New Delhi: Despite the Supreme Court stepping in, homebuyers of the Amrapali Group will have to endure another long wait before they can get their dream homes.
The court on 23 July had cancelled the RERA registration of the embattled real estate group and laid down the course of action for completion of the projects. But the National Buildings Construction Corporation (NBCC), the government-run real estate developer that the SC appointed to complete the job has, as of now, only 0.2 per cent of the funds it believes it requires.
The NBCC has estimated that it will need approximately Rs 8,500 crore to complete the over 46,000 unfinished flats in various Amrapali projects. As of now, it has only Rs 19 crore.
The Rs 19 crore is in an escrow account that was opened on the directions of the court, in which money recovered from various sources, including selling off Amrapali assets, is to be deposited.
The NBCC, appointed as the project management consultant (PMC) in 2018, will also not put in its own funds.
“NBCC’s mandate is to simply execute the project as and when funds are arranged and disbursed by the court,” a source in the union housing ministry, under which NBCC comes, told ThePrint. “It is not going to put its own fund.”
The NBCC has stopped work on two projects given to it by the Supreme Court in January because of a lack of funds.
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‘Homebuyers not liable to pay full amount’
In its 23 July judgment, the Supreme Court drew up an elaborate plan to recover funds to the tune of Rs 11,320 crore. But those familiar with the matter told ThePrint that the measures listed by the court, which includes recovering pending dues from homebuyers, is riddled with complexities.
For instance, the court has directed homebuyers to clear all pending dues amounting to Rs 3,624.65 crore within three months.
But buyers in the various residential projects of Amrapali had opted for construction-linked payment. “In construction-linked payment, the homebuyers are not liable to pay the full amount,” advocate M.L. Lahoty, who represented the homebuyers, told ThePrint.
Most homebuyers have also taken loans from banks. “Only some buyers have made 80 per cent to 90 per cent of the payment. For others it varies from project to project and is anywhere between 20 per cent to 70 per cent,” said I.D. Bhatt, a homebuyer and president of the Amrapali Leisure Park Homebuyers’ Association. “Which bank will disburse the full remaining amount in three months?”
Lahoty said it is to address these peripheral issues that the apex court will meet again on 9 August. “We are going to request the court to set up a committee comprising the court-appointed receiver, homebuyers and the NBCC to monitor the implementation as per the court’s order,” Lahoty added.
Bhatt said that though the apex court’s order has given a lot of hope to homebuyers, raising funds to complete the over 46,000 flats will pose a big challenge.
“The court has appointed a receiver but it is not clear how he will arrange for funds. What are the avenues for funds?” Bhatt asked.
The total recoveries listed by the apex court from various sources includes selling Amrapali’s unsold inventory, recovering money from the company owners, top managers and their relatives, recovering funds of homebuyers diverted by the company among others.
A senior government official familiar with the matter said that recovering all of the amount will be a long-drawn and complicated process.
“For instance, the court has not specified how it plans to recover Rs 3,152 crore taken from homebuyers but diverted to other projects,” the official, who did not want to be named, said. “Or for that matter how and who will sell Amrapali’s unsold inventory worth Rs 2,337 crore on behalf of the court.”
No funds, NBCC has already stopped work on 2 Amrapali projects
In January, as a test case, the apex court had directed NBCC to finish the pending work in two Amrapali projects — Eden Park and Castle — where 85 per cent to 90 per cent of construction had already been completed. The estimated completion cost for the two projects in Noida, with a total of 660 flats, was approximately Rs 10 crore.
The SC had arranged for the NBCC to receive Rs 1.5 crore for starting the work. The NBCC had put another Rs 1 crore from its own funds. “But work has been stopped now as NBCC is waiting for more funds,” the housing ministry source said. “What it got was not enough to complete two projects whose completion cost is Rs 10 crore.”
NBCC has now submitted the details of the money it had spent from its pocket to the Supreme Court for reimbursement. “The apex court could not disburse the money as the court was closed for vacations. It will be done now,” the source added.
The Amrapali Group has till date received Rs 11,573 crore from homebuyers for its various projects and spent Rs 7,389 crore on construction including land payment to authorities. It owes the Noida and Greater Noida authorities over Rs 5,500 crore towards payment of lease money along with penal interest.
“This will also have to be paid off unless of course the authorities decide to waive their dues,” the housing ministry source quoted above said.
ThePrint reached NBCC CMD Shiv Das Meena and Housing Secretary D.S. Mishra through email and telephone calls, but there was no response.
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NBCC does not have funds to complete this project and it has made a bid for Jaypee group. Will they explain how do they plan to complete that project.
This is just a eyewash and homebuyers are going to suffer.