of trust with the home buyers. Theytransferred the funds from the projects to the companies whichwere closely held by the directors, their family members and/orby their trusted associates. The objective was to create assets in

the closely held companies and leave the home buyers on theroad. For example, Eklavya Building Solutions Pvt Ltd acquiredproperty in Goa amounting to is Rs.2 crore through funds receivedfrom Amrapali group, 27 other companies further invested Amrapalifunds in Amrapali projects (For example Many Flats in IT Park atGreater Noida);

The directors spent homebuyers funds on wedding of daughter ofdirector, foreign travels, expensive watches, jewellery, purchasingluxury cars for use by directors. The homebuyers funds werealso used for investment in mutual funds, creating personalproperties , payment of housing loans, investment in shares &securities. The directors created discreet projects for personalincome for example In the name of Amrapali Hospitality hotelat Deogarh was constructed out of funds received fromhomebuyers without their knowledge of it. They used homebuyersfunds in the form of construction of assets for other projects,examples constructed mall at Muzzafarpur, Bareilly etc, Hotel atDeogarh, Bareilly, Hospital at Noida etc.

Few particulars of diversion of funds received from Amrapaligroup are as under:

By Anil Kumar Sharma

Particulars Amount Amount Paid for Housing Loan of Plo t no 88, 3,137,000 2057/7 resi Magos Village, GoaAmount Paid for Housing Loan of Jaypee 3,796,452 Green E-11 Plot, Sector 128, Noida Amount paid for purchasing shares 59,600,000 Purchased Jewellery 33,921,575 Purchased Car 5,613,572 Investment in LIC and Star Union Daichi – 18,238,326 Insurance Policies Expense done during wedding of Daughter 13,500,000 Swapnil ShikhaTransfer to Surabhee Advertising Maharani 38,500,000 Bagh Property Transfer to Quality Synthetic Industries 30,000,000 Limited Surekha Group Transfer to others (Chander Wadhwa, 18,600,000 Shash ank Manohar, etc)transfers to family m embers 107,310,878 Payment by Stunning Construction Pvt Ltd of 44,510,320 direct tax Total 376,728,123

By Shiv Priya

Advance against property to Gaursons India Ltd51,00,000 Bathroom products and Marble for home 38,92,668 Furniture 74,76,644 Helicopter services6,20,000 Watches19,45,500 Lights, art designing, Bed linen 38,26,290 Jewellery 33,44,475 Quality Synthetic Industries Ltd1,50,00,000 Cozy Habitat Builders Pvt Ltd 15,00,000 SN Dubey 10,00,000 Stamp duty for registry of Jaypee Green Villa 32,50,000 Payment for LIC3,49,96,654 Investment in mutual funds8,86,50,409 Payment of loan for Pearl Gateway Towers 30,84,952 Payment of loan for Jaguar23,13,800 Payment of loan from bank of Maharashtra46,65,200 Total 18,06,66,592

By Ajay Kumar

Yogesh Chand25,00,000 Transferred to Sweep Account 1,33,00,000 Ozone GSP Infratech 50,00,000 Quality Synthetic Industries Ltd 40,00,000 Investment in mutual funds2,25,00,000 Payment of housing loan for IRS Colony, Abhay Khand, Indirapuram 56,31,000 Payment of housing loan for Pelican Villa Jaypee Green 37,55,784 Payment for LIC2,56,53,384 Total 8,23,40,168

Funds transferred from Amrapali group of companies waswithdrawn in cash from personal accounts of directors anddiverted to undisclosed people. In case of Anil Kumar Sharma, itis seen that an amount of is Rs.10.38 crore was withdrawn fromJune 2008 to May 2012 within few days of transfer to bankaccount of Anil Kumar Sharma in Bank of Maharashtra. Severaltimes, description of source of receipt or person to whom paymentwas made were not clear and such sources or application couldnot be identified.

Several companies were incorporated to create assets or to holdinvestment in the group companies or outside the group companieshaving assets. The promoter directors or their family membersbecame the shareholders in these companies without investingany paisa. Homebuyer funds were diverted to these companiesand then these companies bought shares from the funds so divertedin the companies having assets for example Noida hospital inAmrapali Healthcare Pvt Ltd, 5 star hotel in Ultra HomeConstruction Pvt Ltd, Institute of hotel management in NoidaTexfab Pvt Ltd etc.

Investment from JP Morgan and other funds availed for the purposeof construction which were not required at all because the fundspaid by homebuyer were in most of the cases were higher thanthe cost of construction and land payments, were diverted on theday of receipt itself to the closely held companies and to thecompanies created for the sole purpose for using them as conduitfor diversion and to the suppliers of bogus supplies. It is verysurprising that when funds were borrowed high rate of interestwas paid ranging from 14 -18% to so called investors and thesame investors were given loans to their group companies withoutcharging any interest. In such scenario, the possibility of takingcash in the form of interest cannot be ruled out.

Directors sold number of flats at low prices as compared to theprices existing on or near to those dates and on which rates saleswere made to other home buyers. It is further submitted that someof the flats have been sold even at rates as low as is Rs.1,000 - isRs.1,400 per square feet which is even lower than the cost ofconstruction. Possibility of taking cash outside the books of accountscannot be ruled out.

Instances of misuse of funds are hereunder:

Anil Kumar Sharma

Mr. Anil Kumar Sharma received funds from Amrapali group ofCompanies which was used for acquiring personal properties, asstated hereunder:

a. Property located at Plot no 88, 2057/7 Resi magos villageGoa-(Housing loan was paid for this property out of amountHreceived from Group companies)

b. Property located at Jaypee Green E-11 Plot, Sector 128,Noida -(Housing loan was paid for this property out ofamount received from Group companies)

1. Mr. Anil Kumar Sharma purchased shares and securitiesamounting to is Rs.5.96 crore out of moneys received fromAmrapali group Companies.

2. Mr. Anil Kumar Sharma purchased following assets out ofamount received from Amrapali group Companies:

a. Jewelries worth is Rs.3.39 crore

b. Car through AMP Motors: is Rs.0.56 crore

c. Life Insurance Policies: is Rs.1.82 crore (based on bankstatements available, although in total amount invested ininsurance policies amounted to is Rs.4 crore)

3. Mr. Anil Kumar Sharma made following personal expenses ofis Rs.1.35 crore for wedding of his daughter out of amountsreceived from Amrapali Group of Companies:

a. Payment made to Event Management Companies: isRs.0.90 crore

b. Payment made to hotels: is Rs.0.45 crore

4. Mr. Anil Kumar Sharma made payment of is Rs.8.71 crore tofollowing third parties out of amounts received from AmrapaliGroup of Companies:

a.Chandan Homes Pvt Ltd: is Rs.10,00,000

b.Kalpana Kumari: is Rs.10,00,000

c.Sapphire Digital Printers: is Rs.25,00,000

d.Shashank Manohar: is Rs.36,00,000

e.Rajesh Malhotra : is Rs.20,00,000

f.Manas Nursing Home: is Rs.25,00,000

g.Amresh Kumar Anand: is Rs.27,00,000

h.Surbhaee Advertising Pvt Ltd: is Rs.3,85,00,000

i.Quality Synthetic Industries Limited: isRs.3,00,00,000

410SUPREME COURT REPORTS

[2019] 9 S.C.R.

Aj.Chander wadhwa: is Rs.25,00,000

k.Mrityunjay Kumar: is Rs.8,00,000

5. Mr. Anil Kumar Sharma made payments of is Rs.10.73 croreto his family members out of amounts received from Amrapaligroup of Companies:B

a.Deepshikha (Daughter): is Rs.93,50,000

b.Ritik Kumar Sinha (Son in Law): is Rs.1,40,00,000

c.Swapnil Sikha (Daughter): is Rs.8,39,60,878

6. Mr. Anil Kumar Sharma received RS. 6.55 crore in his bankCaccount from Amrapali Hospitality during the month of June andJuly, 2018 for sale of Bareilley mall to Vaishnavi Vahini MountLife Hospitality Pvt Ltd. The said amount was immediatelydisbursed to family members:

a.Self: Rs.4,77,00,000D

b.Pallavi Mishra (Wife) Rs.60,00,000

c.Swapnil Shikha (Daughter) Rs.48,00,000

d.Raj Dulari devi (Mother) Rs.52,00,000

e.Ranjit Kumar Rs.9,90,000

7. Unexplained cash deposits of Rs.5.73 crore were received byMr. Anil Kumar Sharma in his bank accounts from November toDecember, 2016 i.e during demonetization period.

8. Mr. Madan Mohan Sharma (Father of Anil Kumar Sharma)Freceived Rs.2 crore from Amrapali Grand during month Novemberand December, 2007.

9. Unexplained cash deposits of Rs.0.13 crore were received byMrs. Raj Dulari Devi (Mother of Anil Kumar Sharma) duringfrom April to July, 2018.

10. Following are the details of lockers held by family membersof Anil Kumar Sharma:

Pallavi Mishra –

a) in UCO bank account no 1557010000618

b) in HDFC Bank account no 50100162844761 locker no9250500004564240

Raj Dulari Devi in Yes Bank account no 8599300000716,Locker no 11606082018

11. There are substantial transactions with Amrapali Aadya Tradingin his bank account of IndusInd Bank Accountno.100028567700 as per details given below:

DateParticularsReceiptsPayments16/07/2014 Neft-Amapali Aadya Trading 2,500,000 - 14/08/2014 Neft-Amapali Aadya Trading 1,000,000 - 14/11/2014 Neft-Amapali Aadya Trading 2,500,000 - -21/01/2015Neft-Amapali Aadya Trading500,000-15/04/2015RTGS- Amapali Aadya Trading1,000,000-15/04/2015Neft- Amapali Aadya Trading1,000,000-24/04/2015RTGS- Amapali Aadya Trading2,000,000-29/04/2015RTGS- Amapali Aadya Trading1,000,00006/05/2015 RTGS- Amapali Aadya Trading - 2,000,000 08/05/2015 RTGS- Amapali Aadya Trading - 2,000,000 13/05/2015 RTGS- Amapali Aadya Trading - 2,000,000 -27/05/2015RTGS- Amapali Aadya Trading2,000,000-19/05/2015RTGS- Amapali Aadya Trading18,500,000-23/06/2015RTGS- Amapali Aadya Trading1,000,000-30/07/2015RTGS- Amapali Aadya Trading1,500,000-21/08/2015RTGS- Amapali Aadya Trading2,000,000-25/08/2015RTGS- Amapali Aadya Trading2,500,00027/08/2015 RTGS- Amapali Aadya Trading - 400,000 27/08/2015 RTGS- Amapali Aadya Trading - 3,600,000 09/09/2015 RTGS- Amapali Aadya Trading - 1,500,000 -20/08/2016RTGS- Amapali Aadya Trading1,500,000Total26,500,00025,500,000Note: He has not disclosed his association With AmrapaliAadya Trading in his various affidavits furnished to the Hon’bleSupreme Court of India.

AShiv Priya

1. Mr. Shiv Priya received funds from Amrapali group ofCompanies which was used for acquiring personal properties, asstated hereunder:

a. Property located at L 801, Pearl Gateway Towers, Sector44, Noida -(Housing loan was paid for this property out ofamount received from Group companies)

b. Vehicle- Jaguar XJ having registration number UP16BA2001-

(Loan was paid out of amount received from Group companies)

2. Mrs. Sonali Suman (Wife of Shiv Priya) made investments indifferent mutual funds amounting to Rs.8.86 crore out of amountsreceived from Amrapali group of Companies.

3. Mr. Shiv Priya purchased following assets out of amountsreceived from Amrapali group of companies:

a. Jewelleries: Rs.33,44,475

b. Life Insurance Policies Rs.3,49,96,654

c. Watches Rs.19,45,500

4. Mr. Shiv Priya made following personal expenses of Rs.2.74Ecrore out of amounts received from Amrapali group of companies:

a. Expenditure made for Residential property (Marbles,bathroom products, lights etc) Rs.56,53,268

b. Helicopter services Rs.6,20,000

c. Art designing Rs.10,00,000

d. Bed Linen, Table linen and art designing Rs.20,36,290

e. Wooden doors and Furnitures: Rs.74,76,644

f. Payment made for clearing dues of American Express CreditCard: Rs.1,06,78,273

5. Mr. Shiv Priya made payment of Rs.1.75 crore to followingthird parties out of amounts received from Amrapali Group ofcompanies:

a. Quality Synthetic Industries Limited Rs.1,50,00,000

b. Cozy Habitat Builders Pvt Ltd Rs.15,00,000

c. S N Dubey Rs.10,00,000

6. Unexplained cash deposits of Rs.6 crore were received by Mr.Shiv Priya in his bank accounts during December, 2016 i.e duringdemonetization period.

7. Mrs. Sonali Suman (Wife of Shiv Priya) re-paid loan from bankamounting to Rs.0.45 crore out of amount received from Amrapaligroup of Companies. It is to be seen what the purpose was forwhich the bank granted loan for 6 months for the said amount.

8. Shiv Priya is holding demat account no 1206420001934748 andSonali Suman is holding demat account no 1206420001936308with HDFC bank, of which details have not been provided to us.

9. Mrs Sonali Suman holds mutual funds with HDFC mutual fundsFolio no 11707520/73, which have market value amounting toRs.0.65 crore as on 28[th] February 2019.

10. sum of Rs.0.45 crore was paid by M/s Royal Golf Link CityProjects Private Limited to Mr. Shiv Priya during the financialYear 2016-17 which was not declared by him in the variousAffidavits filed in the Hon’ble Supreme Court.

11. There was an income tax search in the premises of AmrapaliGroup of Companies and the residence of the directors in themonth of 7[th] and 8[th] August, 2013. During this search operationunaccounted cash was seized from the residence of directorsnamely Shri Shiv Priya amounting to Rs 1 Crores. Unexplainedjewellery was also seized from the residence of Mr. Shiv Priyaamounting to Rs 0.58 Crores. Thus, it apparently shows that hehas unaccounted cash.

Ajay Kumar

1. Mr. Ajay Kumar received funds from Amrapali group ofCompanies which was used for acquiring personal properties, asstated hereunder:

a. Property located at Plot no: A-014 Savanna Villas, JaypeeGreens Sector-128, Noida; the property was not disclosed inaffidavit submitted on 3[rd] December, 2018 -(Housing loans was

paid for this property out of amount received from Groupcompanies)

b. Property located at IRS colony, Abhay Khand, Indirapuram,Ghaziabad- Rs.1.38 crore.

c. Property located at Plot No: A-014, Pelican Villa JaypeeGreen Noida 201301- Rs.1.11 crore.

2. Mrs. Seema Kumari (Wife of Ajay Kumar) made investmentsin different mutual funds amounting to Rs.2.25 crore out ofamounts received from Amrapali group of companies duringAugust to September, 2018.

3. Mr. Ajay Kumar made investments in Life insurance Policiesof Rs.2.59 crore out of amounts received from Amrapali group ofcompanies.

4. Mr. Ajay Kumar made payment of Rs.1.25 crore to followingthird parties out of amounts received from Amrapali Group ofCompanies:

a. Yogesh Chand Rs.25,00,000

b. Ozone GSP Infratech Rs.50,00,000

c. Quality Synthetic Industries Ltd Rs.50,00,000

5. Mr. Ajay Kumar made investment of Rs.1.12 crore in UltraHome Construction as Share Capital out of amounts receivedfrom Amrapali group of companies.

6. Mr. Ajay Kumar made payment of direct tax of Rs.0.11 croreout of amounts received from Amrapali group of companies.

7. Mrs Seema Kumari holds mutual funds with HDFC mutualfunds Folio no 14756739/01, which have market value amountingto Rs.0.48 crore as on 28[th] February 2019.

8. Bank Statement of Anandi Singh of IndusInd BankGAccount no.150019032006

sum of Rs.1.73 crore has been transferred from Seema Kumarion 09/08/2018.

Further sum Rs.2.25 crore has been invested in Mutual Fundsas per details given below:

Date ParticularsAmount A16/08/2018Mirae Asset MF5,000,00016/08/2018 Aditya Birla Mutual 5,000,000 Fund18/08/2018Kotak Mutual Fund5,000,00011/09/2018HDFC Mutual Fund5,000,00012/09/2018Tata Mutual Fund2,500,000Total22,500,000B

Note: This amount can be attached and recovered by encashmentof these investments.

Sunil Kumar and Sunita Kumari (wife of Sunil Kumar)

1. While scrutinizing the Accounts of Gaurisuta InfrasolutionPrivate Limited in which Mr. Sunil Kumar was the Director, itwas observed by us that bogus commission of Rs.1.07 crorewas booked. This amount of Rs.1.07 crore should be recoveredfrom Mr. Sunil Kumar.

2. sum of Rs.0.50 crore has also been paid as Salary to Mrs.Sunita Kumari in M/s Gaurisuta Infrasolution Private Limited whichis not genuine as per detailed report given in the case of M/sGaurisuta Infrasolution Private Limited. This Amount of Rs.0.50crore should also be recovered from Mrs. Sunita Kumari.

Mr. Sudhir Kumar Choudhary

He is director in Amrapali Biotech India Private Limited &Gaurisuta Infrasolution Private Limited. As per his statementrecorded, he was forced to become the director in first week ofaugust 2018 with effect from 06th July 2018.

We are of the view that this planning has been done by the AmrapaliManagement after the order of the Hon’ble Supreme Court toaccept the resignation of Mrs. Seema Kumari Wife of Sunil Kumarfrom the Directorship and to appoint Mr. Sudhir Kumar Choudharyas the director of the company.

It was further explained by him that he was mere employeeonly and by virtue of threat by the Amrapali Group of Companies,he was forced to become the Director of Amrapali InfrasolutionPrivate Limited.

Apart from above specific points, it shall be noted that we had gotaccess to the email of the Accounts department of Amrapali Group

of Companies with Id [REDACTED] short periodafter interrogation from an Ex-employee. We could download fewinstances of Cash transactions which are enclosed as sample inAnnexure 26-B. The access to this mail was stoppedimmediately. We requested the management to give the access tothis mail to enquire into the further such mails related to the cashand other accounting adjustments contained in this Email Account.But this access was not made available to us.

However, the access had been made available after the orders ofthe Honorable Supreme Court dated 28th February, 2019. Now,all the mails relating to receipt of cash from the various homebuyers have been deleted. Thus, the management of the companyhas tempered with the evidence which were available earlier.(Page No. 205 Volume-I)

Further an amount of Rs.113.5 crore paid by AmrapaliInfrastructure Pvt Ltd to directors is recoverable as on 31[st] March2018 and this amount is on account of shares allotted of UltraHome Construction Private Limited to the directors withoutreceiving any money from the directors during the Financial Year2010-11. This seems to be dubious transaction by the directorsof the company in manipulating the accounts in this manner byallotting the shares without actual consideration. These amountsare not disclosed by the Directors in their Affidavits. Hence, theAffidavits filed by the directors are incorrect to this extent.

10. Executives who colluded with directors

The executives of the Group colluded with the management toavoid proper recording of transactions in books of accounts. Toavoid the traceability of the transactions, the executives recordedthe financial transactions up to March 2015 in Accounting Packagetally, then shifted to FARVISION from April 2015 and continuedtill March 2016, and thereafter partially recorded transaction intally and for few companied in FARVISION. At the time ofswitchover, even the opening balances were not properly entered,thereby leading to huge difference in the data provided to us.In November 2016, the Group left Farvision half way and startedrecording transactions for partial period in tally.

The executives intentionally recorded transactions by switchoverof accounting package improperly so that complete trail could notbe established. Subsequently, the companies of the group evenstopped getting the annual accounts prepared and filing returns toROC and Income tax

The Sales and Marketing head Mohit Gupta, CFO ChandarWadhwa, Accounts head Adhikari Das, Company SecretaryPankaj Mehta and the Architect Vaibhav Jain along with theirimmediate coterie extended helping hand to the management inplanning and execution of the scam.

–Mr. Mohit Gupta Marketing Director

He was responsible for the whole marketing department,Customer Relationship Management of the Amrapali Group andhe did not cooperate during the entire process of forensic audit.

It is pertinent to note that till now list of flat wise possession hasnot been provided to us.

At first he did not submit us the customer data inspite of numberof reminders. Subsequently, the customer data submitted was notcorrect. We found the following–

(i) The inventory of vacant flat submitted by him was incorrect.

(ii) We found 401 flats (Refer Annexure S-5 page 28282836 Supplementary report) which were either lyingvacant and were available in inventory because the flatbuyers were shifted out of Amrapali Group to the otherproject of other builders. Mr. Mohit Gupta also did notdisclose the details of flats booked in the name of variousparties without receipt of any amount from them just bypassing journal entry.

(iii) From the above it is clear that it defies the order ofHonorable Supreme Court and has violated the order andis responsible for the gross contempt of the HonorableCourt.

Mr. Adhikari Debi Prasad Dash- GM/DGM Accounts

It is found that Mr. Adhikari authorized (Refer Annexure S-6page 2837-2841 Supplementary report) most of the paymentsregarding payment of professional charges, raw materials,

418SUPREME COURT REPORTS

Acontractor dues and other direct/indirect expenses. It is pertinentto note that he was also involved in diversion of funds fromAmrapali group and equally responsible in the conspiracy ofcheating with home buyers and diversion of funds.

He was responsible for the whole accounts department and heBdid not cooperate during the entire process of forensic audit. Hewas authorized to receive payments in cash and was submittingon day to day basis cash receipt status to Mr. Shiv Priya. After aclearance from him, possession slip or no due certificate is issued.

He continuously replied that he is not aware of anything and forCeverything there were Chartered Accountants for respectivecompanies. This is not correct statement and he contradictedhis own statement many times. He was in possession of finalaccounts of group companies and did not share with us.

Adhikari Dash also did not disclose the details of flats booked inDthe name of various parties without receipt of any amount fromthem just by passing journal entry.

From the above it is clear that it defies the order of HonorableSupreme Court and has violated the order and is responsible forthe gross contempt of the Honorable Court.

EHe along with his brother exercised direct control over belowcompanies:

(i) Teks Tech Inspection India Private Limited

(ii) Teks Tech IT Services India Private Limited

F(iii) Vinayaka Square Private Limited

(iv) Shri Vinayaka Buildspace Private Limited

(v) Milestone Highrise Private Limited

Vinayaka Square Private LimitedGThe company has commercial project named “Beta Plaza”at Greater Noida which received funds from Teks TechInspection India Private Limited (controlled by Mr. Adhikari),APJ Finmart Private Limited, Opulent Inn Private Limited, TastyFeast Private Limited, Opulent Holidays and Travels (P)

Limited. The chairman of four companies CA Pankaj Mittalappeared before us and could not explained the reasons forgiving loans @ 6% p.a. to real estate project whereas thebank rate on FDR is 7% and more.

The company has purchased this land for the project at GreaterNoida in FY 2015-16 amounting to Rs.17.09 crore

Vinayaka Square received Rs 1 crore from Amrapali fundsrouted through Teks Tech Inspection India Private Limited andreceived Rs.2.56 crore from Shri Vinayaka Buildspace PrivateLimited. This is project funded by Amrapali’s Funds and shallbe attached.

Mr. Chander Wadhwa CFO Amrapali Group of Companies

It has also been observed that sum of Rs.5 crores wastransferred by M/s Amrapali Homes Project Private Limited toMr. Amit Wadhwa, nephew of Mr. Chander Prakash Wadhwa.As per the affidavit filled by Mr. Chander Prakash Wadhwa thesaid sum was invested by him in M/s Three Platinum SoftechPrivate Limited. The Heartbeat city projects is partly owned bythree Platinum and Amrapali group has invested in the projects inthe name of Chander Wadhwa.

As per Statement of Mr. Sanjeev Kumar Director of La ResidentiaDevelopers Private Limited recorded by us, he Informed that asum of Rs.4 crores Approximately, was paid as fees for use ofAmrapali Brand Name to Saffron Propmart Private Limited (ThisCompany is controlled by Mr. Chander Wadhwa CFO). No Billshave 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 receivedfrom Amrapali group for the work awarded to Anil Mittal ChanderWadhwa is one of the masterminds along with the other promotersdirectors behind the whole scam. He facilitated movement of fundsby creating web of companies within and outside the group. Hisrelatives were made partner investor in LA Residentia and Heartbeat city projects. Funds were invested in Patel Advance JV (NeoTown project Noida) and Euphoria Sports City.

Furthermore, it is observed that the Company Management aswell as Statutory Auditors and CFO have failed in their duty tofollow the Accounting Standards relating to recording the valuationof Work in Progress as per ICAI guidelines applicable to RealEstate Companies. It is also pointed out that the CFO has notsigned any Audited Financial Statements for reasons best knownto them. But according to the statement recorded by us of variousemployees and suppliers as well as home buyers, we are informedthat he was the main person handling Finance and every meetingwas held with him only. (page no 209 Volume 1)

–Mr. Pankaj Mehta Company Secretary

He was responsible for the secretarial compliances of thecompanies. He incorporated more than 50 additional companiesto create cobweb. He was director in many of these companiesand was an important link in the transfer of funds through variousgroup companies.

He was also signatory to the bank account of Stunning ConstructionPrivate Limited. He resigned from the services of the Companyin December, 2016. However even after his resignation, on theinstructions of Mr. Chander Wadhwa, CFO, he continued tooperate the Bank Accounts of Stunning Construction PrivateLimited.

After his resignation in the Amrapali Group, he started workingas partner of Saffron Consultants LLP with Mr. ChanderWadhwa. Also Mr. Anil Kumar is still working as an employeewith Mr. Chander Wadhwa.

On the instructions of Mr. Chander Wadhwa CFO manipulativeentries were recorded for adjustment of payment dues of Mr.Pankaj Mehta against his Flat No. E-1502, Silicon City, Sector -76, Noida.

11. Non compliance of statutory obligations

(i) The group companies have not filed annual returns and AuditedFinancial Statements after 31[st] March, 2015. The Registrar ofCompanies has already disqualified the Directors namely Mr. AnilKumar Sharma, Mr. Amresh Kumar, Mr. Shiv Priya, Mr.Ajay

Kumar and Mr. Suvash Chandra Kumar for period of 5 yearsfrom 1/11/2017 to 31/10/2022 u/s 164(2) of The Companies Act,2013.

(ii) The company has not been regular in payment of TDS andService tax and has also not filled relevant returns of TDS/Servicetax after 31st March, 2015. There is also no follow up availablefrom the Concerned departments.

Latest information regarding status of default in respect of TDS/Service tax is not made available to us. There may be huge demandsoutstanding against the company due to non-payment and non-filing of TDS/Service tax returns.

(iii) No Statutory records have been maintained by the Amrapaligroup companies and produced before us relating to the following:

i.Register of Directors and shareholders

ii.Register of related party contracts

iii. Minute book of Director and Shareholders

iv. Fixed Assets Register

v.Charges register in respect of loans taken from Banks andothers

(iv) Transfer entries are recorded in Inter Corporate Depositaccounts by transferring the amount from one Amrapali groupcompany to another Amrapali group company in contravention ofsection 269SS/269T of The Income Tax Act, 1961.

(v) Depreciation has not been provided on the building incontravention of the provisions of the Companies Act, 1956, nowCompanies Act, 2013 in Navodaya Properties Private Limited.

It is highly surprising that in spite of such glaring discrepanciesregarding non-Compliance of statutory compliances, the StatutoryAuditors have not pointed out any such discrepancies in theirStatutory Audit Reports.

There are many other glaring short comings in the Audited BalanceSheet & Financial Statements

a) I – Page 214)

A12. Anil Mittal - Statutory Auditor

While scrutinizing the affidavit submitted by Shri Anil Mittal Date12/11/2018 before the Hon’ble court we have noted the following:

a)CA Anil Mittal was paid Rs.0.56 crore (Rs.0.66 crore lessRs.0.10 crore recovered) during the period 2011 to 2018.BThese payments have been shown in the nature of chequesgiven /credit card payments which have been never beenrecovered.

b)Statutory Auditor CA Anil Mittal and Shri ChanderWadhwa CFO were in connivance with each other andthese payments have been made by Shri Anil Mittal toChander Wadhwa CFO for sharing fees received fromAmrapali group for the work awarded to CA Anil Mittal.CA Anil Mittal blindly signed all the accounts and is grosslyinvolved along with Mr. Chander Wadhwa in making variousmanipulation in the accounts.

c)Audit files handed over by Shri Anil Mittal Statutory Auditorare grossly deficient and they do not contain the documentswhich are normally required in the statutory audit files asper guidelines and directions issued by The Institute ofChartered Accountants of India.

d)Statutory Auditor CA Anil Mittal has received the paymenton account of professional charges in the name of thecompanies in which his relatives are directors. This facthas not been disclosed in audited financial statements.

e)A sum of Rs.52.07 crore was adjusted against the paymentdue on account of Flat number P-1203 in Amrapali PrincelyEstate on account of professional fees due and to be paidon account of Audit fees.

f)Further sum of Rs.16.36 crore was also adjusted againstGthe flat number P-1104 in Amrapali Princely Estate onaccount of Professional fees due and to be paid on accountof Audit fees.

13. Diversion of homebuyers funds

Amrapali Group was engaged in diversion of home buyer fundsfrom one project to another project, other group companies,directors and senior executives of the group. There is also adiversion of funds to various suppliers where advances were madewithout any further adjustment/ transactions.

There is not only diversion of funds, there is siphoning of fundsalso by way of booking undervalued transactions in respect ofsale of flats, by way of booking of expenses, and making purchasesfrom the bogus suppliers/service providers.

In addition to this they adopted fraudulent practices also by wayof double booking of flats. There are also instances of adjustmentof amounts payable to suppliers/brokers with the amount due fromthe home buyers such trade creditors have denied having anyknowledge of such transactions.

We have traces of receiving of Cash from the home buyers/ othersas shown by the email of the accounts department of the AmrapaliGroup of Companies which is not accounted for in the books ofaccounts.

There is also allotment of shares without inward movement offunds by making manipulative entries in the books of accounts.

The homebuyers funds were diverted Rs. 5,619.47 crore toother companies/directors:

(i)through payment of professional fee to directors Rs.100.53crore;

(ii) by way of booking of bogus bills including commissionRs.842.42 crore;

(iii) by selling flats at undervalued prices in books and receiveddifferential market value in cash Rs.321.21 crore; (it is atip of iceberg)

(iv) by way of granting inter corporate deposits to relatedentitiesand unrelated entities / trusted partners forultimately diverting funds to unapproved uses.

Summary of diversion of funds is as under:

424SUPREME COURT REPORTS[2019] 9 S.C.R.ABCDEFGH

14. J P Morgan

Amrapali Zodiac Developers Private Limited has financed thistransaction by its own shares through Group Companies byincorporating new Companies. These transactions enable AmrapaliZodiac Developers Private Limited to avoid the provisions of TheCompanies Act, 1956 applicable for buying its own shares.

It is also relevant to point out that Shri Anil Mittal at any stage oftime has not reported his interest or disclosed about his relativesof Director and Junior Employee. Both the directors andshareholders of the company i.e Mr. Atul Mittal (Relative) andMr. Chandan Kumar (Junior Employee), are relatives/employeeof Anil Mittal, the Statutory Auditor of the company.

a) Rudraksh Infracity Private Limited- Shri Chandan Kumar, anemployee of CA Anil Mittal, Statutory Auditor and Shri Atul Mittal,relative of CA Anil Mittal were inducted in the board. The basicpurpose of this Company was only for money laundering and wasincorporated to receive Funds from Mannat Buildcraft PrivateLimited which Company was incorporated by CFO ChanderWadhwa through his close associates. After receiving moneyfrom Mannat Buildcraft Private Limited, the same was transferredto J.P. Morgan Investments for purchase of Equity Shares ofAmrapali Zodiac Private Limited at an exorbitant price. As perdetails furnished hereunder, the Valuation Report was also madeto suit to the requirement of J.P. Morgan Investments as the M/sSudit K. Parikh & Company, Chartered Accountants wereappointed by J.P. Morgan officials for the said valuation. Theyhave admitted that valuation work was done on the basis ofinformation provided by J.P. Morgan Investments after applyingsome basic checks.

The whole racket of money laundering and receiving money fromthese Companies i.e. Mannat Buildcraft Private Limited andRudraksh Infracity Private Limited are the brain child of Mr.Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor ofAmrapali Group of Companies. Both these Companies arecontrolled by both of these persons and had been formed only forthis Money Laundering Business. There are no transactions beforeor after these transfers of money and the same have been

camouflaged to make it look with business transactions on thebasis of the Valuation Report.

JP Morgan invested Rs.85 crore in the year 2010 with anunderstanding to have preferential claim on profits calleddistributable surplus in the ratio of 75% to JP Morgan and 25% topromoters namely Amrapali Homes Project Private Limited andUltra Home Construction Private Limited with the following maincondition in Shares Subscription Agreement dated 9[th] September,2010 amongst Ultra Home Construction Private Limited, AmrapaliHomes Project Private Limited, JP Morgan & Amrapali ZodiacDevelopers Private Limited

The Company shall provide evidence of the aforesaidinvestment in the Investee Company to the Investor. (Rs.60 Cr. in Leisure Valley Developers)

(A) There was prescribed methodology and procedures definedof computation of Fair Market Value at the time of the exit to beworked out in the agreement on Page No 51, schedule 6 ofShareholder’s Agreement, which was not followed at the time ofany of the exits.

Clause 4.2 (iii) – The Company shall grant an interest free loan ofRs 85,000,000 (Rupees Eighty Five Million Only) to UHCPL.

Clause 4.2(iv) – The Company shall remit Rs 600,000,000(Rupees Six Hundred Million Only) to the InvesteeCompany for subscribing to 0.01% compulsorilyconvertible Preference shares of the Investee Company(“Investee Company Shares”)

(B) Distribution of profit was agreed between the Investor i.e., JPMorgan & the Investee i.e., Amrapali Group to share the profitsfrom the project in the agreed ratio as per clause 7.3 & Clause7.5.1 Page No 19 of Shareholder’s Agreement.

(C) Clause 7.1 - The Company agrees and undertakes that it shall,and the Investor and Developers agree that they shall causethe Company to first utilize the revenues (less the cost ofconstruction of the project, provision for futureconsideration cost of the Project, payment of Project Landcost and interest thereon, annual lease rent payment to New

Okhla Industrial Development Authority and one time landlease cost) towards payment of applicable taxes andpayment of interest to the lenders, if any, in accordance withthe provisions of Law.

Clause 7.2 – Post the payment of taxes and interest to the lenders,as aforesaid, the Company shall make payments of all principalamounts accrued and payable to the lenders, if any, at applicableseniority.

(D) In clause 2.12 of Page No 12 of Shareholder’s agreement itwas agreed that the aggregate advances outstanding from theAmrapali Zodiac developers Private Limited to its affiliates willnot exceed Rs 25 crores excluding Amrapali InfrastructurePrivate Limited. It was also in the knowledge of JP Morganvide clause 2.14 of Page No 12 of Shareholder’s Agreement thatadvances to Amrapali Infrastructure Private Limited which wasRs 51 crore on 31[st] July, 2010 will be restricted to Rs 15crore.

(E) Clause No 10.4.3 in page No 21 of Shareholder’s Agreementmentions that no action can be taken without investor’s approvalin relation to 10.4.3(xi) any payments made to related parties.

(F) It was also mentioned in the agreement that statutoryauditor and internal auditor cannot be appointed andremoved without the approval of JPMorgan.

(G) The following points indicate very clearly that JP Morganwas having full control on Amrapali Zodiac DevelopersPrivate Limited project and no material decision could havebeen taken without JP Morgan approval.

On Page No 60 of Shareholder’s Agreement in Note 1 itwas agreed & accepted that any surplus cash flow from theproject will be first utilized for payment of land cost to NoidaAuthority.

Documents to be submitted by Amrapali Zodiac DevelopersPrivate Limited to JP Morgan:

(i) Monthly progress report signed by director & CFO.

(ii) No delay report in specified format.

JP Morgan insisted that the cost shall be restricted to Rs 425crore and any additional cost over and above Rs 425 crore shallbe brought in by Amrapali Group promoter. The additional costconsidered was Rs 125 crore to be brought in by promoters.

(H) Zodiac has followed recognition of revenue on the basisof Project Completion Method – Accounting Standard - 7(Construction Contracts). As per Project Completion Methodas given in Accounting Standard – 7, the profit cannot berecognized until the project is completed and as per Clause No7.3 of Shareholder’s Agreement the distributable amount is thebalance amount representing the aggregate of all profits, afterconsidering the payments referred to in clause 7.1 and 7.2 , includingany amounts transferred to the reserves accounts of the Companyshall for the purpose of this clause 7 are referred to as the“Distributable Amount”.

(I) From the above it is clear that in absence of recognition ofprofit in the agreement there cannot be any distributable amountfor distribution.

(J) It was accepted by Mr Suraj Chhabria of JP Morgan(Apollo) that the money invested by them in Amrapali ZodiacDevelopers Private Limited was not utilized in the project.He also accepted that it was in their knowledge that moneyinvested by them was not going to be utilized in AmrapaliZodiac Developers Private Limited project and it iscontracted that Rs 60 crores to Amrapali Leisure ValleyDevelopers Private Limited, Rs 8.5 crores to Ultra HomeConstruction Private Limited be transferred.

(K) JP Morgan was in knowledge of that the CompanyAmrapali Zodiac Developers Private Limited has paid themoney received from the Home buyers to tthe otherCompanies of Amrapali Group.

(L)JP Morgan permitted transfer of Rs 140 crore to MannatBuildcraft Private Limited and from Mannat Buildcraft PrivateLimited to Neelkanth Buildcraft Private Limited and RudrakshInfracity Private Limited for buying shares from JP Morgan ofAmrapali Zodiac Developers Private Limited. There were alwaysadvances exceeded than the limits specified in

Shareholder’s Agreement but JP Morgan did not ensurebringing back the money from the affiliates though it was havingits board representation in the ratio3:2.

JP Morgan did not ensure that the funds for additional costwere brought in and in valuation it was assumed that additionalcost of Rs 125 crores will be brought in by the promoter for thelast lag of the construction for its IRR (Internal Rate of Return)working.

(M) JP Morgan was getting return at the rate of more than20 % on its investment of Rs 85 crore & was agreeing withAmrapali Zodiac Developers Private Limited to invest inAmrapali Leisure Valley Developers Private Limited asubstantial part of its investment i.e., 60 crore out of Rs 85crore at the rate 0.01%. It categorically demonstrates thatJP Morgan invested Rs 60 crore in Amrapali Leisure ValleyDevelopers Private Limited without complying FEMA(Foreign Exchange Management Act) for its investment ofRs 60 crore in Amrapali Leisure Valley Developers PrivateLimited. It is not out of place to mention that AmrapaliZodiac Developers Private Limited was project wherehome buyers were required to pay on the basis of progressof the construction of the project. Meaning it wasconstruction linked payment project.

(N) We found that most of the time customers have paidmore than what was spent in the project. The Amrapali ZodiacDevelopers Private Limited diverted home buyer’s money& there was no need of any investment from JP Morgan. Itwas accepted by Mr Suraj Chhabria that there was norestriction on the Company to invest the money in theproject & it was in his knowledge & the knowledge of JPMorgan that the money has been diverted, Transferred

Valuation

(A) The valuation did not follow the correct methodology of DCF(Discounted Cash Flow). The valuation is without any sanctity &validity. The valuation was carried out to cause wrongful lossto the homebuyers of Amrapali Zodiac Developers PrivateLimited and to give advantage to JPMorgan.

A(B) Name of the firm – Sudit K. Parekh & Co.

Chartered Accountants

Name of the Partners–

I. Mr. Durgaprasad Khatri

BII. Mr. Tanwir Shirolka

III. Mr. Srikant V Jilla

IV. Ms. Deepti K.Ahuja

Ms Ahuja, then partner in SKP&Co.Chartered AccountantsCinformed that JP Morgan, Mumbai office in Andheri/ Santacruisedid not allow to take any of the details/ abstract from the sharepurchase agreement. It is to note that at the time of exit, it waspredetermined that Zodiac Developers would not pay the leaserent as well as the installment due to Noida Authorities as clearlyexplained in the cash flow statement provided by the SKP&Co inD4 no. of valuation certificates from2010-2015.

Valuation No of Face Value per Total amount Date of FC- Sold to Report date shares Value share * TRS 9/09/2010 785715 10 1081.8172 85,00,00,00 20/10/2010 JP Morgan E23/10/201436508 10 2290.9 99,99,99,26 30/12/2013 Neelkanth 3 Buildcraft Private Limited 9/09/2014 97000 10 2577.25 24,99,93,20 30/09/2014 RudrakshInfracity Private Limited F10/04/20134365 10 2910 10,00,02,10 29/07/2015 Rudraksh5 Infracity Private Limited 10/04/20117180 10 2910 4,99,93,800 6/10/2015 Rudraksh5 Infracity Private GLimited (C)

Source: Data from Form FC-TRS

From the table above it is clear that valuation exercise wasdone backwardly. For instances first we paid Rs 100 crores,then Rs 25 crores, then Rs 10 crores and finally Rs. 5Cr..HEXTRACT from FEMA RULES;

FEM (Transfer or Issue of Security by Person Resident OutsideIndia) Regulations, 2000

“4. Restriction on an Indian entity to issue security to personresident outside India or to record transfer of security from orto such person in its books.

Save as otherwise provided in the Act or Rules or Regulationsmade thereunder, an Indian entity shall not issue any security to aperson resident outside India or shall not record in its books anytransfer of security from or to such person: Provided that theReserve Bank may, on an application made to it and for sufficientreasons, permit an entity to issue any security to person residentoutside India or to record in its books transfer of security from orto such person, subject to such conditions as may be considerednecessary.

Transfer of shares or convertible debentures or warrants of anIndian company or units of an Investment Vehicle] by personresident outside India

(1) Subject to the provisions of sub-regulation (2), person residentoutside India holding the 2[shares or convertible debentures orwarrants of an Indian company or units of an Investment Vehicle]in accordance with these Regulations, may transfer the 3[sharesor convertible debentures or warrants of an Indian company orunits of an Investment Vehicle] so held by him, in compliancewith the conditions specified in the relevant Schedule of theseregulations.

Further, subject to minimum lock-in period of one year or minimumlock-in period as prescribed under Annex-B of Schedule 1whichever is higher, person resident outside India holding theshares or convertible debentures or warrants] of an Indiancompany containing an optionality clause in accordance with theseRegulations and exercising the option/right, may exit withoutany assured return, subject to the following conditions:

(i) In case of listed company, at the 6[market price prevailing onthe floor of the recognized stock exchanges]

(ii) In case of equity shares, preference shares or debentures ofunlisted company, at price not exceeding that arrived at as

per any internationally accepted pricing methodology for valuationof shares on arm’s length basis, duly certified by CharteredAccountant or SEBI registered Merchant Banker. The guidingprinciple would be that the non-resident investor is notguaranteed any assured exit price at the time of makingsuch investment/agreements and shall exit at the priceprevailing at the time of exit, subject to lock-in-periodrequirement.

(2) (i) person resident outside India, not being non-residentIndian or an overseas corporate body, may transfer by way ofsale or gift the shares or convertible debentures or warrants of anIndian company or units of an Investment Vehicle] held by him orit to any person resident outside India;

(ii) non-resident Indian may transfer by way of sale or gift, theshares or convertible debentures or warrants of an Indian companyor units of an Investment Vehicle] held by him or it to anothernon-resident Indian only;

(iii) person resident outside India holding the 6[shares orconvertible debentures or warrants of an Indian company or unitsof an Investment Vehicle] in accordance with these Regulations,

(a) may transfer the same to person resident in India by way ofgift;

(b) may sell the same on recognized Stock Exchange in Indiathrough register broker.”

In the valuation working, it is shown that all project cost wasincurred by June, 2013. It is only additional cost of Rs 125crore & marketing cost of Rs 6.85 crore shown as to beincurred after that.

(A) JP Morgan personnel have never met the buyer. Both theCompanies Neelkanth Buildcraft Private Limited & RudrakshInfracity Private Limited were formed in the year 2013 having acapital of Rs 0.01 crore each for the specific purpose of buyingshares from JP Morgan.

(B) No person from Mauritius travelled to India and no personfrom India travelled to Mauritius. Indian people signed the contract

in India and Mauritius people signed the contract in Mauritius.Buyer did not carried out any due diligence nor it appointed anyvaluer.

(C) The Sales agreement was drafted by JP Morgan team, buyersare not aware of it.

(D) We spoke to the director of Neelkanth Buildcraft PrivateLimited & Rudraksh Infracity Private Limited namely Vivek Mittal& Chandan Kumar. Both of them refused meeting with anyperson/entity from JP Morgan. They are not aware of that anytime they have bought these shares.

No substantial fundswere used in the construction of the project.The address of the Company who purchased share from JPMorgan is the address of Group Statutory Auditor Mr. Anil Mittal.

(A) Mr Chandan Kumar, director in Neelkanth Buildcraft PrivateLimited & Rudraksh Infracity Private Limited is an office boy inthe office of Statutory Auditor Mr Anil Mittal.

(B) Mr Vivek Mittal, another director in Neelkanth BuildcraftPrivate Limited is nephew of Statutory Auditor Mr Anil Mittal &does small timejobs

Facts

Amrapali Zodiac Developers Pvt Ltd incorporated on 18[th]December 2009. As per the Share Subscription Agreement dated9th September, 2010, JP Morgan invested 85 crore on 20[th] October2010 with an understanding to have preferential claim on profitscalled distributable surplus in the ratio of 75% to JP Morgan and25% to promoters namely Amrapali Homes Project Private Limitedand Ultra Home Construction Private Limited. The said investmentwas repatriated to JP Morgan as under:

RS. 100 crore on 30[th] December 2013;

RS. 25 crore on 30[th] September 2014;

RS. 10 crore on 29[th] July 2015; and

RS. 5 crore on 6[th] October 2015.

AFEMA

Extracts of Master Circular no.8/2010-11 dated July 01,2010 on External Commercial Borrowings and TradeCredits

External Commercial Borrowings (‘ECBs’) refer to commercialloans in the form of bank loans, buyers credit, suppliers credit,securitized instruments (eg floating rate notes and fixed rate bonds,non convertible, optionally convertible or partially convertiblepreference shares)availed of from non-resident lenders with aminimum average maturity of 3 years.

ECB can be accessed under 2 routes

a) Automatic route and

b) Approval route.

A) Under Automatic route

Eligible borrowers can be corporates, including those in theDhotel, hospital, software sectors (registered under theCompanies Act 1956) and Infrastructure Finance companies,Housing Finance companies and Non Banking FinanceCompanies.

Recognised lenders can be international banks, suppliers ofEequipments, foreign collaborators and foreign equity holders

All in cost ceilings for ECBs under automatic route are:

Average maturity period 3 to 5 years- 300 basis points over 6months London Interbank Offered Rate (‘LIBOR’)

FAverage maturity period more than 5 years – 500 basis pointsover 6 months LIBOR

ECBs are eligible for end use for investment for import ofcapital goods, industrial sector, infrastructure sector andspecified service sectors. However, proceeds of ECBs shouldGnot be used for acquisition of land in any of these permitteduses.

ECBs are not permitted to be utilized for real estatesector.

B) Under Approval route

Certain ECBs which are not under automatic route are underapproval route.

ECBs are not permitted to be utilized for real estate.

However, the term real estate excludes development ofintegrated townshipas defined by the Ministry of Commerceand Industry, DIPP, SIA (FC Division), Press Note 3 (2002 Series)dated January 4, 2002. As per the said press note, development ofintegrated township includes housing, commercial premises, hotels,resorts, city and regional level urban infrastructure facilities suchas roads and bridges, mass rapid transit systems and manufactureof building materials. Development of land and providing alliedinfrastructure will form an integrated part of township’sdevelopment.

Hedging required:

Minimum mandatory hedging is required @70% of principal plusinterest (both) of ECB where Minimum Average Maturity Periodis less than 5 years. Minimum tenor should be one (1) yearthereafter to be rollover till expiry of ECBCompliance under FEMA

ECB Compliance

Borrowers are required to submit report about signing of loanagreement with the lender for obtaining Loan Registration Number(LRN) within 7 days of the signing it to RBI in form ECB.Borrowers are required to report monthly about actual ECBtransactions through form ECB-2 to AD Category I bank within 7days from close of the month.

Companies Act 1956

Amrapali Zodiac Developers Pvt Ltd could not have bought backits own shares from JP Morgan as company cannot buy back itsown shares as per the provisions of section 77 of the CompaniesAct 1956.

Section 77 states “(1) No company limited by shares, and nocompany limited by guarantee and having share capital,

Ashall have power to buy its own shares, unless the consequentreduction of capital is effected and sanctioned in pursuanceof sections 100 to 104 or of section 402.”

Even otherwise, as per Section 77A, company can purchase itsown shares from

(i) free reserves; Where company purchases its own shares outof free reserves, then sum equal to the nominal value of theshare so purchased shall be transferred to the capital redemptionreserve and details of such transfer shall be disclosed in thebalance-sheet or

(ii) securities premium account; or

(iii) proceeds of any shares or other specified securities. ACompany cannot buyback its shares or other specified securitiesout of the proceeds of an earlier issue of the same kind of sharesor specified securities.

Conditions of Buy Back

(a)The buy-back is authorised by the Articles of association ofthe Company;

(b)A special resolution has been passed in the general meetingof the company authorising the buy-back. In the case of alisted company, this approval is required by means of postalEballot. Also, the shares for buy back should be free fromlock in period/non transferability. The buy back can be madeby Board resolution If the quantity of buyback is or lessthan ten percent of the paid up capital and free reserves;

(c)The buy-back is of less than twenty-five per cent of theFtotal paid-up capital and free reserves of the company andthat the buy-back of equity shares in any financial year shallnot exceed twenty-five per cent of its total paid-up equitycapital in that financial year;

(d)The ratio of the debt owed by the company is not more thanGtwice the capital and its free reserves after such buy-back;

(e)There has been no default in any of the following

i. in repayment of deposit or interest payable thereon,

ii. redemption of debentures, or preference shares oriii. payment of dividend, if declared, to all shareholders withinthe stipulated time of 30 days from the date of declarationof dividend or

iv. repayment of any term loan or interest payable thereonto any financial institution or bank;

(f)There has been no default in complying with the provisionsof filing of Annual Return, Payment of Dividend, and formand contents of Annual Accounts;

(g)All the shares or other specified securities for buy-back arefully paid-up;

(h)The buy-back of the shares or other specified securities listedon any recognised stock exchange shall be in accordancewith the regulations made by the Securities and ExchangeBoard of India in this behalf; and

(i)The buy-back in respect of shares or other specifiedsecurities of private and closely held companies is inaccordance with the guidelines as may be prescribed.

Misrepresentation of facts by investing the funds in theform of private equity in the project namely Zodiac and thendiverting it from there to promoters and the promotersassociated companies

As ECBs were not permitted in real estate sector under automaticroute, JP Morgan gave the said borrowings, the nomenclature ofequity shares having different return on investment as comparedto other equity shareholders. In fact JP Morgan remittedRs.60 crore to Amrapali Leisure Valley Developers Pvt Ltd asECB without obtaining approval from competent authority.Immediately on receipt of funds by Amrapali Leisure ValleyDevelopers Pvt Ltd, the funds were transferred to promoters andassociate companies of the group.

Had JP Morgan invested in the form of ECB, following wouldhave been the compliances to be fulfilled by recipient:

a)obtaining Loan Registration Number from RBI;

b)file ECB-2 returns every month to the RBI;

Ac)withhold tax on interest payment to JP Morgan under section195 of the ITA. As per Article 11 of the Avoidance of doubletaxation agreement between India and Mauritius tax shall becharged @7.5% of the gross amount of interest.

d)In fact JP Morgan would have to file its income tax returnu/s 139 of ITA in India due to withholding tax on its interestincome borrower.

Relevant questions from FAQ issued by RBI with regard tothe Foreign Exchange Management (Transfer or Issue of Securityby Person Resident Outside India) Regulations, 2017 datedNovember 7, 2017as amended from time to time:

“Q.29: What is the concept of downstream investment andIndirect Foreign Investment?

Answer: Downstream investment is investment made by anIndian entity which has total foreign investment in it or anInvestment Vehicle in the capital instruments or the capital, as thecase may be, of another Indian entity.

If the investor company has total foreign investment in it and isnot owned and not controlled by resident Indian citizens or is ownedor controlled by persons resident outside India then such investmentshall be “Indirect Foreign Investment” for the investee company.”

“Q.41: What is an investment vehicle?

Answer: Investment Vehicle is an entity registered and regulatedunder relevant regulations framed by SEBI or any other authoritydesignated for the purpose. For the purpose of Schedule 8 ofFEMA 20(R), an Investment Vehicle is Real Estate InvestmentTrust (REIT) governed by the SEBI (REITs) Regulations, 2014,an Infrastructure Investment Trust (InvIt) governed by the SEBI(InvIts) Regulations, 2014 and an Alternative Investment Fund(AIF) governed by the SEBI (AIFs) Regulations, 2012. It doesnot include Venture Capital Fund registered under the erstwhileSEBI (Venture Capital Funds) Regulations, 1996.”

SUMMARY- NET SURPLUS/DEFICIT

1) Amount Realisable from the sale of the unsold inventory andfrom home buyers (Residential and commercial) in various projectsand its extent.

Net surplus/deficitATotal Estimated Cost to Net S.NoName of company Receivable Cost still to be Refund/ Complete Surplus/ from Buyers incurred Shifitng by NBCC (Deficit) BAmrapali Princely 38 - - 44 1 Estate Pvt.Ltd. (6) 12 - - Amrapali Eden Park 5 2 Developers Pvt.Ltd. 7 70 - - Amrapali Zodiac 61 3Developers Pvt.Ltd.10 Amrapali Leisure 1,887 267 - 4Valley Pvt.Ltd.1,586 35 Amrapali Centuiran 575 - 2 769 D5Park Pvt.Ltd.(196)6Amrapali Grand 16 - - -16 Ultra Homes 580 40 3 Construction 26 7Pvt.Ltd.511 E8Amrapali Homes Project Pvt Ltd 7 - - - 7 Amrapali Dream 1,435 - - 9Valley Pvt Ltd1,657 (222)Amrapali Silicon 558 - - 477 10City Pvt Ltd81 FAmrapali Smart 489 - - City Developers Pvt 846 11 Ltd (357) Amrapali Leisure 309 - - Valley Developers 322 12 Pvt.Ltd. (13) 69 - - 90 Amrapali Sapphire 13Developers Pvt Ltd(20) 6,046 307 5 Group Total 5,882 (148)

ARefer ANNEXURE XXIII

The unsold Inventory in the various schemes where forensic auditwas carried out is to the tune of Rs 1,958.82crores spread-over in 5,229Flats.

*Unsold inventory of Amrapali Centurian Park Private Limitedcomprises of three projects namely- Amrapali Tropical Garden,Amrapali Terrace Homes, O2 Valley.

We have not been provided the inventory details of O2 Valley, thedata mentioned here and included in calculation of surplus/deficitis agreed in discussion with CMD, Amrapali Group.

Unsold units of O2 Valley is 223.

The unsold Inventory in respect of the commercial shop spaceamounts to Rs.162 crores spread-over in 5schemes.

*487 units are available in commercial project Tech Park whichare yet to be examine. The detailed list of inventory is attached inANNEXURE XXII.2.

15. Sale of Flats at lowerprices (Under-Valued Transactions)

While scrutinizing the record for sale of flats, we have observedthat number of the flats were sold at low prices as compared tothe prices existing on or near to those dates and on which ratessales were made to other home buyers. It is further submittedthat some of the flats have been sold even at rates as low as RS.1,000 - RS. 1,400 per square feet which is even lower than thecost of construction. No satisfactory explanation has been givento us for the same. Possibility of taking cash outside the books ofaccounts cannot be ruled out. Total Amount involved in under-valued transaction is enclosed Annexure 26-A (Volume III Pageno 584-586 ) & at Annexure S-7 (Supplementary Report page no2842-2893). The amount shown below is the minimum and it maybe in the range of 1,000 crore. Since the sample size is 5856against the total number of more than 42,000 flats.

S.no. Name of the company Number of Amount (In Refer Page AUnits Crores) Number 1 *Amrapali Sapphire 31576.02 205 - Point No. 1Developers Private Limited 2 *Amrapali Leisure 222 - Point No. 1BValley Developers 705.88 Private Limited 3 *Amrapali Smart City 26118.97 232 - Point No. 1Developers Private Limited 4 *Amrapali Silicon City 46873.05 257 - Point No. 1CPrivate Limited 5 *Amrapali Dream 1,75224.11 248 - Point No. 1Valley Private Limited 6 #Amrapali Leisure 1228.53 2811 Valley Private Limited (SupplementaryDAudit Report)7 #Ultra Home 52430.87 2811 Construction Private (SupplementaryLimited Audit Report)8 #Amrapali Centurian 1,91243.12 2811 Park Private (SupplementaryELimited Audit Report)9 #Amrapali Princely 1466.70 2811 Estate Private Limited (SupplementaryAudit Report)10 #Amrapali Zodiac 1076.75 2811 FDevelopers Private (SupplementaryLimited Audit Report)11 #Amrapali Patel 17927.31 2811 Platinum (SupplementaryAudit Report)Total5,856321.31

Note: *These calculations are based upon the rates, where thesale consideration of the flat is less by more than 25% of theaverage sale price of the project.

# These calculations are based upon the rate of Rs.2000/- per sq.ft. and where flats were sold lesser than the rate of Rs.2000/- persq. ft.

16. Group investment in other projects

The group started demerging and delinking the good projects fromthe brand name “Amrapali” though these projects were initiallylaunched as Amrapali projects. The said projects identified till thedate of writing of the report are La Residentia, Vinayaka square,Heartbeat City, O2 Habitat.

La Residentia

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

Stunning Construction Private Limited (‘Stunning’), an Amrapaligroup company, holds 19.75% shares in the company. Stunninghas been consortium partner since beginning and land was allottedby Noida Authorities to the 5 members consortium includingStunning. The project was launched as an Amrapali group projectand was marketed accordingly. As per the discussion with directorsof La Residentia Developers Private Limited, they broke up withAmrapali group in 2017. 2017 is the year when writ petition wasfiled before the Honorable Supreme Court. It is informed to usthat marketing agreement was entered into between LaResidentia Developers Private Limited and Amrapali group (nameof the company not known) that Amrapali group would market itsproject for consideration of Rs.16 crore. It was informed byMr. Sanjeev Kumar (director of La Residentia Developers PrivateLimited and very old friend of Mr. Shiv Priya, director, Amrapaligroup) that though the agreement was signed but Amrapali groupdidn’t provide copy of the agreement. It proves that Amrapalidirector were having significant influence on La ResidentiaDevelopers Private Limited that they had an authority even not togive copy of the agreement to person/entity who has signed it.

Out of Rs.16 crore, which were to be paid to Amrapali groupas per the agreement, Rs 4 crore were paid to Saffron PropmartConsultancy Private Limited Owned and controlled by CFO

Chander Wadhwa) under verbal instruction of Mr. Adikhari,GM/DG accounts of Amrapali group. It is to be noted that directorsof La Residentia Developers Private Limited were acting andworking under the supervision of Mr. Adhikari who was middlelevel management officer. It indicates that the project wasconceived by Mr. Anil Kumar Sharma & Mr. Shiv Priya directorsof Amrapali group and Mr. Sanjeev Kumar, Mr. Mukesh KumarRoy and others were only front.

it is very clear that there was no contribution of funds from theconsortium partners whatever funds contributed by the consortiumpartners were not only withdrawn within very short period butover and above that extra funds were given to them in the nameof interest free loans and advances.

Amrapali group companies have transferred some of theirbuyers to the company. We found that the list of unsold inventorywas sent to Mr. Anil Sharma and it was he who decided that thefollowing buyers from Amrapali group companies be shifted toLa Residentia this proves that La Residentia was under the directcontrol of Mr. Anil Sharma and Mr. Shiv Priya and is an entity ofAmrapali group.

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

The website of the company is following www.amrapali-laresidentia.com.

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

17. Summary of amounts recoverable standing as debitbalances in books of accounts

Amrapali group of companies had several amounts lying in debitbalances in the form of advances recoverable on account of longterm loans to third parties, short term loans given to third parties,advances given for purchase of plots, advances given to creditorsfor materials/others etc.

Amrapali group of companies were mostly diverting loan fundsas well as home buyers funds to directors, key managerial

personnel, relatives, group companies and third parties. They didconstruction activity only in part and created circle for movementsof funds vide bogus expenses or hollow transactions. Funds weregiven to several parties in the garb of advances against purchaseof land or for purchasing material for construction and booked assundry creditors with debit balances. However, in effect suchamounts were neither returned nor any expense was bookedagainst them. Such amounts are as old as 2006-07, which havenot been returned or no expense has been booked till date. Totalof such recoverable amounts to Rs.582 crore.

Top 20 of such parties with their balances are stated hereunder:

Name of the Company/EntityTotalJaura Infratech Private Limited 34,55,00,000 Mauria Udyog Limited 22,24,34,199 Anil Kumar Sharma16,34,69,224 Shiv Priya11,53,30,097 Prem Mishra 10,26,03,947 Vansh Consultants Private Limited 9,75,00,000 Apex Infraventure Private Limited7,95,05,000 Rinku Computech Private Limited 6,69,59,467 Sapphire Digital Printers 4,46,83,088 Heart Beat City Developers Pvt Ltd 4,29,32,000 Rubi Creations Private Limited4,26,27,790 Ajay Kumar 4,05,40,931 Star Land Craft Private Limited 4,01,85,888 Heartland City Developers Private Limited4,01,22,762 Vidhya Shree Buildcon Private Limited4,00,00,000 Sky Tech Buildcon Private Limited 3,88,53,775 Skyline Tele Media Services Limited 3,48,02,771 Shantinath Enterprises3,24,71,100 Red Star Tradex P Ltd. 3,00,00,000 Mohabbat S/o Abbas 2,66,99,000Total of top 20companies/parties1,64,72,21,039

It can be seen from records that the recoverable are due sincelong and there are mostly no movements subsequently either inthe form of booking of expenses or receipts. Out of the amounts

recoverable from parties in case of Ultra Home Construction PvtLtd, 20 parties having huge balances recoverable were called forpersonal interviews. 7 parties appeared and no satisfactoryexplanation was provided

(Refer Annexure X.1, Volume IV page no 1015-1019)

18. Assets created out of diverted funds

Refer Page no 550 to 557 of Volume II

19. Cars

The Company has bought many luxury cars and other cars out ofthe funds of the homebuyers.

Many of the cars were transferred in the name of the relatives /employees without passing any entries in the books of accountsand receiving any money from the transferees.

Moreover, the cars were transferred in the name of the personswho was not associated with the company which originally boughtthe cars. We have already reported the matter in the court hearingsand the honourable court has ordered for the sale of the saidluxury cars.

Out of the above 15 cars only 9 were made available for physicalverification.

20. HOMEBUYERS

The group constructed and booked/sold residential and commercialunits:

a) before launch of the projects;

b) at the launch of the projects; and

c) Continued to book till any inventory was left over in theprojects.

The customers booked the flat for:

a) Abode;

b) Investment;

c) barter in advance;

d) adjusting their amounts in respect of work done in sameproject (creditors of same projects)

e) adjusting their amounts in respect of work done in otherprojects (creditors of other projects)

f)booked in the name of unidentifiable/untraceable personsentities.

During this procedure, we were informed that the data related tocustomers was maintained in the software FAR VISION as wellas manually of some of the projects. The Data in such fashion isintentionally maintained to avoid findings in future the gaps.

1) It is found that the promoters/directors/senior management ofthe company were treating the inventory of the projects as personalasset and started allotting the unsold inventory to various persons/entities by passing an accounting entry in the Accounting softwaretally.

2) We found that 14 flats were booked in the name of Mr. RajeshViz in the project Amrapali Centurion Park, Terrace Homes. Thecustomer data in FAR Vision provided, shows only Rs 10,000/-received for each flat from him as booking amount. We did notfind his name in the tally data of books of accounts of AmrapaliCenturion Park Pvt. Ltd. We sent Emails to him to confirm thesame but did not get any satisfactory response from him. He didnot come and avoided meeting us for last 5 months.

3) We found differences in amount shown as per the records i.e.amount received as per Customer data base sheet extracted fromsoftware FAR VISION and the amount actually paid by thecustomer. We came to know about the differences in receivableafter sending mails/ speaking over the phone to the customers.A list of such differences is given on sample basis (Page No. 483)4) We found the following 2 customers who had been handedover the possession but still appearing in the Customer databaseas undelivered. Both have paid less than 50% as per companyrecords.

S. PROJECT NAME CUSTOMER FLAT NO. POSSESSION POSSESSION ANo.NAME (as per customer) (as per details provided to us)1 Amrapali Zodiac MR. SAMEER JP-03 Handed over Not handed over KR. SUNEJA 2 Amrapali Princely MRS. FP-01 Handed over Not handed over Estate MRIGANKA PRABHAT

5) For amount received there is mismatch in the tally records/FV accounts and customer data in software Far Vision. Amountreceived from customer with flat no. though shown in customerdatabase but didn’t account for in the tally. List on sample basis isgiven (Page No. 486)

6) We found mismatch that the name of customer is different inaccounting package (tally& ERP FAR Vision) and customer datarecord in FAR VISION. We were not explained satisfactorily thereason for the same. (Page No. 489)

7) We found no. of customers/buyers whose know your customer(KYC) is not available (N/A).For example PAN, e-mail, phoneand address (Page No. 490)

8) The supplier of material and provider of services wereunsecured creditors for the amount claimed by them. Thereare number of flats booked against the amount claimedas due. All this was done in 2015-17. There are flats allottedto parties (unsecured creditors) in different projectsirrespective of whether any service was provided/ materialsupplied to the same project or not.

We propose the following order for allotment of flats to the persons/entity who have booked the flats subject to the verification oftheir claim:

(a) For abode;

(b) For investment without interest and payments made bybank;

(c) For investment against barter in advance if servicesrendered/supplies made to the same project;

(d) To the creditor if services rendered/supplies made to thesame project; and

(e) The last should be the person/ entities who havesupplied and services rendered to the group companies

9) We checked the customer data on the basis of selected criteria(customers having two or more than two units& customers nothaving KYC details) and found that no money is received againstBthe sale of those units. The units are booked by just passing JV.A few examples are shown below. The detailed list of units (projectwise) which we checked is also attached. (ANNEXURE-XV.28page 2646-2658 vol. VIII)

S. No. Project Name Customer NameUnit NoUnit CostC(ex ST) 1Amrapali GrandMORPHEUS SECURITY T-7-G274,16,700PVT. LTD 2Amrapali GrandSANJEEV KUMART-6-G494,76,5113Amrapali GrandMAHESH KUMART-6-G284,99,961D4Amrapali Eden IshwarKhandelwalD-210284,28,450Park 5Amrapali Eden AMRENDER KR JHA/ C-G011,40,00,000Park SUNITA JHA E6 Amrapali Eden MAHESH KUMAR C-G02 70,75,000 Park 7Amrapali Eden SUSHMA RANI/ VIJAY NARAYAC-G0396,75,859Park RAI 8IMT ManesarSAI Glazing32382,09,095F9IMT ManesarNOPS Infrastructure22787,76,12810IMT ManesarNOPS Infrastructure2341,32,02,50011Amrapali villageMrs PoojaKM-1205 31,35,000

GThere have been instances of duplicate allotment of flats i.e. oneflat is allotted to more than one person and money is receivedfrom both the home buyers. Sample details are given here under.The work relating to duplicate flats allotment is still in the processof being checked.

Ultra Home Construction Pvt Ltd allotted flats to buyers on falsepromises and forged documents. An instance being in the case ofMr. Mohammad Kaif where he was allotted 3 flats i.e G-2502,G 2501 and LG-1 vide agreements dated 22[nd] August 2012, 19[th]September 2012 and 9[th] January 2013, through their consortium-Amrapali Patel Platinum and UHCPL received INR 2 crore onassured return basis. However, subsequently, it came tothe knowledge that flats mentioned in the buyer agreement neverexisted as 25[th] floor did not exist in the approved building plan.Further, as per details provided by Mr. Kaif, as on 31[st] March2017, an amount of INR 1,40,00,000 was payable to him, however,as per books of accounts (in tally data), an amount of INR1,70,00,000 was payable to him by UHCPL.

Hi Tech City Developers Pvt Ltd has huge amount of TradeReceivables of INR 1.64 crores

Whereas , the project under this Company i.e. Amrapali Empirehas been completed. Most of the flats have been handed overand registry has been done. We fail to understand as to why theaforesaid amount is still appearing as recoverable from varioushome buyers.

This implies it was received in cash and not accounted for. Thecomplete list of all such flat owners along with their sale amountand amount received is enclosed below:

ABCDE

It is worth mentioning here that of the above 33 home buyersmost of them are employees/ ex-employees of the Company. Themanagement has done under-valued registry for all these cases.We are of the view that the management has under-valued theseregistries to evade the stamp duty to be paid to the governmentFand has taken the money outside the books from these employeesand these amounts outstanding in the books are only book entriesand should be recovered from the management.

21. Misrepresentation of Facts

As per the information provided and the records made availableto us, Flat No C-704 in Amrapali Castle and Flat No D-702 inAmrapali Eden Park were shown as vacant flats and were providedto NBCC for the purpose of sale. However, we have receivedletters from Mr Manoj Kumar and Mr Maneesh Gaur in AmrapaliCastle and Amrapali Eden Park respectively along with many

Annexures. (Payment receipts, NOC, possession letter).that theflats have been booked by them

9) While scrutinizing the customer data, we found case wherethe flat is sold at discount. The total value of the flat is booked asa discount. There may be many more such cases.

ProjectCustomer NameUnit NoAreaUnit CostDiscount Amrapali M/S. AMCON A-002 2525 80,38,484 80,38,484 Leisure BUILDCON PVT. Valley LTD.

We are informed that Mr.Adhikari Debi Prasad Das (GM/DGMAccounts) and Mr. Mohit Gupta (Director Marketing) were directlyresponsible for accounting and collection of receivables andmarketing of flats.

We interviewed both the persons several times. Both kept onchanging their stand/answers and did not cooperate in answeringour queries. Their answer to every question was that they are notaware. They did not provide many documents and the laptopswhich are in their possession. In spite of repeated reminders, Mr.Mohit Gupta has not made available the complete data with respectto home buyers/flat owners.

We found Mr Mohit Gupta and Mr Adhikari Devi Prasad Dasdirectly responsible for all the wrongdoings in booking ofreceivables, marketing of the flats and in handing over thepossession of the flats.

Utilities like Milk booth, Nursery schools, Senior secondaryschools, Nursing homes allotted to various parties shouldbe cancelled.

LIST OF FLATS (Residential & Commercial) ALLOTEDTO BROKERS AND SUPPLIERS

833 Flats booked (identified till now) in the name of various vendorsshould be attached and be released at last till the last home buyersgets his/her flat.If there is shortfall , then the flats should betreated as inventory and be sold .

The following flats should be cancelled.

These are the 353 flats booked in the name of various vendorsparties without receipt of any sum. The flats has not been included

in inventory and will be available for sale after giving chance tothe Flat buyer if he/she/it introduce any documents to substantiatethe claim. Refer list below:

It has further been observed that, 75 flats adjustments were madebetween M/s LA Residentia and Amrapali Group of Companiesagainst the aforesaid Branding Income. These home buyers havealready been allotted flats in M/s LA Residentia. Hence, the 75Flats booked by Amrapali Group in various schemes should betreated as vacant. (Volume-I Page No. 200). The Complete Listof all such flat has been enclosed as Annexure 25-A. (VolumeIII Page no 582-583)

22. Sureka group

Amrapali and Sureka’s have very long and intricate associationstarting officially with the partnership venture ‘Amrapali Homes’in 2006 wherein Ultra Home Construction Private Limited andMauria Udyog Limited is partner and developed project in nameof Amrapali Homes in Indirapuram then Amrapali Grand whereinUltra Home Construction Private Limited and Bihariji Ispat UdyogLimited were partners, though the land was allotted to BiharijiIspat Udyog Limited. Initially Amrapali Group ventured like thesetypes of association as he was independently not able to meet thenet worth, turnover and other eligibility criteria for land allotmentby Noida authorities. They then next associated in Sapphire Projectwherein Sureka’s family participated as shareholders and directorsin the Company. Every Joint Venture used to have an unexecutedprofit sharing and investment arrangement. Since the companydidn’t declared dividend ever, the profits were drawn by Surekafamily in the nature of advances which has majorly been squaredoff against billing from Mauria Udyog Limited, Jotindra Steel andtheir other related companies. Some of the amount is still lying asadvance in the books of accounts of Amrapali Group. In 2012Amrapali Group invested in 25% stake in Sureka family’s threeprojects Heart Beat City, Pebbles Prolease, Three PlatinumSoftech. Apart from subscribing to share capital, the furtherinvestment was made directly as advance or billing from AmrapaliGroup to these companies and some through shell companies aswell.

Further they did project in Ultra Home Construction PrivateLimited with Mozambique. This project was planned, coordinatedand managed by Mr Navneet Sureka in the name of Ultra HomeConstruction Private Limited and whatever advance wassanctioned and disbursed by the Government of Mozambiquethrough EXIM bank to Ultra Home Construction Private Limitedwas eventually diverted to Sureka family through billing fromJotindra Steel and Tubes Limited, Mauria Udyog Limited, etc. Aseparate bank account of Ultra Home Construction Private Limitedwas opened in State Bank of Patiala, Faridabad branch wheresignatory was Mr Akhil Sureka who used to operate the accountfrom there. The entire transactions of LC and EXIM bank wasrouted from that account. Navneet Sureka visited more in theperiod of contract finalization to Mozambique

Partner in the following projects:

Amrapali Sapphire Developers Pvt. Ltd. – 10.52% ofshareholding BihariJi Ispat Udyog Limited

Amrapali Smart City Pvt Ltd – 10% shareholding held byMauria Udyog Ltd

Amrapali Homes – 5% - Mauria Udyog Ltd (Rs.20 crore givenas an advance before 2008 and is recoverable)

Amrapali grand – 10% BihariJi Ispat Udyog Limited –We wereinformed that the land was allotted in the name of Bihariji IspatUdyog Ltd and construction and development work was doneby Amrapali group.

Directors in the following companies

Amrapali Leisure Valley Pvt Ltd – Akhil Sureka

Cheque signatories in the following companies

Amrapali Leisure Valley Pvt Ltd

Amrapali Dream Valley Pvt Ltd

Amrapali Leisure Valley Developers pvt Ltd

Amrapali centurian Park Pvt Ltd

From the above, it is clear that Sureka group directors namelyVishnu Sureka, Navneet Sureka and Akhil sureka were promoters

in amrapali group. They were in equal control of affairs with otherpromoters (Anil Sharma Shiv Priya, etc.). They not only investedas promoter heavy amount but also provided the land allotted toBihariji Ispat sureka group company. But the amount investedwas withdrawn in very short period by other associate companiesin the form of interest, supplies, provision of services etc. it wasfound out that there were many other suppliers who neverinteracted with any of the directors/staff but supplied material toAmrapali through Akhil and Navneet Sureka. In our opinion, thiswas nothing but accommodation bills and form of withdrawingfunds from the group. None of the employess/ directors of thesureka companies knew that Sureka group has supplied ,materialto Amrapali group. Though sureka group has policy andprocedure wthat for any item above Rs,. 5,000/- purchase orderwould be issued but it was not followed in the case of supplies toAmrapali. Surprising all the transactions worth more than 500crore has been handled single handedly by Navneet and akhilsureka without involving any of the directors and employees. Allthe cheques were also signed by Usreka family and not by anyother directors.

It is pertinent to note that the amount paid for FSI purchased bySuraka group companies was taken back on the same day byrouting through number of companies.All such cheques formoney laundering were signed by Akhil Sureka Furthermore, it isfound that the amount so paid ie Rs. 80 crore was also receivedfrom suppliers of the Amrapali group. Therefore in our opinion,notonly FSi should be canceled but the amount os Rs. 80 crore isrecovereable from them.

They adopted the same methodoly. Formed various businessentities, appointed small time employees the directors in thesecompanies and routed fundsof 100s of crores and it may be in therange of 1000s crores.. None of the directors were knowing aboutany of the business transactions. Further more most of the directorsnever attended any board meetings,knew about nature of businessthe company does, name of other directors in the company and soon. We are not sure who was teacing the fraudlent practices towhom, whether Sureka to Amrapali or vice versa.

It was observed Rs.13.44 crore paid to Sureka Public CharitableTrust were transferred to donation account subsequently. It issubmitted that Sureka Public Charitable Trust is group institutionof Jotindra Steels & Tubes Limited, which is also under the forensicaudit. This should be recovered from the Jotindra Steels & TubesLimited.

Sureka group used several companies to route funds from Amrapaligroup to Sureka group, an example being in the case of AmrapaliInfrastructure Pvt Ltd, where the company received Rs.3.23 crorefrom “Synergy Freightways Private Limited” from 26th March2015 to 30th March 2015. On 31st March 2015 an amount toRs.4.18 crore was paid to the said party through 16 separatetransactions and thereby leading to debit balance recoverablefrom the party amounting to Rs.0.9,5 crore as on 31st March2015. This amount should be recovered from the Sureka Group.

It is worthwhile to mention here that M/s Synergy FreightwaysPrivate Limited is an associate Company of M/s Jotindra Steeland Tubes Limited. Further, there are no business transactionswith the said party except routing of funds.

Another example being in the case of Shriv Buildmat PrivateLimited where one of the directors is common with MauriaUdyogLimited. On scrutiny of ledger accounts of Shriv Buildmat, it wasobserved that during FY 2014-15 and 2015-16, the said companyhad almost 100% sales to Amrapali group of companies. It wasalso observed that one flat was allotted to Mr. Atul Kumar, Directorof ShrivBuildmat Private Limited in Verona Heights, againstthe amount due to the said company. This adjustment is not genuineand the relevant amount should be recovered from Mr. Atul Kumaror his flat may be attached. As per ledger account advance toAmrapali for flat, sum of INR 34.05 lakhs has been shown asrecoverable as on 31st March, 2015. There is no name of theCompany to which such advance has been given in the books ofthe Amrapali Group of Companies. Thus, this amount of INR34.05 Lakhs is shown as recoverable is not genuine.

sum of INR 53.21 Lakhs has been debited to Labour ChargesContractors on account of bill no. SBPL/Noida/010 dated 13/3/2013 has been recorded in the books of Amrapali InfrastructurePrivate Limited on 16/03/2015.

ARN Traders

During the financial year 2016-17 and 2017-18, sum of INR17.63 crores has been debited to this party and standingrecoverable as per Raw Tally Data, till date as per details givenbelow:

BDate Particulars Amount in Remarks lakhs30-11-2016Bank Payment 0.02Payment made without any narration on the voucher 13-12-2016Bank Payment 750Payment made without any narration on the voucher C19-04-2017Transfer entry through 1,004Being Amount transfer as MauriaUdhyog Limitedper letter signed by Mr. Anil Sharma 19-04-2017Transfer entry through 960Being Amount transfer as Sarvomme per letter signed by Mr. Anil Infrastructure Private Sharma Limited Total 2,714.02D

Further, there is no Name, Pan or Address available in the recordsof M/s RN Traders. It was further observed that there are nobusiness transactions with M/s RN Traders. It is possible that thisamount of INR 2,714.02 Lakhs has been withdrawn by theEmanagement for their own personal use and should be recoveredfrom the management.

BiharijiIspat Udyog Limited being one of the partners of AmrapaliGrand always had negative capital. They withdrew much morethan what they brought into the business. There is no substance inFthem being called as capital contributors to the business of AmrapaliGrand. As on 1st April 2008 they had withdrawn INR 12 croreand invested capital contribution of INR 1.5 crore. As on 31stJuly 2018, they have debit balance of INR 1.67 crore and negativecapital of INR 30,380. They always withdrew homebuyers fundsfor misusing for their own agendas apart from the business.

Out of INR 12 crore given to BihariJiIspat Udyog Limited, theyreturned INR 6.45 crore through bank and the balance amountwas adjusted against receivables from Ultra Home ConstructionPvt Ltd and against capital contribution by BiharijiIspat UdyogLtd.

Amrapali Grand gave loans and advances to below parties, whichare recoverable as on 31[st] July 2018 amounting to INR 25.73crore as per Tally data.

S. No. Name of the AmountDate of transaction Company/Person 1Anil Kumar Sharma 10,03,55,90020.11.2007 to 25.07.20182Shiv Priya 7,10,50,00020.04.2007 to 22.09.2010 3Madan Mohan Sharma 2,01,00,00020.11.2007 to 5.12.2007 4Ajay Kumar 2,74,68,00023.06.2007 to 31.03.2011 5BiharijiIspat Udyog Limited 1,67,00,0005.04.2006 to 31.07.2018 6Amrapali Homes 54,01,51915.09.2006 to 07.12.20137SuvashChander Kumar 47,11,0003.01.2008 to 01.12.20098Shiv Priya –Imprest 35,70,4801.04.2008 to 24.12.20099Amrapali Zodiac Developers 19,20,00027.06.2017 to Private Limited 13.07.2017 10Jhamb Finance and 19,00,0005.11.2015 Leasing Private Limited 11Amresh Kumar 16,86,0001.04.2007 to 15.09.200812GK International 10,00,00021.01.2007 13Pallavi Mishra 6,07,08012.07.2018 14Mohit Gupta 5,80,00025.06.2007 to 11.04.200815P K Choubey 1,50,0002.08.2007 16Amrapali Foundation 1,00,00024.11.2015 17Suraj pur Sales & Service 1,00,0001.11.2010 Total 25,73,99,979

It has been observed that amounts paid to parties above weremostly routed to Quality Synthetics Pvt Ltd which primarily belongsSureka family. For example:

a)Payment of Rs 2,74,68,000/- has been made to Mr AjayKumar from 2007-08 to 2010-11 as advance recoverable.Out of this, Rs 77,00,000 was paid by him for purchase ofproperty located at Jaypee Greens, Noida & Rs 50,00,000was paid by him to Quality Synthetics Industries Limited.b)Payment of Rs 10,03,55,900 has been made to Mr Anil KumarSharma from 2007-08 to July, 2018. Out of this, Rs 3,00,00,000was paid to Quality Synthetics Industries Limited.

460SUPREME COURT REPORTS

[2019] 9 S.C.R.

Ac)Payment of Rs 7,10,50,000 has been made to Mr Shiv Priyafrom 2007-08 to September 2010. Out of this, Rs 1,00,00,000was paid to Quality Synthetics Industries Limited.

While reviewing the books of accounts of Amrapali InfrastructurePrivate Limited and M/s Jotindra Steel and Tubes Limited, it hasBbeen observed that Amrapali Infrastructure has made purchasesfrom M/s Jotindra Steel against Letter of Credit. The letter ofcredit has been discounted by M/s Jotindra Steel with the banks.The discounting charges of INR 1.30 Crores have been debitedby M/s Jotindra Steel to M/s Amrapali Infrastructure. We fail tounderstand the reason for this treatment. In normal course ofCbusiness, the supplier is the person who bears the discountingcharges in respect of the transactions as the margin when sold onLetter of Credit are generally higher. This amount of INR 1.30Crores on account of discounting charges of Letter of CreditShould be recovered from M/s Jotindra Steel and Tubes Limited.

i.It has also been observed that M/s Jotindra Steel and TubesLimited has issued service invoices for erection, shiftingand transportation charges amounting to INR 96 lakhsapproximately during the financial year 2014-15 as perdetails given below:

Name of the Gross Nature of the EDate Bill numberPartyAmount TaxTotalServiceJotindra Steels & Erection 6/6/2014 JST/FBD/SG/0001Tubes 5,000,000 618,000 5,618,000 Charges Jotindra Steels & Transportation 6/6/2014 JST/FBD/SG/0002Tubes 2,532,000 78,239 2,610,239 Charges Jotindra Steels & Transportation F12/1/2014 Bill not availableTubes247,500 7,648 255,148 ChargesJotindra Steels & Transportation 12/1/2014 Bill not availableTubes365,000 11,279 376,279 ChargesJotindra Steels & Transportation 2/1/2015 Bill not available Tubes 221,400 6,841 228,241 Charges Jotindra GSteels & Transportation 2/1/2015 Bill not available Tubes 182,700 5,646 188,346 Charges Jotindra Steels & Transportation 3/31/2015 Bill not availableTubes164,700 5,089 169,789 ChargesJotindra Steels & Transportation 3/31/2015 Bill not available Tubes 216,000 6,675 222,675 Charges HTotal 9,668,717

Further, on scrutiny of the invoices issued by the JSTB it appearsthat the invoices raised for the above services are completelydifferent from the invoices issued regularly and are prima facienon-genuine. Hence, the same should be recovered from JSTBor the Company Management as both the parties have beenpartnering in various projects.

ii.It is further observed that purchases amounting to INR 7.09Crores, INR 59.53 Crores and INR 47.04 Crores has been madefrom this party in M/s Amrapali Infrastructure Private Limitedduring the financial year 2013-14, 2014-15 and 2015-16respectively. While sample checking of the purchase bills, it wasnoted that the goods consignment notes enclosed with the purchasebill are issued by M/s Synergy Freightways Private Limited whichis also group Company of Jotindra Steel and Tubes Limited.Goods consignment note enclosed with the purchase bills don’tseem to be genuine in view of the undermentioned observations:

1.We sent letter to M/s Synergy Freightways Private Limitedas per address on record which has been received back asundelivered.

2.Statement of Mr. Akhil Sureka, Managing Director of M/sJotindra Steel and Tubes Limited was recorded and it wasconfirmed by him that most of the purchase/ sales transactionsare back to back i.e. all such consignments are sent directlyfrom their supplier to Amrapali Group of Companies. In thesecircumstances it is not understood by us that how theconsignment notes of M/s Synergy Freightways PrivateLimited have been enclosed with most of the purchase bills,if the transactions were back to back for their supplies.

3.On scrutiny of the tally data/documents of AmrapaliInfrastructure Private Limited and JST, it has beenobserved that no freight has been paid to M/s SynergyFreightways Private Limited either by AmrapaliInfrastructure Private Limited or by JST.

This clearly establishes that all the GRs issued by M/sSynergy Freightways Private Limited are not genuine.Further, most of the purchase invoices of JST have been shownas sale on the same date with similar particulars/ quantity by raisingthe invoice on Amrapali Infrastructure Private Limited.

462SUPREME COURT REPORTS

AWe are of the view that these sales invoices raised by JST arealso not genuine and are mere accommodation entries only.

Sample details of such transactions for 2 days are enclosed below:

II. M/s Mauria Udyog Limited Ghaziabad

While scrutinizing the ledger of this party it was observed asfollows:

a)During the month of December 2015 there were 7purchase invoices from this party amounting to INR 0.65Crores all dated 18/12/15.

b)While scrutinizing the data called from M/s Mauria UdyogLimited it was noted that they have purchased these goodsvide 7 purchase invoices dated 17/12/15 for INR 0.63Crores.

c)There is no other purchase/Sale by M/s Mauria UdyogLimited.

d)Similarly, in other months also 100% of the sale is madeto Amrapali Group of Companies. Since M/s MauriaUdyog Limited is group company of Jotindra Steels &Tubes Limited, there is very high possibility ofaccommodation bills being issued and all their purchasesbeing Non-Genuine amounting to INR 5.28 Crores forfinancial year 2015-16.

e)It is further observed that all the payments against thesepurchases’ bills have been made by issuing letter of credit.It seems that the Company is getting the LC’s discountedfrom the bank against these non-genuine bills.

When we questioned Mr. Navneet Sureka who approachedAmrapali group from trust side and who was approached inAmrapali group. He answered “he is not able to recollect”.

He didn’t cooperate otherwise how it is possible that such hugeamount donated by Amrapali group companies and he is not ableto remember the basic question. We recommend the amountdonated should be recovered from the Sureka group.

We are of the opinion that the supplies and services provided byJotindra Steel & Tubes Limited (Rs 321 crore) and Mauria UdyogLimited (Rs 128 crore) are prima facie bogus in nature.

1. The 2 directors namely Mr. Akhil Sureka and Mr. NavneetSureka are equally responsible for companies having shareholding/capital/profitsharing and should be held responsible for shortfall incost of construction and land dues to Noida authorities. (Referannexure S-11 page 2960 Supplementary report)

2. Mr. Akhil Sureka opened bank account in SBI, Patiala,Faridabad in the name of Amrapali group companies and becamea signatory. Amrapali did not have any base at Faridabad but Akhilsureka operates from Faridabad.

3. Jotindra Steel and Tubes Limited agreed to buy usedconstruction equipments from Amrapali Infrastructure PrivateLimited and paid Rs 8 crore on 13[th] December, 2016 andimmediately transferred that funds to group companies of Surekagroup namely Jotindra Steel and Tubes Limited and others byrouting the funds from Amrapali Infrastructure Private Limited toUltra Home Construction Private Limited.

4. The FSI’s bought by Sureka group (details given in Chart D)without making any payment. The modus operandi was funds werepaid from one company and on the same day were transferred toother Sureka group company by routing in 2-3 Amrapali Groupcompanies. This would not have been possible without activeinvolvement of Mr. Akhil Sureka, who is bank signatory. Wefound on sample basis that the amount of Rs. 80 crore so routedwas originally started from Amrapali. The amount so claimed ofRs 80 crore has been routed through various companies. thisamount has been paid out of Amrapali group against purchasesand payment made to various vendors namely Bhagirathi Tubes(Prop Mr. SHiv Kumar)etc. It was confirmed by supplier that hedid not have any knowledge of any of the transactions and statedthat all transactions were carried out in good faith under the advice& instruction of Mr. Akhil Sureka. He further submitted that henever visited any of the Amrapali group office, he or his staffincluding employees has never visited any of the offices or site ofAmrapali group. When questioned on supplies of scaffoldingmaterial and steel to and purchase sales reconciliation of suppliesalong with purchase orders and sales orders, he confirmed that itis not available. The amount so paid should be recovered fromthe SUREKA group companies. It was further confirmed thatfunds movement were also on behalf of Akhil Sureka carried outunder good faith.5. An amount of Rs 55 crore was received from EXIM bankunder line of credit for project was to be done in Mozambique.The group submitted bogus bank guarantee for the said

advance to Mozambique client from bank namelyInternational Trade Bank Limited. Out of the funds of RS55crore, major amount was transferred to Companies of Surekagroup.

On enquiry from the Amrapali Group we came to know that thebank guarantee was made available by Mr. Navneet Sureka,Managing Director of Mauria Udyog Limited and that no bankexist/existed by the name International Trade BankLimited. It was also informed that the project was under directcontrol and supervision of Mr. Navneet Sureka. It shows activeinvolvement of Mr. Navneet Sureka in the project. Mr. PrashantKumar and Mr. Ram Kumar are the persons who were travellingto Mozambique and know about the project but we could not getthe contact details of these 2 persons

6. Quality Synthetics (Sureka Group) had given loan to AmrapaliSapphire of RS 3 crore in March, 2009 at the rate of interest of14% p.a. The company kept on paying to Quality Synthetics whenit was having no funds for construction. The Amrapali Group wasgiving advances to various vendors/parties interest free and takingloan from Quality Synthetics, at the rate of 14% p.a. It ispertinent to note that the said amount of RS 3 crore alongwith all interest due totaling to RS 3,86 crore was repaid inMarch, 2018 when there were no funds available forconstruction of flat and the case was pending beforeHonorable Supreme Court. The amount should berecovered immediately. It is pertinent to note that the companyis not doing any business and are used just for the purpose ofmoney laundering.

7. Sureka group was promoter and was providing the networth certificate at the time of allotment of land to Noida/Greater Noida authorities. At the time of making paymentto the authorities for land funds were arranged by them.

8. The directors other than the family have come and informedthat they were not knowing about the operations of the companyand not attended any board meeting and papers were send totheir residence for signatures.

9. There are many other high value transactions which we are inprocess of examination.

10. Further to our supplementary report dated 30th April 2019.The directors of four companies of Sureka Group appeared beforeus from 9th May 2019 to 18th May 2019, the directors gave theirstatement On the basis of interaction in the statement given bythem. We found as follows.

The four companies which bought FSI for the sham companiescreated for the purpose of money laundering. Neither theshareholders nor the directors of the companies were aware ofany transactions carried out by these companies. It is worthwhileto note that Mr. Vishnu Sureka, Mr. Navneet Sureka and Mr.Akhil Sureka were neither the shareholders nor the directors aswell didn’t attend any board meeting including AGM/EGM.However, out of three who were signatory to the bank in all thecompanies. Directors were not aware of who have been thesignatories. When questioned . Vishnu, navneet and akhil Surekacould not reply why they were the signatories when they wereneither shareholders, directors, employees.

Mauria Udyog Limited

It was submitted in affidavit of Mauria Udyog Limited that MauriaUdyog Limited is manufacturer and traders. It is stated that inaddition, to manufacturing of LPG Cylinders, MUL alsomanufactures world class “Terry Towel” and “Apparels”.Further MUL also trades internationally & domestically inSteel Products in addition to Ferrous & Non Ferrous metals.MUL also deals in agro commodities such as soya bean,refined oil & deoiled cake used as fodder for the cattle feed/poultry industry.(from affidavit of MUL para 5 page 2) Wescrutinized the annual accounts of Mauria Udyog Limitedand found that the product that is TMT bars are suppliedonly to Amrapali Group companies and very minusculequantity to other companies.In the 2010-11, TMT bar supplied for Rs. 52.97 crore and thepayment received Rs 29 crore and that is also major part of thepayment of Rs 16.5 crore was received in March.

Similarly, in the year 2012-13, supplies were made of TMT barand the payment was received in the month of March 2012 justbefore closing of the year.

Suddenly in the year 2012-13, trend is changed and Ultra HomeConstruction Pvt Ltd gave an advance of Rs 33 crore on variousdates which was returned subsequently in the month of Februaryand March.

The above transactions are dubious in nature because wescrutinized the supply bills of Mauria Udyog Limited and foundthat Mauria Udyog Limited has supplied TMT bars only toAmrapali group of companies. It is not an item in which MauriaUdyog Limited has dealt with any other party except minisculequantity of 2-3 customers who in turn has also supplied to Amrapaligroup. There was no purchase order from Amrapali group toMauria Udyog Limited even the size of TMT bar was notmentioned on the invoice of Mauria Udyog Limited. Therate charged by Mauria Udyog Limited are higher in therange of 15-20% then the market rate for which nosatisfactory explanation was provided to us. In year 2013-14, Ultra Home Construction Pvt Ltd gave Rs 2.45 crore to MauriaUdyog Ltd which was returned on 29th March. It is surprisingto find out that in the year 2014-15 in the month of May andJune, Ultra Home Construction Pvt Ltd has accepted LCsfrom banks without booking of any purchase of material.The company’s bank account is used for accommodation billsand Mauria Udyog Ltd was paid an excess of Rs 1.16 crore overand above an accommodation bill. In the year 2015-16, in themonth of May Amrapali group started supplying TMT barsto Mauria Udyog Ltd, the purpose of supplies of TMT barsby Ultra Home Construction Pvt Ltd was not explained tous. In the year 2015-16, total supplies are to the extent of Rs15.79 crore and in the year 2016-17 amounting to Rs 5.36 crore.In the year 2015-16, payments were made to Mauria Udyog Ltdon behalf of Shri Satguru Metalloys Pvt Ltd and Bhagirathi Tubesof Rs 8 crore and Rs 6.50 crore respectively. We were notexplained any reasons for making such payments.

It is pertinent to note that the company is not doing any businessand are used just for the purpose of money laundering.

Shri Narayan Rajkumar Merchants Ltd

group company of Sureka group paid Rs 1 crore to AmrapaliSapphire Developers Pvt Ltd. The entire amount along with interestpayment of Rs 1.11 crore was paid to Shri Narayan RajkumarMerchants Ltd, surprisingly Amrapali group didn’t charge anyinterest on payments made to Sureka group of companies but ithad paid without fail interest @ 13.45% to Shri Narayan RajkumarMerchants Ltd. Further an amount of Rs 2 crore was paid toShri Narayan Rajkumar Merchants Ltd on 31st March 2018,when the matter was pending before the HonourableSupreme Court. The amount of Rs 2 crore shouldimmediately be recovered from Shri Narayan RajkumarMerchants Ltd and Sureka family.

It is pertinent to note that the company is not doing any businessand are used just for the purpose of money laundering.

Conclusion

We are of the opinion that this company floated/formed for thepurpose of money laundering and FSI sold to these companieswere merely accounting and adjustment entries done by themtransferring funds from one account to another as reported earlierin our supplementary report. The modus operandi adopted bySureka family was the same as adopted by Amrapali Group i.e.they formed the companies, their employees who were paidsalaries in the range of Rs 20,000-Rs 60,000 the shareholders anddirectors in these companies. It is pertinent to note that theirsignatory to the bank are family members.

Mr. Navneet Sureka and Mr. Akhil Sureka used these companiesfor the purpose of money laundering of funds of Amrapali Group.

The bank guarantee was bogus and we couldn’t find the bankname which issued the bank guarantee, it appears that there wasa criminal conspiracy and the bank was not in existence.

Mr. Navneet Sureka was in full control of Amrapali groupcompanies which is very clear and can be understood from thetransactions of donation. On the instructions of Mr. NavneetSureka, GM/DGM accounts Mr. Adhikari was transferring fundsto the trust from various group companies of Amrapali as andwhen desired by him and instructed by him.

None of the directors ever attended board meeting it wasinformed that the directors signed the paper under the instructionsand directions of Mr. Akhil Sureka. The fact was accepted byMr. Akhil Sureka. This proves that there was non compliances ofholding board meetings and AGM as required u/s 174 of CompaniesAct, 2013. Further, the bank signatories to the bank are Mr. VishnuSureka and Mr. Navneet Sureka as an authorized signatory. Inwhat capacity they were the signatory, they could not explain andit was told by Mr. Akhil Sureka and Mr. Vishnu Sureka that thedirectors were having full faith upon them therefore authorizedthem as bank signatory surprisingly, directors were not thesignatory this is an unique case which is difficult to found in thecorporate history.

When there was transfer of shares from one shareholder toother in full or part of his/her shareholding there was no transactionsfor consideration through banking channels.

23. 27 Additional companies

(i) Funds invested to become the consortium partners by these 27companies were from the Amrapali group of companies and these27 companies were just the face created to comply the conditionsof partners and also keeping in mind to demerge part of the plotin furtue to the consortium partners. The funds contributed bythese 27 companies were originated and routed from the Amrapaligroup companies.

(ii) These companies were managed by CFO Mr. ChanderWadhwa, Company Secretary Mr. Pankaj Mehta and CA Mr.Anil Mittal.

General:

1. The companies were formed for the purpose of acquiring theshares in the 47 group companies to gain the position of consortiumpartner, for villa in Goa, immovable property E/17 SurajkundNoida, D- 151 , Preet Vihar, NewDelhi, First Floor-E-57,Preet Vihar, New Delhi. for routing the cash duringdemonetization and booking flats in IT Park Greater Noida ofUltra Home Construction Private Limited. The cash on Hand ofRs. 1.98 crore. From these companies is not traceable and ismisappropriated and be recovered from CA Anil Mittal The

ADirectors in these companies are Junior employees of Anil MittalStatutory Auditors namely

1.Pankaj Mehta Company Secretary of Amrapali group ofCompanies

2.Vivek Mittal Nephew of Anil Mittal

3.Chandan Kumar Office boy of Anil Mittal

4.Seema Mittal wife of Anil Mittal

5.Chandar Wadhwa CFO

6.Bushan Sharma

7.Ashish Jain employee of Anil Mittal

8.Amit Wadhwa Nephew of Chandar Wadhwa

List of companies are as under:

S.noName of companyPage no1.Aptara Infrastructure Pvt Ltd2.Bhavya Housing Projects Private Limited3.Bushells Developers Private LimitedD4.Chintapurni Estates Private Limited5DH Education Services Pvt Ltd6.Earthwell Developers Pvt Ltd7.Eklavya Building Solutions Pvt Ltd8.Bushells Reality Solution Private Limited9. Saffron Propmart Consultancy Private LimitedE10.GaurisutaBuildhome Private Limited11.Gaurisuta Real Estate and Developers Private Limited 12.Kamyani Realtors Private lImited13.Kapila Building Solution Private Limited14.MahamayaBuildcon Private Limited15.Rinku Clothing Creation Private LimitedF16.RRS Properties Private Limited17.Spacewell Developers Private Limited18.StatelinesBuildwell Private Limited19.Mansarovar Textiles Private Limited20.Rainbow Cotton Private Limited21.Kamakshi Buildwell Private Limited22.Golden Portfolio Consultant Private GLimited23.Double Esh Infrastructure Private Limited 24. Aashirwad Linens Private Limited 25.Aksh Real Estates Private Limited26.AdhunikBuildtech Private LimitedH27.Rinku Computech Private Limited

We recommend the forfeiture of the following investment in thegroup companies by these 27 companies because the fundsinvested to become the consortium partners were from the groupcompanies and these companies were just the front created tocomply the conditions of partners and also keeping in mind todemerge part of the plot in future to the consortium partners.The funds contributed by these 27 companies were originatedand routed from the Amrapali group companies.

Paid-Up CapitalS. Name of the No. of Investment in Number of Number % of No. Company Shares which Amrapali Equity of Equity Group Co. shares of Preference Shares respective co. Shares of respective Cco.1 Aksh Real Estate Pvt Amrapali Centurian Ltd8,20,000 Park Pvt Ltd36,50,0008,50,00022.47%2 DH Education Amrapali Centurian Services Pvt Ltd 5,01,500 Park Pvt Ltd 36,50,000 8,50,000 13.74% 3 Mansarovar Textiles Amrapali Centurian Pvt Ltd3,71,000 Park Pvt Ltd36,50,0008,50,00010.16%D4 Bhavya Housing Amrapali Leisure Projects Pvt Ltd 1,000 Valley Pvt Ltd 10,000 4,57,334 10.00% 5 Kamayani Realtors Amrapali Leisure Pvt Ltd 1,000 Valley Pvt Ltd 10,000 4,57,334 10.00% Amrapali Leisure 6 Chintapurni Estates Valley Developers pvt Ltd 1,000 Pvt Ltd 10,000 6,00,000 10.00% 7 Aashirwad Linens Amrapali Dream EPvt Ltd 1,500 Valley Pvt Ltd 10,10,000 - 0.15% 8 Rainbow Cotton Pvt Amrapali Dream Ltd 1,000 Valley Pvt Ltd 10,10,000 - 0.10% 9 Rinku Clothing Amrapali Silicon Creation Pvt Ltd 1,429 City Pvt Ltd 10,36,982 - 0.14% Double Esh 10 Infrastructure Pvt ltd1,000 Amrapali Smart City Dev. Pvt Ltd6,91,42,401-0.00%F11 Earthwell Amrapali Smart Developers Pvt Ltd1,000 City Pvt Ltd10,000-10.00%Amrapali Smart 1,000 City Dev. Pvt Ltd6,91,42,401-0.00%12 Sapcewell Amrapali Smart Developers Pvt ltd1,000 City Pvt Ltd10,000-10.00%GAmrapali Smart 1,000 City Dev. Pvt Ltd6,91,42,401-0.00%13 GaurisutaBuildhome Mums Megha Food Pvt Ltd200 Park Ltd100002.00%14 Rinku computech Amrapali Biotech Pvt Ltd23,94,000India Pvt Ltd1,20,00,00019.95%15 Kamakshi Buildwell Mums Megha Food Private Limited500 Park Ltd100005.00%H

ARs. 100 of Crores of home buyers funds in active connivanceof CFO Chandar Wadhwa and Statutory Auditors Anill Mittalwere routed through

1. Rinku Computech Private Limited

BPatel Advance JV8,25,00,000Case Enterprises Ltd10,00,000Manjeet Singh16,00,000MSB Software Technologies 2,40,000 Anil Kumar Sharma 9,85,000 CBhushan Sharma34,00,000Digital India19,59,110KK Shukla 9,00,000 RV Consultant Service95,00,000Sundry Advances26,99,000DSunita Bhagwani20,00,000Saffron Propmart Consultancy Pvt Ltd 7,10,00,000 TOTAL17,77,83,110EDateParticularsTransactionBalance28-03-2018 Balance as on 28/03/2018 4,06,50,815 Payment to Saffron Propmart29-05-2018 Less: Consultancy Private Limited 3,90,00,000 FLess:Payment to Preeti Jaiswal1,50,000Less: Other Payments 5,90,771 Balance before proceeds 9,10,044 from FDR GReceipts From FDR31-07-2018Add:Proceeds from FDR9,86,19,983Balance after proceeds from 9,95,30,027 FDR

Payments made out of receipts from FDRNet Payment to Saffron 31-07-2018 Less: Propmart Consultancy 3,20,00,000 Private Limited 01-08-2018 Less: Payment to Vandana 2,00,00,000 Wadhwa 23-10-2018 Less: Payment to Ample Hotels & 1,00,00,000 Resorts23-10-2018 Less: Payment to Moral Sales 1,00,00,000 23-10-2018 Less: Payment to Mahalaxmi 1,00,00,000 Enterprises 23-10-2018 Less: Payment to Annex IT 70,00,000 Distributors23-10-2018 Less: Payment to Anjali Buildcon 1,00,00,000 Other Payments 1,61,904 TOTAL9,91,61,904Balance as on 28-10-2018 3,68,123

24. Misuse of Bank Loan funds (Volume II Page No. 426-457)

Diversion of loan funds for unapproved purposes

Amrapali group of companies obtained funds primarily fromfollowing sources:

a) Home buyers funds against construction linked progress;b) In the form of loans (term loan, working capital/cash creditlimits) from banks against construction linked progress; and

c) Homebuyers also availed housing loans from banks forpurchasing flats in Amrapali projects

Banks granted loans to Amrapali group under certain terms andconditions which included utilisation of loan funds for:

a) Payment of cost of land and lease rental to Noida authorities;

b) Payment of construction cost of projects.

AObservation

1. The amounts disbursed were not utilised for payment of cost ofland or for payment of lease rentals or for payment of constructioncost. The banks did not monitor utilisation of funds grantedby them. In fact, these funds were diverted as loans to relatedand/or unrelated entities which was ultimately utilised in buildingassets/purposes which were unapproved by the banks. The banksacted as mute spectator to unapproved diversion which wasalmost happening evidently in all banking transactions.

2. While obtaining loan funds, Amrapali group hypothecated landon which project was being undertaken as well as building underconstruction as well as material lying at project, leaving nothingwith home buyers for recovery of their payments.

3. It is also observed that the loan funds were routed throughseveral bank accounts of the same company and thereafter routedto third parties whereby trying to misguide the flow of funds. Itclearly means these transactions had no substance and were madeonly to mislead.

1. In the case of Amrapali Zodiac Developers Pvt Ltd:

Bank of Baroda (Rs.75 crore), Union Bank of India (Rs.50 crore)and Corporation Bank (Rs.25 crore) together approved term loanamounting to Rs.150 crore to develop group housing project atSector-126, Noida. These funds were granted against the aforesaidterm loan, the banks secured first charge by way of assignmentor creation of security interest of-

(i)All the rights, title, interest benefits, claims & demandswhatsoever of the borrower in –

(a) permits, approval, clearances, etc. in respect of projectbeing financed.

(b) any letter of credit, guarantee, performance bond,corporate guarantee, bank guarantee, provided by anyparty under the project.

(ii) All the receivables, reserves, book debts, bankaccounts, including the Escrow account & all otherincomes, present & future pertaining to the projects beingfinanced.

(iii) All insurance contracts, insurance proceeds.

(iv) Charge on the specific reserve to be created by UltraHome Construction Private Limited, the holding companyby contributing 10% of their profits to address thecontingent liabilities of their subsidiaries.

The banks also secured second charge over the land & buildings(First charge is with Noida Authority). Also hypothecated rawMaterial, work in progress (pari passu charge over the projectassets).

Immediately on receipt, these funds were diverted to several thirdparties as stated

S.No.ParticularsAmount 1 U Tek Sales Corporation 6,97,39,500 2 Taneja Building m aterial Suppliers 4,24,01,000 3Devki Nandan Trading Co3,00,00,000 4 Guru Kripa Traders-2 3,00,00,000 5 Shri Balaji Cem ent & Hardware 2,89,61,000 6Investor Clinic Infratech Private Limited2,00,00,000 7 Mauria Udyog Limited 3,00,00,000 8 Shiva Trders 2,00,00,000 9Shiv Traders1,75,00,000 10 Om Traders 1,35,00,000 11Lakshmi Steel1,20,81,351 12Mahaveer Enterprises1,00,00,000 13 Sidhivinayak Trading Company 1,00,00,000 14Rama Trading ompany75,00,000 15Uday Enterprises69,50,500 16 Orient Trading Company 68,96,800 17Kartikey Enterprises68,72,600 18 Dayal Traders 68,42,300

AR.K. Enterprises 19 67,50,500 20MahaLuxmi Traders67,32,500 21 Purnima Steel Syndicate 65,71,972 B22 New Payal Traders 64,50,500 23Shyam Sales Corporation64,38,700 24 Kishan Steel Corporation 62,53,700 C25 Shri Ganesh Trading Company 62,50,500 26Arhaan Enterprises62,17,570 27 Gayatri Traders 59,42,500 28 Lakshmi Steels 53,42,600 D29Guru Kripa Traders50,00,000 30 Guru Nanak Trading Company 50,00,000 31 R R Enterprises 50,00,000 E32Rohit Steel50,00,000 33 Shree Ji Trading Company 50,00,000 34 Shri Hari Trading Company 50,00,000 35G.S. Enterprises49,50,500 F36 A.B Enterprises 48,16,654 37 Amit Steel 40,00,000 38Barnala Steel Industries Ltd36,72,008 G39 S.R Steel 34,92,054 40Kumar Trading Company32,45,859 41Quality Synthetics Private Limited25,00,000 42 Shri Bankey Bihari Trading Company 25,00,000

A43 Jayem M anufacturing Co Pvt Ltd 23,15,400 44SBL Construction Private Limited22,10,040 45 ANALCO ( INDIA ) PVT LTD 21,86,728 46 Kum ar Trading CO 19,53,325 B47BUILD TECH INDUSTRIES19,06,800 48 M. K TRADERS 16,20,370 49 Shree Ram Plywood 14,79,510 50ARUNACHAL TIMBER TRADERS PVT LTD13,98,400 C51 Naveen Associates 13,60,217 52 Deepak Mehta & Associates 13,50,000 53Raj Shree Ispat10,92,584 DREAM INTERIORS & DEVELOPERS (P) 54 LTD 10,00,790 D55 Aryan Corporate Soloutions Pvt Ltd 10,00,000 56Astech Marketing Private Limited6,81,321 57 Jotindra Steel & Tubes Ltd 5,00,250 E58 Amrapali Infrastructure Private Limited 2,94,829 TOTAL51,37,23,732

Few examples of diversion of funds are as under:

1. Guru Kripa Traders-2

RS. 3 crore was paid as advance to them in October 2010 whichremained as it is till January 2011, when expenses for purchase ofsteel were booked against the aforementioned advance. Below isthe extract of relevant portion of ledger.

DateParticularsVch TypeDebitCreditBalance05/10/2010 Bank of Baroda Payment15000000.0015000000.00 A/C No -Dr 21580200000079

478SUPREME COURT REPORTS

06/01/2011 STEEL Purchase 1118674.00 12692022.00 AU.P Dr 07/01/2011 STEEL Purchase 1034488.00 11657534.00 U.PDr07/01/2011 STEEL Purchase 1087996.00 10569538.00 U.P Dr 08/01/2011 STEEL Purchase 1082110.00 9487428.00 U.P Dr 08/01/2011 STEEL Purchase 1054092.00 8433336.00 BU.PDr09/01/2011 STEEL Purchase 1116534.00 7316802.00 U.P Dr 10/01/2011 STEEL Purchase 1109399.00 6207403.00 U.P Dr 10/01/2011 STEEL Purchase 1073727.00 5133676.00 U.PDr10/01/2011 STEEL Purchase 1087996.00 4045680.00 CU.P Dr 11/01/2011 STEEL Purchase 1062669.00 2983011.00 U.P Dr 11/01/2011 STEEL Purchase 889730.00 2093281.00 U.PDr12/01/2011 STEEL Purchase 1023600.00 1069681.00 U.P Dr D13/01/2011 STEEL Purchase 1097561.00 27880.00 Cr U.P 31/03/2012 REBETE & Journal 27880.00 DISCOUNT30027880.00 30027880.00

2. Shri Balaji Cement & Hardware

RS. 2.08 crore was paid as advance to them towards the end ofMarch 2011 against which expense was booked on 31[st] March2011 and continued till 1[st] week of April 2011. It was noticed thatthe same person was selling steel, bricks, cement, rodi sand,badarpur, which itself is in unorganised sector and is questionable.

DateParticularsVch TypeDebitCreditBalance19/03/2011Bank of Baroda Payment3949500.003949500.00 A/C No -Dr 2158020000007921/03/2011Bank of Baroda Payment3851500.007801000.00 A/C No -Dr 2158020000007926/03/2011Bank of Baroda Payment6450500.0014251500.00 A/C No -Dr 2158020000007928/03/2011Bank of Baroda Payment6550800.0020802300.00 A/C No -Dr 21580200000079

480SUPREME COURT REPORTS[2019] 9 S.C.R.A31/03/2011BADARPURPurchase 456225.0020346075.00 U.P Dr 31/03/2011CementPurchase 490875.0019855200.00 U.P Dr 31/03/2011STEELPurchase 495666.0019359534.00 U.PDrB31/03/2011BADARPURPurchase 471345.0018888189.00 U.PDr31/03/2011CementPurchase 496650.0018391539.00 U.PDr31/03/2011STEELPurchase 483946.0017907593.00 U.PDr31/03/2011CementPurchase 505313.0017402280.00 CU.P Dr 31/03/2011BADARPURPurchase 525945.0016876335.00 U.P Dr 31/03/2011STEELPurchase 27300.0016849035.00 U.PDr31/03/2011CementPurchase 493763.0016355272.00 U.PDrD31/03/2011BADARPURPurchase 476280.0015878992.00 U.PDr31/03/2011STEELPurchase 470905.0015408087.00 U.P Dr 31/03/2011CementPurchase 502425.0014905662.00 U.P Dr 31/03/2011BADARPURPurchase 510678.0014394984.00 EU.P Dr 31/03/2011STEELPurchase 469124.0013925860.00 U.PDr31/03/2011CementPurchase 501843.0013424017.00 U.PDr31/03/2011BADARPURPurchase 438375.0012985642.00 U.PDrF31/03/2011CementPurchase 750750.0012234892.00 U.P Dr 31/03/2011BADARPURPurchase 754950.0011479942.00 U.P Dr 31/03/2011STEELPurchase 766725.0010713217.00 U.PDr31/03/2011CementPurchase 782513.009930704.00 U.PDrG31/03/2011BADARPURPurchase 754320.009176384.00 U.PDr31/03/2011STEELPurchase 767644.008408740.00 U.PDr31/03/2011CementPurchase 779625.007629115.00 U.P Dr

31/03/2011BADARPURPurchase 778260.006850855.00 U.P Dr 31/03/2011CementPurchase 788288.006062567.00 U.P Dr 01/04/2011RodiPurchase 884331.005178236.00 U.PDr01/04/2011CementPurchase 931392.004246844.00 BU.PDr01/04/2011RodiPurchase 882872.003363972.00 U.PDr01/04/2011BricksPurchase 853965.002510007.00 U.PDr01/04/2011STEELPurchase 844356.001665651.00 U.P Dr C02/04/2011Bank of Baroda Payment2310500.003976151.00 A/C No -Dr 2158020000007902/04/2011Bank of Baroda Payment5848200.009824351.00 A/C No -Dr 2158020000007902/04/2011CementPurchase 935550.008888801.00 DU.P Dr 02/04/2011SandPurchase 839969.008048832.00 U.PDr04/04/2011BricksPurchase 876120.007172712.00 U.PDr04/04/2011SandPurchase 831527.006341185.00 U.PDrE05/04/2011STEELPurchase 841333.005499852.00 U.P Dr 05/04/2011STEELPurchase 849350.004650502.00 U.P Dr 06/04/2011BricksPurchase 884147.003766355.00 U.P Dr 06/04/2011CementPurchase 284130.003482225.00 FU.PDr07/04/2011RodiPurchase 884321.002597904.00 U.PDr07/04/2011CementPurchase 931392.001666512.00 U.PDr12/04/2011BricksPurchase 872193.00794319.00 U.P Dr G12/04/2011STEELPurchase 853780.0059461.00 CrU.P 28961000.0029020461.00Closing Balance59461.0029020461.0029020461.00H

3. Investor Clinic Infratech Private Limited

It is evident from the books of accounts that loan funds wereutilized for payment of RS. 2 crore who had invoiced the companyfor brokerage expense which is not construction linked payment.Brokerage is an indirect expense, incurred for the sale of flat.BThe banks had granted funds for construction activity and not forsale activity. This is clearly diversion of loan funds to unapproved

means.

4. Shiva Traders

RS. 2 crore was paid as advance on 9[th] October 2010 againstCwhich subsequently invoices for purchase of steel were bookedin December 2010 only to adjust the balance.

Date Particulars Vch Type Debit Credit Balance 09/10/2010 Bank of Baroda Payment A/C No -2,00,00,000 2,00,00,000 21580200000079D11/12/2010 STEEL Purchase U.P 10,39,959 1,89,60,041 13/12/2010 STEEL Purchase U.P10,39,964 1,79,20,077 14/12/2010 STEEL Purchase U.P 8,31,947 1,70,88,130 15/12/2010 STEEL Purchase U.P 12,47,950 1,58,40,180 E16/12/2010 STEEL Purchase 12,47,945 1,45,92,235 U.P17/12/2010 STEEL Purchase U.P 14,55,941 1,31,36,294 18/12/2010 STEEL Purchase U.P 12,47,958 1,18,88,336 20/12/2010 STEEL Purchase U.P10,39,965 1,08,48,371 01/01/2011 STEEL Purchase FU.P 8,47,103 1,00,01,268 03/01/2011 STEEL Purchase U.P 10,55,136 89,46,132 04/01/2011 STEEL Purchase U.P10,51,612 78,94,520 05/01/2011 STEEL Purchase U.P 10,63,874 68,30,646 06/01/2011 STEEL Purchase GU.P10,85,323 57,45,323 07/01/2011 STEEL Purchase U.P10,48,579 46,96,744 08/01/2011 STEEL Purchase U.P 10,77,182 36,19,562 10/01/2011 STEEL Purchase U.P10,73,193 25,46,369 11/01/2011 STEEL Purchase HU.P 10,79,473 14,66,896

12/01/2011STEEL Purchase U.P 8,08,790 6,58,106 13/01/2011STEEL Purchase U.P6,56,927 1,179 31/03/2011Short & Excess Journal A/c 1,179 20000000.00 2,00,00,000

5. Om Traders

RS. 1.35 crore was paid in September 2010 against whichsubsequently invoices for purchase of steel were booked inDecember 2010 only to adjust the balance.

DateParticularsVch TypeDebit Credit Balance 02/06/2010 BOM-SEC51 A/C Payment 50,00,000 50,00,000 No - 60036386553 03/06/2010 Hardware Item Purchase 8,76,488 41,23,512 U.P 24/06/2010 Hardware Item Purchase 9,20,241 32,03,271 U.P 03/07/2010 Hardware Item Purchase 7,57,796 24,45,475 U.P 04/07/2010 Hardware Item Purchase 7,56,000 16,89,475 U.P05/07/2010Hardware ItemPurchase 7,20,421 9,69,054 U.P10/08/2010Steel PurchasePurchase 9,77,734 8,680 U.P14/09/2010 HDFC BANK(L.N) Payment 50,00,000 49,91,320 22/09/2010 BOM-SEC51 A/C Payment 60,00,000 1,09,91,320 No - 60036386553 27/09/2010 Bank of Baroda Payment 85,00,000 1,94,91,320 A/C No -2158020000007901/10/2010Bank of Baroda Payment50,00,000 2,44,91,320 A/C No -21580200000079 22/10/2010 BOM-SEC51 A/C Payment 1,50,00,000 3,94,91,320 No - 60036386553 25/10/2010 HDFC BANK(C.P)-Payment 1,00,00,000 4,94,91,320 14018640000045 01/02/2011 Hardware Item Purchase 9,90,150 4,85,01,170 U.P 01/02/2011 Hardware Item Purchase 9,49,200 4,75,51,970 U.P01/02/2011Hardware ItemPurchase 9,98,025 4,65,53,945 U.P01/02/2011 Hardware Item Purchase 9,48,518 4,56,05,427 U.P01/02/2011 Hardware Item Purchase 9,18,750 4,46,86,677 U.P 01/02/2011 Hardware Item Purchase 9,06,203 4,37,80,474 U.P 01/02/2011 Hardware Item Purchase 7,80,780 4,29,99,694 U.P

484SUPREME COURT REPORTS

[2019] 9 S.C.R.

A01/02/2011 Hardware Item Purchase 9,45,000 4,20,54,694 U.P 01/02/2011 Hardware Item Purchase 11,08,275 4,09,46,419 U.P 01/02/2011 Hardware Item Purchase 9,41,850 4,00,04,569 BU.P01/02/2011Hardware ItemPurchase 12,81,000 3,87,23,569 U.P01/02/2011 Hardware Item Purchase 9,06,780 3,78,16,789 U.P01/02/2011 Hardware Item Purchase 9,08,523 3,69,08,266 U.P01/02/2011 Hardware Item Purchase 7,38,203 3,61,70,063 CU.P 01/02/2011 Hardware Item Purchase 11,24,928 3,50,45,135 U.P 01/02/2011 Hardware Item Purchase 9,70,305 3,40,74,830 U.P01/02/2011Hardware ItemPurchase 8,93,550 3,31,81,280 U.P01/02/2011 Hardware Item Purchase 8,91,030 3,22,90,250 DU.P01/02/2011 Hardware Item Purchase 8,94,548 3,13,95,702 U.P 01/02/2011 Hardware Item Purchase 8,49,450 3,05,46,252 U.P 01/02/2011 Hardware Item Purchase 9,31,718 2,96,14,534 U.P 01/02/2011 Hardware Item Purchase 9,31,718 2,86,82,816 EU.P01/02/2011Hardware ItemPurchase 8,80,530 2,78,02,286 U.P01/02/2011 Hardware Item Purchase 9,63,375 2,68,38,911 U.P01/02/2011 Hardware Item Purchase 10,62,810 2,57,76,101 U.P F01/02/2011 Hardware & Purchase 9,29,198 2,48,46,903 Sanitary Items U.P 01/02/2011 Hardware Item Purchase 8,13,750 2,40,33,153 U.P 02/02/2011 Hardware Item Purchase 8,56,800 2,31,76,353 U.P03/02/2011 Hardware & Purchase 11,98,050 2,19,78,303 Sanitary Items U.P G04/02/2011Hardware & Purchase 9,85,950 2,09,92,353 Sanitary Items U.P 05/02/2011Hardware & Purchase 10,58,925 1,99,33,428 Sanitary Items U.P

06/02/2011Hardware ItemPurchase 9,39,750 1,89,93,678 U.P 07/02/2011Hardware ItemPurchase 8,04,825 1,81,88,853 U.P 08/02/2011Hardware ItemPurchase 9,50,250 1,72,38,603 U.P09/02/2011Hardware ItemPurchase 8,80,824 1,63,57,779 U.P09/02/2011Hardware & Purchase 8,30,771 1,55,27,008 Sanitary Items U.P 10/02/2011Hardware & Purchase 7,70,921 1,47,56,087 Sanitary Items U.P 11/02/2011Hardware & Purchase 7,88,130 1,39,67,957 Sanitary Items U.P 12/02/2011Hardware ItemPurchase 9,03,693 1,30,64,264 U.P13/02/2011Hardware ItemPurchase 8,31,180 1,22,33,084 U.P 14/02/2011Hardware ItemPurchase 6,44,532 1,15,88,552 U.P 14/02/2011Hardware ItemPurchase 9,58,073 1,06,30,479 U.P15/02/2011Hardware ItemPurchase 9,56,802 96,73,677 U.P16/02/2011Hardware ItemPurchase 9,25,344 87,48,333 U.P17/02/2011Hardware ItemPurchase 9,03,231 78,45,102 U.P18/02/2011Hardware ItemPurchase 6,48,732 71,96,370 U.P 18/02/2011Hardware ItemPurchase 8,02,578 63,93,792 U.P 19/02/2011Hardware ItemPurchase 8,49,912 55,43,880 U.P 20/02/2011Hardware ItemPurchase 9,77,550 45,66,330 U.P21/02/2011Hardware ItemPurchase 8,68,004 36,98,326 U.P22/02/2011Hardware ItemPurchase 10,56,930 26,41,396 U.P 23/02/2011Hardware ItemPurchase 8,29,500 18,11,896 U.P 24/02/2011Hardware ItemPurchase 9,21,413 8,90,483 U.P 25/02/2011Hardware ItemPurchase 8,79,564 10,919 U.P31/03/2012REBETE & Journal10,919 DISCOUNT 54500000.005,45,00,000

A6. Mauria Udyog LimitedRS. 3 crore was diverted to the company on 29[th] September2010 and 30[th] March 2011 for RS. 1 crore & 2 crore respectivelyas advance and the same was subsequently booked againstpurchase of steel in January 2011 and May 2011 only to adjust theBbalance.DateParticularsVch TypeDebit Credit Balance 29/09/2010 Bank of Baroda Payment A/C No -1,00,00,000 1,00,00,000 21580200000079 C14/01/2011 STEEL Purchase U.P 17,43,440 82,56,560 14/01/2011 STEEL Purchase U.P 17,87,807 64,68,753 14/01/2011 STEEL Purchase U.P17,77,211 46,91,542 14/01/2011STEELPurchase U.P17,81,419 29,10,123 D16/01/2011 STEEL Purchase U.P22,16,525 6,93,598 20/01/2011 STEEL Purchase U.P 2,96,570 3,97,028 20/01/2011 STEEL Purchase U.P 2,97,012 1,00,016 30/03/2011 Bank of Baroda Payment A/C No -2,00,00,000 2,01,00,016 E21580200000079 13/05/2011 STEEL Purchase U.P22,15,039 1,78,84,977 16/05/2011 STEEL Purchase U.P 20,97,410 1,57,87,567 F17/05/2011 STEEL Purchase U.P 22,02,653 1,35,84,914 17/05/2011 STEEL Purchase U.P 21,12,682 1,14,72,232 30/05/2011 STEEL Purchase 21,09,193 93,63,039 U.P30/05/2011 STEEL Purchase U.P21,72,250 71,90,789 30/05/2011 STEEL Purchase GU.P22,02,076 49,88,713 30/05/2011 STEEL Purchase U.P 20,00,371 29,88,342 31/05/2011 STEEL Purchase U.P 22,91,842 6,96,500 31/05/2011 STEEL Purchase U.P 21,58,699 14,62,199 31/05/2011 STEEL Purchase HU.P23,54,459 38,16,658

22/08/2011 STEEL Purchase U.P 20,90,696 59,07,354 22/08/2011 STEEL Purchase U.P 12,11,312 71,18,666 22/08/2011 STEEL Purchase U.P19,90,348 91,09,014 22/08/2011 STEELPurchase U.P20,68,279 1,11,77,293 22/08/2011 STEEL Purchase U.P15,67,565 1,27,44,858 22/08/2011 STEEL Purchase U.P23,08,793 1,50,53,651 22/08/2011 STEEL Purchase U.P 22,68,774 1,73,22,425 22/08/2011 STEEL Purchase U.P 22,56,451 1,95,78,876 01/01/2012 STEEL Purchase U.P22,46,743 2,18,25,619 01/01/2012 STEELPurchase U.P23,01,728 2,41,27,347 01/01/2012 STEEL Purchase U.P23,25,626 2,64,52,973 01/01/2012 STEEL Purchase U.P 23,49,055 2,88,02,028 3,00,00,000 5,88,02,028 Closing Balance 2,88,02,028 5,88,02,028 5,88,02,028

1. In the case of Amrapali Princely Estate Pvt Ltd:

Syndicate bank and Bank of India together approved term loanamounting to Rs.100 crore to develop housing project at Plot noGh-02/A, Sector-76, Noida over an area of 15.15 acres consistingof 19 towers. These funds were granted on 13[th] April 2013 and15[th] May 2013, 6[th] March 2014 and 28[th] March 2014 for Rs. 25crore each time.

Against the aforesaid term loan, the banks secured first pari passucharge over the entire project assets of Amrapali Princely EstatePvt Ltd (including building under construction & constructionmaterial kept at site) & receivable excluding advance bookingmoney. The banks also secured second pari passu charge (withfirst charge on land with Greater Noida Authorities) by way ofequitable mortgage on 61300 square metres of the project land atplot no.Gh-02,Sector-76, Noida

Immediately on receipt, these funds were diverted to several thirdparties as stated hereunder:

488SUPREME COURT REPORTS[2019] 9 S.C.R.AS.No.ParticularsPayments1 FIXED DEPOSIT BOI 8,25,00,000 2 Bhagirathi Tubes B/p 6,51,80,135 3Raj Shree Ispat4,20,00,000 B4 Vrindavan Buildcon Pvt Ltd 4,00,00,000 5 Kapila Buildhome Pvt Ltd. 3,70,00,000 6Sameer Builtaid Pvt Ltd.3,32,07,919 C7 Gaurisuta Infrastructure Pvt Ltd. 3,00,00,000 8 Radius Synergies Pvt Ltd 2,90,00,000 9Lakshmi Steels2,87,00,000 10 Arhaan Enterprises 2,25,00,000 DBank of India Loan A/c No-11 605965410000120 1,70,25,946 12GaurisutaBuildhome Pvt Ltd.1,40,00,000 13 SBL Construction P Ltd (Tower C& D) 1,30,77,888 E14 Shri Balaji International 1,19,58,509 15Jaypeeco India1,11,79,965 16 Lakshmi SteelB/p 1,00,00,000 17Amrapali Sapphire Developers Pvt Ltd84,22,323 F18 SPS Buildtech Pvt Ltd (Tower-B & K) 84,06,223 19 Syndicate Bank A/c No-87801010004689 32,00,000 20Shriv Build Mat Pvt Ltd.20,00,000 21 Ashtech Marketing Pvt Ltd. 16,62,747 G22 GAURISUTA INFRASOLUTION PVT.LTD 10,00,000 23AAUSH RAJ7,95,339 24 Pradhan Projects 1,02,271 HTOTAL 51,29,19,265

(i) Fixed deposit – The Company made fixed deposit ofRs. 8.25 Crore and out of which Rs. 3.75cr was outstanding ason 31[st] March 2015 which we could find if utilized for businesspurpose. Rs. 4.50 cr. was used for repayment of Loan

(ii) Radius Synergies Pvt Ltd – It is seen that RS. 1.55 crorewas given as advances since 2013 and continued giving advancestill 2015 to this party. Out of these funds an amount of Rs.1 croreis outstanding till 31[st] March 2015. Out of advances for Rs.1.55crore, expenses were booked only for Rs.52 lakh for labourcharges in 2014. The veracity of the expenses booked is to beexamined

(iii) Shriv Build Mat India Pvt – It is seen that Rs.20 Lakh wasgiven as advance in 2014 which has not returned subsequentlyand no expense was also booked.

2. In the case of Amrapali Eden Park Developers Pvt Ltd:

Eden Park Developers Pvt Ltd received term loan of RS. 45 crorefor development of project ‘Amrapali Eden Park’ in March 2013from Corporation Bank to develop housing project. Against this,the company mortgaged plot No 27, Block F, Sector-50, Noida,Gautam Budh Nagar, U.P.

Immediately on receipt, these funds were diverted to several thirdparties as stated hereunder:

Name of partyAmount (RS. in crore)Gaurisuta Infrastructure Private Limited 2.00 Siddhi Interiors Private Limited 0.40 Ishaan Housing & Construction 1.00 Ishaan Infotech1.00Ishaan Infraestates India Private Limited1.00Reinfo Tech Estates Private Limited1.00Gaurisuta Infrastructure Private Limited2.48S.R. Steels0.50Tashima Construction Private Limited 0.50 Witty One Stop Solution Private Limited 0.50 Happy Worker Private Limited 0.50

ASpyy Traders Private Limited0.50New Tech Shelters Private 0.50 BOM-CA-60024309220 3.00 Dynamic Realcom Private Limited 2.00 Financial World Private Limited2.00BTotal18.88

25. OTHER OBSERVATIONS

1. Cozy Habitat Builders Pvt. Ltd.

It is holding 25% shareholding in Heart Beat City Project Controlledby three Companies namely Three Platinum, Softtech Pvt. Ltd.,Pebbles Prolease Pvt. Ltd. and baseline Infra Developers Pvt.Ltd.

Cozy Habitat Builders Pvt. Ltd. Received Rs. 30,00,000 fromAmrapaliand Paid Rs. 15,00,000 to Mr. Shiv Priya. We areDtherefore the opinion thatthat Rs. 15,00,000 should be recoveredfrom Cozy Habitat Builders Pvt. Ltd. and be deposited to thetreasury of the Honourable Supreme court.

2. DFC Projects Private Limited

The management of DFC Projects Pvt. Ltd. as informed wereproviding services to Amrapali Group for arranging funds. Wefound that there invoices were paid within period of 2-3 daysfrom the date of raising the invoices which raises doubt whetherthere were the invoices raised for services rendered or wereadjustments. The properties/flats were booked in the nameof DFC group about which the directors Mr.Pankaj Sharmaand Mr.VinayRai showed total ignorance. Consequent tothe questioning they agreed to surrender the flats.

(Refer ANNEXURE XIII.6)

3. Chaudhary ENT Udyog (Supplier of Bricks)

As per the copy of the receipts issued by Amrapali Group ofCompanies, it has been observed that the party had paid INR500,000 in cash on 24[th] February, 2017 vide receipt number 3074Dated 24.02.2017 (Copy enclosed) on account of flat Number

T6-G06 that was allotted to the said party in Amrapali Grand onaccount of outstanding amounts due from Amrapali Group ofCompanies. The Company has not recorded the receipt of theaforesaid amount of INR 500,000 in their books of account.

This shows that this money has been taken away by theManagement and hence should be recovered from them.

It was further informed by the supplier, that Amrapali Group ofCompanies committed fraud since this flat is already sold to Mr.Nikhil Kumar Datta. The party came to know of this on 31[st]August, 2018, when he received letter dated 18[th] August, 2018from IDBI Bank seeking payment for overdue amount in the nameof Mr. Nikhil Kumar Datta.

This serious kind of fraud done by the Amrapali Group ofCompanies. The party has even written letter to Police, UttarPradesh against the aforesaid fraud. Copy of the said letter topolice along with the letter issued by IDBI Bank to Mr. NikhilKumar Datta has been enclosed as Annexure 34-D.

4. Closing Inventory as per Audited Financial Statement ason 31[st] March, 2015

There is no stock list, valuation certificate or any documentaryevidence regarding physical verification with the company or in

Athe Statutory Auditors file. We are of the view that these are onlyarbitrary figures shown in the Audited Financial Statements.

5. Fixed Assets

a) Building Account

BDuring the financial year 2013-14 sum of INR 80.34 croreshas been capitalized to Building A/c by crediting various purchase/expense account as per journal voucher passed on 31/03/14 asper the copy of the voucher given below.

This entry seems to be mere adjustment entry since there is noValuation report on the basis of which these expenses arecapitalized to Building account and no working sheet of the sameis available.

We are of the view that this amount has been taken away by theManagement of the Company and this amount should be recoveredfrom them.

6. Royalgolf Link City Projects Private Limited

It has been observed that sum of INR 4 Crores approximatelyis recoverable from M/s Royalgolf Link City Projects PrivateLimited (Royalgolf) in the books of Amrapali Infrastructure Pvt.Ltd. on account of supply of precast materials.

Mr. Shiv Priya was the Director of this Company from 26.9.2014(Date of Incorporation of the company) to 3.4.2017. ThisCompany was formed as SPV for Cozy/Bagadiya Group ofCompanies with Mr. Shiv Priya as the Director of Royalgolflaunched for project “Hemisphere” . Amrapali Group of Companiesthrough Ultra Home Construction Private Limited and AmrapaliInfrastructure Pvt. Ltd. had given loan to Royalgolf mainly forpurchase of land and its registration thereof. dispute aroseamongst the Company in six months of its operations and on 1[st]April, 2015 Loan Settlement Agreement was signed betweenAmrapali Group, Cozy/ Bagadiya Group vide which 30 Villasvaluing approximately INR 50.47 cr. were earmarked forAmrapali Group.

Amrapali Infrastructure Pvt. Ltd. (Infra) was the Supplier ofPrecast Building material and they were to supply these materialsfor “Hemisphere” project worth INR 67 crores approximately.However, Infra could supply only 24% of the contract value anddue to difference between Amrapali Group and Royalgolf, thecontract was terminated in June, 2017.

Proceedings under IBC 2016 were initiated by Royalgolf againstInfra and they filed claim for INR 17.50 crores with the IRPappointed by NCLT. The matter is still in dispute at NCLT for theclaimed loan of 17.50 crores lodged by Royalgolf on AmrapaliInfra.

7. Hire Charges Received

The Group companies had paid hire/erection charges from thevarious group companies for example Amrapali Infrastructurereceived Rs.170.15 crores during the period 2008-15. (Volume II– Page 306) It was further observed that there have been nodetails regarding the equipment given on hire to each companyand the basis of raising bills on account of hire charges. It seemsthat bills for hire charges have been raised on arbitrary basis andthere are no comparative quotations for the same available.

26. STATUS OF DATA AVAILABILITY

There is overlapping in accounting data from April 2016 toSeptember 2016 and we found that few entries were entered inFARVISION and few in the tally for the said period.

Due to scarcity of time audit not completed of following companies/entities/persons:

Amrapali Princely Estate Pvt. Ltd.

Jotindra steels & tubes Ltd.

The following companies were carved out by Amrapali Group,which are being audited and report on these companies will besubmitted.

1) Prem Mishra Indore.

2) O2 Valley Noida

3) Heart beat city projects Noida.

27. M.S. Dhoni

It is observed that the Company Amrapali Sapphire DevelopersPrivate Limited has paid sum of Rs. 6.52 Crores out of the totalamount of Rs. 42.22 Crores paid from the Amrapali group ofCompanies to Rhiti Sports Management Private Limited duringthe years 2009 - 2015.

This sum has been paid on account of Agreements executed byShri Anil Kumar Sharma, CMD for and on behalf of AmrapaliGroup of Companies with Rhiti Sports Management Private

Limited. There is no resolution on record authorizing Mr. AnilKumar Sharma, CMD to enter into an agreement on behalf of allAmrapali group of Companies.

There were various agreements as per details given below:

a) Endorsement Agreement dated 22[nd] November, 2009

According to this agreement Mr. Mahendra Singh Dhoni will makehimself available to the Chairmen for three days along with onerepresentative of Rhiti Sports. There are no documents held onrecord for compliance of this condition.

b) According to the Agreement for sponsorship dated 20[th] March,2015, Amrapali Group of Companies got right to advertise as LogoSpace at various places in the IPL 2015 for Chennai Super Kings.It is observed that this Agreement is on plain paper and executedonly between Amrapali and Rhiti Sports Management PrivateLimited and there are no signatories on behalf of Chennai SuperKings to this Agreement. No Resolution in favour of Shri ArunPandey, Signatory of Rhiti Sports Management Private Limited isattached with the said Agreement.

This clearly shows that these Agreements have just been madefor payment of amounts to Rhiti Sports Management PrivateLimited Company are Sham Agreements and made just for makingpayments to Rhiti Sports Management Private Limited. We feelthat Home Buyers money has been diverted illegally and wronglyto Rhiti Sports Management Private Limited and should berecovered from them as the said Agreement in our opinion do notstand the test of Law.

Amrapali Mahi Developers Pvt Ltd

Mr. Mahendra Singh Dhoni, husband of Ms. Sakshi Singh Dhoni(director of company) was the brand ambassador of Amrapaligroup and have carried out number of transactions withrespect to endorsement of Amrapali group’s projects. He hasentered in agreements with other group company.

We are informed verbally that this company was incorporatedfor development of project in Ranchi. An MOU was also

[2019] 9 S.C.R.

entered between the parties though we were not provided acopy of that. We understand that copy of MOU is availablewith Mr. Adhikari.

In Amrapali Sapphire Developers Private Limited Flat (Flat No– TC-P04) has been booked in the name of Rhiti SportsManagement Private Limited by passing an adjustment entry.However Mr Sanjay Pandey of Rhiti Sports Management PvtLtd denied booking of any such flat. He also confirmed that neitherthe company nor any individual has any flat in Amrapli Group. MrPandey confirmed that no due diligence was carried out beforeaccepting the brand endorsement though he informed that brandvalue and paying capacity was seen. No Agreement was providedthough it was agreed that it would be provided by 11[th] March,2019. Expenses were reimbursed to Rhiti Entertainment PrivateLimited group company, without any agreement.

28. Properties alienated

Chart

The group started alienated the properties starting from 2015-16 ,and many properties were transferred when the case was pendingbefore the Honourable Court with criminal mind to alienate theassets. The funds were routed from one account to another andproperties were registered in benami names.

For the assets sold up to 31/3/2015, we didn’t generally findanything in contravention of the details submitted in affidavit ChartD.

We have categorized the Chart-D transactions into following 3categories:

Category A– The properties attached should be sold off andrecover the amount.

Category B– The properties attached should continue to beattached.

Category C- The properties attached should be releasedoff.

Name of Name of the AreaCategoryDate of Page no of Company of party to which transfer supplementary Amrapali Group allotment/sale report was made CATEGORY-A Ultra Home SKN Hospitality 1067.50 15[th] March 2791-2796 BConstruction Pvt Ltd sq. mtr. 2017 Pvt LtdAmrapali Homes Bhuvneshwar 6.52 AAvailable2781 Project Pvt LtdlandAcresAmrapali Homes Pradeep Mishra 123171 21[st] August 2779-2780 Project Pvt Ltdsq. ft.2017Amrapali Sarvome 7108 10[th]July 2768-2769 Smartc Housing Pvt Ltdsq. ft. 2017 City Developers Pvt LtdAmrapali Dream High Life 8500 Available 2770 Valley Pvt Ltd Commercial sq. ft. Amrapali Bihariji 22621 10[th]July 2767-2768 Smartcity Developers Pvt sq. ft. 2017 Developers Pvt Ltd LtdAmrapali Bihariji High 31202 10[th]July 2782-2783 DLeisure Valley Rise Pvt Ltd sq. ft. 2017 Pvt Ltd Amrapali Bihariji High 13928 10[th]July 2782-2783 Leisure Valley Rise Pvt Ltd sq. ft. 2017 Pvt LtdAmrapali Bihariji High 7020 10[th]July 2785-2786 Centurian Park Rise Pvt Ltd sq. ft. 2017 Pvt Ltd EAmrapali Bihariji 22621 10[th]July 2785-2786 Centurian Park Properties Pvt sq. ft. 2017 Pvt LtdLtdUltra Home Shri Viniyak 6120 2[nd]April 2790 Construction Avas Pvt Ltd sq. ft. 2014 Pvt Ltd Amrapali Sarvome 16500 10[th]July 2775-2776 Leisure Valley Housing Pvt Ltdsq. ft 2017 FDevelopers Private Limited CATEGORY-B Hi-Tech City Anita Chandok 4027.31 21[st]July 2755-2756 Developers Pvt sq. 2016 LtdyardsAmrapali SBL 14500 B23[rd]August 2765 GSmartcity Construction sq. ft. 2016 Developers Pvt Pvt Ltd Ltd Amrapali SBL 18450 23[rd] August 2765 Smartcity Construction sq. ft. 2016 Developers Pvt Pvt Ltd Ltd

[2019] 9 S.C.R.

AAmrapali Bhatia 6120 BAvailable2766Smartcity Properties sq. ft. Developers Pvt Ltd Amrapali Bhatia 22200 B6[th]May2777BLeisure Valley Properties sq. ft. 2015 Developers Pvt Ltd Hi-Tech City Sarbjit Leasing 1245.23 B23[rd]July 2756-2758Developers Pvt and Finance sq. 2016 LtdCompanyyardsAmrapali Vaishnavi 10261 B13[th]2758-2764Hospitality Vahini Mount sq. ft. November CServices Pvt Ltd Life Hospitality 2017 Pvt LtdSangam Anjali 3.13 B24[th]April 2753Colonizers Pvt Consultants Hectare 2017 Ltd Amrapali Dr. J P Sharma2.1 BJune 20172764Hospitality Bigha DServices Pvt LtdAmrapali Homes Ajit Kumar & 11245 B9[th]October 2780-2781Project Pvt LtdKriti Agarwalsq. ft.2017Amrapali Deepak Kumar1560B20[th]August 2784Leisure Valley sq. ft. 2016 Pvt Ltd Amrapali Dream Bihariji 16000 B10[th]July2770-2771EValley Pvt Ltd Developers Pvt sq. ft. 2017 LtdAmrapali Dream SBL 6500 B5[th]July 2771-2772Valley Pvt Ltd Construction sq. ft. 2017 Pvt Ltd Amrapali Silicon SBL 20640 B2[nd]May 2778City Pvt Ltd Construction sq. ft. 2017 Pvt LtdFAmrapali Silicon NiralaIndia 16436 B15[th]2778-2779City Pvt Ltd Developers Pvt sq. ft. October Ltd 2015 Amrapali Dream Mr. Vinay Garg11000 B15[th]2769Valley Pvt Ltd sq. ft. February 2018Ultra Home V. 82.937 B18[th]2795-2796GConstruction Thiruvenkitam Cents January Pvt Ltd & Thushara 2012 ReddyAmrapali One 16360 B25[th]2786-2787Centurian Park Flameboyant sq. mtr. September Pvt Ltd Realty Pvt Ltd 2013

CATEGORY-C

Sangam Radheshyam 3.28 C19[th]Feb 2754-2755Colonizers Pvt Yadav, Keshav Hectare 2015 Ltd Yadav, Surender Yadav, Narayan Yadav & BLakhan Yadav Amrapali PSK Finance 14853 C15[th]July 2782Leisure Valley Solution Pvt sq. ft. 2014 Pvt LtdLtdAmrapali Star Land Craft 23395 C31[st]July2784-2785Leisure Valley Pvt Ltd sq. mtr. 2013 Pvt Ltd Amrapali Dream Shri Balaji Hi 12479 C31[st]July 2772-2773CValley Pvt Ltd Tech sq. mtr. 2013 Construction Pvt Ltd Amrapali Dream K V Developers 19986 C7[th]June 2773Valley Pvt Ltd Pvt Ltd sq. mtr. 2013 Amrapali Dream J M Housing33537 C5[th]June 2773-2774Valley Pvt Ltd Ltd sq. mtr. 2013 DAmrapali Dream Samridhi 27989 C17[th]June 2774Valley Pvt Ltd Realty Home sq. mtr. 2013 Pvt LtdAmrapali Hawelia 14920C5[th]June 2787-2788Centurian Park Builders Pvt sq. mtr. 2013 Pvt Ltd Ltd Amrapali DSD Homes Pvt 14760 C20[th]June 2788ECenturian Park Ltd sq. mtr. 2013 Pvt LtdAmrapali Elegant 14590C1[st ]June 2788-2790Centurian Park Infracon Pvt Ltdsq. mtr. 2013 Pvt LtdAmrapali PSK Finance 12500 C15[th]April 2766Smartcity Solution Pvt sq. ft. 2016 Developers Pvt Ltd FLtd

29. Further Assets To be Attached

Inventory of plots at Jaipur – of company names SangamColonisers Pvt Ltd

Amrapali Power & Cement Pvt Ltd – Land from CharuRai yet to be identified, Land from UPSIDC yet to beidentified.

Vinayaka Projects at Greater Noida

500SUPREME COURT REPORTS

[2019] 9 S.C.R.

A30. Statement of cash flowReceipt and Payment Statement (Amount in crores)S.NoName of the CompanyAmount Cost of Remarks/Assumptionsreceived as Construction per Chart-taken from of latest affidavit of audited Bpromoters financial submitted statements on 3rd available Dec'181 Received from CustomersAmrapali Centurian Park Pvt Ltd1050.83573CAmrapali Dream Valley Pvt Ltd1270.5549Amrapali Leisure Valley Pvt The group received Rs 11573 Ltd 1563.17594Crore from th homebuyers Amrapali Sapphire and spent Only Rs. 7,389 Developers Pvt Ltd 1186.66828Crore on construction Amrapali Silicon City Pvt Ltd1468.791126including land payment to Amrapali Smartcity authorities. It is pertinent to DDevelopers Pvt Ltd1230.87780note it includes borrowing cost also. Any amount of Amrapali Zodiac Developers Pvt Ltd 835.69566expenditure which was outstanding is not considered Hi Tech City Developers Pvt Ltd 113.18104.16in the given tabe and it is prepared on the bsia of Amrapali Eden Park audited financial statements Developers Pvt Ltd 171175.14latest available upto March Sangam Colonizer Pvt Ltd9.587.61E2015 except one company for Amrapali Grand 217104.98which it is March 2016. It was Amrapali Princely Estate Pvt found at any given point of Ltd724.55578time the amount received Amrapali Leisure Valley from homebuyers was never Developers Pvt Ltd505.19355in short Amrapali Homes Project Pvt Ltd*103103UltraHome Construction Pvt FLtd* 1123.12945Sub Total (A)11573.137388.89Sales of 2Property/FSI/Facilities 358.68 As per affidavit The amount paid to bank as per Chart of affidavit is G2394 crore. We could not verify the number of amount paid in absence of details being not available. We worked out the otstanding loan amount from audited 3 Bank2712.021827financial statements of 2015.H

The amount borrowed in Aagainst private equity which has no liabilty of principal and interest and the investor would recover his its investments by selling the shares on/off market. Investment in the form of compulsory convertible debenture and optionally Bconvertible would have interest liabilty upto date of conversion. the debenture were note converted on due dates . Furthermore the amount invested was diverted immediately upon receipt to 4FDI/Financial Institution 52065unapproved purposes. Number has been taken from Caffidavit and has not been 5Investors300200verified by us.Number has been taken from affidavit and has not been 6Partner Investment 150150verified by us. Sub Total (B)4040.72242Grand Total (A+B)15613.839630.89Difference5982.94Short cashflowD

1 The above does not include the cash received from customers.

2 * Assumed the figure as given in the affidavit.

31. Mrs. Manju Rajpal and Mr. Ramesh Rajpal

Mrs. Manju Rajpal and Mr. Ramesh Rajpal HUF each investedRs 7.5 crore in May 2011 on interest in Amrapali Leisure ValleyPrivate Limited. The rate of interest is 18%. However he claimedin his submission that it was an investment in residential propertyfor his staff because he was having plan to shift his businessoperations in Noida. He submitted that he acquired this propertyfor residence of his staff. On reviewing the return of income ofMrs. Manju Rajpal (Refer annexure S-1 of supplementaryreport page no. 2823) and Mr. Ramesh Rajpal we found thatamount invested in various units as given below:

1. Mr. Ramesh Rajpal – Unit No A-388 admeasuring 20,200sq. feet in Amrapali Leisure Valley Private Limited for RS 7.5Cr. However, due to company’s inability to handover the said villa,8 units were allotted instead. Refer Annexure S-2 ofsupplementary report page no. 2824

We found Unit No A-388 in Amrapali Leisure Valley PrivateLimited is booked in the name of Mr. Joginder Sharma on 13[th]February, 2016 admeasuring area 2525 sq. feet for value of Rs1.29 crore. It depicts very clearly that there was no unitadmeasuring an area of 20,200 sq feet and the amount wasinvested for purpose to avail Capital Gain benefits andearn interest on investment at the rate 18% p.a. It is recommendedthat the units allotted as per Annexure S-2 of supplementaryreport page no. 2824 should be treated as vacant and beavailable for sale.

2. Mrs. Manju Rajpal – Unit No A-396 admeasuring 17,675sq. feet in Amrapali Leisure Valley Private Limited for RS 7.5Cr claimed as Long term Capital gain. It is claimed, due tocompany’s inability to handover the said villa, 53 units were allottedinstead. Refer Annexure S-3 of supplementary report pageno. 2825-2826.

We found Unit No A-396 in Amrapali Leisure Valley PrivateLimited is booked in the name of Mr. Satya Vir Srivastava on 14[th]July, 2014 admeasuring area 2525 sq. feet for value of Rs 65.5Lakh. It depicts very clearly that there was no unitadmeasuring an area of 17,675 sq feet and the amount wasinvested for purpose to avail Capital Gain benefits and earninterest on investment at the rate 18% p.a. It is recommendedthat the units allotted as per Annexure S-3 of supplementaryreport page no. 2825-2826 should be treated as vacant and beavailable for sale.

The amount invested in residential property is claimed as Capitalgain. Subsequently in the year 2017, the villas were shifted fromAmrapali Leisure Valley Private Limited to Royalgolf Link,Amrapali Princely Estate Private Limited, Amrapali ZodiacDevelopers Private Limited, Amrapali Silicon City Private Limited,Amrapali Dream Valley Private Limited and Amrapali Smart CityDevelopers Private Limited and the villas numbers are attached.(Refer Annexure 2.2 and Annexure 2.3)

For the amount invested of Rs 15 crore, Rs 12.25 crore has beenpaid to him in the form of interest at the rate of 18%.

Exotique Exports, an entity of Mr Rajpal, invested Rs 5 crore in2010 at the interest rate of 18%. It had been paid Rs 4.55 tillFebruary 2016 in the form of interest. It is submitted that 5 unitsnamely Unit no. 118, 119, 120, 121, 122 were purchased in AmrapaliCommercial Complex Cum Corporate Hub at Plot No. Sector – 2Manesar, Gurgaon, Haryana for Rs 5Cr however the value of 5units as per Builder Buyer Agreement is Rs 3.19 Cr.

32. M/s Surbhaee Advertising Private Limited

(Immovable Property-A3A, Maharani Bagh, New Delhi)

(i) Mr. Paramjit Gandhi, Mr. Gagandeep Gandhi & Ms. JasmineGandhi are the directors of the company M/s Surbhaee AdvertisingPrivate Limited.

The shares of M/s Surbhaee Advertising Private Limited werepurchased by Mr. Paramjeet Gandhi & M/s Special Tools PrivateLimited (a company owned by him & his family) for Rs 1.59crore for which no agreement was provided by them.

(ii) It was informed that principal business of the company isAdvertising of Projects. However no income has been earnedfrom its principal business activity or any other source.

(iii) The company is holding an immovable property at A3AMaharani Bagh, New Delhi admeasuring approximately 800 sqyards.

It is also stated that the family of Mr. Anil Kumar Sharma isresiding in the same house against which no rent deed is agreedbetween Mr. Anil Kumar Sharma & Mr. Paramjit Gandhi(Surbhaee Advertising Private Limited)

(iv) When asked to Mr. Paramjit Gandhi who resides in Ghaziabadthat why he purchased the property in New Delhi 4-5 years back,he replied that he wanted to shift to this property.

However the fact is that he has never shifted to Delhi & all therenovation & maintenance work was overlooked by Mr. AnilKumar Sharma.

(v) The company has also taken loan of Rs. 25 crores from AdityaBirla Finance Limited in the FY 2016-17 against the hypothecation

[2019] 9 S.C.R.

of the property which was purchased for Rs 1.59 crore. Thisindicates the property value was much higher on the date oftransfer.

(vi) The company has advanced Rs. 25.88 crores as short termloans & advances to the following parties-

1. Chandan Homes Private Limited- Rs. 6.89 crores.

2. Inderjeet Arora- Rs. 1.25 crores.

3. Ishwar Steels- Rs. 2.18 crores

4. Jai Kishan Estate Developers Private Limited- Rs. 1.33crores.

5. Shekri Finance & Investment Private Limited- Rs. 3.10crores.

6. Shubha Green Private Limited- Rs. 4.77 crores.

7. Special Tools Private Limited- Rs. 3.37 crores.

8. PJ Buildtech Private Limited- Rs. 0.55 crores.

9. Paradise System Private Limited- Rs. 0.52 crores.

10. Jiwan Kumar Arora- Rs. 0.50 crores.

11. Shubhkamna Buildtech Private Limited- Rs. 0.25 crores.

(vii) The company has also received Rs. 2.35 crores & Rs. 3.55crores from Mr. Ritik Kumar Sinha & Miss Swapnil Shikharespectively, also directors in M/s Surbhaee Advertising PrivateLimited in the FY 2016-17 out of funds received from Amrapaligroup of companies enrouted via the account of Mr. Anil KumarSharma.

(viii) It implies that the property which was bought for Rs 1.59crore, the amount has been funded out of Amrapali Group fundsrouted by Mr. Anil Kumar Sharma who is family member andfrom them to Surbhaee Advertising Private Limited. Two of hisfamily members were made director to have control on theproperty of value of Rs 50 Cr. It further proves that the differencebetween the value of property and the price at which it wastransferred to Mr. Paramjit Gandhi was paid in cash out of cashamount received in Amrapali Group by booking of bogusexpenditure and selling the flats undervalued.

Opinion

Based on the facts stated above, in our opinion the property atA3A Maharani Bagh, New Delhi is “Property” belongs to Mr.Anil Kumar Sharma/Amrapali group held in the name of thecompany M/s Surbhaee Advertising Private Limited.

33. Facility Sold

It is found that the facilities sold under various projects as shownin Chart M of Affidavit submitted on 3[Rd] December, 2018 aremere adjustment entries (Refer Annexure S-10 ofsupplementary report page no. 2958-2959).

We found that the buyer is not aware of that he has purchasedany land for the mentioned facility. We further found that there isno account in the name of the said buyers in many cases to whomthe facilities were sold. It is recommended that the facilities soldso far should be attached.

34. Mr.Prem Mishra

We are of the opinion and also given to understand from varioussources that the group diverted funds in the range of 500-600crore in Madhya Pradesh projects in particular Indore. Mr.PremMishra has appeared in response to the court notice and he wasnon-cooperative. We have also received communicationsupporting our views, reproduced below-

“Good Evening Sir,

Hope you are doing well, this is regards Amrapali Scam ofCMD Anil Sharma, as per my information CMD has transferred1 thousand crore to the different Amrapali Townships projectof M.P. through Mr. Prem Mishra. The details of the same onpaper is available with me. If you can arrange some time andallow me to have detail discussion of the same, that wouldbe great.Kindly inform me two days prior to the meeting date,as I am from XXXXXX. need to do some arrangements for thesame, its request.

Waiting for your response.”

We could not complete the examination of Mr.Prem Mishra inIndore project due to paucity of time and request it to be includedin the second audit.

A35. 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 AmrapaliBGroup 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 projectCwas 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 the

Dkey managerial persons. In the absence of accounting recordswe could not proceed further on the issue.

35. Summary of recoverable amounts

Total recoveries from undermentioned areas:

S. No.Particulars Amount in Crores E1Sale of Flats at lower Prices 321.312Amount receivable from home buyers 3,624.653Amount receivable from buyers of Commercial Area 89.834Unsold Inventory Fi) Flats 1,991.69ii)Commercial Areas 345.785Amount recoverable from KMP’s and their Relatives:i)Professional fee 100.53ii)Advances Recoverable 152.24iii) Cash in hand 69.36Giv) Other recoverable 582.686Diversion of home buyer’s funds 3,152.307Non genuine purchases from suppliers 842.428Recovery from Others 32.699Unexplained cash deposits/jewellery 14.94Total 11,320.42H

1. Sale of Flats at lower prices

Total amount involved in under-valued transactions inrespect of Companies audited by us is

Rs.321.31 Crores as per summary given below:

S.no.Name of the company Number of Amount (In Refer Page NumberUnits Crores) 1Amrapali Sapphire 31576.02 Volume – I Page No. 205 - Point No. 1 Developers Private Limited 2Amrapali Leisure Valley Volume – I Page No. 705.88Developers Private Limited 222 - Point No. 1 3Amrapali Smart City 26118.97 Volume – I Page No. 232 - Point No. 1 Developers Private Limited 4Amrapali Silicon City Private 46873.05 Volume – I Page No. Limited 257 – Point No. 1 5Amrapali Dream Valley Private 1,75224.11 Volume – I Page No. Limited 248 - Point No. 1 6 Amrapali Leisure Valley Private 1228.53 [2811 ]Limited (Supplementary Audit Report) 7 Ultra Home Construction 52430.87 [2811 ]Private (Supplementary LimitedAudit Report) 8 AmrapaliCenturian Park Private1,91243.12 [2811 ](Supplementary Limited Audit Report) 9 Amrapali Princely Estate Private 1466.70 [2811 ]Limited (Supplementary Audit Report) 10 Amrapali Zodiac Developers 1076.75 [2811 ]Private (Supplementary Limited Audit Report) 11 Amrapali Patel Platinum 17927.31 [2811 ](Supplementary Audit Report) Total 5,856321.31

508SUPREME COURT REPORTS

A2. Amount Recoverable from Home BuyersA sum of Rs.3624.65 crores is recoverable from homebuyers. Detailed summary is as under:

S.no.Name of the company Amount Refer Page B(In Number Crores)1Amrapali Sapphire 46.44 Volume – I Page No. Developers Private Limited2 207 – Point No. 2 2Amrapali Leisure Valley 200.53 Volume – I Page No.222 Developers Private Limited – Point No. 2 C3Amrapali Smart City 400.00 Volume – I Page No.232 Developers Private Limited – Point No. 2 4Amrapali Silicon City Private 390.00 Volume – I Page No.257 Limited – Point No. 2 5Amrapali Dream Valley Private 724.14 Volume – I Page No.248 Limited – Point No. 26AHS Joint Venture 3.10 [Volume – II Page ]DNo.276 – Point No. 4 7 Hi Tech City Developers Volume – II Page Private Limited (Immediately 2.37No.283 – Point No. 11 recoverable)Volume II - Section XXII 8Ultra Home Construction Private 65.08(Page No. 563– 568) Limited EVolume II - Section XXII 9Amrapali Princely Estate Private 28.17(Page No. 563 – 568) Limited Amrapali Zodiac Developers PrivateVolume II - Section XXII 10Limited 26.56(Page No. 563 – 568) Volume II - Section XXII 11Amrapali Leisure Valley Private 1470.94(Page No. 563 – 568) FLimited Volume II - Section XXII 12Amrapali Centurian Park Private 240.17(Page No. 563 – 568) Limited Volume II - Section XXII 13Amrapali Eden Park Private 4.71(Page No. 563 – 568) Limited GVolume II - Section XXII 14Amrapali Grand 15.56(Page No. 563 – 568) 15Amrapali Homes Project Pvt. Ltd. Volume II - Section 6.88XXIII (Page No. 569)Total 3624.65

3. Amount recoverable from buyers of Commercial Area

sum of Rs.89.83 crores is recoverable from buyers ofCommercial area. Detailed summary is asunder:

S.no.Name of the company Amount Refer Page No.(InCrores)1Amrapali Sapphire Developers Private 7.14 Volume – I Page BLimited No.207- Point No. 32Amrapali Leisure Valley Developers Volume – I Page Private Limited 1.68No.222- Point No. 3 3Amrapali Smart City Developers Private 19.58 Volume – I Page Limited No.232- Point No. 34Amrapali Silicon City Private Limited 2.48 Volume – I Page No.257- Point No. 3 C5Amrapali Dream Valley Private Limited 6.12 Volume – I Page No.248- Point No. 3Volume – II Section 6Ultra Home Construction Private Limited 38.03XXII (Page No. 563 – 568)Volume – II Section 77Amrapali Princely Estate Private Limited5.50XXII (Page No. 563 – D568)Volume – II Section 8Amrapali Zodiac Developers Private 2.08XXII (Page No. 563 – Limited 568)Volume – II Section 9Amrapali Leisure Valley Private Limited 3.58XXII (Page No. 563 – 568)Volume – II Section E10Amrapali Eden Park Private Limited 3.64XXII (Page No. 563 – 568)Total 89.83

4. Unsold Inventory

There is unsold inventory of flats and Commercial areas amounting

to Rs.2337.47Crores

approximately as per details given below:

a) Unsold Inventory of Flats

S.no.Name of the company Number ApproximatPage No. of Units Realizable Reference in Value Residential (In Crores) 1 Amrapali Sapphire Developers Private 1414.45 Volume – I Limited Page No.39- Point No. 4a

510SUPREME COURT REPORTS[2019] 9 S.C.R.

A2 Amrapali Leisure Valley Developers 329100.67 Volume – I Page No.39- Private Limited Point No. 4a3 Amrapali Smart City Developers Private 18365.29 Volume – I Limited Page No.39- BPoint No. 4a 4 Amrapali Silicon City Private Limited 191154.25 Volume – I Page No.39- Point No. 4a 5 Amrapali Dream Valley Private Limited 1833660.91 [Volume – I ]Page No.39- CPoint No. 4a6 Amrapali Leisure Valley Pvt. Ltd.* 1203412.91 Volume – II Section XXII (Page No. 563 – 568)D7 Amrapali Centurian Park Pvt. Ltd.* 981+2329.34 Volume – II Section XXII (Page No. 563 – 568)8 Amrapali Eden Park Developers Pvt. 42.47 Volume –II Section XXII Ltd.* (Page No. E563 – 568)9 Amrapali Princely Estate Pvt. Ltd.* 34.54 Volume –II Section XXII (Page No. 563 –568)10 Amrapali Zodiac Developers Pvt. Ltd.* 2741.48 [Volume – II ]Section XXII F(Page No. 563 – 568)11 Ultra Home Construction Pvt. Ltd.* 459205.38 [Volume –II ]Section XXII (Page No. 563 – 568)GTotal 5,2291991.69

*Estimated Realizable value Noida @ Rs 4,500 approximatelypsf and Greater Noida @ Rs3,000 approximately psf (Amount inCrores).

b) Unsold Inventory of Commercial Area/ShopsAS.no.Name of the Company Unsold ApproximaPage te No. Commercial Realizable refereValue (In nce Inventory Crores) B1Amrapali Sapphire Developers 1 Shop 0.71 Volume – Private Limited I Page No.39- Point No. 4b 2Amrapali Leisure Valley Volume – Nursery Developers Private Limited I Page Schools, CNursingHomes 7.00 No.39- Point No. and MilkBooth 4b 3Amrapali Smart City 1 Shop 0.49 Volume – I Page No.39- Point No. Developers Private 1 Nursery School 4.00 4b DLimited4Am rap ali S ilic on ity P riv ate Vo lum –Li m ited N u rse ry Sc hoo l 11 .0 0 I P age & M ilk o oth N o.39 - Point N o. 4b5Am rapali re am V all ey Pri va te 18 Sho ps, Vo lum –Li m ited N u rse ry I P age ESc hools , N o.39 - N u rsin om es Point N o. and Se nio r 4b Se cond ary 44 .4 7 Sc hools 6Amrapali Eden Park Developers 1 .4 0 Vo lum Pvt. Ltd. 1 – II Se ction X X II (P age FN o. 563 – 568 ) 7AmrapaliCenturianParkPvt. Ltd.17 5.7 1 Vo lum – II Se ction X X II (P age N o. 563 – 568 )G8Ultra Home Construction Pvt. 31 8 + 487 271 .0 0 Vo lum Ltd. – II Se ction X X II (P age N o. 563 – 568 )Total345.78H

5. Amount recoverable from Key Managerial Persons and theirRelatives

a) Professional fees paid to directors Rs.100.53 crore

Name of Director Professional Fees (As per Affidavit) (Under Disclosure in Rs. in Cr. Affidavit)Rs. in Cr. Anil Kumar Sharma 29.13 8.75 Shiv Priya 26.43 24.65 Ajay Kumar 5.76 - Suvash Chandra Kumar 5.11 - Amresh Kumar 0.68 - Total 67.13 33.40

b) Advances recoverable

sum of Rs.152.24 crores is recoverable from the DirectorsDon account of their taxes paid, advance given for purchase ofShares and Other Advances given including their family members.The companies gave advances which were neither adjusted norsquared off against any future purchases or services under takenby the companies from the said parties nor were received backby the companies Stunning Construction Private Limited had madeEpayments of Direct Taxes which were neither received back bythe Company nor adjusted against any services. In other wordsthe said advances are still standing to the debit (recoverable fromthese parties) in the books of the Company. This includes sumof INR 17.43 Crores paid on behalf of directors, senior employeesFand their family members. Please refer executive summary onPage 39 of Volume 1 of Final Report.

Summarized as below:

S.no.Name of the Amount Anil Kumar Shiv Priya Ajay Otherscompany (InSharma and and familyKumar Crores)familyand familyG1Amrapali Sapphire 0.500.020.390.09-Developers Private Limited (Page No. 202-219)2Stunning 17.436.45.571.73.76Construction Private Limited (Page No. 196-201)H

3 Amrapali Smart City 0.02---0.02ADevelopers Private Limited (Page No.- 229-244)4 Amrapali Silicon 0.280.050.23--City Private Limited (Page No. 255-266)5 AHS Joint Venture 9.586.183.120.28-B(Page No.-273-278)6 Amrapali 113.5473.2535.155.14-Infrastructure Private Limited (Page No. 286-306)7 Sangam Colonizers 0.03---0.03Private Limited C-(Page No.189192)8 Amrapali Hospitality6.626.55--0.07Services Private Limited (Page No. 346-350)9 Hi Tech City 4.244.24---Developers Private DLimited (Page No. 279-285)Total152.2496.6944.467.213.88

Recoverable from other KMPs is as under :

ChanderWadhwa and Family 2.55 Mohit Gupta and Family 0.16 SuvashChander Kumar 0.67 Amresh Kumar 0.17 NishantMukul 0.12 Adhikari Devi Prasad and Family 0.02 Anil Mittal and Company (Statutory Auditor)0.19 Total 3.88

Cash in Hand

Cash in hand of various Companies is not physically available nordeposited in the banks and siphoned by the Directors amountingto Rs.69.36 crores should be recovered from the Directors asper details given below:

AS. no.Name of the CompanyAmount (In Crores)1Stunning Construction Private Limited0.172Amrapali Sapphire Developers Private Limited0.113A mrapali Leisure Valley Developers Private 0.23Limited4A mrapali Smart City Developers Private Limited10.79B5A mrapali Silicon City Private Limited3.586A mrapali Dream Valley Private Limited8.027Hi-tech City Developers Private Limited0.468A mrapali Infrastructure Private Limited3.169Sangam Colonizers Private Limited0.15C10Navodaya Properties Private Limited0.2411 Hawthorne Intellect Management Solutions 0.01Private Limited 12MSB Software Technology Private Limited0.7014GaurisutaInfrasolution Private Limited0.0117A mrapali Hospitality Services Private Limited0.01D18KapilaBuildhome Private Limited0.0319MannatBuildcraft Private Limited0.2020Ultra HomeConstruction Private Limited0.2221AmrapaliCenturian Park Private Limited7.45E22Amrapali Eden Park Developers Private Limited2.0023Amrapali Grand0.5024Amrapali Homes0.1925Amrapali Homes Projects Private Limited0.2326Amrapali Leisure Valley PrivateLimited9.79F27Amrapali Media Vision Private Limited9.6728Amrapali Princely Estate Private Limited5.0229Amrapali Smart City Private Limited0.5030Amrapali Zodiac Developers Private Limited3.8431GaurisutaInfrastructure PrivateLimited0.02G32MVG Techno Consultants Private Limited0.1333 Noida Texfab Private Limited 0.13 34La Residentia Developers Private Limited0.3035 Amrapali Biotech India Private Limited 1.50 Total69.36

a) Advance Recoverable from Non-Related Parties

Amounts given as advances to third parties without any businesstransactions which have not been adjusted along with the amountreceived/paid for the Non–Genuine transactions amounts toRs.256.22 crores + Rs.326.46 crores and should be recoveredfrom the management of the Amrapali group of Companies.

The Company has given advances to various parties. The saidadvances that were given by the Company were neither adjustednor squared off against any future purchases or services. No detailsregarding Pan, Address and Nature of Advance has been givento us. The actual amount may be much higher.

S. no. Name of the Company Amount (InRefer Page No.Crores)1 Amrapali Sapphire Developers 73.06 Volume – I Page Private Limited No.40- Point No.4c 2 Amrapali Leisure Valley Developers 19.67 Volume – I Page No.40- Point No.4c Private Limited 3 Amrapali Smart City Developers 17.20 Volume – I Page Private LimitedNo.40- Point No.4c4 Amrapali Silicon City Private Limited50.41 Volume – I Page No.40- Point No.4c 5 AHS Joint Venture 15.81 Volume – I Page No.40- Point No.4c6 Hi-tech City Developers Private 8.91 Volume – I Page Limited No.40- Point No.4c 7 Amrapali Infrastructure Private 40.24 [Volume – I Page ]No.40- Point No.4c Limited 8 Sangam Colonizers Private Limited 0.36 Volume – I Page No.40- Point No.4c9 Amrapali Power and Cement Private 0.91 Volume – I Page Limited No.40- Point No.4c 10 Hawthorne Intellect 0.17 Volume – I Page Management Solutions No.40- Point No.4c Private Limited 11 Amrapali Aerocity Private Limited 0.01 [Volume – I Page ]No.40- Point No.4c12 Amrapali Buddha Developers Private 0.47 Volume – I Page Limited No.40- Point No.4c 13 Gaurisuta Infrasolution Private 1.24 Volume – I Page LimitedNo.40- Point No.4c 14 Amrapali Hospitality Services Private 13.55 Volume – I Page Limited No.40- Point No.4c 15 Kapila Buildhome Private Limited 0.41 Volume – I Page No.40- Point No.4c 16 Mums Mega Food Park Private 1.29 Volume – I Page LimitedNo.40- Point No.4c17 Mannat Buildcraft Private Limited 0.99 Volume – I Page No.40- Point No.4c

A18 Amrapali Patel Platinum 7.85 [Volume – I Page ]No.40- Point No.4c19Stunning Constructions Private 0.44 Volume – I Page Limited No.40- Point No.4c 20 Amrapali Dream Valley Private 3.23 Volume – I Page LimitedNo.40- Point No.4c21Amrapali Grand29.17 Annexure X.2 Final BReport Volume – IV 22Amrapali Homes21.41 Annexure X.2 Final Report Volume – IV 23 La residential Developers Pvt. Ltd. 23.35 [Annexure X.2 Final ]Report Volume – IV 24AmrapaliEden Park Developers Pvt.3.02 Annexure X.2 Final Ltd. Report Volume – IV C25Gaurisuta Infrastructure Pvt. Ltd.0.46 Annexure X.2 Final Report Volume – IV 26 Jhamb Finance & Leasing Pvt. Ltd. 5.93 Annexure X.2 Final Report Volume – IV27Ultra Home Construction Pvt.Ltd.87.68 Annexure X.2 Final Report Volume – IV 28 Amrapali Homes Project Pvt. Ltd. 55.01 Annexure X.2 Final DReport Volume – IV 29Amrapali Zodiac Developers Pvt. Ltd.28.07 Annexure X.2 Final Report Volume – IV30Amrapali Smart City Pvt. Ltd.0.95 Annexure X.2 Final Report Volume – IV 31 Amrapali Leisure Valley Pvt. Ltd. 51.62 [Annexure X.2 Final ]Report Volume – IV 32Amrapali Media Vision Pvt. Ltd.4.96 Annexure X.2 Final EReport Volume – IV33Amrapali Health care Pvt. Ltd.0.22 Annexure X.2 FinalReport Volume – IV 34 Stunning Construction Pvt. Ltd. 14.61 Annexure X.2 Final Report Volume – IV Total582.68F

Advance Construction co Pvt ltd is/was partner holding 9% inAmrapali Patel Platinum and 66% in AHS Joint Venture Projectwith Ultra Home Construction Pvt Ltd. They overdrew 7.10 croreand 14.81 crore from the respective joint venture totaling to 21.91crore

While scrutinizing the documents sent by Advance ConstructionCompany Private Limited, detail of capital contribution of theAdvance Construction Company Private Limited as on 1[st] April,2008 and thereafter is as under (as per tally data and confirmedby Advance Construction Company Private Limited):

ParticularsAs on 31[st]As on 31[st]As on 31[st]As on31[st]AMarch, 2007 March, 2008 March, 2009 March, 2010 Capital Account 3,00,00,00050,00,000(6,10,00,000)(7,10,00,000)

Note: The negative figures represent debit/ recoverable balance.

The aforesaid amount of Rs.7.10 crores should be recoveredfrom the said party along with interest of Rs.7.24 Crores(computed at 12% p.a. simple interest) in view of theundermentioned observations:

The clause 12 of MOU dated 11[th] November, 2006 clearlystates that the profit would be divided amongst the partners in theprofit-sharing ratio.

The Audited Financial Statements of the firm for the financialyear 2013-14 reflect the firms Reserve and Surplus as Rs.35,433only.

No other clause in the MOU states regarding payment ofInterest on Capital.

It is not understood that how the said Company has withdrawnRs.10.10 Crores on an investment of Rs.3 Crores investedfor only period of 1.5 years from this partnership firm. Nosatisfactory explanation has been given to us by the Management.

Even the ledger account sent by the said Company confirms thatthey owe Rs.7.10 Crores to this firm as on 31[st] March, 2018after which an entry has been passed in the books of accounts.

As per supplementary partnership cum deed of retirement dated31[st] Day of March, 2014, 2 partners namely M/s Patel EngineeringLimited and M/s Advance Construction Company Private Limitedhave retired from the partnership and M/s Amrapali InfrastructurePrivate Limited has joined as partner with M/s Ultra HomeConstruction Private Limited. However, the amount of Rs.7.10Crores was not adjusted and was shown as payable to AmrapaliPatel Platinum by Advance Construction Company Private Limitedsince 2014 till 2018. Further, The Audited Financial Statements ofAmrapali Infrastructure Private Limited for the financial year 2013-14 and thereafter don’t reflect any investment in Amrapali PatelPlatinum.

AParticularsAs onAs on As on As on As on As on As on As on 31[st]31[st]31[st]31[st]31[st]31[st]31[st]31[st]March, March, March, March, March, March, March, March, 20082009201020112012201320142015Capital 4.224.254.264.324.354.354.304.30Account Current (12.56)(14.82)(14.82)(14.82)(14.82)(14.82)(14.82)(14.82)BAccount

Note: The negative figures represent debit/ recoverable balance.

The aforesaid amount of Rs.10.52 crores should berecovered from the said party along with interest of Rs.17.78croresupto 31[st] March 2018 (computed at 12% p.a. simpleinterest) in view of the undermentioned observations:

a. It is not understood that how the said Company has withdrawnRs.14.82 crores on an investment of Rs.4.30 crores. Nosatisfactory explanation has been given to us by the Management.

b. As informed to us by Advance Construction vide their maildated 6[th] March, 2019, the Company had effectively retired fromthe said partnership and all the project related responsibilities werehanded over to Mr. Sharma, (of Ultra Home) and the same wasevidenced by an MOU dated 17[th] January, 2006.

This explanation given by Advance Construction is not satisfactorysince the Company is continuing as partner and the subsequentAudited Financial Statements have also been signed by AdvanceConstruction as Partner sharing profit/ loss. This shows thatMOU as referred by Advance Construction is bogus/ legally notenforceable.

c. Further, Partnership firm has been legally dissolved as perdissolution deed dated 2[nd] Day of April, 2018. This shows thatAdvance Construction is continuing as partner in this firm tillthis date. It has also been mentioned in the dissolution deed thatthe accounts of the firm have been made upto 31[st] March, 2014to the mutual satisfaction of all the parties here to. Even thisdissolution deed is dated 2[nd] April, 2018 doesn’t seem to be genuinein view of the following observations:

i.It refers to the Audited Financial Statements for the financialyear 2013-14, whereas the Audited Financial Statements areavailable upto financial year 2014-15.

ii.The deed of dissolution has not been notarized.

iii.The Witnesses to this Dissolution Deed are incomplete in sofar, name and address of witness number 1 is not there andsignature of witness number 2 is not there.

iv.There is no copy of the resolution available authorizing Mr.Shiv Priya to sign the deed of dissolution.

The Company has made cash payments to various partiesexceeding INR 20,000 in contravention to The Income Tax Act1961, to the tune of INR 45,768,482 in just one company namelyAmrapali Sapphire Developers Pvt Ltd. This is just tip of theiceberg and actual amount may be much much higher. Most ofthese payments are not supported by evidence. It was furtherobserved that neither the Statutory auditor has mentioned thesecash payments exceedingRs.20,000 in his report and nor anyaddition has been made by the Income Tax department in framingthe Assessments for the Assessment year 2014-15 vide orderdated 31.03.2016.

Financial YearName of PartyExpense DebitedAmount2012-13 Staff Incentive 2,252,720 Labour charges of 2014-15 Unity Contractor Contractor 1,600,000 ShailenderaDhwaj (T Z-2014-15 803) - 1,399,500 2013-14 MV Ayer (TL-506) - 1,000,000 Other Petty Amounts between 20,000 to 10 Lakhs 39,516,262 Total45,768,482

6. Diversion of home buyer’s funds

Further as per financial statements and the books of accountsscrutinized by us up to 31[st] March 2015, sum of Rs.1,588.59Crores has been diverted to other projects, other group companies,directors and their relatives and senior employees. As per summarygiven below:

520SUPREME COURT REPORTS[2019] 9 S.C.R.

AS.no.Name of thecompanyAmount Refer Page No.(InCrores)1 Amrapali Sapphire Developers Private Limited 113.98[Volume – I Page ]BNo.210- Point No. 7 2 Amrapali Leisure Valley Developers Private 134.25[Volume –I Page ]No.224- Point No. 7 Limited 3 Amrapali Smart City Developers Private 532.76Volume – I Page No.233- Point No. 7 Limited C4 Amrapali Silicon City Private Limited 347.36[Volume – I Page ]No.259- Point No. 7 & 8 5 Amrapali Dream Valley Private Limited 457.82[Volume – I Page ]No.251- Point No. 76 Hi Tech Developers Private Limited2.42[Volume –II Page ]No.281- Point No. 2 DTotal 1,588.59

7. Non genuine purchases from suppliers

The total amount of non-genuine/ bogus purchases amounting toERs.842.42 crores approximately. Details are as follows:

Non genuine purchases from Suppliers

(Refer Page No. 2800 Supplementary Report& AnnexureNo. S-4)

FRs. 837.12 crore

Add: Land development charges booked without supportingdocuments

Rs. 7.30 crore

Total

Rs. 842.42 crore

8. Recovery from Others

sum of Rs.32.69 croresis recoverable from others as per detailsgiven below:

Sr. No.Name of the Company Amount Refer Page No. Ain crores 1 Advance Constructions Private 25.02 Volume – I Page Limited No.43 2 ATN Infratech Private Limited 0.70 [Volume – I Page ]No.433 AlokRanjan 0.25 [Volume – I Page ]BNo.43 4 RinkuComputech 1.19 [Volume – I Page ]No.43 5 Casita Propmart Private 0.08 [Volume – I Page ]No.43 Limited 6 Digital India (Controlled by Anil 0.86 [Volume – I Page ]CNo.43 Mittal)7 AadhunikBuildtech Private 0.12 [Volume – I Page ]No.43 Limited 8Kapila Building Solutions0.05 Volume – I Page No.43 9 Ozone GSP Infratech 0.42 [Volume – I Page ]DNo.4310Royalgolf Link City4.00 Volume – I Page No.43 Project Private Limited Total 32.69

9. Unexplained cash deposits/jewellery

Details are as under :

Name of person Amount/Refer Page No. value (in crore)FAnil Kumar Sharma (Cash)5.73Volume II - page no 419, Point no 71.50Volume II - page no 420, Point no 12Raj Dulari (mother of Anil 0.13Volume II - page no Kumar Sharma)(Cash)420, Point no 9Shiv Priya (cash)6.00Volume II - page no G422, Point no 61.00Volume II - page no 422, Point no 11Shiv Priya (Jewellery)0.58Volume II - page no 422, Point no 11Total 14.94

[2019] 9 S.C.R.

10. Balance due to Noida Authority and Greater Noida Authorityas per affidavits submitted by them before Hon’ble Supreme Courtof India

The Group paid only 1[st] installment to Noida and Greater Noidaauthorities and did not pay in almost all the cases the installmentdue, lease rent and interest under one pretext or another. TheGroup has not made any provision for additional interest due todelay in payments of installments. We had issued letter dated30[th] January, 2019 to Noida Authority to send us the completeinformation/ documents regarding the amounts due from AmrapaliGroup of Companies. But we have not received any such detailsfrom the Noida Authority. In these circumstances balance due toNoida Authority Couldn’t be verified by us.

It was further informed to us by the management of Amrapalithat Noida and Greater Noida authorities have submitted threeclaims before the Honourable Supreme court. We were producedone of the annexure of the affidavit and the same is reproducedbelow.

We found that Noida/Greater Noida authority administration wasnon active for reasons best known to them. Amrapali group neverpaid the 2nd installment but Noida and Greater Noida authoritiescontinued to allot large size land to them without fail. They neverbothered to issue even notice to be pasted at site for theinformation of home buyers that the land dues had not been paidso that home buyers could be cautious and on alert. In spite ofnon receipt of any installment, lease rent, interest they were verytrumped in giving no objection certificate for the borrowings toAmrapali group from different sources like JP Morgan, ICICIand Aditya Birla Pvt equity funds and/or various banks.

a) Noida Authority

S. no. Name of the Company Amount (In Crores) 1 Amrapali Sapphire Developers Private 348.8Limited 2 Eden park Developers Private Limited 31.73 Amrapali Silicon City Private Limited 537.94 Amrapali Princely Estate Private Limited 149.65 Amrapali Patel Platinum 115.56 Amrapali Zodiac Developers Private Limited 276.1Total 1,459.6

b) Greater Noida Authority

S.no. Name Amount (In Crores)1Amrapali Smart City Developers Pvt Ltd 628.062Amrapali Leisure Valley Developers Pvt Ltd 255.373Amrapali Leisure Valley Pvt Ltd 914.334AmrapaliCenturian Park Pvt Ltd 569.365Amrapali Dream Valley Pvt Ltd 718.28Total 3,085.4Grand Total 4,545(a+b)

11. Balance payable against Term Loans

Date of Total (InName of the Company Name of the bank Confirmation Crores) Indian Overseas Bank 31-12-201816.15Ultra Home Constructions Private Limited Corporation Bank 5/2/201991.49Amrapali Smart City Developers PrivateLimited Corporation Bank 5/2/2019143.74Amrapali Leisure Valley Andhra Bank 5/2/201998.04Developers Private Limited Bank of Maharashtra 5/2/2019179.02A/c Andhra Bank 5/2/201913.56Bank of Maharashtra 5/2/201922.24Amrapali Silicon City Private Limited Bank of Maharashtra 5/2/201995.34Total 659.58

Note: Information in respect of bank loans has been given to theextent of availability of documents.”

61(a). The aforesaid is the summary of report of the ForensicAudit which states that the Group collaborated with external parties likeJ.P. Morgan in contravention of FEMA and distributed returns alongwith the principal amount, even though it did not book gains within thebusiness of the company.

(b). The report also reveals various disturbing features that noaccounts were prepared from 2015 to 2018 and money was withdrawn

Aout of it and diverted from one company to another. The entiretransactions were not being entered into Tally. The opening balanceswere not entered properly. In April 2015, the Amrapali Group introducedFar Vision an ERP, which was also not implemented properly.

(c). There was no information about purchases from the supplier.BDuring search in 2013, it was held by Income Tax Authorities thatpurchases are being made from bogus suppliers without receiving thegoods physically. Bogus expenses and cash has been surrendered byAmrapali Group in the income tax search.

(d). The amount shown as developmental charges is not supportedCby evidence or vouchers. The total bogus expense has been ascertainedto Rs.842.42 crores. An amount of Rs.0.25 crore was paid to Mr. AlokRanjan towards brokerage.

(e). The company has also made unusual cash payments in thefinancial year 2016-2017 by transferring cash to the Site, but the same isDnot supported/authenticated by the Site Cash In-charge. Certainpayments have not been found to be genuine.

(f). The Group Companies purchased gold bar worth Rs.5.88 crore,which is personal expense and it should be recovered from themanagement of the company.E(g). The amount disbursed by Banks was not utilised for

E(g). The amount disbursed by Banks was not utilised forconstructions of projects and the funds of homebuyers as well as theamount disbursed from the Banks were diverted to unapproved uses,namely, creation of personal assets of Directors; creation of assets inclosely held companies by Directors along with their partners andrelatives; funds were used for personal expenses of Directors; fundsFwere advanced to unrelated entities for several years without levyinginterest on unrealized amount, the recoverable amount from third partieshas amounted to Rs.326 crores; creation of discreet projects for personalincome; and construction of assets for other projects.

(h). There were negligence and non-monitoring by Bankers. ThereGwas transfer of funds from one company to another company to athird company and so on and so forth on the same dates would not havebeen possible without the active support of the Bankers. They turnedblind eye to all the transfers and did not inquire, which were being routedevery day. If they had been alive to the situation, the Management

would not have dared to launder the money from one company to anotheraccording to their whims and fancies and the Bankers are solelyresponsible for the negligence on their part. The Bankers did not do anymonitoring. The Bank of Maharashtra and Andhra Bank also failed todo the monitoring. Even the basic checks were foregone. The Banksacted as mute spectator to unapproved diversion which was happeningevidently in all banking transactions. Even, Noida and Greater NoidaAuthorities were grossly negligent in reviewing and monitoring theprogress of projects and did not take any action for non-payment of landdues and continued to allot land to Amrapali Group for the reasons bestknown to them.

(i). The Directors along with trust partners discreetly divided theprojects into two parts:

(i)Projects in which home buyers funds were received andfunds 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.

(j). Several dummy companies were formed in the names of officeboys and peons. Technically, the allotments at the initial stage were voidab-initio. The amount received by the Companies from home-buyerswas more than the amount spent on construction and for payment of theland. The sole objective of taking loan was to divert the funds to otherventures to create assets in the name of family members and to makemovies. Villas were bought at tourist destination for fun at the expensesof the middle class and low-income group people.

(k). Several companies were created solely for the purpose ofrouting funds. These companies did not have any material transaction asper the main object for which they were incorporated and did not have abusiness since their incorporation.

62. As is apparent from the report, several companies were createdonly to route the funds and transactions consisting of office boys, personswith no income and dummy companies in which family members andrelatives were inducted as members only for few transactions, whichare as under:

A(1) Jhamb Finance & Leasing Private Limited.

It was under the control of Mr. Chander Wadhwa, CFO. It hasadvanced loans amounting to Rs.875 crores to related and unrelatedentities, which are recoverable.

(2) Gaurisuta Infrastructure Private LimitedB

It was also created for diverted funds.

(3) Neelkanth Buildcraft Private Limited

Similarly it was formed for the purpose of buying shares from J.P.Morgan at exorbitant rates, consisiting of office boys and relatives of

CMr. Anil Mittal, Statutory Auditor.

(4) Stunning Construction Private Limited

As per findings of the Forensic Auditors, they should eithersurrender 19.75 percent of land or 632 flats.

D(5) Kapila Buildhome Private Limited

It financed sum of Rs.392.68 crores. It accepted non-interestbearing inter-corporate deposits from non-group companies, which wasused for money laundering.

(6) Rudraksha Infracity Private LimitedE

It was consisting of office boys and relative of Anil Mittal, StatutoryAuditor, which was created to receive money from Mannat BuildcraftPrivate Limited and to transfer it to J.P. Morgan Investments bypurchasing it at exorbitant rates and for no other transaction.

F(7) Mannat Buidcraft Private Limited

It was created for money laundering of Rs.120 crores, only forfew transactions.

(8) Amrapali Magadh Developers Private Limited

It did not carry out any principal business activity. The purpose ofGits creation is not clear. The shareholders paid the share applicationmoney in cash.

(9) Amrapali Mahi Developers Private Limited

It received share capital in cash and all the expenses were paid incash.H

(10) Amrapali Spring Valley Private Limited

It was created for the purpose of routing and diversion of fundsamounting to Rs.186 crores has been found.

(11) Amrapali Media Vision Private Limited

It was created making movies. There was no necessity of creationof this company for advertising. It was created to divert funds to makemovies. Rhiti Management Private Limited was paid Rs.24 crores forprofessional charges and advertisement expenses etc.

(12) Hawthrone Intellect Management Solutions Private Limited

It had paid up capital of Rs.1 lakh and incurred losses of Rs.2.33crores. The expenses are inflated to wipe off the various loans andadvances received from sister concerns. The entries have found to bedubious and the amount of loss of Rs.2.33 crores to be recovered fromthe Directors as it was wiping off the amount of the homebuyers.

(13) Amrapali Smart City Private Limited

It is stated in the report that plot allotted to Amrapali Smart CityPrivate Limited was cancelled, therefore, money receivable from GreaterNoida is Rs.18.35 crores.

(14) Amrapali Biotech India Private Limited

It was created for routing funds. The ICD’s are either from thegroup companies or received from outside the group companies throughadjustment entries.

(15) Amrapali Healthcare Private Limited

It formed the property by funds of Ultra Home ConstructionPrivate Limited created from home buyers’ funds. It deserves to besold.

(16) Amrapali Centurian Park Private Limited

The Forensic Auditors have found bogus booking of expenditureand certain adjustments against bogus billings of River Sand for an amountof Rs.3.60 crores.

(17) Amrapali Leisure Valley Private Limited

Mr. Akhil Kumar Surekha became the Director and thereaftermost diversions of funds took place through the current account. The

Afunds of the company were transferred to and fro with companies inwhich Surekha family had control. FSI was sold without taking approvalfrom Great Noida Authority. The money received from Bihari HighRise Private Limited was diverted to Jotindra Steel & Tubes Limitedand Ozone GSP Infratech by routing it through Ultra Home ConstructionPrivate Limited. Bihariji High Rise Private Limited, Jotindra Steel &BTubes Limited and Mauria Udyog Limited are owned by Surekha family.There was bogus booking of expenditure since March 2018 also of Rs.2.86crores and other bogus entries of huge amounts.

(18) Amrapali Homes

CIt has been found that Mauria Udyog Limited has to pay Rs.20crores and the same be recovered.

(19) La Residentia Developers Private Limited

The consortium of five members was created, which wascontrolled by Amrapali Group. The shareholders and directors wereDjust acting faces for outsiders. There was diversion of funds sincebeginning of the project itself. The company purchased raw materialfrom Amrapali Infrastructure Private Limited amounting to Rs.67.45lakhs, but not even single penny was paid since then. The loan amountof Rs. 49 crores were taken. On the other hand, there was withdrawalEby Directors and advances given to the related parties and entities.Amrapali Group transferred some of their buyers to La ResidentiaDevelopers Private Limited and the payment for the same was receivedby Amrapali Group. They were reflected as customers in the customerdata of Amrapali Group. The company is using the brand name/trademarkof Amrapali Group on its letterheads.F

(20) Amrapali Homes Projects Limited

Mr. Prem Mishra was given Rs.12.40 crores for purchase of landsince 1[st] April 2008, out of which Rs.10 crores are still receivable fromhim. Rs.55.87 crores are recoverable amounts and out of which Rs.20.75crores pertain to advances against land which has not been charged toGcost of construction.

(21) Ultra Home Construction Private Limited

The flats were allotted on false promises, forged documents andcertain allotted flats did not exist in the approved building plan.HShareholders used the money of home buyers for allotment of shares in

the company. The records of certain lands purchased by the companydisappeared, the details of which have been given. The company hasadvances recoverable amounting to Rs.111 crores.

(22) Amrapali Grand

Bihariji Ispat Udyog Limited always had negative capital. Loansand advances amounting to Rs.25.73 crores have been diverted. Theother diversions have also been noticed in the report.

(23) Amrapali Eden Park Developers Private Limited

There is no substance in the nature of transactions of the company.It was for routing funds form one entity to another to hidden objective.Banks loans were diverted as advances to third parties. The fundswere diverted for purposes other than development.

63. Several companies were created for building assets. Therewas no compliance of the statutory obligations by the companies. Theannual returns and audited financial statements have not been filed after31.3.2015. The Registrar of Companies has disqualified the Directors,namely, Mr. Anil Kumar Sharma, Mr. Amresh Kumar, Mr. Shiv Priya,Mr. Ajay Kumar and Mr. Suvash Chandra Kumar for period of 5years under Section 164(2) of the Companies Act, 2013. The Companyhas not been regular in payment of TDS and service tax and has also notfiled relevant returns after 31.3.2015. Mr. Anil Mittal, CA (StatutoryAuditor) and Mr. Chander Wadhwa, CFO were in connivance with eachother. Mr. Anil Mittal, CA blindly signed the accounts and along withMr. Chander Wadhwa, CFO is grossly involved in making manipulationin the accounts. He has received payment on account of professionalcharges in the name of companies in which his relatives were Directorsand this fact has not been disclosed in the audited financial statement. Asum of Rs.52.07 crore was adjusted on account of professional fees dueand to be paid on account of audit fees. Further, sum of Rs.16.36crore was adjusted against flat in Amrapali Princely Estate on accountof audit fees. They incorporated 27 additional companies identified.They were shell companies, whose share capital was mostly subscribedin cash and the transfer of shares was also in cash leaving no audit trail.The home-buyers funds to the extent of Rs.5,619.47 crores have beendiverted. There was diversion of funds to various suppliers, fakepurchases and advances without any adjustment. Siphoning off fundshad also taken place by way of booking under-valued transactions in

EFG

Arespect of the sale of flats. The Forensic Auditors have also traces ofreceiving cash from home-buyers, which is not accounted for in thebooks of accounts. The home-buyers funds were diverted to the tune ofRs.5,619.47 crores to the other companies through (i) payment ofprofessional fee to Directors for Rs.100.53 crores; (ii) bogus billing forRs.842.42 crores; (iii) under-valuing of flats to the tune of Rs.321.21Bcrores; (iv) brokerage was paid against flats which were not sold by thecompany; and (v) inter-corporate deposits were given to related entities.

64. In J.P. Morgan, had also been found to routing money and inviolation of FEMA by the Forensic Auditors. As pointed out, the equityshares were purchased at an exorbitant price to suit the requirements ofCJ.P. Morgan. Sudit K. Parikh & Co., Chartered Accountants and theAuditors made the valuation on the basis of information provided by J.P.Morgan Investments. Amrapali Zodiac Developers Pvt. Ltd. has divertedhome buyers fund and there was no need for any investment from J.P.Morgan. It was in the knowledge of Mr. Suraj Chhabria and also in theDknowledge of J.P. Morgan that money had been diverted.

65. Rule 4 of FEMA Rules has been referred by the ForensicAuditors pointing out that External Commerical Borrowings (ECB) canbe accessed under two routes namely Automatic Route and ApprovalRoute. Under Automatic Route, the ECB is not permitted to be utilizedEfor real estate sector, whereas under Approval Route the ECB are notpermitted to be utilized for real estate. Rs.60 crores were remitted toAmrapali Leisure Vally Developers Pvt. Ltd. by J.P. Morgan withoutobtaining approval from the competent authority so as to make investmentin the form of ECB. It is necessary to comply with the following :F(a)obtaining Loan Registration Number from R.B.I.;

(b)file ECB-2 returns every month to the R.B.I.;

(c)withhold tax on interest payment to J.P. Morgan underSection 195 of the Income Tax Act. As per Article 11 ofthe Avoidance of Double Taxation Agreement betweenGIndia and Mauritius, the tax shall be charged @ 7.5percent of the gross amount of interest;

(d)J.P. Morgan would have to file its income tax returnunder Section 139 of the Income Tax Act in India due towithholding tax on its interest income borrower.

66. The Forensic Auditors have also reported duplicate allotmentof flats. They have provided the details of flats. Flats were alloted(residential and commercial) to the brokers and suppliers of which listhas been given. Utilities like Milk Booth, nursery schools, senior secondaryschools, nursing homes alloted to various parties should be cancelled.

67. With respect to Sureka Group, it is pointed out in the ForensicAudit Report that they have been partner in various projects and wereauthorised cheque signatories in various companies. It is observed thatRs.13.44 crores were paid to Surekha Public Charitable Trust, which isa group institution of Jotindra Steel and Tubes Limited, which amountshould be recovered from Jotindra Steel & Tubes Limited. An amountof Rs.9,506,120 should also be recovered from Surekha Group. Fundswere routed through Synergy Freightways Pvt. Ltd. Mr. Atul Kumarwas alloted flat which was not by way of adjustment. The amountshould be recovered or his flat may be attached.

68. With respect to R.N. Traders, an amount of Rs.2,714.02 lakhshave been withdrawn by the management for the purpose of their ownuse and should be recovered from the management. There is billing ofRs.5.28 crores for the financial year 2015-16 in the name of MauriaUdyog Limited. Forfeiture of the investments has also been suggestedin the group companies named by the Forensic Auditors.

CONSIDERATION OF SUBMISSIONS

69. In the instant matter, the question of larger public importanceis involved. It is shocking and surprising state of affairs that suchlarge-scale cheating has taken place and middle and poor class homebuyers have been duped and deprived of their hard-earned money andlifetime savings and some of them had taken loan from the bank andthey are not getting houses. Bank has made payment to the builder,owners have the liability of making payment of amount with interest,home buyers are still waiting for their dream houses to be completed.This is not only with respect to the Amrapali builders that projects havenot been completed as reflected in the affidavits of Noida and GreaterNoida Authorities. More than 70% of the projects have not beencompleted which were initiated way-back in the year 2008-09 and weresupposed to be completed within 3 years. By the Amrapali Group, thebuyers’ money which has been obtained has not been invested in theconstruction activities, rather it has been diverted to great extent. Money

Aobtained from the banks has also not been invested in the projects andhas been diverted elsewhere to acquire other assets.

70. There are huge liabilities of Noida and Greater Noida Authoritiesand though builders were asked way back on 17.11.2017 to deposit 10%of the amount with the Noida and Greater Noida authorities, that orderBwas repeated again on 18.1.2018 but still that has not been compliedwith. Thereafter on the basis of joint note, this Court directed Amrapaligroup of companies to complete the projects but the order was notcomplied with. Various wrong representations were made in this Court.Developers backed out and an application was filed to waive the conditionof deposit of Rs.250 crores to start work by the Amrapali group thatCshows that its action was mala fide and it never intended to completevarious projects as rightly found by the forensic auditors and that theirintention was to divert the funds and this they had done at large scaleas is borne out from their report.

71. The question involved in the case is whether the builders andDpromoters can be permitted to usurp and divert the money of homebuyers and home buyers can be left in the lurch as silent spectator. Asper the Noida and Greater Noida authorities, in case the lease-deed issnapped, the entire constructed buildings shall have to be demolishedwithin 3 months. As per the bankers, they have charge on the propertyEas the land has been mortgaged to them and until and unless their amountis paid, the builder will have no right on the property which has beenconstructed by their money, and the buyers have also to wait for thesatisfaction of the dues.

72. In our opinion, if the real estate business has to survive inFIndia, it has to be answerable to the public and has necessarily to upholdthe trust reposed in builders/promoters. They have been paid hugeamounts not only by the home buyers but also, they have to pay hugeamount for the public land given to them on lease by Noida and GreaterNoida Authorities for construction of houses. The land has been given tothem by the authorities on concessional basis by making payment ofG10% amount at the time of allotment. The builders have to be accountableto public/home buyers as well as the authorities and bankers. It is amatter relating to housing needs dealing with shelter place, such an activityis of the public importance as the real estate sector plays pivotal role inthe fulfilment of needs of housing infrastructure.

IN RE: PUBLIC TRUST DOCTRINE

73. The public trust doctrine imposes on the State and itsfunctionaries mandate to take affirmative action for effectivemanagement, and the citizens are empowered to question itsineffectiveness. The land of the farmers had been acquired for thepurpose of housing and infrastructure needs by the State Governmentand handed over to the concerned authorities for construction. They arebound to ensure that builders act in accordance with the objective behindthe acquisition of land and the conditions on which allotment had beenmade. It was duty of concerned officials; they are not only enjoined toensure that the rights of the home buyers are protected but also theinterests of the authorities; and bankers. The public authorities are duty-bound to observe that the leased property is not frittered away alongwith the money of the home buyers. Affirmative action was clearlyenjoined upon them not only under the statutory provisions of variousenactments but also under the public trust doctrine that has evolved overthe years by this Court. In Noida Entrepreneurs Association v. Noida& Ors. (2011) 6 SCC 508, this Court has observed:

“38. The State or the public authority which holds the property forthe public or which has been assigned the duty of grant of largesse,etc. acts as trustee and, therefore, has to act fairly andreasonably. Every holder of public office by virtue of which heacts on behalf of the State or public body is ultimately accountableto the people in whom the sovereignty vests. As such, all powersso vested in him are meant to be exercised for public good andpromoting the public interest. Every holder of public office is atrustee.

40. The Public Trust Doctrine is part of the law of the land. Thedoctrine has grown from Article 21 of the Constitution. In essence,the action/order of the State or State instrumentality would standvitiated if it lacks bona fides, as it would only be case of colorableexercise of power. The Rule of Law is the foundation of ademocratic society. (Vide Erusian Equipment & Chemicals Ltd.v. State of W.B., AIR 1975 SC 266, Ramana Dayaram Shetty v.International Airport Authority of India, AIR 1979 SC 1628,Haji T.M. Hassan Rawther v. Kerala Financial Corpn., AIR

1988 SC 157, Shrilekha Vidyarthi v. State of U.P., AIR 1991SC 537; and M.I. Builders (P) Ltd. v. Radhey Shyam Sahu,AIR 1999 SC 2468).

41. Power vested by the State in Public Authority should beviewed as trust coupled with duty to be exercised in larger publicand social interest. Power is to be exercised strictly adhering tothe statutory provisions and fact-situation of case. “PublicAuthorities cannot play fast and loose with the powers vested inthem”. decision taken in an arbitrary manner contradicts theprinciple of legitimate expectation. An Authority is under legalobligation to exercise the power reasonably and in good faith toeffectuate the purpose for which power stood conferred. In thiscontext, “in good faith” means “for legitimate reasons”. It mustbe exercised bona fide for the purpose and for none other. (VideCommr. of Police v. Gordhandas Bhanji, AIR 1952 SC 16, SirsiMunicipality v. Ceceila Kom Francis Tellis, AIR 1973 SC 855,State of Punjab v. Gurdial Singh, AIR 1980 SC 319, Collector(District Magistrate) v. Raja Ram Jaiswal, AIR 1985 SC 1622,Delhi Admn. v. Manohar Lal, (2002) 7 SCC 222 and N.D. Jayalv. Union of India, AIR 2004 SC 867).”

74. In Natural Resources Allocation, In re, Special ReferenceNo.1 of 2012, (2012) 10 SCC 1, the Court observed:

“172. The judgment in LDA v. M.K. Gupta, (1994) 1 SCC 243,brings out the foundational principle of executive governance. Thesaid foundational principle is based on the realization thatsovereignty vests in the people. The judgment, therefore, recordsthat every limb of the constitutional machinery is obliged to bepeople oriented. The fundamental principle brought out by thejudgment is, that public authority exercising public powerdischarges public duty, and therefore, has to sub-serve generalwelfare and common good. All power should be exercised for thesake of society. The issue which was the subject matter ofconsideration, and has been noticed along with the citation, wasdecided by concluding that compensation shall be payable by theState (or its instrumentality) where inappropriate deprivation onaccount of improper exercise of discretion has resulted in loss,

compensation is payable by the State (or its instrumentality). Butwhere the public functionary exercises his discretion capriciously,or for considerations which are malafide, the public functionaryhimself must shoulder the burden of compensation held as payable.The reason for shifting the onus to the public functionary deservesnotice. This Court felt, that when court directs payment ofdamages or compensation against the State, the ultimate suffereris the common man because it is tax-payers money out of whichdamages and costs are paid.”

75. In Association of Unified Tele Services Providers & Ors.v. Union of India & Ors. (2014) 6 SCC 110, the Court observed:

“4. We have indicated, the worth of spectrum to impress upon thefact that the State actions and actions of its agencies/instrumentalities/ licensees must be for the public good to achievethe object for which it exists, the object being to serve public goodby resorting to fair and reasonable methods. State is also bound toprotect the resources for the enjoyment of general public ratherthan permit their use for purely commercial purposes. Public trustdoctrine, it is well established, puts an implicit embargo on theright of the State to transfer public properties to private party ifsuch transfer affects public interest. Further, it mandatesaffirmative State action for effective management of naturalresources and empowers the citizens to question ineffectivemanagement.”

76. In the instant case, it is apparent that there are colossal duesof Noida and Greater Noida Authorities. The dues of Noida Authoritiesas on 30.4.2019 are Rs.2191.38 crores and dues of Greater Noidaauthority are stated to be Rs.3234.71 crores as on 15.1.2019. Thus, thetotal dues of Noida and Greater Noida authorities are more thanRs.5426.09 crores; by now more than Rs.5500 crores. Payments weremade to Noida authorities in 2010 and some amount in 2013; in-betweenor thereafter, except one or two payments no other amount has beenpaid. There were several defaults in making the payment of the premiumamount, lease money, even the money payable to the farmers ascompensation for land acquisition has not been paid by the builders, as isapparent from the account statement filed on behalf of the Noida authority.Though the builder has realised from home buyers the amount payable

Ato authorities of Noida and Greater Noida as component of the pricepayable by them.

77. Once the Noida and Greater Noida Authorities knew verywell that there were defaults, they could not have allotted further land tothe Amrapali group without insisting for payment of its dues. Secondly, itBwas not open to the authorities to permit the sub-leases of plot of landexecuted by builders, thereby allowing the leaseholder to earn hugeamount without making payment of the amount due to them. The officialsof the authorities have acted in clear breach of public trust. They havepermitted the defaulting leaseholders to earn the amount by sub-leasingits land of which dues had not been cleared. Thus, apparently, the officialsCof the authorities acted clearly in collusion with the builders and overlookedthe interest of the Authorities and home buyers while permitting the sub-leases of plot of land to be granted. It passes comprehension how theofficials of the authorities could have permitted such sub-leases in thefactual scenario of the case when even the basic obligation to raise theDconstruction was not being fulfilled by the builders and they were notpaying the dues of premium, lease money etc. The action of the officialsof the authorities has the effect of causing unjust enrichment of builderfrom the land held by the concerned authorities. It was wholly an illegalexercise permitted.E78. We are of the considered opinion that the officials of the Noida

E78. We are of the considered opinion that the officials of the Noidaand Greater Noida authorities have acted clearly in breach of publictrust and apart from that, they have failed to act as per the statutorymandate, the regulations and the terms of the lease deed. The transferof the plot by the lessee was only on fulfilment of certain conditions. Thedues of lessor towards the cost of land were to be cleared in accordanceFwith the schedule of payment. Following provision is contained in leasedeed dated 3.8.2010 entered into between Greater Noida IndustrialDevelopment Authority and M/s. Amrapali Leisure Valley DevelopersPvt. Ltd. The relevant provision with respect to the transfer of the plot isextracted hereunder:G“TRANSFER OF PLOT

. Without obtaining the completion certificate the Lessee shallhave the right to sub-divide the allotted plot into suitable smallerplots as per planning norms and to transfer the same to theinterested parties up to 30.0.2010, or as decided by the Lessor,

with the prior approval of LESSOR on payment of transfer charges@ 2% of allotment rate. However, the area of each of such sub-divided plots should not be less than 20,000 sq. mtrs. However,the individual flat/plot will be transferable with prior approval of-the LESSOR as per the following conditions:

(i) The dues of LESSOR towards the cost of the land shall bepaid in accordance with the payment schedule specified in theLease Deed before executing of sub-lease deed of the flat.

(ii) The lease deed has been executed.

(iii) Transfer of flat will be allowed only after obtaining completioncertificate for the respective phase by the Lessee.

(iv) The sub-Lessee undertakes to put to use the premises for theresidential use only.

(v) The Lessee has obtained building occupancy certificate fromthe Building Cell/Planning Department, GREATER NOIDA.

(vi) First sale/transfer of flat/plot to an allottee shall be througha Sub-lease/Lease Deed to be executed on the request of theLessee to the LESSOR in writing.

(vii) No transfer charges will be payable in case of the first sale,including the built-up premises on the sub-divided plot(s) asdescribed above. However, on subsequent sale, transfer chargesshall be applicable on the prevailing rates as fixed by the LESSOR.

(viii) Rs. 1000/- shall be paid as processing fee in each case oftransfer of flat in addition to transfer charges.”

(emphasis supplied)

79. In the lease deed, the schedule of payment was fixed. Twoyears was the period of the moratorium and thereafter payment was tobe made on expiry of 23.10.2012, onwards up to 23.4.2020. In case ofdefault in depositing the amount, the interest @ 15% compounded halfyearly shall be leviable. With respect to the extension of time, it is providedthat in exceptional circumstances, time to deposit for payment of balancedue amount may be extended by the CEO for 15% interest compoundedhalf yearly. The extension of time, in any case, cannot be allowed formore than 60 days for each instalment to be deposited, subject to

Amaximum of 3 such extensions during the entire payment schedule. Theprovision relating to the extension of time is extracted hereunder:

“A. EXTENSION OF TIME

1. In exceptional circumstances, the time of deposit for thepayment of balance due amount may be extended by the ChiefBExecutive Officer of the Lessor.

2. However, in such cases of time extension, interest @ 15% perannum compounded half yearly shall be charged on the outstandingamount for such extended period.

3. Extension of time, in any case, shall not be allowed for morethan 60 days for each instalment to be deposited, subject tomaximum of three (3) such extensions during the entire paymentschedule.

4. For the purpose of arriving at the due date, the date of issuanceof allotment letter will be reckoned as the date of allotment.”D

80. The lease was granted for term of 90 years. It is specificallyprovided in lease deed condition No.(ii)(c) that the lessee shall use theallotted plot for construction of group housing/flats/plots. ConditionNo.(ii)(c)(iii) deals with the part transfer of the plot. It lays down normallythe permission for part-transfer of the plot shall not be granted underEany circumstances. The lessee shall not be entitled to complete thetransaction for sale, transfer, assign or otherwise part with possession ofthe whole or any part of the building constructed thereon before makingpayment according to the schedule specified in the lease deed of the plotto the lessor. Relevant condition No.2(c)(iii) is extracted hereunder:

“(c) The Lessee shall use the allotted plot for construction ofGroup Housing/flats/plots. However, the Lessee shall be entitledto allot the dwelling units on sub-lease basis to its allottee andalso provide space for facilities like Roads, Parks, etc. as pertheir requirements, convenience with the allotted plot, fulfillingGrequirements or building bye-laws and prevailing and undermentioned terms and conditions to the Lessor. Further transfer/sublease shall be governed by the transfer policy of the Lessor.

i)Such allottee/sub Lessee should be citizen of India andcompetent to contract.

ii) Husband/wife and their dependent children will not beseparately eligible for the purpose of allotment and shall betreated as single entity.

iii) Normally, the permission for the part transfer of plot shall notbe granted under any circumstances. The Lessee shall not beentitled to complete transaction for sale, transfer, assignorotherwise part with possession of the whole or any part of thebuilding constructed thereon before making payment accordingto the schedule specified in the lease deed of the plot to theLessor. However, after making payment of premium of theplot to the Lessoras per schedule specified in the lease deed,permissionfor transfer of built-up flats or to part withpossession of the whole or any part of the building constructedon the Group Housing Plot, shall be granted and subject topayment of transfer charges as per policy prevailing at thetime of granting such permission of transfer.However, theLessor reserves the right to reject any transfer applicationwithout assigning any reason. The Lessee will also be requiredto pay transfer charges as per the policy prevailing at the timeof such permission of transfer.

The permission to transfer the part of the built-up spacewill begranted subject to execution of tripartite sub-lease deed whichshall be executed in form and format as prescribed by the lessor.On the fulfilment of the following conditions: -

a) The lease deed of the plot has been executed and the Lesseehas made the payment according to the schedule specified inthe lease deed of the plot, interest and one-time lease rent.Permission of sub-lease deed shall be granted phase wise onpayment of full premium (with interest up to the date of deposit)of the plot of that phase.

b) Every sale done by the Lessee shall have to be registeredbefore the physical possession of the property is handed over.

c) The Lessee has obtained building occupancy certificate fromthe Planning Department, Greater Noida.

d) The Lessee shall submit list of individual allottees of flats within6 months from the date of obtaining occupancy certificate.

Ae) The Lessee shall have to execute sublease in favour of theindividual allottees for the developed flats/plots in the formand format as prescribed by the LESSOR.

f)The Sub-Lessee undertakes to put to use the premises for theresidential use only.”

(emphasis supplied)

81. In view of the aforesaid clause, by way of sub-lease of theplot, the transfer of plots could not have been made by the lessee. Thelessee was required to start construction within 12 months from the dateof possession. The date of execution of lease deed shall be treated asCthe date of possession. The lessee shall be required to complete theconstruction of minimum 15% of the total FAR of the allotted plot as perthe approved layout plan and get occupancy/completion certificate within3 years from the date of execution of the lease deed. Cancellation oflease deed is also provided in the case of violation of directions, or rules,Dregulations or in case of the default on the part of the lessee for breachor violation of terms and conditions of the registration/allotment/leaseand/or non-deposit of allotment amount. In the case of cancellation, ifthe plot is occupied by the lessee, an amount equivalent to 25% of thetotal premium of the plot shall be forfeited and possession of the plot willbe resumed by the lessor with structure thereon, if any, and the lesseeEwill have no right to claim compensation thereof. The provision relatingin lease deed as to its cancellation is extracted hereunder:

“CANCELLATION OF LEASE DEED

In addition to the other specific clauses relating to cancellation,the Lessor, as the case may be, will be free to exercise its right ofFcancellation of the lease in the case of:-

1. Allotment being obtained through misrepresentation/suppressionof material facts, misstatement and/or fraud.

2. Any violation of directions issued or rules and regulation framedGby Lessor or by any other statutory body.

3. Default on the part of the Lessee for breach/violation of termsand conditions of registration/allotment/lease and/or non-depositof allotment amount.

4. If at the same time of cancellation, the plot is occupied by theLessee thereon, the amount equivalent to 25% of the total premiumof the plot shall be forfeited and possession of the plot will beresumed by the Lessor with structure thereon, if any, and theLessee will have no right to claim compensation thereof. Thebalance, if any, shall be refunded without any interest. The forfeitedamount shall not exceed the deposited amount with the Lessorand no separate notice shall be given in this regard.

5. If the allotment is cancelled on the ground mention in sub-clause 1 above, then the entire amount deposited by the lessee tillthe date of cancellation shall be forfeited by the Lessor and noclaim whatsoever shall be entertained in this regard.”

82. As provided by clause 6, the lease deed/allotment shall begoverned by the provisions of the U.P. Industrial Area DevelopmentAct, 1976 and by the rules and/or regulations made or directions issuedunder the Act. Clause 7 requires the lessor to monitor the implementationof the project. The applicants who do not have firm commitment toimplement the project within the time limits prescribed are advised not toavail the allotment. In larger public interest the lessor under clause 13 isalso given right to take back possession of the land/building by makingpayment at the prevailing rate. Condition Nos.6, 7 and 13 are extractedhereunder:

“6. The Lease Deed/allotment will be governed by the provisionsof the U.P. Industrial Area Development Act, 1976 (U.P. ActNo.6 of 1976) and by the rules and/or regulations made ordirections issues, under this Act.

7. The Lessor will monitor the implementation of the project.Applicants who do not have firm commitment to implement theproject within the time limits prescribed are advised not to availthe allotment.

13. The Lessor in larger public interest may take back thepossession of the land/building by making payment at the prevailingrate.”

(emphasis supplied)

Thus, it is apparent that the officials of the concerned authoritieshave not discharged their duty in accordance with the trust enjoined

Aupon them under aforesaid terms and conditions of lease deed, thus, bytheir inaction, enabled cheating of the home buyers at large scale.They were well aware of what was happening on the spot.

IN RE: MORTGAGE

83. With respect to the creation of mortgage deed in favour ofBbankers etc., Noida Authority has submitted that every mortgagepermission is granted by the Noida Authority to the individual companyof Amrapali group wherein provision is made that Noida Authority hasfirst charge/priority over all other charges including those created infavour of banks and financial institutions. The conditions on whichCpermission to mortgage had been granted are as under:

“This is to inform you that Noida shall have no objection for thepurpose of financing his investment in the project on Group HousingPlot No.001, Sector 119, Noida in favour of Nationalised Banks/Financial Institutions/HUDCO, New Delhi or to issue NOC toDmortgage the said land to facilitate thehousing loans of the finalloans of the final purchasers subject to such terms and conditionsas may be decided by the Authority at the time of granting thepermission. This permission is being granted subject to the conditionthat in the mortgage deed, following clauses will be included:-E(i) That the financial institution in whose favour mortgagepermission is required should be recognised by the Reserve Bankof India/National Housing Bank/HUDCO New Delhi. Noida shallhave the first charge towards the pending payment in respect ofplot/flat allotted/lease rent/taxes or any other charges as informedor levied by the Authority on the plot and the banks/financialFinstitutions/HUDCO New Delhi, shall have the second charge onthe dwelling units thus being financed.

(ii) The mortgage permission shall be effective on making fullpayment of premium and up to date annual lease rent of grouphousing plot and after execution of sub-lease deed in favour ofallottee of the dwelling unit and the allottee/sub-lessee shall begoverned by the terms and conditions of allotment/lease deed ofthe plot to be executed and sub-lease deed to be executed infavour of the allottee sub-lessee. In the event of sale/transfer offlat, transfer charges at the rate prevailing at the time of transfershall be payable to Noida.

(iii) Each allottee/sub-lessee of the dwelling units shall have tointimate Noida of the creation of the mortgage in favour of bank/financial institutions/employer and the bank/financial institution/employee of the allottee shall also keep Noida informed about thedwelling units thus financed.

(iv) It is further to inform you that in the case of cancellation oflease, Noida Authority will give 30 days’ notice to nationalisedBanks/financial institutions/HUDCO, New Delhi prior to exercisingits right of re-entry on the premises.”

(emphasis supplied)

84. The permissions to mortgage containing aforesaid clauses havebeen placed on record along with affidavit dated 22.11.2018. It is apparentfrom the second condition, subject to which permission to mortgage shallbe effective on making full payment of the premium and up to dateannual lease rent of group housing plot and after execution of the sub-lease deed in favour of the allottee of the dwelling unit, the allottee/sub-lessee shall be governed by the terms and conditions of allotment/leasedeed of the plot to be executed and sub-lease deed to be executed infavour of the allottee/sub-lessee. Since at no point of time, payment ofpremium due had been made and up to date annual lease rent had notbeen paid, no mortgage could have been created in favour of the bank inview of specific condition No.2 extracted above. Thus, when theconditional permission granted by the authority was furnished to the bankfor obtaining the loan by promoters/builders, it was incumbent upon Bankofficials to ascertain from the concerned authorities that the premiumdue under the leases has been paid and lease rent due up to date hasalso been paid. In order to create mortgage, it was necessary toobtain clear NOC in order to create effective mortgage deed. As thathas not been done so far, no mortgage in the eye of law has been createdin favour of the bank. It was not open to the bankers to mortgage theland in view of the conditional permission to create mortgage, themortgage created in violation of condition cannot be said to be effectivein accordance with law as the land was owned by the concernedauthorities and the lessees had right to mortgage only subject to fulfilmentof conditions imposed by the lessor/authorities.

85. On behalf of Noida and Greater Noida authorities, it was pointedout that they had taken steps reminding the lessees to pay dues by issuing

Anotices w.e.f. 2007 to 2017. In our opinion, in spite of no payment madeby lessees, failure to take action, makes their position further worse. Asno effective action had been taken and officials have permitted wilfullycontumacious violations of conditions of the lease. Right under their noseand to their knowledge serious kind of fraud had been taking place andofficials have clearly connived with builders. In spite of constructionBactivity lying stand still for years together dues not being paid. As amatter of fact, issuance of conditional NOC was with ulterior motive,there was no reason to issue such conditional permission, subject towhich mortgage could have been made. They could not have issuedany conditional permission for creation of mortgage also without paymentCof amount due, permission has been issued obviously for being misused,in collusion with the officials of the bank and Authorities. It was incumbentupon the concerned authorities not to issue such an NOC for mortgageand it was incumbent upon the bank officials in order to create validmortgage to ascertain from the Noida and Greater Noida Authoritiesthat the condition imposed by them as condition precedent to create aDmortgage had been fulfilled and to obtain clear NOC. But that is how inillegal manner the public money is obtained from banks for the purposeof construction activity and then it was not used for that purpose, asfound in the forensic audit report in which it is rightly pointed out thatthere was diversion of money. The amount of loan advanced by banksEwas not used for the purpose it had been obtained for particular projectand it was diverted to other companies. It was happening not only underthe nose of Noida and Greater Noida authorities, but was directly in theknowledge and connivance of the bankers as day-to-day transactions inthe bank accounts were pointing out that the money was being siphonedand diverted for other purposes routinely, not being utilised for the purposeFit was given. Thus, all of them have helped in perpetuating the fraud onthe home buyers by Amrapali group of companies, its various Directors,officials and others who have been specified in minute details in theforensic audit reports. The case also indicates that not only the bankshave failed to ensure that mortgage was effected in accordance withGthe law, but also they have failed to check whether money was in fact,required for the projects and was used for purpose it was lent. By thecollusion, the money paid by home buyers to builders which includedmoney payable to the Authorities could be diverted, had the deposit madeby home buyers been unutilised, money due under lease would havebeen paid to authorities before the creation of the mortgage. MoneyH

borrowed from bank, in fact, was not required for completion of theseprojects as the money paid by the buyers was enough for that purpose,but that was also diverted and the money obtained from the banks wasalso not utilised for the purpose it was taken and it was well within theknowledge of the bankers and Authorities that the funds were beingdiverted, but they remained mute spectators.

DIVERSION OF FUNDS

86. It has been observed in extensive detail in the forensic auditreport that the Bank of Baroda, Syndicate Bank, Bank of India,Corporation Bank did not monitor utilisation of funds and acted as amute spectator to diversion which was almost happening evidently in allbanking transactions. In the case of Amrapali Zodiac Developers, Bankof Baroda has advanced an amount which was diverted immediately onreceipt. The details have been given in the forensic auditors’ reportextracted above. There was no amount due as on the date of the transfer.In the case of Amrapali Princely Estate Pvt. Ltd., the details have beengiven with respect to the Syndicate Bank and Bank of India as to howimmediately on receipt, the funds were diverted to several parties. Inthe case of Amrapali Eden Park Developers Pvt. Ltd., there was areceipt from the Corporation Bank, and similar is the position. Immediatelythe funds were diverted to the third parties as detailed in the forensicreport. Details of diversion of loan funds have been given in tabularform in Section XII from pages 426 to 457 of the report. The submissionswhich have been raised on behalf of Bank of Baroda that due observanceof norms was observed before sanctioning the loan, before disbursaland an independent Lenders’ Engineer had been appointed in order tomonitor the contract. Monitoring was done during and post disbursal ofloan by Bank of Baroda. As matter of fact, the bank has not been ableto show what steps it has taken to stop the diversion of funds to thirdparties on the same date of disbursal of the amount. The aforesaid standof the Bank is falsified by the Forensic Auditors’ report.

87. The transactions of Amrapali Zodiac Developers Pvt. Ltd.with J.P. Morgan were clearly in order to avoid the provisions of theCompanies Act. It is apparent that Mr. Anil Mittal, Statutory Auditor, didnot report his interest and disclosed about his relatives and junior employeeas Director and shareholders. Mr. Chandan Kumar was junior employeeand Mr. Atul Mittal was his relative. Thus, it is apparent that RudrakshaInfracity Pvt. Ltd. was created for money laundering as aforesaid two

ADirectors and shareholders had no income, Rudraksha Infracity Pvt.Ltd. was incorporated to receive funds from Mannat Buildcraft whichwas also created by Mr. Chander Wadhwa, CFO through his closeassociates. After receiving money from Mannat Buildcraft Pvt. Ltd.,the same was transferred to J.P. Morgan Investments for purchasingequity shares of Amrapali Zodiac Pvt. Ltd. at an exorbitant price. ThereBwas no transaction before or after these transfers of monies in theaforesaid dummy companies. To suit the requirement of J.P. MorganInvestments, in entirety incorrect valuation report was prepared by M/s.Sudit K. Parikh & Co., Chartered Accountants. The methodology andprocedures defined of computation of fair market value were not followedCat the time of exit. J.P. Morgan was having full control on AmrapaliZodiac Developers and no action could have taken as per clause 10.4.3without investors’ approval. The profit cannot be recognised until theproject is completed. Thus, there cannot be any distributable amount asprofit for distribution to J.P. Morgan. It has also been found by the ForensicAuditors that J.P. Morgan was in the knowledge of the fact that AmrapaliDZodiac Developers had paid the money received to other companies ofAmrapali group. Advances exceeded the limits specified in theshareholders’ agreement, but J.P. Morgan did not ensure bringing backthe money. It was accepted by Mr. Suraj Chhabria that it was in hisknowledge and that of J.P. Morgan that the money has been divertedEfrom shareholder’s agreement and share subscription agreement. Thevaluation of the shares did not follow the correct methodology ofdiscounted cash flow as detailed out by the forensic auditors. Thevaluation exercise was done backwardly in order to inflate the value ofshare to siphon out the money of home buyers through J.P. Morgan.

F88. The FEMA rules prohibited the kind of transactions whichwere entered into with J.P. Morgan. Rule 4 of FEMA has been clearlyviolated. Master Circular No.8/2010-2011 of July 1, 2010, dealing withexternal commercial borrowings and trade credits clearly provides thatexternal commercial borrowings are not permitted to be utilised for real

estate business under the automatic route. The term real estate excludesGthe development of the integrated township. It was not case ofdevelopment of the integrated township. Even if it is taken to be caseof integrated township as submitted on behalf of J.P. Morgan, then alsofor approval route, hedging is required as pointed out by the ForensicAuditors in their report and borrowers had to submit their report aboutHthe signing of loan agreement with the lender for obtaining Loan

Registration Number. In case J.P. Morgan had invested in the form ofECB, following would have been the requirements: (i) obtaining LoanRegistration Number from the RBI; (ii) file ECB-2 returns every monthto the RBI, (iii) to pay tax on interest payment to J.P. Morgan; and (iv) tofile income tax return. We are in agreement with the findings of theforensic auditors in this regard. It is clear that it was methodologyadopted by the group to siphon out the funds of the home buyers inviolation of the FEMA rules and the notifications and by the creation ofdubious companies for which appropriate action is warranted by theconcerned authorities.

89. The report of Forensic Audit also indicates that the Companyhas received sum of Rs.140 crores during the financial year 2012-13from IPFFI Singapore PTE Limited under Foreign Direct InvestmentScheme. As per FEMA Rules, this amount was to be invested in realestate construction projects only.

90. The IPFFI Singapore PTE Limited which was incorporatedon 20.5.2011, entered into Share Subscription Agreement with ASCPLon 23.8.2012 and paid sum of Rs.140 crores to ASCPL in the followingmanner on 7.8.2012:

(a)INR 85 crores received in Axis Bank, IndirapuramBranch on 7.8.2012.

(b)INR 55 crores received in BOB Escrow Account on7.8.2012.

Thus, total sum of Rs.140 crores was received in Axis Bank.The amount was received in Axis Bank of INR 85 crores was transferredto Amrapali Centurian Park Pvt. Ltd. in three proportion. On 7.8.2012,Rs.5 crores were transferred. On 8.8.2012, an amount of Rs.50 croreswas transferred and on 18.8.2012, Rs.30 crores were transferred. TheACPPL on receiving Rs.85 crores allotted equity shares worth INR 85lakhs to ASCPL and balance INR 84.15 crores were treated as sharepremium account. There is no valuation report available as to how theshare premium of INR 84.15 crores had been calculated. This transferof fund by ASCPL to ACPPL is termed as absolutely violative of FDIRules and agreement. With respect to Rs.55 crores routed from IPFFISingapore in the Escrow Account of Bank of Baroda, Escrow Accountwas transferred from 8.8.2012 to 28.9.2012 in the account of Bank ofBaroda and used for payment of term loan instalments of OBC and

ABank of Maharashtra for repayment of their term loan instalment. Thismoney was not meant for payment of term loan instalment as per FDIRules. It was to be used in the construction.

91. The ASCPL did not use the money for the project which wasreceived from IPFII Singapore but transferred Rs.85 crores to ACPPLBand Rs.55 crores to repay bank loan instalments and repay the outstandingcreditors provided for in the books and standing in the books. The saidpayments have rightly been held by Auditors to be in contravention ofthe FDI norms and rules and for which the money was brought in India.

92. From 2013 to 2015, ASCPL has paid interest of Rs.58.81Ccrores @ 17 percent, which is highly abnormal rate. sum of Rs.14.41crores was paid on 31.3.2013. Likewise, on 31.3.2014, Rs.22.20 croreswere paid and on 31.3.2015, another amount of Rs.22.20 crores waspaid. The violations were made with the knowledge of the IPFIISingapore and they were in connivance with the ASCPL.

D93. The stand of the Bank of Baroda that they have independentlyappointed Lender’s Engineer is of no avail. There was negligence onthe part of Bank of Baroda and merely proceeding before the Court in2017 to recover the amount is not going to serve the purpose. More so,in view of the finding of the Forensic Audit that there was no necessityof obtaining the loan from the Bankers as Amrapali Group had sufficientEmoney from the home buyers, which has also been diverted and has notbeen utilised in the construction activities. Other assets have been createdwith the help of the same and the borrowings have been used in order tosiphon off the money by making payment of some unusual amount notonly to J.P. Morgan, but also to IPFII Singapore in violation of the FEMAFRules and FDI Rules as found by the Auditors in the respective cases.

94. It was submitted that the Bank of Baroda has obtained thedeed of corporate guarantee inter alia from Ultra Homes ConstructionLtd, Rinku Clothing Creations Pvt. Ltd., Jotindra Steels and Tube Limitedand Vidyashree Buildcon Pvt. Ltd. RoC search report and CA certificateGhad also been obtained. Lender’s Legal Counsel Report dated 2.3.2012verifying the validity and enforceability of financing documents andcreation of securing on assets of ASCPL is also on record. JotindraSteels and Tubes Limited issued corporate guarantee, it was absolutelyimproper for the Bank of Baroda to discharge the bank guarantee withoutpayment of amount in view of the fact that Jotindra Steels and TubesH

Limited was not ready to subscribe to the capital was no ground forBank of Baroda to discharge Jotindra Steels and Tubes Limited. Onceguarantee has been given and in view of the finding recorded by theForensic Auditors as to the nature of bid by the Jotindra Steels andTubes Limited and other persons, it is apparent that action was illegal.

95.The leases had been granted by Noida and Greater NoidaAuthorities subject to the provisions contained in U.P. Industrial AreaDevelopment Act, 1976. Section 13 of the U.P. Industrial AreaDevelopment Act, 1976 deals with imposition of penalty and mode ofrecovery of arrears, which states that where any transferee makes anydefault in the payment of any consideration money or instalment thereofor any other amount due on account of the transfer of any site or buildingby the Authority or any rent due to the Authority in respect of any leaseor where any transferee or occupier makes any default in payment ofany amount of fee or tax levied under the Act, in addition to the amountof arrears, further sum not exceeding that amount shall be recoveredfrom the transferee or occupier by way of penalty. Under Section 13-A, any amount payable to the Authority under Section 13 shall constitutea charge over the property and may be recovered as arrears of landrevenue or by attachment and sale of property in the manner providedunder the provisions of Uttar Pradesh Municipal Corporations Act, 1959(Act no.2 of 1959). Section 14 provides for the resumption of any siteor building and forfeiture of whole or any part of the money if any paidin respect thereof.

“14. (1) In the case of non-payment of consideration money orany instalment thereof on account of the transfer by the Authorityor any site or building or in case of any breach of any condition ofsuch transfer or breach of any rules or regulations made underthis Act, the Chief Executive Officer may resume the site orbuilding so transferred and may further forfeit the whole or anypart of the money if any paid in respect thereof.

(2) Where the Chief Executive Officer order resumption of anysite or building under sub-section (1) the Collector may, on hisrequisition, cause possession thereof to be delivered to him andmay for that purpose use or cause to be used such force as maybe necessary.”

96. The Authorities have failed to take action under the aforesaidprovisions. The Authorities have also failed to perform the statutory

Aduty cast upon them to take prompt action. Merely filing of the caseagainst Unitech Builders by way of petition in this Court did not furnishany grounds to the Authorities to remain silent spectator on theperpetration of fraud committed on the home buyers by Amrapali Groupof Companies. Public trust doctrine requires an affirmative action, whichwas envisaged not only statutorily but under the Scheme also. TheyBwere required to ensure that projects were completed within the stipulatedperiod, otherwise, the very purpose of the grant would stand frustratedand colossal loss of public money. Amrapali Group did not pay even theamount due to be paid to the landowners on the part of land acquisition,it did not pay premium annual lease amount interest to Authorities. TheyChave violated every condition, but still, Authorities were bent upon tocondone everything. This reflects absolute dereliction of duty cast uponthe Authorities.97. The Noida and Greater Noida Authorities and the Bankershave permitted diversion of funds of home-buyers and the possession ofDother assets by Amrapali Group. The buyers’ money had been diverted,which was meant for construction on payment of dues of Authorities incase they were paid timely by the Amrapali Group to the Authorities andto the Banks substantively liability would have been cleared. But bytheir inaction and rather conniving, the buyers were cheated by theAmrapali Group. Authorities did not object when mortgages were effectedEin favour of Banks in violation of conditions. Bankers could not haveviolated conditions. Now, whatever complete/incomplete structures arethere, the Authorities are claiming that buyers have no right and theyhave the first charge on the structure as they have to recover the amount,only thereafter if anything is left out, can be paid to the buyers. In caseFthe submission is accepted, it would amount to playing further fraudupon the fraud. It was incumbent upon the Authorities as well as theBanks to prevent the fraud. Now, if Banks, as well as the Authorities,are permitted to recover the amount from the home-buyers’ investment,in that case, it would be equally unjust and would be against the conscience

of the law and nothing would be left for buyers not even brick and theGstructures have come up by investing their money. Law never permitsunjust gain based upon fraud. The principle “fraud vitiates” is clearlyattracted and such transaction would become unenforceable and wouldbe against the public trust doctrine. Real estate business can neverprosper in case of breach of trust, bankers, Authorities in connivanceHand the builders are permitted to take away the innocent home-buyers’

money without being accountable to their action/inaction. From tomorrowhuge money will be collected from home buyers by the builder, bankswould act in connivance and the Authorities sleep in slumber, permittingdiversion of money of buyers/bankers, etc., and the home-buyers will bepaying the dues of all concerned without investment of penny by builderand rather they are diverting the money of the home-buyers in connivancewith Authorities and Bankers and they are left without dream homes. Ifthat is factual scenario, no Court can permit such fraud to beperpetrated. Since “fraud vitiates”, the bounden duty of the Court is toact as parens patria not only to save the home-buyers but also to ensurethat they are not cheated.

98. Authorities and Bankers have not acted in furtherance of publicinterest and failed to perform duties enjoined upon them. The kind offraud that has taken place not only in Amrapali Group of Companies butat large as more than 70 percent of the various projects have not comeup, is alarming to the Courts to take affirmative steps with the directionto prevent such frauds, restore the money of home-buyers and to punishincumbents responsible for such act. At the same time to ensure thatbuildings are completed. It cannot be denied that lifetime savings ofhome-buyers have been invested for purchase of house with the faithand trust they have given the money. The scheme of the Government isto promote the real estate for which land had been acquired, even poorfarmers have not been paid the compensation. The land allotted at throwaway prices of 10%, the allotment premium has not been paid and in anillegal manner plots have been allotted on huge amount by builders isanother fraud in collusion with Authorities.99. How buyers get their houses and can be suitably compensatedfor the delay that has taken place in the matter and they are left at thejuncture where the builder has diverted the funds for the last severalyears and no construction activities have taken place. For several years,no accounts were maintained from 2015 till date and lot of money hadbeen withdrawn from the Banks. The orders passed by this Court on22.11.2017 to deposit 10 percent of the amount was not complied withby the Amrapali Group. Thereafter again on 17.5.2018, this Courtpermitted them to carry forward the project, but they did not do so andwere not ready to deposit the amount of Rs.250 crores to show theirbona fide to undertake construction activity and efforts had been madeto wriggle out of assurances on which basis this Court had passed theorders.

A100. On behalf of Authorities provisions contained in Section 13of the Uttar Pradesh Apartment (Promotion of Construction, Ownership,and Maintenance) Act, 2010 has been pressed into service. It is submittedthat transfer cannot be made in favour of home-buyer without executingthe Transfer Deed. As per Section 5 of Act of 2010, flat buyers becomeentitled to ownership and possession of the Apartment and undividedBinterest in the common areas as specified in the deed of the Apartment.It is further submitted that tripartite sub-lease deed has to be enteredinto in order to transfer ownership to the home-buyers, consisting ofAuthorities, builders and home-buyers and before that is done, it isnecessary for builder to obtain the completion certificate on fulfilment ofCcertain conditions. The main objection raised by the counsel is withrespect to the issuance of completion certificate is default of the paymentof amount with interest to be made under lease and relating to fire safety.It is also pointed out that completion certificate is necessary to be issued,the issuance of the same would depend upon payment of the dues and

the Authorities, later on, will have no mechanism to recover the dues,Donce registered conveyance deed is executed in favour of home-buyers.According to Authorities, the buyers may contend that they have paidthe entire consideration to the builder, who has defaulted in making thepayment for the flat and the privity of making the payment is betweenthe concerned Authorities and the builder. It is also submitted on behalfEof Authorities that in part completion also, the certificate can be issuedagainst the part payment received, however, the completion certificatewould be issued in the same proportion minus 10 percent so that financialinterest of the Authorities is protected. Sub-lease deed would be executedas per the present policy up to 90 percent of the proportion in which partpayment has been received.F

101. In our opinion, in the ordinary course, there cannot be anydispute with respect to the aforesaid propositions. However, in the instantcase, the facts indicate that 9000 families are residing for the last severalyears out of the sheer necessity of shelter place and they have not beenprovided with electricity connections and other facilities due to non-Gissuance of occupancy certificate by the concerned authorities. Mostof them have paid the entire amount to the builders. The amountoutstanding as against home buyers have to be used in completion ofbuilding. The payment to be made to concerned Authorities had alsobeen collected by the builder from home buyers as component of priceHof flat, but has not been deposited with the concerned Authorities andthe home buyers’ money had been diverted, which was more than thedues of the Authorities and the Banks taken together. Had timely actionbeen taken by them no amount could have been diverted and the positionwould have been different as it stands today. However, since we haveattached various other properties where home buyers’ money has beeninvested, the rights of the Authorities as well as bankers to get the moneyrecovered from the other properties of the builder Amrapali Group/Directors and where they have invested money and belonging to theguarantors in the various transactions. However, at the same time forwant of payment to Authorities and Bankers by the builder under thesefacts and circumstances, it would be absolutely improper for theAuthorities to deny issuance of occupancy or completion certificate,especially on the ground of non-payment of dues. As per the interimorders, we have ensured that fire safety devices are fitted in buildings atappropriate places wherever necessary and in case it is lacking at anyplace we have to ensure that they are fitted and there are no otherviolations pointed out in the construction so far made. Thus, theconcerned Authorities have to issue occupancy certificate as well ascompletion certificate with respect to the projects in which home buyersresiding without insisting for the payment of their dues. This Court hasto monitor the payment of the dues to the Authorities as well as theBankers, from guarantors and other proprietors. The innocent buyerscannot be made to suffer for no fault on their part.

102. Once Authorities have allowed 9000 home-buyers to occupythe premises without terminating the lease on the ground that occupationis illegal. Obviously, builders have put them in possession, they are notthe encroachers and they have invested their valuable saving and haveno other shelter place to live. They cannot be deprived of their housesand cannot be left without basic necessities of life like water, electricity,etc. The concerned Authorities are responsible to provide electricity,water, and all other basic amenities to buyers as they have the right tooccupy the premises. In the peculiar facts of the case, we have directedthe Authorities to provide basic necessities forthwith. We also direct theCentral Government and Government of Uttar Pradesh to ensure thateverything is done to protect the interest of the home-buyers obviouslywithout obliging the builders. Wherever we seek any favour for home-buyers, we see that defrauding parties i.e., promoters/builders are furtherobliged by making certain concessions by the Government that wouldamount to perpetrating further fraud and unjust enrichment of builder.

AThe case poses challenge to the law enforcement agencies to act intandem to book such culprits.

103. When there are defaults galore, creation of fake and dummycompanies in an unbridled manner, it passes comprehension that howthe Statutory Auditor has failed to discharge the duty cast upon him andBthe officials of the Amrapali Group also shared hard earned money ofhome-buyers in an illegal manner by siphoning it off. Directors hadobtained salaries without doing anything. Money is diverted and siphonedoff in other projects. Office junior employees, peons and relatives etc.were inducted as Directors just to defraud the home-buyers of theirmoney and to siphon it out. Without material being supplied, largeCamount of money had been paid by way of forge purchases as methodto divert money even through authorised signatories and the Companiesof the relatives, family members and relations of the Directors andGuarantors also. In the case fraud is to such large extent, it is difficult tocapsulise the facts in narrow compass, for that when we see the reportDand good job done by the Forensic Auditors to unearthed the fraud.They have gone into minute details forensically and done their jobextremely well, due to which serious kind of fraud has been unearthedwith the involvement of so many persons as referred to by them. Wedirect the concerned Authorities to look into the violation of the FEMAand FDI norms as projected by the Forensic Auditors in their report andEto submit progress report in this Court.

IN RE: RERA

104. The Bill was passed in the Rajya Sabha on 10.3.2016 and inthe Lok Sabha on 15.3.2016. The Bill intended to standardise businessFpractices and transactions in the real estate sector. It intends to ensureconsumer protection. It intends to regulate transaction related to bothresidential and commercial projects. The Statement of Objects andReasons are as under:

“STATEMENT OF OBJECTS AND REASONS

The real estate sector plays catalytic role in fulfilling the needand demand for housing and infrastructure in the country. Whilethis sector as grown significantly in recent years, it has been largelyunregulated, with absence of professionalism and standardisationand lack of adequate consumer protection. Though the Consumer

Protection Act, 1986 is available as forum to the buyers in thereal estate market, the recourse is only curative and is not adequateto address all the concerns of buyers and promoters in that sector.The lack of standardisation has been constraint to the healthyand orderly growth of industry. Therefore, the need for regulatingthe sector has been emphasised in various forums.

2. In view of the above, it becomes necessary to have Centrallegislation, namely, the Real Estate (Regulation and Development)Bill, 2013 in the interests of effective consumer protection,uniformity, and standardisation of business practices andtransactions in the real estate sector. The proposed Bill providesfor the establishment of the Real Estate Regulatory Authority (theAuthority) for regulation and promotion of real estate sector andto ensure sale of plot, apartment or building, as the case may be,in an efficient and transparent manner and to protect the interestof consumers in real estate sector and establish the Real EstateAppellate Tribunal to hear appeals from the decisions, directionsor orders of the Authority.

3. The proposed Bill will ensure greater accountability towardsconsumers, and significantly reduce frauds and delays as also thecurrent high transaction costs. It attempts to balance the interestsof consumers and promoters by imposing certain responsibilitieson both. It seeks to establish symmetry of information betweenthe promoter and purchaser, transparency of contractual conditions,set minimum standards of accountability and fast-track disputeresolution mechanism. The proposed Bill will inductprofessionalism and standardisation in the sector, thus paving theway for accelerated growth and investments in the long run.

4. The Real Estate (Regulation and Development) Bill, 2013 interalia provides for the following, namely:-

(a) to impose an obligation upon the promoter not to book, sellor offer for sale, or invite persons to purchase any plot,apartment or building, as the case may be, in any realestate project without registering the real estate projectwith the Authority;

(b) to make the registration of real estate project compulsoryin case where the area of land proposed to be developed

exceed one thousand square meters or number ofapartments proposed to be developed exceed twelve;

(c) to impose an obligation upon the real estate agent not tofacilitate sale or purchase of any plot, apartment or building,as the case may be, without registering himself with theAuthority;

(d) to impose liability upon the promoter to pay suchcompensation to the allottees, in the manner as providedunder the proposed legislation, in case if he fails todischarge any obligations imposed on him under theproposed legislation;

(e) to establish an Authority to be known as the Real EstateRegulatory Authority by the appropriate Government, toexercise the powers conferred on it and to perform thefunctions assigned to it under the proposed legislation;

(f) the functions of the Authority shall, inter alia,include – (i) to render advice to the appropriateGovernment in matters relating to the development of realestate sector; (ii) to publish and maintain website ofrecords of all real estate projects for which registrationhas been given, with such details as may beprescribed; (iii) to ensure compliance of the obligation castupon the promoters, the allottees and the real estate agentsunder the proposed legislation;

(g) to establish an Advisory Council by the CentralGovernment to advice and recommend the CentralGovernment on – (i) matters concerning theimplementation of the proposed legislation; (ii) majorquestions of policy; (iii) protection of consumerinterest; (iv) growth and development of the real estatesector;

(h) to establish the Real Estate Appellate Tribunal by theappropriate Government to hear appeals from the direction,decision or order of the Authority or the adjudicatingofficer;

(i)to appoint an adjudicating officer by the Authority foradjudging compensation under sections 12, 14 and 16 ofthe proposed legislation;

(j)to make provision for punishment and penalties forcontravention of the provisions of the proposed legislationand for non-compliance of orders of Authority or AppellateBTribunal;

(k) to empower the appropriate Government to supersede theAuthority on certain circumstances specified in theproposed legislation;

(l)to empower the appropriate Government to issuedirections to the Authority and obtain reports and returnsfrom it.

(5) The Notes on clauses explain in detail the various provisionscontained in the Real Estate (Regulation and Development) Bill,2013.

(6) The Bill seeks to achieve the above objectives.”

105. It is apparent from the aims and objectives that Act ensuresgreater accountability towards consumers and significantly reduce fraudand delays. Accountability standards have been laid down where dutiescast upon promotors as well as the effort has been made to makeconsumer also responsible.

106. Before coming to the rival submission with respect to RERA,we deem it appropriate to note certain provisions. Common areas havebeen defined under Section 2(n). The apartment has been defined underSection 2(e). Section 2(k) defines carpet area, whereas Section 2(q)defines completion certificate. Completion certificate to mean thatcertificate issued by competent authority certifying that the project hasbeen developed according to the sanctioned plan, layout plan andspecifications as approved by the competent authority. Occupancycertificate has been defined in Section 2(zf) which states that certificateissued by the competent authority permitting occupation of any buildingwhich has provision for civic infrastructures such as water, sanitation,and electricity. Section 2(zk) defines promoter as person who constructsor causes to be constructed an independent building or building

Aconsisting of apartments or converts an existing building for the purposeof selling to other persons; person who develops land into project;any development authority or any other public body; an apex State levelco-operative housing society etc.; any other person who acts himself asa builder, coloniser, contractor, developer, estate developer or by anyother name; and such other person who constructed any building orBapartment for sale to general public.

107. It is provided under Section 3 that no promoter shall advertise,market, book, sell or offer for sale any plot, apartment or building in anyreal estate project or part of it without registration with the Real EstateRegulatory Authority established under the Act. The provisions of theCAct have also been made applicable to the ongoing projects on the dateof commencement of the Act and for which completion certificate hasnot been issued, the promoter shall make an application to the Authorityfor registration of said project within three months from the date ofcommencement of the Act.DThe projects of Amrapali Group have registration under the RERAis an admitted fact. The provisions of the RERA are applicable is alsonot in dispute.

108. Section 4 requires the application to be filed with specifieddocuments for the purpose of registration. As per Section 4(2)(l)(D), 70Epercent of the amount realised for the real estate project from the allottees,from time to time, shall be deposited in separate account to bemaintained in scheduled bank to cover the cost of construction and theland cost and shall be used only for that purpose and the promotor shallwithdraw only to the proportion of the percentage of completion of theFproject. The accounts have to be audited in every six months andchartered accountant has to certify that amounts collected for particularproject have been utilised for that project and the withdrawal has beenin compliance with the proportion of the percentage of the completion ofthe project. The provisions of Section 4(2)(l)(D) is extracted hereunder:

G“4. Application for registration of real estate projects.- (1)**(2) The promoter shall enclose the following documents alongwith the application referred to in sub-section (1), namely: —

(l) declaration, supported by an affidavit, which shall be signedby the promoter or any person authorised by the promoter, stating:-

(D) that seventy per cent of the amounts realised for the realestate project from the allottees, from time to time, shall bedeposited in separate account to be maintained in scheduledbank to cover the cost of construction and the land cost and shallbe used only for that purpose:

Provided that the promoter shall withdraw the amounts from theseparate account, to cover the cost of the project, in proportion tothe percentage of completion of the project:

Provided further that the amounts from the separate account shallbe withdrawn by the promoter after it is certified by an engineer,an architect and chartered accountant in practice that thewithdrawal is in proportion to the percentage of completion of theproject:

Provided also that the promoter shall get his accounts auditedwithin six months after the end of every financial year by achartered accountant in practice, and shall produce statementof accounts duly certified and signed by such chartered accountantand it shall be verified during the audit that the amounts collectedfor particular project have been utilised for that project and thewithdrawal has been in compliance with the proportion to thepercentage of completion of the project.

Explanation.- For the purpose of this clause, the term “schedulebank” means bank included in the Second Schedule to theReserve Bank of India Act, 1934 (2 of 1934);”

109. When we consider the provisions in the instant case, it wasnecessary to deposit the amount in the account. In the year 2015, theRERA was in contemplation and certain provisions came into force on1.5.2016 and some more Sections i.e., 3 to 19, 40, 59 to 70 and 79 and 80came into force with effect from 1.5.2017.

110. blatant violation of the provisions of RERA has been doneby the Amrapali Group. Since RERA contemplates timely completionof projects once registration has been granted under Section 5 and

Aextension of registration under Section 6, it is only in the event of forcemajeure in case there is no default on the part of the promoter, registrationcan be extended in aggregate for the period not exceeding one year.Force majeure shall mean case of war, flood, drought, fire, cyclone,earthquake or any other calamity caused by nature. The registrationgranted under Section 5 is valid for period declared by the promoter.BSection 7 provides that the Authority may on receipt of complaint orsuo motu or on the recommendation of the competent authority revokethe registration granted under Section 5 in case promoter makes defaultin doing anything required by or under the Act or the rules or the regulationmade thereunder; the promoter violates any of the terms of approvalCgiven by the competent authority; the promoter is involved in any kind ofunfair practice or irregularities. It is also independently provided that incase the promoter indulges in any fraudulent practices, the registrationcan be revoked. Upon revocation of the registration, the promoter shallbe debarred from accessing the website in relation to that project underSection 7(4)(a). Under Section 7(4)(b), the Authority shall facilitate theDremaining development works to be carried out in accordance withprovisions of Section 8. Provisions of Section 7 is extracted hereunder:

“7. Revocation of registration. - (1) The Authority may, onreceipt of complaint or suo motu in this behalf or on therecommendation of the competent authority, revoke the registrationEgranted under section 5, after being satisfied that—

(a) the promoter makes default in doing anything required byor under this Act or the rules or the regulations made thereunder;

(b) the promoter violates any of the terms or conditions of theFapproval given by the competent authority;

(c) the promoter is involved in any kind of unfair practice orirregularities.

Explanation.— For the purposes of this clause, the term “unfairpractice means” practice which, for the purpose of promotingGthe sale or development of any real estate project adopts anyunfair method or unfair or deceptive practice including any of thefollowing practices, namely:—

(A) the practice of making any statement, whether in writingor the visible representation which,—

(i) falsely represents that the services are of particularstandard or grade;

(ii) represents that the promoter has approval or affiliationwhich such promoter does not have;

(iii) makes false or misleading representation concerningthe services;

(B) the promoter permits the publication of any advertisementor prospectus whether in any newspaper or otherwise ofservices that are not intended to be offered;

(d) the promoter indulges in any fraudulent practices.

(2) The registration granted to the promoter under section 5 shallnot be revoked unless the Authority has given to the promoter notless than thirty days notice, in writing, stating the grounds on whichit is proposed to revoke the registration, and has considered anycause shown by the promoter within the period of that noticeagainst the proposed revocation.

(3) The Authority may, instead of revoking the registration undersub-section (1), permit it to remain in force subject to such furtherterms and conditions as it thinks fit to impose in the interest of theallottees, and any such terms and conditions so imposed shall bebinding upon the promoter.

(4) The Authority, upon the revocation of the registration,—

(a) shall debar the promoter from accessing its website in relationto that project and specify his name in the list of defaulters anddisplay his photograph on its website and also inform the otherReal Estate Regulatory Authority in other States and Unionterritories about such revocation or registration;

(b) shall facilitate the remaining development works to becarried out in accordance with the provisions of section 8;

(c) shall direct the bank holding the project back account,specified under subclause (D) of clause (I) of sub-section (2)of section 4, to freeze the account, and thereafter take suchfurther necessary actions, including consequent de-freezing ofthe said account, towards facilitating the remaining developmentworks in accordance with the provisions of section 8;

562SUPREME COURT REPORTS

A(d) may, to protect the interest of allottees or in the publicinterest, issue such directions as it may deem necessary.”

111. It is clear that RERA intends for completion of the project incase any fraud is committed by the promoter and the activity is notcompleted, the home-buyers cannot be left in lurch, allowing the prayerBon behalf of Bankers as well as by the Authorities would amount tounfair treatment of home buyers in the facts of this case. It is too latefor them to submit that home buyer has no rights in the teeth of theprovisions contained in the RERA, which intends to prevent fraud.

112. Once registration lapses on non-completion of project withinCthe time stipulated or it is revoked the consequence ensue as enumeratedin Section 8 of RERA, the Authority is enjoined upon the duty to consultwith the appropriate Government to take such action as it may deemincluding the carrying out of the remaining development works bycompetent authority or by the association of allottees or any other manneras may be determined by the Authority. The development work has toDbe completed and cannot be left in between. Section 8 reads thus;

“8. Obligation of Authority consequent upon lapse of or onrevocation of registration.- Upon lapse of the registration oron revocation of the registration under this Act, the Authority,may consult the appropriate Government to take such action as itEmay deem fit including the carrying out of the remainingdevelopment works by competent authority or by the associationof allottees or in any other manner, as may be determined by theAuthority:

Provided that no direction, decision or order of the Authority underFthis section shall take effect until the expiry of the period of appealprovided under the provisions of this Act:

Provided further that in case of revocation of registration of aproject under this Act, the association of allottees shall have thefirst right of refusal for carrying out of the remaining developmentGworks.”

113. Functions and duties of the promoter are specified in Section11. As per the provisions of this Section, the promoter shall be responsibleto obtain the completion certificate or the occupancy certificate. Heshall also be responsible for providing and maintaining the essentialH

services on reasonable charges, till taking over of the maintenance bythe association of the allottees. The promoter shall enable the formationof an association or society or co-operative society or federation ofallottees. He shall pay all outgoings until he transfers the physicalpossession to the allottee. After he has executed an agreement for salefor any apartment, plot or building, he may not mortgage or create acharge on such an apartment, plot or building and if any such mortgageor charge is made or created then notwithstanding anything contained inany other law for the time being in force, it shall not affect the right andinterest of the allottee. It is clearly provided under Section 11(4)(h),which is extracted hereunder:

“11. Functions and duties of promoter.-

(4) The promoter shall—

(h) after he executes an agreement for sale for any apartment,plot or building, as the case may be, not mortgage or create acharge on such apartment, plot or building, as the case may be,and if any such mortgage or charge is made or created thennotwithstanding anything contained in any other law for the timebeing in force, it shall not affect the right and interest of the allotteewho has taken or agreed to take such apartment, plot or building,as the case may be;”

114. It is clear that is the duty of the promoter to abide by the timeschedule of the completion of the project of the allottee. The time ofcompletion of the project is fixed from the date of the agreement. Thoughthe RERA has come into force after the mortgage had been created, theintendment of RERA is that after the execution of the agreement nosuch mortgage or charge should be created.

115. Section 14 provides adherence to sanctioned plans and projectspecifications by the promoter. Section 15 deals with the obligations ofthe promoter in case of transfer of real estate project to third party.The promoter shall not transfer or assign his majority rights and liabilitiesto third party without obtaining the prior written consent of two-thirdsallottees and without the prior written approval of the Authority. Section16 deals with obligations of promoter regarding the insurance of realestate project. Section 17 provides for the transfer of title. It is incumbentupon the promoter to execute registered conveyance deed in favour of

Athe allottee along with undivided proportionate title in the common areasto the association of the allottees or the competent authority and thepossession of the plot, apartment or building, as the case may be, shallbe handed over to the allottees and the common areas to the associationof the allottees or the competent authority, as the case may be. Section17(1) is extracted hereunder:B

“17. Transfer of title.- (1) The promoter shall execute aregistered conveyance deed in favour of the allottee along withthe undivided proportionate title in the common areas to theassociation of the allottees or the competent authority, as the casemay be, and hand over the physical possession of the plot,Capartment of building, as the case may be, to the allottees and thecommon areas to the association of the allottees or the competentauthority, as the case may be, in real estate project, and theother title documents pertaining thereto within specified period asper sanctioned plans as provided under the local laws:DProvided that, in the absence of any local law, conveyance deedin favour of the allottee or the association of the allottees or thecompetent authority, as the case may be, under this section shallbe carried out by the promoter within three months from date ofissue of occupancy certificate.”E116. It is apparent that after the transfer of conveyance deed, thetitle vests in the allottee and of the common area in the association of theallottees or the competent authority as the case may be. No title remainswith the promoter.

117. Section 18 deals with the return of amount and compensation.FIn case promoter fails to complete or is unable to give possession of anapartment, plot or building, he shall be liable on demand to the allottees.In case the allottee wants to withdraw from the project, without prejudiceto any other remedy available, the promoter has to return the amountreceived in respect of that apartment, plot, building with interest in thisGbehalf including compensation in the manner as provided under the Act.

118. The rights and liabilities of allottees are provided in Section19, which is reproduced hereunder:

“19. Rights and duties of allottees.- (1) The allottee shall beentitled to obtain the information relating to sanctioned plans, layoutHplans along with the specifications, approved by the competent

authority and such other information as provided in this Act or therules and regulations made thereunder or the agreement for salesigned with the promoter.

(2) The allottee shall be entitled to know stage-wise time scheduleof completion of the project, including the provisions for water,sanitation, electricity and other amenities and services as agreedto between the promoter and the allottee in accordance with theterms and conditions of the agreement for sale.

(3) The allottee shall be entitled to claim the possession ofapartment, plot or building, as the case may be, and the associationof allottees shall be entitled to claim the possession of the commonareas, as per the declaration given by the promoter under sub-clause (C) of clause (I) of sub-section (2) of section 4.

(4) The allottee shall be entitled to claim the refund of amountpaid along with interest at such rate as may be prescribed andcompensation in the manner as provided under this Act, from thepromoter, if the promoter fails to comply or is unable to givepossession of the apartment, plot or building, as the case may be,in accordance with the terms of agreement for sale or due todiscontinuance of his business as developer on account ofsuspension or revocation of his registration under the provisionsof this Act or the rules or regulations made thereunder.

(5) The allottee shall be entitled to have the necessary documentsand plans, including that of common areas, after handing over thephysical possession of the apartment or plot or building as thecase may be, by the promoter.

(6) Every allottee, who has entered into an agreement for sale totake an apartment, plot or building as the case may be, undersection 13, shall be responsible to make necessary payments inthe manner and within the time as specified in the said agreementfor sale and shall pay at the proper time and place, the share ofthe registration charges, municipal taxes, water and electricitycharges, maintenance charges, ground rent, and other charges, ifany.

(7) The allottee shall be liable to pay interest, at such rate as maybe prescribed, for any delay in payment towards any amount orcharges to be paid under sub-section (6).

(8) The obligations of the allottee under sub-section (6) and theliability towards interest under sub-section (7) may be reducedwhen mutually agreed to between the promoter and such allottee.

(9) Every allottee of the apartment, plot or building as the casemay be, shall participate towards the formation of an associationBor society or cooperative society of the allottees, or federationof the same.

(10) Every allottee shall take physical possession of the apartment,plot or building as the case may be, within period of two monthsof the occupancy certificate issued for the said apartment, plot orbuilding, as the case may be.

(11) Every allottee shall participate towards registration of theconveyance deed of the apartment, plot or building, as the casemay be, as provided under sub-section (1) of section 17 of thisAct.”

119. Certain rights and duties as well as the liabilities to pay interestin case of default on the part of allottees are also provided in the provisionscontained in Section 19. Chapter V provides for Real Estate RegulatoryAuthority, whereas Chapter VI deals with the Central Advisory Council.The provisions relating to Real Estate Appellate Tribunal are provided inEChapter VII. Chapter VIII contains provisions relating to offences,penalties, and adjudication and Chapter IX deals with finance, accounts,audits, and reports.

120. It is apparent that RERA intends protection of home-buyersand aims at completion of the buildings. The buildings have to becompleted, for that, we are required to pass orders. We have alreadyFassigned the task to NBCC for completion of buildings as the promoters/builders have failed to complete the building within the time fixed andthe time which could have been extended. Now, more than 10 yearshave passed and buyers were given the assurances that they would getflats within three years period by the promoter/builder. The maximumGtime fixed in RERA has also expired and extension could not have beenbeyond 1 year.

121. It is clear that common areas as provided under Section 17have to be ultimately handed over to the Association of Allottees or theCompetent Authority as the case may be. Thus, any sub-lease, alienationHor transfer affected by the promoter of the common areas as defined in

the RERA and otherwise reserved under the plan shall be void andinoperative.

122. As the basic obligations have not been complied with by thepromoters, they cannot also be entitled to FAR. It was pointed out onbehalf of Authorities that permissible FAR is 2.75, whereas it has beenwrongly mentioned and worked out at 3.50 by the Amrapali Group. Inthe instant case, we find that there is serious kind of fraud by thepromotors as such they cannot be said to be entitled to avail the FAR toutilise it or to alienate and more so when they have failed to completethe projects and pay the dues.

123. It is also apparent from the provisions of the Act of 1976 aswell as RERA and also the case set up by the Authorities that partialoccupation certificate can also be issued. The completion certificatecan be issued partially also as per the provisions of Uttar PradeshApartment (Promotion of Construction, Ownership, and Maintenance)Act, 2010. The main obstacle is said to be non-deposit of the amountwhich may be ordered to be paid, for that we may clarify in the peculiarfacts and circumstances of the case, it has to be secured and recoveredby way of selling other attached properties and the one, which havebeen created out of the diverted funds of the home-buyers and propertyof guarantors etc. The banks’ borrowings have to be taken care of in asimilar manner. The money payable to the Authorities had been divertedand huge amount of buyers’ money had not been invested in the projectsneither any part of the money of bank borrowings, in fact, were spent inthe construction as found by the Forensic Auditors. The promoters areheld accountable for the diversion of the money paid by the buyers ascomponent of price of flats even on account of payment to Authorities.124. There appears to be non-issuance of the completioncertificate, whereas the buildings are being occupied, we direct issue ofcompletion certificate. This Court has to monitor the payment of duesof the Authorities and Banks and that outstanding are not going to createhurdle in the execution of the registered document/conveyance deed infavour of home buyers. It has to be executed by the concerned Authoritiesas well as by the Court Receiver and by the home buyers. The amountwhich is due on the part of home buyers has to be deposited in theaccount, which has been opened, in the UCO Bank by this Court. It hasto be utilised firstly for the purpose of completion of the buildings and forproviding other facilities and the home buyers of incomplete projects

Aalso have to deposit the outstanding amount on their part in the aforesaidaccount opened in the UCO Bank and out of that amount, it has to bedisbursed as per the orders to be passed by this Court for the purpose ofconstruction and outstanding if any, shall be used for the purpose ofpayment of compensation to home buyers for the period of delay as perthe agreement or as may be determined ultimately and other dues.B

125. With respect to percentage of profit of NBCC, we fix it at 8percent. As it is Government Undertaking, NBCC has to ensure thatDPR is prepared reasonably and the work to be completed asexpeditiously as possible.C126. Learned senior counsel on behalf of Bank of Baroda

C126. Learned senior counsel on behalf of Bank of Barodasubmitted that Amrapali Group as per the conditions of the lease deedexecuted by the Noida Authority had the right to mortgage the land withthe prior permission of the authority for raising loans for the purpose offinancing investment in the project. No doubt the lease deed contained astipulation as to mortgage with prior permission but no clear-cutDpermission had been obtained from Noida authority. Noida authority hasclearly stated as rider that until and unless the entire due premium is paidalong with lease money due, no mortgage can be effected. The stand ofthe authority is clear that without payment of land dues no mortgagecould be effected. Thus, in fact in the eye of the law no mortgage couldEbe created as there was no permission to mortgage unless the dueswere paid and thus the bank could not have mortgaged the propertybefore clearance of the dues of the Noida Authority, and secondly, themortgage was permissible for the purpose of financing the investment inthe project. As matter of fact, when this was the stipulation, it was thebanker’s duty to ensure that money made available was invested in theFproject.

127. The Forensic Auditors’ report makes it apparent that Bankershave failed to ensure and oversee that the money was invested in theprojects. It was diverted elsewhere as rightly found by the ForensicAuditors. Thus, no charge can be said to have been created by bankGloans on the projects as the money, in fact, it has not been used in theprojects as such home buyers cannot be saddled with liability and alsothe projects. Even what was paid by the home buyers, had not beenused in the projects and stands diverted. There was, in fact, no necessityfor raising the loans from the bank. The money borrowed from banksHwas used to create other assets worth thousands of crores. Thus, thebanks can realise their money from those assets and from guarantorsand not from the investment of home buyers, not from the buildings inwhich loans granted by banks have not been invested, which have beenerected partially or some are at the nascent stage, for which hard-earnedmoney has been paid by the home buyers. Home buyers are not directparty to the bank loan, thus it was the duty of the bankers and Noidaauthorities, if they wanted to impose their charge, to ensure that nofraud takes place and money is invested in the projects for the purposefor which it has been taken not only the money paid by the home buyersbut obtained from the banks and due to be paid to Noida authorities, isnot usurped illegally by promoter/builder. Though it was realised as partof the component of the price of flat from the home buyers, by thepromoters/builders its illegal diversion was permitted by Amrapali Groupin connivance with the officers of the authorities and the bank. Thus, thevery condition of investment in the project by bankers, subject to whichthe mortgage was permissible, had been violated. Thus, it cannot be saidthat any charge of the banks has been created on the projects. Thecharge would be on the property which has been purchased/created bydubious methods. It would be inequitable to fasten the charge againstthe investment made by the home buyers whereas they have not beenbenefited and rather have been cheated by the promoters for whichbankers, as well as authorities, have to share the blame. We cannotperpetuate another fraud on the innocent home buyers in facts of thecase of fastening liability of amounts payable to Authorities and Bankers.

128. Learned senior counsel on behalf of the Bank of Baroda,also submitted that the home buyers are not secured creditors, as suchthey have no right over secured creditors. While making the aforesaidsubmissions the provisions of RERA have been ignored. Though theymay not be secured creditor, they have right to be treated inaccordance with the law, fairly and they cannot be subjected to afraudulent action by the promoters, that too in connivance with the bankersand officials of the Noida and Greater Noida authorities. Even otherwise,in such situation the court has to come to their rescue and protect theirinterests, and it is the duty of the court to ensure that buyers get flats anddevelopment work is completed as intended under the RERA and theflats are handed over to home buyers after completion. In case the fraudis permitted to be perpetrated on the home buyers, the very purpose ofenactment of RERA would stand defeated.

ABC

A129. No doubt about it as submitted on behalf of Amrapali groupof companies, that the provisions of RERA are for protecting the interestsof promoters also. No doubt about it that the RERA intends to protectthe interests of the promoters and home buyers both. However, in theinstant case, we have given the opportunity to the promoters to depositthe 10% of the amount in December 2017 and January 2018 but ordersBhave met with non-compliance with all impunity. Thereafter on theassurance of the Amrapali Group that it would undertake the constructionwork and joint plan was submitted after great wastage of time andenergy and then order dated 17.5.2018 was passed that was also notcomplied with. It was passed on condition that sum of Rs.250 croresCto be deposited which was also not deposited by the Amrapali group toshow its bona fide. The Group never intended right from the beginningto complete the construction work, has been rightly observed by ForensicAuditors. Thereafter, we have assigned the work to the NBCC. But atthe same time, the effort has been made by Amrapali Group/ its Directorsto sell the property which has been created by diversion of home buyers’Dfunds. Incorrect facts have been stated and suppressions have beenmade in various affidavits filed in this Court that the certain propertiesare not encumbered. Various applications are being filed one after theother by the encumbered holders with respect to several properties thatthey have the charge over the said property.E

130. That apart, several attached properties have been put to saleby DRT under the orders of this Court. In most of the cases, no buyershave turned up and/or the price offered by forming cartel are too low.The property cannot be sold at throw away price. For example, in thecase of hospital situated at Noida, the very group of doctors wanted toFpurchase, it who are running it, at paltry sum by forming cartel.Aforesaid is one of the examples of cartel formation that is how Amrapaligroup is instrumental in not allowing the properties to be sold. Thereappears to be some invisible hand holding buyers out and even the bankersare not coming up to finance the purchasers, is the genuine grievancepointed out at the Bar. Be that as it may. Entire gamut of facts indicatesGthe contumacious conduct of Amrapali Group, proper and correctdisclosures on oath have not been made, even encumbrances are notbeing specified clearly in spite of repeated orders passed by us. Theyhave sold several valuable properties during pendency of petitions aspointed out by the Forensic Audit Report. In the aforesaid circumstances,

the submission raised on behalf of Amrapali group that under the provisionsof the RERA their interest should be protected. In our opinion, consideringthe serious kind of fraud unearthed on the forensic audit, formation ofdummy companies, violation of norms of foreign investment, violationof FEMA, siphoning off the money of home buyers, making payment ofdividend without profits and methodology had been devised of valuingthe shares on an unreasonable higher basis so as to siphon out the moneyof the home buyers to J.P. Morgan etc. The creation of large numberof assets with the help of money of the home buyers. The ForensicAudit unfolds the true story of Amrapali Group. Right from 2015, noconstruction activity has taken place. Account books had not beenmaintained and money has been transferred continuously. No audit wasmade. Money was taken out from banks, and fake purchases havebeen made. Thus, they are not at all entitled for any indulgence underthe provisions of the RERA. In view of their unholy conduct, defyingdescription, their contumacious fraudulent conduct totally disentitles themand they are required to be dealt with as sternly as possible so as tomake it exemplary one that such fraudulent actions do not recur in future,in real estate business in India. We are not country in which Courtswill permit such action and permit person to go scot-free.131. The agreement initially executed in favour of home buyersto purchase flats may not create any right in the property in praesenti, itwill be only on the execution of the registered document that title isgoing to be perfected, but investment in project is only of home buyers.In this case, as they have paid money invested in projects, it is for thecourts to do complete justice between the parties and to protect theinvestment so made and interests of home buyers and to ensure thatthey get the perfect title and the fruits of their hard earned money andlifetime savings invested in the projects.

132. On behalf of Bank of Baroda, learned senior counselsubmitted that the agreement of promoter/builder with home buyers isunregistered as such, no right has been created in the immovable propertyin view of the provisions contained in section 49 of the Registration Act.The submission ignores and overlooks the provisions of RERA whichintends to prevent such frauds on home buyers and ensure completionof projects and that of the agreement between promoters and buyers.There are various rights under the agreement as well as under the RERA.

AThe agreement entered into at the time of allotment is the basis of theinvestment in the projects made by home buyers, it cannot be said to bea scrap of paper. It is their valuable investment which is required to beprotected and cannot be permitted to be taken away by builder or securedcreditors in an illegal manner. The provisions of section 17 of theRegistration Act no doubt provide that document of title requiresBcompulsory registration, no doubt registered document has to be executedthat also has to be taken care of by the Court so as to protect the interestof home buyers.

133. Learned senior counsel appearing on behalf of the Bank ofBaroda urged that by virtue of the provisions contained in section 11(4)(g)Cof the RERA Act, it is the duty of the promoter to pay all outgoings untilhe transfers the physical possession of the real estate project to theallottee or the association of allottees, which he has collected from theallottees, for the payment of outgoings, including the land cost, groundrent, municipal or other legal taxes, charges for water or electricity,Dmaintenance charges, including the mortgage loan and interest onmortgages or other encumbrances and such other liabilities payable tocompetent authorities, banks and financial institutions, which are relatedto the project. The two expressions of the provisions of Section 11(4)(g)are significant. Firstly, which the promoter has collected from the allottees.Secondly “which are related to the project”. In the instant case dues ofEthe Noida/Greater Noida authorities have been collected from the allotteesby the promoters but the authorities have permitted diversion of saidamount by not taking any action in view of the chronic default right fromthe beginning. Though they knew that the promoter had booked the flats,even the permission to grant sub-lease of the plot had been granted inFtotally illegal manner without payment of dues of premium and leaserent etc. Conditional permission to the mortgage was issued withoutpayment of the premium lease money etc. so as to perpetuate the fraudbeing done by the promoters. The mortgage created ought to have beenobjected in view of the conditions subject to which it could have been

done. Obviously, it was done by Amrapali Group in connivance withGofficials of Authorities including the bankers. Thus when the authoritieshave themselves permitted fraudulent action money has been diverted,which has been paid by home buyers for payment to Authorities also, aspremium was component of price and as bankers have also permitteddiversion of loan amount, mostly on same day, it cannot be said in theH

facts of the case, that any amount of the bankers or that of authoritiesremains invested in the project. The sine qua non is the expression“which are related to the project” would mean that that amountrecoverable from the allottee is the one which has been invested in theproject. third person can be held liable for the money payable to securedcreditors in case it has been invested in the project, in case it has notbeen spent in constructions, same cannot be permitted to be realisedfrom the project/home buyers, the investment of home buyers cannot befrittered away and to fasten liability upon the innocent buyers/allotteesin that event would tantamount to perpetrating yet another fraud on them.Accountability, as per law, has to be fastened on promoters/builders andall concerned. It would amount to total deprivation of money of homebuyers without any fault on their part or legal liability. It would amount tofastening liability upon them once over again by misuse of the process oflaw. The factual matrix unfolded on forensic audit indicates serious kindof fraud that has taken place which would shut the enforcement of liabilityclause as against the home buyers. The provisions of the first and secondcharge cannot come to the rescue of Authorities/Bankers. Under Section11(4)(g) the promoter has to pay all outgoings which he has collectedfrom the allottees, the payment of outgoings includes land cost, groundrent, charges for water or electricity, maintenance charges etc. As perthe proviso to Section 11(4)(g), the promoter shall continue to be liable,even after the transfer of the property, to pay such outgoings and penalcharges, if any, to the authorities. Outgoings which have been collectedby the promoter can be and have to be recovered in the facts andcircumstance of the case from them as intended by section 11(4)(g) ofRERA.

134. Learned senior counsel on behalf of the Bank of Barodasubmitted that the provisions of section 11(4)(h) of RERA provides thatthe promoter, after he executes an agreement for sale for any apartment,plot or building, cannot mortgage or create charge on such an apartment,plot or building, as the case may be, and if any such mortgage or chargeis made or created then it shall not affect the right and interest of theallottee who has taken or agreed to take such apartment, plot or building,as the case may be. The provision has non-obstante clause. As theprovision has given an overriding effect by non-obstante clause, theprovision is no help to the banks as the agreement had been by promoterswith home buyers entered into earlier in point of time to the creation of

ABCDE

Athe mortgage. There could not have been any mortgage createdsubsequently and even if validly created, it would not affect the right andinterest of the allottee as intended by RERA. Thus, the right and interestof the allottee are safeguarded by virtue of the provisions contained insection 11(4)(h). As the project was pending, the provision intends toconfer right on the allottee and save the allottees and also their interestsBfrom such liability. Even if the provision is held not applicable on theground that RERA came into force later, since there was no validmortgage as held by us, it was incapable of affecting the right or interestof the allottee. Had it been ensured that the money due to Noida andGreater Noida authorities was paid by the promoters to the authorities,Cthe fraud of siphoning of money would not have taken place to the extentit has been done. Moreover, the money borrowed from banks has notbeen invested in the projects. In fact, projects required no funding. Itwould be iniquitous to charge the allottees with the bankers’ money.Thus, in the peculiar facts and circumstances of the case, we hold thatrights or interests of the allottees are not at all affected by the mortgageDcreated by the bankers or by the dues of the Noida or Greater Noidaauthorities.

135. On behalf of the Bank of Baroda, Shri Maninder Singhlearned senior counsel has submitted that section 4(2)(1) of the RERArequires the promoter to disclose the prior encumbrance. Therefore, theERERA contemplates the creation of encumbrance even before the projectis registered and such plot can be offered to allottees. Basically, adeclaration is required under section 4(2)(l)(A) that the land is free fromall encumbrances or as the case may be, details of the encumbrances, ifany, on such land, should be disclosed. The intention is that the allotteeFshould know about the encumbrance if any. The provision does notespouse the cause of the bank in any manner whatsoever.

136. On the strength of the provision of section 19(4) of RERA,learned senior counsel has submitted that the allottee should be entitledto claim the refund and compensation, if the promoter fails to comply orGis unable to give possession of the apartment, plot or building inaccordance with the terms of the agreement for sale or due todiscontinuance of his business as developer on account of suspensionor revocation of his registration under the provision of the RERA or therules and regulations made thereunder. He submitted that the right ofthe allottees is restricted to only receiving the compensation from theHpromoters. We wholly disagree with the submission. It is made in oblivion

of the provisions of Section 8 of the RERA which provides for completionof the development projects by the competent authority or by theassociation of allottees or in any other manner, as may be determinedand the association of allottees shall have the first right of refusal forcarrying out the remaining development work is the wholesome provisioncontained in the second proviso to section 8. To claim compensation is atthe option of the allottee if the allottee wants to go out. That is an additionalright, not the only right conferred under the RERA. He cannot be left inlurch but is entitled to claim the refund if he so desires. It is his option toclaim the refund along with interest and compensation which is to bedetermined under the RERA. The rights of the allottees are not restrictedto only receiving the compensation as submitted. The submission is tootenuous to be accepted.137. submission has also been raised that the RERA recognisesand protects interests of the lenders and does not in any manner takeaway rights under any of the existing statutes such as T.P. Act, DebtRecovery Tribunal Act, SARFAESI Act. It is apparent from perusalof RERA, which is special Act, that certain rights have been createdin favour of the buyers. The provisions of RERA have to prevail. Whenwe come to the question of protection of rights of buyers even if RERAhad not been enacted, under aforesaid laws in the facts of the case, adifferent view could not have been taken. However, there is no disputethat the bankers would have the right to recover their dues from whomand in what manner is the question which we have already answered.The provisions of RERA are beneficial to the home buyers and areintended to insulate them from fraudulent action, ensures completion ofthe building and it is the duty of the court to protect and ensure the home

buyers’ interest and at the same time to hold them responsible for theduties enjoined upon them under the said statute. We are not absolvingthe home buyers from the discharge of their liability if any. At the sametime, they have the right of enforcement of their right for compensationdue to undue delay in completion of the project.

138. It was submitted by learned senior counsel on behalf of theGreater Noida authority that title has to pass in home buyers by way ofregistered document as provided in section 17(1)(b) of the RegistrationAct and section 13 of the U.P. Apartments Act, 2010 and also theprovisions of the lease deed. The deed of transfer will be tripartitesub-lease deed. Completion certificate has to be obtained, for that it hasto be applied for. Dues of the authorities have to be paid before

Acompletion certificate is issued. The charge of Noida and Greater Noidaauthority has priority over other charges. None of the aforesaidsubmissions impress us so as to defeat the rights of home buyers. Wehave already dealt with that the dues have to be recovered in accordancewith law from the properties which have been created by the fundswhich have been diverted and the property of the directors etc. In orderBto do complete justice between the parties so that the faith of public isnot shaken in the real estate sector and such frauds are prevented in thefuture. We cannot permit the authorities in the facts and circumstancesof the case to deal with the rights of the home buyers in arbitrary and inan unjust manner.C139. In case the authorities are making allotment of plots at apaltry sum of 10% and giving the builders 8 years period to make paymentof premium with moratorium of 2 years then the period runs to 10years and the project is to be completed within 3 years. It is clear thatthe authorities have to be very vigilant for securing their interests otherwiseDin every case even if the promoter has completed the project and realisedthe charges from the home buyers and has not deposited the amountdue to the authorities, in case no action is taken by the Authorities, can itbe taken after 10 years against home buyers. The question arises whetherinnocent home buyers would have to pay the amount to authorities whichthey have already paid to promoters as part of the component of cost ofEflats or plots as the case may be, whether they are to be saddled onceover again with the liability to pay, though the amount paid by them hasbeen illegally usurped and diverted elsewhere and not paid to theauthorities and they have acted in connivance of officials. The authoritieshave to be vigilant in such cases and not to tolerate the default. TheyFhave to blame themselves for their inaction and have to wait for therealisation of dues by sale of other properties and as against guarantorsetc. The projects have to be completed as mandated by Section 8 ofRERA140. It was submitted that the authorities on cancellation of theGlease have to forfeit 25% of the amount and have to resume the landsalong with the structure. It cannot be done in view of the provisions ofRERA, particularly in view of the provisions of section 8 and otherbeneficial provisions contained in the said Act. Under section 14 of theAct of 1976, there can be forfeiture of the entire amount also, in case of

breach of condition or breach of rules, etc. by the promoters/ builders.Be that as it may. We hold and direct no action under any provisionsderogatory to the interest of home buyers can be taken either by theauthorities or the bankers in the peculiar facts and circumstances of thecase, that is to say, that no part of the building can be demolished. Buildingshave to come up and completed even the ones which are at the nascentstage as mandated by RERA. No doubt about it that in case of failure topay the dues the onus of payment of land dues has to be passed on to thebuyers on pro-rata basis but in the instant case they have already paidthe substantial amounts, huge amount has been permitted to be divertedby the authorities and bankers as such they have to wait for recoveryand cannot act in manner further detrimental to the interests of thehome buyers.

141. On behalf of Amrapali group, learned senior counsel submittedthat there were force majeure conditions in completing the projects.There were legal impediments in the completion of projects within theperiod given in the flat-buyers agreement during the period from 2011-15. The submission is baseless. It is apparent that the Full Bench of theHigh Court though held that the land acquisition was vitiated but still itwas upheld. The High Court did not quash it for the reason thatdevelopment has taken place. Higher compensation was ordered to bepaid. That order was affirmed by this Court in 2015 in Savitri Devi v.State of U.P. (2015) 7 SCC 21. There was no interim stay granted bythe High Court on construction work, is made clear by the Noida andGreater Noida authorities. There was no room to entertain any doubt asto the fact whether for particular village the acquisition had beenquashed. There was no quashing of land acquisition and moreover, therewas no stay. Only higher compensation was ordered to be paid. Therewas no force majeure condition or any legal impediment as such theperiod from 2011 to 2015 cannot be treated as moratorium period vis-à-vis the dues of Noida and Greater Noida authorities. The submissionmade as to the farmers’ agitation etc. is too vague and 30% of theprojects have come up; whereas 70% have not yet come up, out of theprojects in Noida and Greater Noida alone. It goes to indicate how atlarge-scale middle-class home buyers have been defrauded of their hard-earned money, taken away by the affluents and the officials in connivancewith each other. Law has to book all of them. We are hopeful that lawwill spread its tentacular octave to catch all culprits responsible for such

Akind of fraud causing deprivation to home buyers. It is shocking andsurprising that so many projects have remained incomplete. Several lakhsof home buyers have been cheated. As if there is no machinery of lawleft to take care of such situation and no fear left with the promoters/builders that such acts are not perceivable in civilised society.Accountability is must on the part of everybody, every institution and inBevery activity. We fail to understand the standard of observance of theduties by public authorities has gone so down that such frauds take placeopenly, blatantly, and whatever legal rights exist only on papers and peoplecan be cheated on such wide scale openly, brazenly and with theknowledge of all concerned. There is duty enjoined under the RERA,Cthere has to be Central Advisory Council as well as the role of theState Government is not ousted in order to protect against such frauds.We direct the Central Government and the State Government to takeappropriate steps on the time-bound basis to do the needful, all othersuch cases where the projects have remained incomplete and homebuyers have been cheated in an aforesaid manner, it should be ensuredDthat they are provided houses. The home buyers cannot be made tosuffer when we are governed by law and have protective machinery.Question is of will power to extend the clutches of law to do the needful.We hope and trust that hope and expectation of home buyers are notgoing to be belied.E

142. We are not impressed by the submission that Amrapali Grouphad taken the lands and had paid part of dues and has invested acertain amount. The statement of the expenditure of the money of thehome buyers, in the construction activity that has been filed in the Court,is not supported by documents and is prima facie scrap of paper. WeFhave called the concerned incumbents who have prepared it and cross-checked from them and we are satisfied that the statement filed on theexpenditure of Rs.10,000 crores is nothing but scrap of paper notsupported by the books of account, supporting documents. It has to beoutrightly rejected as there is an attempt made on siphoning off, apparentfrom the report of the Forensic Auditors also.G

143. In his affidavit, Anil Kumar Sharma has given details ofcompanies from which funds were transferred to the extent ofRs.2,996.20 crores to different group companies, mainly from followingnine companies:

CHART “E” DETAILS OF MAJOR COMPANIES FROMWHERE FUNDS WERE TRANSFERRED IN THE FORM OFICD AND SHARE CAPITAL AS PER BALANCE SHEET

TILL 2015

Consolidated Amount Transferred from Amrapali Group till 31[st] March

2015S. No.Name of CompaniesNet amount Transmitted/ Transferred from these companies of Amrapali Group of Companies (A) Amount in Cr,1Amrapali Smart City Dev. Pvt. Ltd.538.592Amrapali Centurian Park Pvt. Ltd.518.783Amrapali Dream Valley Pvt. Ltd.445.334Amrapali Leisure Valley Pvt. Ltd.431.115Amrapali Silicon City Pvt. Ltd.391.576Amrapali Leisure Valley Dev. Pvt. 237.53Ltd.7Amrapali Zodiac Dev. Pvt. Ltd.224.478Amrapali Princely Estate Pvt. Ltd.186.999Amrapali Sapphire Dev. Pvt. Ltd.21.84Grand Total2,996.20

The diversion of huge amount has been rightly detected on Forensic

Audit.

144. Learned senior counsel appearing on behalf of AmrapaliGroup also submitted that the under-valued transactions have been foundof INR 321.31 crores which is incorrect. The Forensic Auditors havegiven the details in their report along with reasons, we agree with themand have no hesitation to reject the submission.

145. As to other amounts with respect to advances which arerecoverable, the explanation that there is surrender of shares by Mr.Shiv Priya, etc. is not supported by books of accounts. There is no basisto contend so. No proper explanation has been given on behalf ofAmrapali Group. Shares were purchased by Mr. Anil Kumar Sharma inhis own name. It was clearly an advance. It was not purchased in thename of the company but in the individual’s name. There was cash inhand and other recoverable also, no proper explanation has been offered.

ACash in hand has to be deposited back as it belongs to home buyers. Thefinding as to the diversion of home buyers’ funds is based on the figuresworked on the basis of minute accounting as reflected in the auditors’report. There is no proper answer to each and every entry which havebeen gone into by the Auditors. General and broad submissions havebeen made which are flimsy and have no legs to stand. Thus, the objectionsBare rejected. The professional fee could not have been realised by theDirectors. They were not the employees. They have not rendered anyprofessional services. They along with other employees, statutoryauditors, CFO, etc. have formed cartel to defraud the home buyers forsiphoning off their money. Dummy companies were created in the namesCof peons, boys of office, the relation of statutory auditor, CFO, etc. andseveral companies were created only for the purpose of few transactions.The fact discloses how the fraud has been perpetrated upon the homebuyers which defies description which could not have been unearthedexcept by skilful exercise done by the Forensic Auditors. Thus, we

have no word to specify the extent of fraud played. Least said is betterDas to the entire gamut of the facts and entire scenario of the case.

146. It is apparent from the report of the forensic audit submittedby Forensic Auditors that there is serious kind of fraud played upon thebuyers in active connivance with the officials of the Noida and GreaterNoida Authorities and that of the banks. The money of the home buyersEhas been diverted. The Directors diverted the money by the creation ofdummy companies, realizing professional fees, creating bogus bills, sellingflats at undervalue price, payment of excessive brokerage, etc. Theyhave obtained investment from J.P. Morgan in violation of FEMA andFDI norms. The shares were overvalued for making payment to J.P.FMorgan. It was adopted as device for siphoning off the money of thehome buyers to foreign countries. In view of the huge money collectedfrom the buyers and comparable investments made in the projects, therewas no necessity to obtain loan from banks. The amount so obtainedwas not used in the projects. The mortgage deeds in favour of the bankswere not permissible due to non-payment of dues of the Noida andGGreater Noida Authorities. The Noida and Greater Noida Authoritiesissued conditional NOCs. to create mortgages subject to payment ofdues which were not paid. They issued such NOCs in collusion withbuilders. It was incumbent upon the bankers also to obtain clearunconditional NOCs. which were not obtained and to ensure that thedues were paid to Noida and Greater Noida authorities. They permittedH

diversion of money immediately after sanctioning of the loan and also inday to day transactions of Amrapali group of companies.

147. No accounts were prepared w.e.f. the years 2015-2018 andmoney withdrawn was diverted during the said period. The StatutoryAuditor, Mr.Mittal failed in duty and was part of fraudulent activities asfound in the Forensic Report. The money obtained from banks wasdiverted to unapproved uses such as for the creation of personal assetsof Directors, creation of assets in closely held companies by the Directorsalong with their partners and relatives, for personal expenses of Directors,to give advances without carrying interest for several years. There wastotal non-monitoring by the bankers. The money laundering was resortedto by Amrapali Group/ Directors. The Noida and Greater NoidaAuthorities were grossly negligent in reviewing and monitoring theprogress of the projects and in collusion with leaseholders failed to takeaction concerning non-payment of dues and illegally permitted the groupto sub-lease the land without payment of dues. Bogus allotments of flatswere made. There were other irregularities galore.

148. Because of their failure to fulfil the obligations towards thebuyers and the serious kind of fraud which has been played by themupon the home buyers, the registration of Amrapali group of companiesunder the Real Estate Regulation and Development Act, 2016 deservesto be cancelled.

149. Because of the gross violations of the conditions of leasedeeds executed by the Noida and Greater Noida Authorities in favour ofAmrapali group of companies with respect to various projects, are liableto be cancelled and the rights thereupon shall vest in the Court Receiver.

150. There was no valid mortgage created in favour of Banksand there was huge diversion of money paid by homebuyers whichwere more than required for payment of dues of the Noida/ GreaterNoida Authorities and banks. The buyers have paid the dues of Noidaand Greater Noida authorities as component of the price for flats.Thus, the premium and other dues payable under the lease deeds to theNoida and Greater Noida Authorities, cannot be recovered from thehome buyers or the projects in question. The dues as may be orderedshall be recovered by sale of other properties which have been createdby the diversion of funds and have been attached by this Court. Thebanks have also failed to ensure that the money was used in the projects.As found in the forensic audit, there was no necessity of obtaining loansfrom the banks and it has not been used for the purpose it was obtained.

AThe Authorities and Bankers have violated the doctrine of public trustand their officials, unfortunately, acted in collusion with builders. Thedues of the banks are also to be recovered from the other attachedproperties as observed by us.

151. The criminal cases have also been registered by the police,Bwe propose to monitor the progress of the investigation. For violations ofFEMA and FDI norms, we direct the Enforcement Directorate to makeinvestigation in accordance with the law and submit reports quarterly tothis Court. Money laundering aspect is also to be looked into by concernedauthorities.

152. It has been found in the Forensic Audit Report that there areCseveral recoverable from various companies as well as from individuals,Directors and other incumbents. We direct that as per the findingsrecorded by the Forensic Auditors, the money be deposited in this Courton time-bound basis and other needful be done as observed by theAuditors. As we have approved the report, let the concerned companies/

DDirectors/ individuals take steps in compliance with the observationsand findings made by Auditors to refund the amount and or to do needfulas suggested within one month.

153. We have also found that non-payment of dues of the Noidaand Greater Noida Authorities and the banks cannot come in the way ofoccupation of flats by home buyers as money of home buyers has beenEdiverted due to the inaction of Officials of Noida/ Greater NoidaAuthorities. They cannot sell the buildings or demolish them nor canenforce the charge against homebuyers/ leased land/ projects in the factsof the case. Similarly, the banks cannot recover money from projects asit has not been invested in projects. Homebuyers money has beenFdiverted fraudulently, thus, fraud cannot be perpetuated against them byselling the flats and depriving them of hard-earned money and savingsof entire life. They cannot be cheated once over again by sale of theprojects raised by their funds. The Noida and Greater Noida Authoritieshave to issue the Completion/ Part Completion Certificate, as the casemay be, to execute tripartite agreement and registered deeds in favourGof the buyers on part-completion or completion of the buildings, as thecase may be or where the inhabitants are residing, within period of onemonth.

154. Resultantly, we order as follows:

(i)The registration of Amrapali Group of Companies underHRERA shall stand cancelled;

(ii)The various lease deeds granted in favour of Amrapali Groupof Companies by Noida and Greater Noida Authorities forprojects in question stand cancelled and rights henceforth, tovest in Court Receiver;

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

(iv) We have appointed the NBCC to complete the variousprojects and hand over the possession to the buyers. Thepercentage of commission of NBCC is fixed at 8 percent.(v) The home buyers are directed to deposit the outstandingamount under the Agreement entered with the promoterswithin 3 months from today in the Bank account opened inUCO Bank in the Branch of this Court. The amount depositedby them shall be invested in the fixed deposit to be disbursedunder the order of this Court on phase-wise completion ofthe projects/work by the NBCC.

(vi) In view of the finding recorded by the Forensic Auditors andfraud unearthed, indicating prima facie violation of theFEMA and other fraudulent activities, money laundering, wedirect Enforcement Directorate and concerned authoritiesto investigate and fix liability on persons responsible for suchviolation and submit the progress report in the Court and letthe police also submit the report of the investigation made bythem so far.

(vii) We direct the Institute of Chartered Accountants of India toinitiate the appropriate disciplinary action against Mr. AnilMittal, CA for his conduct as reflected in various transactionsand the findings recorded in the order and his overall conductas found on Forensic Audit. Let appropriate proceedingsare initiated and concluded as early as possible within 6 monthsand report of action taken to be submitted to this Court.

(viii) We direct various Companies/ Directors and other incumbentsin whose hands money of the home buyers is available asper the report of Forensic Auditors, to deposit the same in

the Court within one month from today and to do the needfulin the manner as observed. The last opportunity of one monthis granted to deposit the amount and to do the needful failingwhich appropriate action shall be taken against them.

(ix) Concerned Ministry of Central Government, as well as theBState Government and the Secretary of Housing and UrbanDevelopment, are directed to ensure that appropriate actionis taken as against leaseholders concerning such similarprojects at Noida and Greater Noida and other places invarious States, where projects have not been completed. Theyare further directed to ensure that projects are completed inCa time-bound manner as contemplated in RERA and homebuyers are not defrauded.

(x) We appoint Shri R. Venkataramani, learned Senior Advocate,as the Court Receiver. The right of the lessee shall vest inthe Court Receiver and he shall execute through authorizedperson on his behalf, the tripartite agreement and do all otheracts as may be necessary and also to ensure that title ispassed on to home buyers and possession is handed over tothem.

(xi) We also direct Noida and Greater Noida Authorities toexecute the tripartite agreement within one month concerningEthe projects where homebuyers are residing and issuecompletion certificate notwithstanding that the dues are tobe recovered under this order by the sale of the other attachedproperties. Registered conveyance deed shall also beexecuted in favour of homebuyers, they are to be placed inFthe possession and they shall continue to do so in future oncompletion of projects or in part as the case may be. Wedirect the Noida and Greater Noida Authorities to takeappropriate action to do the needful in the matter. The WaterWorks Department of the concerned area and the ElectricitySupplier are directed to provide the connections for waterGand electricity to home buyers forthwith.

155. Let the cases be listed for further hearing before us on9.8.2019.

HKalpana K. Tripathy

Directions issued.