The Supreme Court on Friday sought response from the Centre, the RBI and others on a petition challenging the National Company Law Tribunal’s order that admitted Bank of Baroda (BoB)’s insolvency plea against Amrapali Silicon City over a loan default of Rs 55 crore.
Over hundred homebuyers, who have invested in three different projects of the Amrapali group, had requested the apex court to safeguard their interests by treating them as secured creditors like banks and financial institutions. A bench led by chief justice Dipak Misra issued notice to the ministry of corporate affairs, RBI, BoB, the Amrapali group, the Insolvency Resolution Professional and others.
The Amrapali group has liabilities of about Rs 3,000 crore towards the authorities and owes over Rs 1,000 crore to about 10 banks, while it needs about Rs 3,000 crore to complete its ongoing projects.
The petition filed by 107 homebuyers led by Bikram Chatterji has sought enforcement of their fundamental rights that have been seriously abrogated by the provisions of the Insolvency and Bankruptcy Code 2016.
They want the Code to be held ultra vires to the Constitution as being violative of fundamental rights — right to equality and right to life guaranteed under Articles 14 and 21. The petition also prayed for quashing of the NCLT’s September 4 order that appointed an Insolvency Resolution Professional (IRP) to take over the company and ordered a stay on all the court proceedings against the company, including those pending before the consumer courts till the corporate insolvency resolution process is on. Besides, they have sought a direction to restrain the IRP from creating any third party interest in the projects.
To safeguard their financial interests, the home buyers have also requested the apex court to make a similar arrangement as was done in a related case involving another real estate firm Jaypee Infratech, against whom insolvency proceeding have been initiated by NCLT last month. The apex court had taken note of a similar plea of hassled homebuyers of Jaypee Infratech and had asked IRP to submit an interim resolution plan within 45 days and also asked its parent firm Jaiprakash Associated Ltd to deposit Rs 2,000 crore to safeguard the interest of its home buyers who have invested in the real estate major’s 27 housing projects in the national capital region.
Stating that the NCLT order has a direct bearing on the home buyers of Amrapali Centurian Park, which is virtually owned by Amrapali Silicon City, the petition said that since both companies are run by almost same directors including Anil Kumar Sharma and Shiv Priya, the resolution process triggered in respect of Amrapali Silicon City cannot be viewed in isolation and divorced from Amrapali Centurian Park.
While Amrapali Silicon City, which is the 98.84% shareholder of Amrapali Centurian Park Pvt Ltd has only one project in Sector 76 in Noida and has 1,000 flat buyers, homebuyers of the latter’s three projects- Amrapali Centurion Park-Low Rise project, Amrapali Centurion Park-Terrace Homes and Amrapali Centurion Park-Tropical Garden in Greater Noida have moved the apex court.
The homebuyers claimed that they had booked apartments during 2010-14 by paying huge booking amounts for the flats to be delivered in 36 months and also alleged that they were made to sign a “one-sided” allotment agreements which “were oppressive, unreasonable, unfair and unconscionable leaning heavily in favour of the builder.”
Detesting the terms and conditions contained in the agreement, the buyers alleged that the one-sided contract allowed the builder to raise loan from any bank by way of mortgage of these flats and that too without buyers having any say.