Paragraph numbers below are the court’s original numbering, recovered from the source text.
14. We heard Mr. Gopal Sankaranarayanan, learned Senior Advocate for the Association, Mr. M.L. Lahoty and Mr. Manoj V. George, learned Advocates for the applicants in the first set of applications; Mr. V. Giri, learned Senior Advocate for the Company in the second set of applications; and Mr. Janendra Kumar Chumbak, learned Advocate for the applicant in the third set.
15. It was submitted by Mr. Gopal Sankaranarayanan, learned Senior Advocate:- a) The shareholding pattern in the tabular chart in I.A. No. 109882 of 2020 (Z-309*) disclosed that the Company was one of the Amrapali Group of Companies. b) Consequently, the entire project land would be part of the assets of Amrapali Group of Companies rather than restricting the share of Amrapali Group of Companies to the extent of 19.75%. c) If the benefit as granted in the order dated 23.07.2019 was extended, all the flat buyers would stand relieved substantially as the dues of GNIDA would stand reduced to a considerable extent in terms of the order dated 23.07.2019. d) The entire project ought to be directly under the control of the Court Receiver and the construction be undertaken through the NBCC6 as was directed to be done in the other projects of the Amrapali Companies. Mr. M. L. Lahoty, learned Advocate appearing for the applicants supported the submissions advanced by Mr. Gopal Sankaranarayanan, learned Senior Advocate. He invited our attention to the reports of the forensic auditors and so also to the order dated 28.07.2020 passed by this Court in the matter concerning “Heartbeat City”. It was submitted that the instant project and “Heartbeat City” Project stood on the same parameters and therefore similar benefits be extended to the instant project. Mr. Manoj V. George, learned Advocate appearing for the applicants in I.A. No.114865 of 2020 (Z-318*) highlighted the predicament faced by the applicants and particularly the stand taken by the Company in its communication dated 18.01.2020.
16. Mr. V. Giri, learned Senior Advocate for the Company submitted:- a) Stunning was merely a shareholder in the Company and that by itself would not make the Company a part of the Amrapali Group of Companies. b) Beyond the amounts put in towards share capital, nothing was invested by the Amrapali Group of Companies; nor any part of money belonging to the flat buyers of Amrapali Group of Companies was used or utilized in the instant project. c) Though the Company was not a part of Amrapali Group of Companies, the benefit in terms of order dated 23.07.2019 ought however be extended as indicated in I.A. No.120307 of 2020 (I- 155*) and I.A.No.123299 of 2020 (I-158*). 16.1 In the written note filed on behalf of the Company, following assertions were made with respect to the construction status and the escalation in costs if the project was to be handed over to the NBCC as prayed for by the Association and the applicants :- 6 NBCC (India) Limited, formerly National Buildings Construction Corporation Limited BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS. [UDAY UMESH LALIT, J.] “5. CONSTRUCTION STATUS a. Unit-wise construction status of the project: Please refer: Para 35 @ Pg. 26-27 of I-158; Total Flats in Project Total Flats sold Flats constructed Flats delivered Occupancy Certificate received Occupancy Certificate applied for Sub-Lease Deeds Registered Unsold Inventory (comprising of 614 unsold flats and 18 cancelled allotments) *It is to be noted that a sum of Rs. 145 Cr. Approx. of the current homebuyers is stuck in the unsold inventory. b. Phase-wise status of project: Please refer: Para 34 @ Pg. 25-26 of I-158 i. Phase-I (Comprising of 18 towers; T1- T-18, 1408 Flats): 1127 Flats/units complete in all respects have been delivered to the homebuyers and balance inventory of 313 Flats/units are at the final stage of ‘finishing’ work. ii. Phase-II (Comprising 11 towers, T-19 to T-29, 996 Flats): All Flats that comprise of Phase-II inventory are also at the initial stage of ‘finishing’ work and delivery of units has started. Handing over of the units in Phase II of the project has also started. It is also relevant to state here that handing over of units has also started in Tower-22 in which the unit of Ms. Savita Tyagi is also situate, who is also an applicant in one of the applications on behalf of the homebuyers. iii. Phase-III (Comprising 10 towers; T-30 to T-39 with about 852 Flats): Structuring work for 704 units out of 852 units in ten towers (Tower 30 to 39) has been completed and ‘slab work; for about 37 stories/floors in these ten towers is yet to be casted.” “6. COST ESCALATION IN CASE THE PROJECT HANDED OVER TO NBCC OR THIRD PARTY: Please refer: Para 12 at Pg. 6-7 of I-155 Certain homebuyers have been seeking directions from this Hon’ble court to get the project handed over to a third party or NBCC for completion of construction. However, for the reasons stated herein below, the same ought not to be done: a. The per square foot construction cost that LA RESIDENTIA has incurred till date works out to be Rs.1657/- which included the interest on money infused and admin expenses. Only land cost is separate from this. b. The per square foot costing that NBCC or any third-party contractor may apply would not be less that Rs.2,550/- per sq. ft. along with 8% consultation charges of NBCC and interest of 12% on capital infused. c. The sale price of the unsold units has been taken at Rs.2852 per sq. feet. The amount thus available from sold and unsold inventory plus amount recoverable would be Rs. 354 Crores. d. Introduction of a third party at this stage will not only increase the timeline of the project, but also escalate the cost of completion of the project by at least 40-45%.” “The effect if the construction is complete by La Residentia Developers would be: The construction of the project would be completed in a fixed period of time The dues of GNIDA will be paid The bank dues shall be paid Pending dues of suppliers and contractors would be cleared. There would be money available in the kitty. In case construction is carried out by NBCC, the effect would be: All the incoming monies, after deduction of the interest and consultation charges and other charges BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS. [UDAY UMESH LALIT, J.] as may be applicable in favour of NBCC, would be put in Amrapali’s kitty Additional cost of land dues to be paid to GNIDA No surplus funds left to pay out the various dues No payments to GNIDA No payments to the banks”
17. Mr. Janender Kumar Chumbak, learned Advocate appearing for Religare Finvest Ltd. reiterated the submissions made in I.A.No.6397 of 2021 (Z-342*).
18. The first two sets of applications principally prayed that the orders dated 23.07.2019 and 14.10.2019 be recalled or revisited. The Association and the applicants supporting the Association submitted that the Company be declared to be part of the Amrapali Group of Companies and consequently the entire project be developed by the NBCC under the control and supervision of the Court Receiver. On the other hand, according to the Company, it was never part of the Amrapali Group of Companies and at best one of the companies of the Amrapali Group could be said to be a shareholder to the extent of 19.75% and that beyond such share capital no other amount was invested by the Amrapali Group of Companies. Thus, according to the Company it could not be directed to surrender 19.75% of the project land or 632 flats as was directed in the order dated 23.07.2019. However, both the sets of applications desired that the same benefits as given to all the flat buyers from Amrapali Group of Companies be extended and the project be relieved of the requirement of paying the dues of GNIDA like other Amrapali projects.
19. When the order dated 23.07.2019 was passed by this Court, I.A. No. 168186 of 2018 (Z-68*) was pending on the file of this Court. Similarly, I.A. No. 153341 of 2019 (Z-233*) was filed on 01.10.2019 i.e. before the subsequent order dated 14.10.2019 was passed by this Court. The prayer made in the latter application that the order dated 23.07.2019 be recalled was not favourably considered on 14.10.2019. On the contrary, after noting the submission made on its behalf, the Company was directed to file an appropriate affidavit indicating the expenditure required for constructing 632 flats so that appropriate adjustments could be effected. In the face of these developments, it would not be possible for us to entertain the prayer made in the concerned interim applications either seeking recall of the orders dated 23.07.2019 and 14.10.2019 or revisit of the issue whether the Company ought to be declared as part of the Amrapali Group of Companies, more particularly because of the developments that have taken place with respect to the instant project.
20. As indicated in the tabular charts which were part of the written note filed on behalf of the Company, out of 3256 flats to be constructed, 1484 flats have been fully constructed and possession of 1143 flats has already been given to the concerned flat buyers. As per said charts, the work of construction with respect to phases one and two is at an advanced stage. Further, according to the figures indicated therein, per sq. ft. cost of construction incurred by the Company has been to the tune of Rs.1657 per sq. ft. whereas the per sq. ft. cost of construction by the NBCC, if at this juncture the project is handed over to the NBCC, would be in the region of Rs.2550 per sq. ft. along with 8% consultation charges of the NBCC. Thus, if the instant project is now handed over to the NBCC, it would result in escalation in costs to the detriment of the flat buyers. The figures also show that as against the original liability of Rs.155.10 crores, the Company has already discharged the liability towards the dues of GNIDA to the extent of Rs.117.10 crores.
21. It is true that the “Heartbeat City” Project coming from the second category5 was dealt with by this Court in its Order dated 28.07.2020 and was directed to be taken over by the NBCC like other Amrapali Projects. However, the distinguishing feature as noticed in paragraph 4 of the Order dated 28.07.2020 was that there was absolutely no progress with respect to said project. In contradistinction, the instant project has progressed to a considerable extent. At least 1143 flat buyers have received possession while the work of construction with respect to phases one and two is at an advanced level. Further, the interest of the Amrapali Group of Companies and consequently that of the flat buyers who had invested money in other Amrapali Projects already stands quantified at 19.75% vide Orders dated 23.07.2019 and 14.10.2019. Therefore, even if there could be some similarity with regard to the status of the instant project as against “Heartbeat City” Project, considering the fact situation on record, that by itself would not afford sufficient reason to entertain the submissions on behalf of the Association and the applicants supporting the Association.
22. Even if the entire project cannot be made over to the NBCC for the reasons stated above, another aspect of the matter that may BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS. [UDAY UMESH LALIT, J.] require consideration is whether the component representing 632 flats could still be made over to the NBCC. However, that course would also not be feasible as those 632 unsold flats are spread over in various towers; some of them are in Phase one while the others are in Phases two and three.
23. An important aspect of the matter is that unlike all the other projects of the Amrapali Group which were made over to the NBCC, the development with respect to the instant project has always been an on-going process. In all the other projects of the Amrapali Group, either there was no development right from the inception or even if some development had been initiated, the same was completely at a standstill when the matters were taken up for consideration by this Court.
24. Considering all these features of the matter, in our considered view, it would not be just and proper to hand over the development at this stage to the NBCC as prayed for by the Association and the applicants supporting the Association. We, therefore, do not deem it appropriate to recall the orders dated 23.07.2019 and 14.10.2019 or to revisit the issue whether the Company could be declared to be part of the Amrapali Group of Companies. Similarly, we also do not deem it appropriate to extend the benefits as prayed for either by the Association or by the Company. We, therefore, reject the first two sets of applications. No separate orders are called for in the third set.
25. However, certain directions must be passed to secure the amounts receivable by the Amrapali Group of Companies through the instant project.
26. It is therefore directed:- a) The Company shall be entitled to continue with the construction and development of the instant project; b) 632 flats which were subject matter of Orders dated 23.07.2019 and 14.10.2019 shall be allowed to be sold by the Company to the interested persons or parties at a fair price or value, provided :- i) all the concerned transactions including the execution of appropriate documents or deeds are counter- signed by the Court Receiver or his nominee; ii) The price or value at which said flats are to be sold is certified by the Court Receiver to be fair and appropriate. iii) all the amounts received by way of such transactions of sale are credited to a separate account completely under the control of the Receiver and/or his nominee; iv) the cost of construction with respect to those 632 flats, upon due certification by the Chartered Accountants of the Company and to the satisfaction of the Receiver, shall be made over to the Company; and v) it shall however be open to the Receiver to give such advances towards the construction of these 632 flats from and out of the amounts deposited in the account as specified hereinabove, depending upon the stage and progress of construction. c) The injunction with respect said 632 flats, as directed in the Orders dated 23.07.2019 and 14.10.2019, shall stand modified to the extent indicated hereinabove. d) The difference between the amounts received from the concerned flat buyers for purchase of said 632 flats and the expenditure incurred on cost of construction shall finally be credited to the general account maintained for the benefit of the flat buyers of the Amrapali Group of Companies.
27. Thus, all the applications under consideration stand disposed of in aforesaid terms but without any order as to costs. Devika Gujral Applications disposed of. BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS. [UDAY UMESH LALIT, J.]