Amrapali Group case: SC directs JP Morgan to transfer over Rs 140 crore to escrow account

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Published: June 18, 2020 10:21 PM

The Supreme Court had said that the money would be used for completing the pending projects of now defunct Amrapali Group.

Amrapali Group, Amrapali group case, amrapali group projectsThe top court had on July 23 last year, cracked its whip on errant builders for breaching the trust of home buyers, ordered cancellation of Amrapali Group’s registration.

The Supreme Court on Thursday directed multi-national firm JP Morgan, accused of allegedly diverting Amrapali Group home buyers money, to transfer Rs 140 crore plus interest from its bank accounts attached by the Enforcement Directorate to the escrow account maintained by the UCO bank.

The top court had on June 3 directed the multi-national firm JP Morgan to deposit Rs 140 crore, allegedly siphoned off in contravention to the norms as per the forensic auditors report and last year’s order in the case.

It had said that the money would be used for completing the pending projects of now defunct Amrapali Group.

A bench of Justices Arun Mishra and U U Lalit, which took up the matter for hearing through video conferencing, said that any claim of refunds by JP Morgan shall be subjected to final orders in the PMLA case registered against it.

It was told by the United Commercial Bank (UCO bank) that it has some difficulties in disbursing loans for construction of stalled projects by keeping the unsold inventory of 5221 units as mortgage.

Senior advocate R Venkataramani, who is a court appointed receiver for the properties of Amrapali Group informed the bench about his meetings with UCO bank and said that they have expressed inability to give loan to complete the stalled projects by mortgaging unsold inventory due to some RBI clauses.

The bench asked UCO bank to work out the issues with the court receiver and whether it can be part of a consortium led by SBICAP Ventures, which manages the government sponsored stress fund for the real estate sector, and has agreed to fund the stalled projects through a Special Purpose Vehicle (SPV).

The UCO bank, which has shown its inclination to provide loan had earlier told the court through court receiver that it can provide fund to the tune of Rs 2000 crores while keeping the unsold inventory of 5221 units as mortgage.

Senior advocate Harish Salve, appearing for SBICAP Ventures, informed the bench about its meeting with the court receiver and said that they are in final stage of working out the modalities and sort some three weeks’ time to complete the proposed action plan for financing the projects.

Senior advocate Siddharth Dave, appearing for NBCC, said that they have floated the tenders for some of the stalled projects but need cash flow of around Rs 700 Cr for all the projects.

The bench posted the matter for further hearing on July 10.

On June 10, coming to the rescue of thousands of hassled home buyers of Amrapali, who saw loans being stalled by banks after the realty group ran into trouble, the top court had directed all financial institutions to disburse their balance funds and restructure the amounts.

It had said that since the projects of now- defunct Amrapali Group have been stalled for last several years, the home buyers who obtained loans from banks and financial institutions could not enjoy the fruits of their investment.

On June 3, the top court had asked JP Morgan to apprise it as how it would deposit the home buyers money and by what time.

The Enforcement Directorate (ED) had earlier told the top court that criminal conspiracy was hatched between JP Morgan Group of Companies and the Directors of Amrapali Group under which JP Morgan India Property Mauritius Company-II made Rs 85 crore investment in Amrapali Zodiac in 2010 and exited it during 2013-15 by taking about Rs. 140 Crore outside India through “sham transactions and shell companies”.

The ED had on May 27 told the top court that it has attached the assets worth Rs 187 crore of JP Morgan as the multi-national firm denied any wrong doing.

The firm, JP Morgan India had said that attachment of properties by the ED is blatantly illegal as it was not part of any kind of financial dealing with Amrapali Group and it was JP Morgan Singapore and Mauritius which had allegedly invested in the real estate group.

On May 22, the top court had allowed ED to attach properties of JP Morgan, which was engaged in transactions with the now-defunct Amrapali Group to allegedly siphon off home buyers money in violation of the Foreign Exchange Management Act (FEMA) and FDI norms.

The top court had on July 23 last year, cracked its whip on errant builders for breaching the trust of home buyers, ordered cancellation of Amrapali Group’s registration under real estate law RERA and ousted it from its prime properties in the NCR by nixing the land leases.

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