Amrapali case: JP Morgan says attachment properties by ED ‘blatantly illegal’

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May 28, 2020 2:45 AM

However, the bench asked the ED to consider objections raised by JP Morgan India against attachment of its properties and posted the matter for hearing on June 3.

The top court has been monitoring the execution and handover of the stalled Amrapali housing projects ever since an internal audit report found grave irregularities on part of Amrapali firms and its directors.The top court has been monitoring the execution and handover of the stalled Amrapali housing projects ever since an internal audit report found grave irregularities on part of Amrapali firms and its directors.

A day after the Enforcement Directorate attached assets of JP Morgan India, the company on Wednesday told the Supreme Court that that attachment of its properties to recover Rs 187 crore as proceeds of crime is “blatantly illegal” as it was never involved in any financial dealings with the defunct Amrapali group.

Mauritius-based JP Morgan, which was engaged in a transaction with the now-defunct real estate group, had allegedly siphoned off homebuyers’ money in violation of the Foreign Exchange Management Act and the FDI norms.

Senior counsel Mukul Rohatgi, appearing for JP Morgan India, told a Bench led by Justice Arun Mishra that the investigative agency had attached the account of the Indian arm to recover money for violation of money-laundering laws in compliance with the apex court’s last weeks order. “I want to submit that the attachment is blatantly illegal as JP India does not have one penny’s worth in Amrapali. I have no dealing with Amrapali. I’m independent and have had no investment in Amrapali. On the contrary, it was JP Morgan Singapore and Mauritius which had invested money in the real estate group.”

However, Justice Mishra retorted, saying, “We are concerned with JP Morgan. It has branches all over the world, and when you have branches all over the world, we have to take it into account. We have already attached. Now we have to see whether we have to dismiss this application or not.”

However, the bench asked the ED to consider objections raised by JP Morgan India against attachment of its properties and posted the matter for hearing on June 3.

While the Centre told the SC that it is for the SBI Capital to decide on disbursal of Rs 500 crore for completion of the stalled Amrapali projects, out of a real estate stress fund created by the government and managed by SBI, for the Amrapali projects, senior counsel Harish Salve, appearing for SBI Cap, sought a week’s time to seek instructions and urge them to release certain funds for construction work to begin.

The top court has been monitoring the execution and handover of the stalled Amrapali housing projects ever since an internal audit report found grave irregularities on part of Amrapali firms and its directors.

The judges also asked government-owned construction firm NBCC to submit a flow chart within a week on its plans for the next 2-3 months, the funds that are available with it for construction activities and how much money it required in the next 3 months and how the funds can be raised.

“How do you plan to finance your activities for the next couple of months? If there are unsold inventories, it would be ideal if they could be sold off,” the judges said, adding that either NBCC can sell unsold inventory itself or the SC can ask any agency to do.

When counsel ML Lahoty argued that homebuyers should not be made to pay anymore at this point towards the construction and they are be entitled to compensation for the delay, the apex court came down heavily on him, saying “homebuyers should not be under the impression that without paying they will enjoy benefits of the property. Let us do something pragmatic in a step wise manner for now. Do not invite our wrath.”

With regard to the rate of interest being levied on delayed payments, Justice Mishra told the urges Noida Authority/Greater Noida authority to be more accommodating. “This sector will die down if you continue to remain rigid. You have to give some relaxation. Not one project, all projects will fall through. We aren’t talking about moratorium just now, there’s a matter regarding that which is pending. But you could talk to the state government and see what your government is willing to do,” the Bench told senior counsel Sunil Gupta, appearing for the Noida Authority.

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