The Supreme Court on Wednesday directed the Reserve Bank of India to ask banks to release the loans sanctioned to home buyers who invested in the Amrapali Group so that funds would be available to expedite the construction of stalled projects, Mint reported. The court ordered that loans declared non-performing assets according to the central bank’s guidelines should also be released.
The top court ordered banks and financial institutions involved in the Amrapali case to restructure the loans given to home buyers. A restructured loan is a loan for which the parties to the transaction have agreed to alter the terms, in order to make it more possible for the buyer to repay the amount.
The Supreme Court ruled that the Noida authority cannot charge an interest rate of more than 8% from builders merely because its payments have been delayed.
The Amrapali Group has been accused of taking money from investors for housing projects, but failing to complete and deliver these houses. The company is accused of leveraging at least Rs 2,765 crore of investors’ funds with the promise of delivering 46,000 flats at 28 properties in the National Capital Region and other cities, according to The Indian Express. Home buyers had moved the Supreme Court in 2017 seeking possession of their homes and compensation for the delay in delivery.
On July 23 last year, the Supreme Court had cancelled the company’s registration under the Real Estate Regulatory Authority, as well as the lease granted to it by Noida and Greater Noida authorities for its properties, after taking note of the “gross violations”.
The bench comprising Justices Arun Mishra and UU Lalit passed Wednesday’s order in view of the economic fallout from the coronavirus pandemic and its devastating impact on the real estate sector. “Considering current situation of real estate, projects [have come to a] standstill,” it observed. “Projects are incomplete. Noida and Greater Noida authorities need to work out a schedule on how much they want at one go.”
The bench will now hear the case again on June 17, for passing further directions based on the additional suggestions received from court-appointed receiver and senior advocate R Venkatramani, the Hindustan Times reported. Venkatramani has been helping with the execution of projects.
During the last hearing on June 3, SBICAP Ventures, the agency which manages government-sponsored stress funds for the real estate sector, told the Supreme Court that it was willing to fund the stalled projects of the Amrapali Group. For this purpose, it would create a Special Purpose Vehicle with a court receiver on board and would appoint a chief executive officer to take over the construction of seven stalled projects, according to the Hindustan Times.
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