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TMI Blog2019 (7) TMI 1233X X X X Extracts X X X X X X X X Extracts X X X X ..... ITION (C) NO.288/2018 WRIT PETITION (C) NO.460/2018 WRIT PETITION (C) NO.353/2018 WRIT PETITION (C) NO.378/2018 WRIT PETITION (C) NO.742/2018 WRIT PETITION (C) NO.829/2018 SMC (CRL.) NO.4/2018 WRIT PETITION (C) NO.1397/2018 Arun Mishra And Uday Umesh Lalit, JJ. JUDGMENT Arun Mishra, J. 1. These writ petitions pertain to the projects of various companies of Amrapali Group in the Noida and Greater Noida. 2. It is submitted on behalf of the petitioners that in 2011 in Noida and Greater Noida various real estate projects for housing were started. In the various projects, the Amrapali Group of Companies proposed to construct approximately 42,000 flats. Various brochures were published and it was assured that the delivery of possession shall be made in 36 months and other world-class amenities were also promised. 3. Various home buyers booked their apartments during the period 2010-2014. The buyers signed the Standard Form of Allotment-cum-Flat Buyers Agreement and even after payment of 40 to 100 percent of total consideration, they are faced with the threat of forfeiture of huge booking amount. The agreement contained specific terms as to interest. Under Clause 14 of the agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appointed the Interim Resolution Professional (in short, the 'I.R.P'). Moratorium was also declared thereby restricting the institution of any suits against the corporate debtor including execution of any judgment, decree or order; transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal interest therein; and any action to foreclose, recover or enforce any security interest created by the corporate debtor in respect of its property under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (for short 'the SARFAESI Act'). The order of NCLT has a direct bearing on the home buyers of M/s. Amrapali Centurian Park Private Limited, respondent no.4, which is virtually owned by M/s. Amrapali Silicon City Private Limited with 98.84 percent shareholding. Both the companies are run by the almost same set of Directors including Mr. Anil Kumar Sharma and Mr. Shiv Priya. Thus, in order to secure the interest of home buyers, in the instant petitions under Article 32, a plethora of intervention applications have been filed. 7. It is submitted on behalf of petitioners that home buyers h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Forensic Auditor Report speaks for itself. 9. Before we consider the Forensic Audit, it would be appropriate to refer to certain orders which were passed from time to time by this Court. This Court on the application filed by petitioner - Bikram Chatterji, passed an order on 22.11.2017, directing builder to deposit 10 percent of the dues to Noida Authorities. This Court also directed that the phase in respect of which Occupancy Certificate and No Objection Certificate, if granted, the possession of flats shall be handed over to the respective flat buyers. Liberty was granted to flat owners to complete the finishing work. Thereafter, an order was passed on 31.1.2018, requesting the builder to deposit amount as ordered on 17.11.2017. It was also pointed that in several places firefighting devices were not installed though the places were occupied by thousands of families of Phase-I of Silicon City of Amrapali in Sector 76, Noida. Directions were issued to do the needful. We also directed to submit the proposal within one week with respect to all the projects, which were incomplete. On 22.2.2018, the following order was passed by this Court: "Applications for impleadment(s) is/are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, the very executability of the project would be doubtful. To this Mr. Ranjit Kumar, learned senior counsel has urged that adequate undertakings would be given by the promoters of Amrapali Group as well as the other developers. Having regard to the rival submissions made and the attendant facts and circumstances and also considering the predominant interest of the home buyers, we are of the view that it would be in the fitness of things to permit the promotors of Amrapali Group to immediately start the finishing work as proposed in the units of the towers as listed at pages 4 & 5 of Compilation 'A' on the basis of the arrangements as proposed. In order to examine the bonafide of the proposal and the progress of the works that would be achieved, list these matters on 27th March at 2 P.M. By then the promotors of Amrapali Group would furnish to this court complete details of the proposals in all respects made by the collaborators/developers and ensure completion of the projects/finishing work as indicated in chart. We part with the belief that the respondents-developers would be true to their assurances to this court and also to the home buyers. Needless to say that all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developers had been chosen to undertake the completion of the projects and remaining work at the site. The independent proposals given by Amrapali along with the proposed co-developer had been placed before the concerned lawyers representing the flat owners in those projects and lawyers of Noida and the representatives of Greater Noida and broad consensus has been reached. 3. The following are the basket-wise proposals: FIRST BASKET I. SAPHIRE - PHASE-I IN NOIDA : In relation to Saphire Phase-I, consisting of 1033 units, the time given is of 10+2 months for completion of the project. II. SAPHIRE-PHASE-II : It consists of 1308 units and the time sought for completion of the project is 12 to 15 months. The promoter of the Saphire Phase I & II projects is M/s. Amrapali Saphire Developers Pvt. Ltd. The developer chosen by the promoter is M/s. Galaxy Dreamhome Developers Pvt. Ltd. With respect to Saphire Phase II project, as agreed to by the promoter, the relevant agreements entered into with co-developers to be placed within one week. The documents shall be filed afresh, even if the same had been filed earlier, duly supported by an affidavit. Let the undertaking of conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DIAC : Zodiac comprises of 2230 units. It is agreed that the work in the said units shall be completed within 12 months. The co-developer is M/s. India Infoline Limited (IIFL) & M/s. Galaxy Dreamhome Developers Pvt. Ltd. A.2. PLATINUM & TITANIUM : (a) Platinum comprises of 888 units, and (b) Titanium comprises of 54 units. The work in the said units shall be completed within 7 months. The codeveloper being M/s. IIFL or M/s. Galaxy Dreamhome Developers Pvt. Ltd. Let the requisite undertaking by the concerned promoter and co- developer be filed within seven days in this Court. A.3. EDEN PARK : Eden Park comprises of 316 units. The work shall be completed within 7 months. The co-developer is M/s. Galaxy Dreamhome Developers Pvt. Ltd. Let the promoter and co-developer to file a requisite undertaking within 7 days from today. CATEGORY B PROJECTS : The following are category 'B' projects : B.1. CENTURIAN : A. CENTURIAN PARK: Centurian Park comprises of low rise 600 units. The work shall be completed within 10 months. B. TERRACE HOMES : Terrace Homes comprises of 3481 units. The work shall be completed within 21 months. C. TROPICAL : Tropical comprises of 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omprises of 379 units. The work shall be completed within 6-15 months in a phase-wise manner. b) Dream Valley-2 (High Rise): This project comprises of 8302 units. The work shall be completed within 9-35 months. c) Enchante: This project comprises of 1508 units. The work shall be completed in a phase-wise manner within 42 months. The co-developer is M/s. Galaxy Dreamhome Developers Pvt. Ltd. Requisite undertaking by the promoter and the co-developer shall be filed within seven days. II. LEISURE VALLEY : a) Leisure Valley Villas - which comprises of 887 units, the work shall be completed within 6-15 months. b) Verona Heights & Jaura Heights - comprise of 4964 units and the work shall be completed within 42 months. c) Adarsh Awas Yojna - comprises of 1904 units and the work shall be completed within 30 to 42 months. The promoter of the projects is M/s. Amrapali Leisure Valley Pvt. Ltd. and the co-developer is M/s. Galaxy Dreamhome Developers Pvt. Ltd. III. HEARTBEAT CITY 1 & 2 : a) In a Heartbeat City-1 project, the number of units is 759 plus shops. The time limit is 10-18 months; and b) In a Heartbeat City-2 project, the number of units is 1217 plus shops. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned at serial number 15 is a part of the unlaunched property of Amrapali Centurion Park (Commercial) held on a leasehold basis from the Greater Noida Industrial Authority and its distress value is Rs. 246 crores (Rupees Two Hundred Forty- Six Crores). 7. There are some other commercial properties, which are in the form of hotels and other commercial properties comprising of malls, etc. and those can also be sold for completion of projects. As and when a concrete proposal is submitted before us for sale, the same shall be considered and appropriate orders would be passed in this regard. However, the amount of Rs. 250 crores (Rupees Two Hundred Fifty Crores) has to be deposited by 15th of June, 2018 without fail, in the escrow account to be opened with the UCO Bank of this Court. 8. There are certain outstanding dues of the buyers. It would be open to the buyers to deposit the said amount in the said escrow account. However, as soon as the projects are completed, we propose to give them reasonable time to deposit the outstanding dues. As soon as the promoter and co-developer are in a position to hand over the possession, the buyers shall have to deposit the outstanding amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or certain amount may be required to be refunded to the buyers, who are not intending to purchase now and not opting for swapping or/and is not feasible, to take up those projects. The promoter shall also file its proposal with respect to such buyers who want their money to be refunded. Let that proposal be also filed after swapping is done indicating therein as to how many persons require to refund the money. The buyers in 'C' category projects only who are intending to obtain a refund, may also submit their proposal to the concerned promoter in the meantime, within one month from today. 14. The promoters with respect to Silicon Valley have applied for connection for electricity, sewerage, and water, as per the order passed by this Court on 10.5.2018. The aforesaid order is carried out punctually. The promoters of Silicon Valley has undertaken to make the payment of dues onwards. 15. The joint statement that has been filed has been signed in the Court by the learned counsel for the promoters as well as by learned counsel for the authorities and the flat buyers, is placed on record and made part of this order as "Annexure-A". 16. The aforesaid Committee constituted by us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It was submitted on behalf of Amrapali Group that a meeting was held today and prayed that something concrete is likely to happen within ten days. We deferred the hearing up to 1.8.2018. However, at the same time, we directed the builder to file the accounts with effect from 1.4.2008 till date under the certificate of Chartered Accountant and also a list of all assets in a sealed cover in this Court. As a matter of fact, there was no compliance of the order dated 17.5.2018 of this Court, but the totally indifferent stand was taken so as to wriggle out of their obligation under said order was passed by this Court on the basis of the joint statement. 13. This Court has passed an order on 1.8.2018, wherein it was observed that in order to scuttle the hearing in this Court, it was stated that the meeting was held on the very same day. The order passed by this Court on 17.5.2018 to deposit Rs. 250 crores had not been complied with. There was also an admission made by Amrapali Group that there was a diversion of more than Rs. 2,765 crores from six projects. This Court observed that money could not have been diverted. That would prima facie tantamount to a criminal breach of trust. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plans as to how earliest you can deliver the flats/houses to the home buyers who have made payments towards the same to your company. 3. A line in confirmation on email, [email protected] will be highly appreciated. Sd/- (Akhil Saxena) Deputy Secretary to the Govt. of India Tel No.23062280 To 1. Shri Shiv Priya, ED, Amrapali Group, C-56/40 Sector-62, Noida-2301307. 2. Shri Nirmal Singh, Three C Group of Companies, Tech Boulevard Central Block, Plot No.6, Sector 127, Noida-201307. 3. Shri Manoj Gaur, Jaypee Infratech Limited, Sector 128, Noida-201304 (U.P.), India. 4. Dr. Ramesh Chandra, Chairman, Unitech Limited, 6, Community Centre, Saket, New Delhi-110017. Copy to : 1. Sr.PPS to Secretary, Ministry of Housing and Urban Affairs. 2. PPS to Additional Secretary (Housing), Ministry of Housing and Urban Affairs. 3. PS to Economic Adviser (Housing), Ministry of Housing and Urban Affairs. 4. Deputy Secretary (Housing), MoHUA Sd/- (Anil Saxena) Deputy Secretary to the Govt. of India Tel. No.23062280" 3. In order to scuttle the hearing in this Court on 18.7.2018 on which the case was listed, it was reported to us that meeting was held on that ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dream Valley Pvt. Ltd. 13. Amrapali Homes Project Pvt. Ltd. 14. Hi-Tech City Developer Pvt. Ltd. 15. Sangam Coloniger Pvt. Ltd. 16. Shalimar Coloniger Pvt. Ltd. 17. Amrapali Infrastructure Pvt. Ltd. 18. Amrapali Aerocity Pvt. Ltd. 19. Amrapali Mahi Developer Pvt. Ltd. 20. Amrapali Buddha Developer Pvt. Ltd. 21. Amrapali Hospitality Pvt. Ltd. 22. Amrapali Biotech Pvt. Ltd. 23. Amrapali Health Care Pvt. Ltd. 24. Amrapali Hospitality Pvt. Ltd. 25. Amrapali Power & Cement Pvt. Ltd. 26. Stunning Construction Co. Pvt. Ltd. 27. Kapila Build Home Pvt. Ltd. 28. Gaurisuta Infrastructure Pvt. Ltd. 29. Gaurisuta Infra Solution Pvt. Ltd. 30. MSB Software Pvt. Ltd. 31. MVG Techno Consultant Pvt. Ltd. 32. Noida Text Fab Pvt. Ltd. 33. Navodya Properties Pvt. Ltd. 34. AHS Joint Venture 35. Amrapali Homes 36. Amrapali Grand 37. HIMS Pvt. Ltd. 38. Amrapali Spring Valley Pvt. Ltd. 39. Amrapali Patel Platinum 40. Amrapali Media Vision Pvt. Ltd. 6. The order passed by this Court of depositing 250 crores of rupees has not complied. There is an admission already made by Amrapali Group that there was a diversion of more than 2765 crores of rupees f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 17.5.2018: "1. Pursuant to the order passed yesterday, i.e., on 1.8.2018, Mr. Durga Shankar Mishra, Secretary, Ministry of Housing and Urban Affairs, has stated that a Committee has been constituted by the Government of Uttar Pradesh under his chairmanship to look into the problems of three lakhs home buyers of Noida, Greater Noida, and Yamuna Expressway. The Committee has been constituted so as to take a policy decision so as to solve the problems of the home buyers. On 25.6.2018, the first meeting of the then Chief Executive Officers (CEOs) of the Noida and Greater Noida, real estate representatives, etc. was held and thereafter, second meeting was held on 10.7.2018, which was attended by 32 persons, inter alia including certain representatives of the Flat Owners Welfare Association, Joint General Manager, ICICI Bank, AGM of the Bank of Baroda, General Manager of HDFC Bank and Chairman of CREDAI had also attended the meeting. Thereafter, no meeting of the Committee has been held. However, a discussion with the Chairman of representatives of the four builders, i.e., Amrapali Group, Jaypee Infratech Ltd., Three C Group and Unitech Limited was held on 18.7.2018, along with deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the order dated 17.5.2018 and same requires modification. The sum of Rs. 250 crores has also not been deposited. An application has been filed so as to waive that requirement also. When we see the conduct of the promoter on the various stages, it is apparent that on 18.7.2018 on behalf of the promoter it was stated before us that the Committee has been constituted by the Government of Uttar Pradesh under the Chairmanship of the Secretary, Ministry of Housing & Urban Affairs, as such we should wait for the outcome of same. Yesterday, i.e., on 1.8.2018 it was stated before us that NBCC is now considering to take over the entire project of Amrapali Group as it has issued an advertisement for the purpose and as such the Court should stay in our hands. In the circumstances, it is apparent that the Amrapali Group does not intend to abide by order dated 17.5.2018 and its conduct is dubious. Thus, we have no hesitation in recalling the order dated 17.5.2018 permitting Amrapali Group to complete the projects. We hereby recall the order entrusting the project to the Amrapali Group of companies for completion, along with co-promoters, and we place it on record that the conduct of Amrapali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is stated by Mr. Anil Mittal that his engagement as statutory auditor has begun in the year 2008 and continued up to 2015. He was the auditor from 2008 and has also stated before us that after 2015 no papers have been given to him. It was stated by Mr. Gaurav Bhatia, learned counsel, that at present S.N. Dhawan & Company is doing the audit of the Company. 11. Since we find that various documents have been placed on record indicating transfer/diversion of the fund by the Amrapali Group itself, the Amrapali Group has admitted that out of the six projects, there was transfer/diversion of Rs. 2765 crores. Though it was submitted that the amount was transferred to other projects, in our opinion, this was clearly diversion of funds. The amount given by the home buyers for the completion of their projects/houses could not have been diverted before the completion of the projects. We request the auditors to find out how much money has been so transmitted/diverted to other projects and how it has been used. Let projectwise information of all projects be furnished. The Amrapali Group of Companies shall furnish the requisite information and documents and shall cooperate with the statutory a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same be circulated to the learned counsel appearing for the parties. Let Amrapali Group of Companies file a response to the NBCC's proposal for completion of the project. We have heard Sh. Gaurav Bhatia about the property which can be sold. He has attracted our attention to the affidavit of Shri Anil Kumar Sharma in terms of the Court's order 10.5.2018 filed with respect to I.A. No. 7366 of 2018 in W.P. No. 942 of 2017. He has submitted that Saleable Area Commercial is described at page 20 of the affidavit. The value is given as per the development model, not the Distress Sale Value. Let Distress Sale Value be also stated on affidavit and with respect to the fact that what are the encumbrances and also the dues of Noida/Greater Noida Authorities as against the property as mentioned at page 20 of the affidavit. He has also attracted our attention to the list of encumbered property on page 27 of the affidavit and list of unencumbered property on page 28. Let affidavit be filed specifically stating with respect to the nature and extent of encumbrances with respect to encumbered property and how much is the amount due and what are the documents executed. With respect to lis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the parties. It was pointed out by Mr. M.L.Lahoty, learned senior counsel that there are certain existing Directors, namely, Mr. Anurag Sanghai, Mr.Vinay Vishal and Mr.Sankalp Shukla, particulars of their properties, etc. have not been filed as ordered by this Court and there are several other existing or former directors whose names have not been disclosed. Let the names of all the directors be disclosed without remiss before the next date fixed along with details of asset etc. as already ordered by this Court. It was also pointed out by Mr. Lahoty in I.A. No.116688/2018 that 'O' 2 valley particulars have not been disclosed by the group of companies. Let reply to the said I.A be filed by the Amrapali Group of companies and details of 'O' 2 Valley be also disclosed. It was also pointed out that DRT has initiated the proceedings and has directed the production of the original documents, sanctioned plans and other relevant documents available with Amrapali Group of Companies. It was also submitted that valuation has also been ordered. We direct the Amrapali Group of companies and the Directors viz. Mr. Anil Kumar Sharma, Ms. Shiv Priya, and Mr.Ajay Kumar to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tenders and also to go ahead with the preparation of the DPRs and also to submit detailed proposals, terms, and conditions in this Court as prayed by them. Existing architects of Amrapali Group of Companies to ensure cooperation with the NBCC. Non-cooperation shall be viewed seriously by this Court. Let DRT go ahead with the process of finding out the encumbrances. We also permit the Bank of Maharashtra and all other such creditors who may have a charge on the unencumbered property to state their claim before DRT. Let reply be filed in IA No.139255/2018, 117300/2018,95140/2018, 135446/2018, 138400/2018. All applications for impleadments to the extent of intervention are allowed. List on 9.10.2018." 19. On 9.10.2018 when despite the orders dated 12.9.2018 and 26.9.2018, orders were not complied with, records were not handed over and there was utter violation of orders passed by this Court, we directed the Police to seize all the documents and to hand them over to the Forensic Auditors from the possession of 46 companies and their Directors. We directed all the Directors to surrender their passports and hand them over to the Police. The observations made by this Court were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evening. This Court ordered that in case documents were not handed over, the same shall be viewed seriously and the incumbents punished suitably. The last opportunity was granted to hand over the requisite documents to the Forensic Auditors. We directed Statutory Auditors to comply with the requisition made by the Forensic Auditors. It was also noted by this Court that a sum of Rs. 242.38 crores had been handed over to Gaurisuta Infrastructure Private Ltd., Vidhyashree Buildcon Private Ltd., Mannat Buildcraft Private Ltd. This Court observed in para 5 thus : "5. It has also been pointed out by Shri Pawan K. Aggarwal in his report that so far with respect to four companies, namely, Gaurisuta Infrastructure Pvt. Ltd., Vidhyashree Buildcon Pvt. Ltd., Mannat Buildcraft Pvt. Ltd. And Jhamb Finance & Leasing Pvt. Ltd., only it has been noticed that a sum of Rs. 242.38 crores has been handed over to them and in most of these firms Shri Ashish Jain and Shri Vivek Mittal are the Directors. Beside, it was stated before us by Shri Anil Mittal, statutory auditor, that his nephew- Vivek Mittal joined as a Director on the request made by Shri Chander Wadhwa, CFO, to create a company and he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst them in the aforesaid factual situation, including the one for the professional misconduct." 22. It was further pointed out by the forensic auditors that there were 23 more groups of companies to whom money had been diverted and these companies had been created by Amrapali group of companies. This Court directed disclosure of these companies in the order dated 26.10.2018 thus: "7. Shri Pavan K. Aggarwal has also pointed out to us that there are 23 groups of companies to whom the money has been diverted and these companies have been created. Let the names of the companies be disclosed to the Amrapali Group of Companies and we direct the police to seize all the documents of these 23 companies to which money has been diverted and be handed over to the Forensic Auditors. 9. We also direct the Directors of other 23 companies, which have been identified so far by the Forensic Auditors, to file their detailed affidavits in this Court, disclosing the amount received by them, dates of receipt, for what purpose and how it is utilized and invested by them." 23. We had also directed Mr. Chander Wadhwa, CFO to file affidavit pointing out appointment order, authorisation, authority t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions were also issued to make the disclosures. This Court has noted the conduct of non-compliance of the order vide order dated 13.11.2018 thus: "4. This Court has drawn suo moto contempt on 12.10.2018 and that is listed on 20.11.2018. In spite of the aforesaid observation made in the order dated 26.10.2018, still there is gross disobedience of the directions issued by this Court and in the affidavit filed in compliance of the order dated 26.10.2018, the various disclosures as ordered have not been made. Besides that, there is a failure to hand over to the forensic auditors, the relevant material as pointed out by them. 5. The names of all the related companies have also not been disclosed with which the transactions have taken place. No such statement has been made categorically in terms of the order passed by this Court on 31.10.2018 and absolutely vague averments have been made. This tantamount to deliberate noncompliance of the orders of this Court despite several opportunities having been granted. 7. An affidavit has also been filed by Mr. Anil Sharma of Amrapali Group of Companies in which names of the companies which were ordered to be disclosed have not been disclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ander Wadhwa. Both are passing liability on each other for creating certain additional companies. None want to own the responsibility. We require Amrapali Group of Companies and their Directors to file a reply to the affidavit, filed by their CFO Chander Wadhwa and Anil Mittal. Let the copies of affidavits of Chander Wadhwa and Anil Mittal be furnished to the Advocate on Record, Amrapali Group of Companies. Let para-wise and point-wise reply be submitted as to what has transpired in the Court, as recorded in order-sheets, including what they have stated in their affidavits. 12. It was also pointed out that Computech Pvt Ltd. is in possession of a substantial amount. The forensic auditors are in the process of examining the details. However, at this juncture pursuant to findings of forensic auditors, it was pointed out by Mr. Vikas Singh, learned counsel appearing on behalf of Chander Wadhwa, CFO that a sum of Rs. 7.58 crore from Rinku Computech Private Limited and Rs. 4.1 crore is lying with Chander Wadhwa, said amount is out of the transactions with the Amrapali Group of Companies. He has volunteered to deposit the amount within three weeks from today. Let it be deposited in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he money has been transacted and creation of companies has taken place in connivance with the CFO, statutory auditors. It was also pointed out that there are various related companies in which money has been transferred. We restrain all monetary transactions out of bank accounts or any kind of alienation of the property held by the related group of companies where the money has been siphoned and has been used for the creation of the assets. Any transfer made in any manner shall be illegal, void and inoperative. 20. It is also necessary in order to find out the actual amount invested in building activities, out of the funds collected. It also appears that certain companies were created only for the purpose of purchasing raw materials. Whether actual transactions of purchase have taken place is required to be ascertained. Let all the vouchers of the purchase, Bills, orders, etc., which are in possession of Amrapali Group of Companies and the estimates of various raw materials for each and every building without which construction of a building is not possible to be undertaken to be positively handed over to the forensic auditors within a week. We also request the forensic auditors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that DRT has pointed out that there was non-cooperation and non-compliance on the part of Amrapali group of companies. It was also pointed out to this Court that certain buyers/companies who have booked the flats by making payment of a paltry amount for the purchase of several flats/plots, did not appear to be genuine buyers. We have directed the Forensic Auditors to look into this issue. We also directed all the Directors of companies, their relatives, family members, Mr.Chander Wadhwa, CFO and statutory auditors who were in receipt of money of home buyers, to deposit the same in this Court. The last opportunity was given to do so. 26. On 12.12.2018 in para 4 we have observed thus: "4. Pursuant to our order dated 05.12.2018, Mr. Adhikari Devi Prasad, Mr. Bhuvan Pant, Mr. Prasanna Kumar Rout, Mr. Jagannath Sharma, Mr. Tarun Kumar Sharma, and Mr. Sunil Kumar and also Mr. Anil Sharma, Director, Amrapali Group of Companies are present in the Court. We generally asked them how the accounts for the period 2015 to 2018 were prepared by them and submitted in the Court. They have stated that it was based on tally data which was given to them. In addition, Mr.Prasanna Kumar Rout, who wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 242.38 crores has been handed over. Mr. Pankaj Jain (current director of Amrapali Group) was also a director in Vidhyashree Buildcon Pvt Ltd. * Sushma Bajaj & Kulbhushan Bajaj (Current directors of Amrapali Group) are also directors in Nishant Creation Pvt Ltd. * Mukesh Kumar Roy (DIN: 2175661) who is presently director of Amrapali Group (listed in 46 companies LA Residentia) is also director of Anjali Buildcon. * In Anjali Buildcon Mr. Sanjiv Kumar (DIN: 03136323) is also one of the directors, who is the director of New Tech La Palacia to whom Shri Balaji Hi-Tech Construction Pvt Ltd (A sublessee of Amrapali Dream Valley) has further transferred the sub-lease of said project. * Stunning construction is one of the Amrapali Group Company listed in 46 companies. * Rs. 46 Crs (Approx) amount which is to be paid by sublessee/s II. Amrapali Dream Valley: (Current Status: 260307) As per the lease deed, Lessor here is Greater Noida Authority. 1. Lessee here is Amrapali Dream Valley Pvt Ltd (Total Area - 354298 Sq Mts) 2. Sub- Lessee of Amrapali Dream Valley Pvt Ltd here are: o M/s Shri Balaji Hi-Tech Construction Pvt Ltd (Total Are - 12479 Sq Mts) o M/s K.V. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. On 11.2.2019 we directed M/s. J.P. Morgan to disclose the names of the investors and beneficiaries who invested in the Mauritius Fund which had invested in Amrapali INR Rs. 85 crores. On 14.2.2019, dues were pointed out against individuals and Directors also. Against Directors there was a report of loans and advances to the extent of Rs. 161.51 crores as noted in the order. We issued certain directions with respect to M/s. Golf Link City Projects Private Ltd. as well as M/s. Royal Golf Link City Projects Pvt. Ltd. We directed Mr. Anil Kumar Sharma to deposit an amount; whereas the non-compliance made by Amrapali was also pointed out by the buyers which had been noted. As inability was expressed on behalf of M/s. J.P. Morgan to explain valuation report dated 23.10.2013 submitted by Mr. Sudit K. Parikh & Co., Chartered Accountants, they were ordered to explain the valuation report on the basis of which Rs. 140 crores had been withdrawn by M/s. J.P. Morgan. It was also pointed out in this connection that the shares of Amrapali Zodiac were ultimately purchased for Rs. 140 crores by M/s. Neelkanth and M/s. Rudraksha Forensic auditors pointed out that two persons namely Chandan Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d how the companies were framed and for what purpose." 28. On 28.2.2019, this Court considered IA No.35430/2019 filed by Deputy Commissioner of Police, EOW, Delhi Police, seeking permission to take into custody various Directors namely Anil Kumar Sharma, Shiv Priya, and Ajay Kumar. This Court has passed the following order: "I.A.No. 35430 of 2019 This application has been filed by the Deputy Commissioner of Police, Economic Offences Wing, Delhi Police, seeking permission to arrest and take into custody various Directors, namely, Anil Kumar Sharma, Shiv Priya, and Ajay Kumar. They are presently in the custody of Noida Police vide our order dated 11.10.2018. We make it clear that the Delhi Police is free to arrest/take into custody any or all the other Directors of Amrapali group of companies. Any order passed by this Court, in this case, shall not come in their way to do so. Let the Police investigate the entire gamut of the scenario of the various projects, as projected in this case and various orders passed and investigate the entire matter. Prima facie, we find that the case requires serious investigation in the facts projected by the Directors, CFO, and the statutory audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions contained in sections 13 and 14 of the U.P. Industrial Area Development Act, 1976 (for short, 'the Industrial Development Act'), the lease deeds granted by Noida and Greater Noida authorities were ordered to be cancelled. In the lease deed also, there is a specific stipulation as to cancellation clause in case of cancellation and imposing penalty and for such other actions against the builder in case of default. Home buyers further submitted that after payment of first 10% of the lease premium, Amrapali Group has not paid any of the 20 half-yearly instalments from 2010 onwards. The Noida and Greater Noida authorities have been liberal, and not taking any stringent action against Amrapali Group which had been mandated by virtue of the provisions contained in the lease deed. The dues of Noida and Greater Noida authorities cannot be treated at par with the dues of home buyers. Home buyers further submitted that so far as the dues of the banks are concerned, they are not placed on any better footing and Forensic Auditors in their report have stated that but for the connivance of the bank officials, the act of money siphoning on such large scale would not have taken place. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e public or which has been assigned the duty of grant of largesse, etc. acts as a trustee, and therefore, has to act fairly and reasonably, promote public good and public interest. Public trust doctrine is a part of the law of the land. The doctrine is a facet of Article 21 of the Constitution. The action has to be bona fide. Public property cannot be transferred to private property in case it affects the public interest. General welfare and common good are to be kept in view by the public authorities exercising public power and discharging public duty. 32. Mr. Krishnan Venugopal, learned senior counsel further urged that in view of the findings recorded by the Forensic Auditors, section 8 of the RERA has to be invoked. He further submitted that even though Amrapali was defaulting on payments of lease rents, authorities continued to allot further plots to them. The first lease had been granted on 1.5.2007 and the last on 30.7.2010. Despite default, they continued to issue permission to mortgage/NOCs for that purpose between 24.12.2009 and 27.2.2013, in spite of the fact that there was no payment of premium and advance annual lease rent up to date. The authorities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deprived of on a large scale in spite of the fact that they have paid a substantial amount of money. Construction has not progressed and money has been diverted elsewhere. There is a charge of the money of the home buyers must be treated as the highest priority. They have paid towards dues of Authorities also which amount has been diverted. Banks and authorities have failed to discharge their duties. Banks have granted loans to the projects in some cases which were not sanctioned even on the date of grant of loan. For example, Phase III of Amrapali Adarsh Awas Yojana Project. Banks have released the complete payment amounts to the builder without the construction having been reached even 10 to 20%. As such lending was not permissible. The current scenario is that the construction of the various projects is stalled and the home buyers are without any hope of the promised homes. Certain incumbents who have taken loan are compelled to repay the loan and money has been siphoned out. As such appropriate relief be granted to home buyers in view of the facts found in the report of the Forensic Auditors. 35. On behalf of the home buyers, reliance has been placed on the provisions contain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... balance premium; (iv) facility of sub-division of plots of area larger than 10 acres so as to make the larger projects financially viable. 38. It was also submitted on behalf of Noida Authority that after 2005, a total of 114 plots had been allotted to various group housing societies. 81 have been handed over the possession on payment of 10% of the total premium. 29 projects, out of these 81, have been completed. Out of other 33 allotted earlier, 11 had been completed, and 7 have obtained part- completion certificates. Noida Authority, being a responsible public organisation, has been diligent in pursuing Amrapali Group, it has not taken the drastic recourse of terminating the lease deed as that would entail demolition of the existing structures as per the provisions of the lease deed. In terms of the lease, home buyers have no title or legal rights to possession of the flats they are occupying. As the projects have been completed to some extent, it would have been unfair to leave the home buyers in the lurch. The occupancy certificate is issued in accordance with the provisions of the New Okhla Industrial Development Area Building Regulations, 2010 (for short, 'the Regulations o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed has been executed. The possession by various home buyers in respect of constructed flats is contrary to the provisions of the lease deed. The builder could not have handed over the possession. Any occupation of flats by the home buyers without compliance of mandatory provision of occupancy certificate and without payment of statutory dues, both to Noida Authority and to the Collector of Stamps and without execution of tripartite sub-lease deed may not be termed as legal and as such which could have resulted in their eventual eviction. 41. It was further submitted on behalf of the Noida Authority that pursuant to order dated 27.11.2017 passed by this Court, on depositing 10% of the dues to issue completion certificate such NOC could not be issued and the order passed by this Court has not been complied with by builder/promoter as such possession could not be handed over. In spite of reiterating the aforesaid direction of this Court on 31.1.2018, it has not been complied with by the promoter/leaseholder. It is submitted by the Noida Authority that its dues to Amrapali group exceed Rs. 2191.38 crores till 30.4.2019. It is in public interest to ensure payment of premium/lease mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50 is itself wrong. FAR has not yet been purchased by Amrapali group by depositing the charges and submission of consent of two-thirds of the apartment owners. Under section 4(2)(1)(D) of RERA, 70% of the amount received from home buyers is to be put in a separate account to be maintained in a scheduled bank and is to be used towards construction and land cost. The land dues payable to Greater Noida authority constitute an encumbrance as provided in section 4(1)(b) of the U.P. Apartments Act, 2010. As per section 11(4)(c) of RERA, it is the duty of the promoters to certify that all dues and charges have been paid. Thus, it follows that money received from the flat buyers is to be spent on construction and payment of land dues. Therefore, payment of land dues cannot be denied to it. Land dues are in the nature of public money. Amrapali group is bound to pay it. The amount is payable in instalments as such same is interest bearing for availing the facility of payment in instalments as such the land cost payable increases. In case of default, penal interest follows. There was no order passed by the Allahabad High Court for staying construction on the leased plots. Amrapali Group was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Pvt. Ltd. There were legal impediments/force majeure conditions in completing the projects within the period given in the flat buyer agreement. The Allahabad High Court finally decided the matter in Gajraj Singh & Ors. v. State of U.P. on 21.10.2011. The Patwari Village issue was pending before this Court till 2015. On 14.5.2015 this Court finally decided the matter in the case of Savitri Devi v. State of U.P. It was an order passed by the National Green Tribunal with respect to Okhla Bird Sanctuary which also hindered the work. Higher compensation was ordered to be paid by the Allahabad High Court in 2011. The period of litigation ought to have been treated as zero periods for the purpose of payment of dues by Noida and Greater Noida authorities. Amrapali Silicon City was affected on account of litigation and land acquisition issues. The work of Leisure Valley, Dream Valley, and Leisure Park were also affected. There was an issue of the approach road with the farmers with respect to Sapphire Housing Project. Other projects were also affected due to farmers' agitation, want of proper roads, etc. The authority was required to give electricity, sewer and water connections. Prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of flats depends upon the situation etc. as the flats were booked at different times, they have different prices as per the prevailing market. In certain cases, the customers took possession of various Towers in partially unfinished conditions and managed the pending work by themselves. In some projects, lifts were installed by the customers' associations. In some other cases, interiors of the flats were finalised by the customers themselves. Amrapali group reduced the value of such flats in their books accordingly. 48. With respect to other amounts recoverable from KMPA/relatives/Directors, as per the affidavit submitted by Shiv Priya on 20.11.2018, Rs. 4.3 crores were paid towards his taxes. The same has been adjusted against the salary due of Rs. 4.4 crores from various Amrapali group of companies. Salary of Rs. 1.6 crores is recoverable by Shiv Priya from Amrapali group of companies. As per the affidavit of Mr. Ajay Kumar, Rs. 1.21 crores were paid by the company towards his taxes out of his outstanding salary up to 31.3.2015. Though his salary for the financial years 2016-18 is still to be mentioned in the books of accounts on account of his due salary. A sum of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report. These advances are against genuine business transactions. There is a possibility that such expenses have not been booked and squared off. 52. With respect to the diversion of home buyers amount to the extent of Rs. 3,500 crores and bogus billing of Rs. 1500-1600 crores, out of the total amount received from home buyers of Rs. 11,652 crores would leave INR 6,652 crores for carrying out the existing construction at sites. The total sum available for construction purposes comes to Rs. 4,352 crores, after deducting the amount of payment to the authorities and banks of Rs. 1,000 crores and Rs. 1,300 crores respectively. With respect to non-genuine purchases from suppliers, though a sum of Rs. 554 crores was given to the income-tax authorities, on appeal the error had been corrected by the income-tax authorities. There was an error in the report of the forensic auditors. The report of the forensic auditors as to non-existing companies is also not correct. It is further submitted that Gaurisuta Infrasolution Pvt. Ltd., which manufactures PVC doors and windows had business transactions with Amrapali group, payment/advances were made to them. It is a fact that parties are related. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of all claims of Amrapali group. 57. On behalf of Bank of Baroda, it has been submitted that Forensic Auditors have made adverse comments without any basis. Bank of Baroda had deployed suitable methods to monitor the utilisation of funds. No diversion of funds was permitted by Bank of Baroda. Monitoring of the loan was done and before sanction of the loan, the net worth of the promoters/Directors of ASCPL was ascertained. Bank of Baroda relied upon a letter dated 29.7.2010 from Noida to ASCPL. The term loan agreement was executed amongst ASCPL, Bank of Baroda, Bank of Maharashtra and Oriental Bank of Commerce "Consortium" for a term loan of Rs. 300 crores. After execution of due documents and deeds of corporate guarantee issued in favour of Bank of Baroda, corporate guarantees were submitted by Ultra Homes Construction, Jotindra Steels and Tubes Ltd. along with Vidhyashree Buildcon. Pvt. Ltd. RoC search report of guarantors was also obtained. NOC of Noida dated 21.2.2012 for mortgaging the project site to procure a term loan from the consortium was also obtained. A detailed project report was issued by Solomon Consulting Pvt. Ltd. There was the appointment of independent lender&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace. The allottee shall not have any lien or interest on the flat unless sub-lease deed is executed. Therefore, they are not secured creditors, they have no right, title or interest or lien on the basis of allotment from flat buyer agreement. It is further submitted that the agreement does not create any rights in praesenti with a promise to enter into a future agreement. It does not create any right, title, interest or claim in the immovable property. In the absence of registration of document under the Registration Act, no rights are created in the immovable property in question under section 49 of the Registration Act. 58. With respect to RERA provisions, it has been submitted by Bank of Baroda that section 11(4) of RERA deals with the interaction between repayment to secured creditors and rights of allottees. Sub-section (h) of section 11(4) states that the promoter shall not create a mortgage or charge after an agreement to sell has been executed. Therefore, the promoter is permitted to create such mortgage or charge prior to the execution of an agreement to sell. Section 4(2)(1) of RERA requires the promoter to disclose the prior encumbrance to the real estate authority. Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fessional fees, by way of booking of bogus bills of Rs. 837 crores, by selling flats as undervalued prices in book and received differential market value in cash, by paying commission and brokerage on bogus booking of flats and by way of granting inter-corporate deposits of Rs. 3,000 crores to related entities and Rs. 500 crores to unrelated entities/trusted partners for ultimately diverting funds to unapproved uses. SUMMARY OF REPORT OF FORENSIC AUDIT 60. The summary of report submitted by Forensic Auditors in the Court is as under: 1. Brief Introduction Amrapali Group started its operations in the year 2003 in Delhi. It was started by Mr. Madan Mohan Sharma who managed it for a brief period. Thereafter the operations of the Group were managed by his son - Mr. Anil Sharma. Gradually, he expanded his team and Mr. Shiv Priya, Mr. Ajay Kumar, Mr. Nishant Mukul, Mr. Chander Wadhwa, Mr. Mohit Gupta, Mr. Adhikari Das and other trusted partners/executives joined in. The Group was into the business of construction of residential complexes, townships, offices, commercial complexes. The Group built good reputation in the public and launched several projects in various cities in India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Company, i.e. management, CFO, the Statutory Auditors and key managerial persons deliberately and for reasons best known to them did not prepare the accounts till 31st March, 2018 or thereafter as nobody wanted to let anybody know where the funds moved from 31.3.2015 onwards. In absence of Book of Accounts, we are constrained to report that the management deliberately withdrew the Bank Balances for making payments to some person and brought down the huge bank balance to negligible amount. The management has diverted the Home Buyers' funds from one Company to another Company in a very clever, pre-planned and clandestine manner. The management could not have done this without the full support of its CFO and the Statutory Auditors. As per the submissions made, many companies were controlled by CFO and the Statutory Auditors to which huge funds have been transferred. It can therefore, be easily said that both CFO and the Statutory Auditor were Master Mind behind these types of planning for diversion and the misuse of funds. It may be important to mention here that funds were transferred from one Company to another and to third and to fourth and so on thereby absolutely confusing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order to confirm the genuineness of these suppliers and a few other suppliers we have sent written communication/ letters by speed post to them in order to confirm the transactions with the Amrapali Group of Companies. Most of these letters have been received back with the remarks "No such firm exists at the specified address". In addition to above, there is no system of calling quotations for purchases and there is no internal control with respect to inventory. We have spotted out further certain non-genuine supplies as per details given below: (i) M/s B S Promotors There have been sales to M/s B S Promoters amounting to Rs. 21.15 Crores during the period 2013-16 from one Company of Amrapali Group and the same goods were re-purchased into another Company of Amrapali Group at a margin of 5% approximately. These transactions seem to be mere accommodation entries, where all purchase/ sales are recorded on a single day only. Further, it was also explained that M/s B S Promotors have made the sales against Bank Letter of Credit which has been discounted by them from their bankers. This seems to be a case of manipulation with the banks also since there is no movement of goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15:13 4 Min 6172 HR55T-5896 29,640 7/2/2015 16:56 17:00 4 Min 6210 HR74A-8194 29,560 7/2/2015 16:59 17:02 3 Min 6169 HR55T 5896 30,910 6/2/2015 15:32 15:36 4 Min 6170 HR55T 8339 31,270 6/2/2015 15:35 15:37 2 Min 6263 HR74A 1680 30,090 14/2/2015 19:09 19:13 4 Min As these bills of Kanodia Cements are prima facie held to be bogus, the entire sum of INR 11.69 Crores booked as purchases from Kanodia Cements should be recovered from them or from the Management for inflating their purchase by debiting bogus invoices. Bogus expense and cash surrendered in income tax search Cash has been surrendered by the Amrapali group in the first Income Tax search conducted on 9th September, 2010. No source of this cash has been explained by the management. According to the Balance sheet of Amrapali Sapphire Developers Private Limited examined by us, cash surrendered is shown as miscellaneous income in the profit and loss account during 2010-11 amounting to Rs. 1.39 Crores. It is further submitted that in the second search conducted by Income tax Authorities on 7th August, 2013, the Amrapali group had surrendered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has deleted all these additions. We are informed by the management that no further appeal has been preferred by the department before the Income tax Appellate Tribunal as they have no idea of the same so far. The bills booked and payments made were just accommodation entries. Many of the parties are not traceable and when we requested the Amrapali Group Management to produce the persons/entities to ascertain the veracities of the claims, they didn't co-operate. It appears Prima-Facie that the bogus invoices were booked and cash was taken from these parties. We are of the opinion that if we confront the recipient of the purported charges then last recipient would flatly deny. It is pertinent to note that Shri Ajay Kumar Aggarwal of BSBK Group in a statement recorded under section 132(4) of the Income Tax Act has admitted that he provided accommodation/bogus bills. Till the date of writing this report the amount so identified for bogus bills is Rs. 837.2 crore. Further, the supplies by Jotindra Steel and Tubes and Mauria Udyog Ltd, having common directors with Amrapali Group Companies, are prima-facie bogus by nature and are under examination amounting to Rs. 450 crore. (Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for payments to staff, suppliers, vendors etc. It is worthwhile to mention that it was not permitted to use Specified Bank Notes (SBN-500, 1000 denomination Notes) for making payments to these parties. Further there has been an Income tax Survey on 17/11/2016. We understand Income Tax Authorities have recorded the statement of Directors and also taken the Inventory of Cash in hand as on that date. A copy of the statement recorded and detail of inventory of Cash in hand is not made available to us. Gold bar purchased from Yashika Diamonds It has been observed that the Group Companies purchased Gold bar, other forms of gold worth Rs. 5.88 crore. The same has been booked as festival expenses. This does not seem to be a normal business transaction but in the nature of personal expenses. Thus, this amount should be recovered from the management of the company. 5. Negligence and non- monitoring by bankers In view of our detailed report attached, we wish to submit here that the whole process of transfer of funds from one Company to another Company to a third Company and so on and so forth on the same dates would not have been possible without active support by the Bankers. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 16th December, 2010. d. Sale of flats at less than Rs. 3,420 per square feet of saleable area and many other clauses of this agreement neither followed nor ensured by the Investor. It is very clear that a Debenture Subscription Agreement and Investment cum Shareholders Agreement both dated 16th day December, 2010 were merely sham documents which were never complied with and both i.e. Amrapali group of Companies and ICICI Prudential Asset Management Company Limited were in connivance with each other in diversion of funds for non-specified purposes. Foreign investment The company has received the sum of Rs. 140 Crores during the financial year 2012-13 from IPFFI Singapore PTE Limited under Foreign Direct Investment Scheme. As per FEMA rules this amount was to be invested in Real Estate construction projects only. The amount received in Axis Bank of Rs. 85 Crores was transferred to Amrapali Centurian Park Pvt. Ltd. (ACPPL) as under: On 7.8.2012 - Rs. 5 Crores On 8.8.2012 - Rs. 50 Crores On 18.8.2012 - Rs. 30 Crores Total = Rs. 85 Crores ACPPL on receiving Rs. 85 Crores, allotted Equity Shares worth Rs. 85 lakhs to ASCPL and balance Rs. 84.15 Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een no business transactions with the company except movement of funds. The list of such liabilities is under preparation which are not payable. Inter-corporate deposits accepted by the Group are Non-Interest- bearing unsecured loans. There are no business transactions with these companies. It is not understood as to why a person will give interest free loans without any considerations. Thus, we are of the view that these are accommodation entry only in lieu of consideration given to them indirectly by the management. Hence, we are of the view that all the aforesaid amounts are not payable. In our opinion, this is a case of Money Laundering as the generic term of Money Laundering is defined to describe the process by which Criminals disguise the original ownership and control the proceeds of the criminal conduct by making such proceeds to have derived from a legitimate source. Money Laundering is the process of concealing the origin of money obtained illegally by passing it through a complex sequence of Banking transfers or commercial transactions. The main process is accounting for the proceeds without raising the suspicion of law enforcement agencies. In the instant case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nks were financing not the construction activity but loans and advances to third parties. (iii) Mr. Rakesh Mahajan and Mr. Ifthikar Khan were grossly involved in the wrongdoings in the company's project and equally conspired in the delay and diversion of home buyers funds and they being 49% shareholders and active directors in the company should be held responsible for the deficit in completion of the project amounting to Rs. 20 crore. Further, Amrapali Infrastructure had given an advance of Rs. 1.5 crore to Nirala Infracity Ajmer Pvt Ltd - a project controlled by Rakesh Mahajan and Iftikar Ahmed. This amount is recoverable from Nirala Infracity Ajmer Pvt Ltd. 7. Companies created solely for the purpose of routing funds The intention of Amrapali Group was to divert funds to other projects/income sources in the name of family members of the promoter and the trusted employees, friends of the promoters as well of the executives, auditors and their relatives. For this purpose, several companies were incorporated for routing funds. These companies did not have any material transaction as per the main object for which they were incorporated and did not have business since their i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,31,000 08-07-2011 7 Financial World Pvt. Ltd 57,00,000 11-07-2012 8 Function Distributors Pvt. Ltd. 50,00,000 03-08-2012 9 Green Value Agro Farm Pvt. Ltd 30,00,000 01-08-2012 &03-08-2012 10 Infotech India Pvt Ltd 1,00,00,000 03-07-2012 11 Kabir Enterprises Pvt Ltd 50,00,000 06-06-2012 12 Ladli Ji Enterprises Pvt Ltd 2,00,00,000 15-05-2012 13 Leisure Buildcon Pvt Ltd 50,00,000 25-04-2012 14 M/S Naksha Properties Pvt.Ltd 84,00,000 19-04-2012 15 M/S Shravni Infrastructre 3,20,00,000 Received on various dates From 19-04-2012 to 11-07-2013 16 M/S Soulful Heart Solutions 22,00,000 Received on various dates From 19-04-2012 to 17-07-2013 17 Ram Rahim Trading Co. Limited 70,00,000 01-08-2012 &02-08-2012 18 Randhir It Solutions Pvt Ltd 50,00,000 07-05-2012 19 Rayan Garments Pvt Ltd 1,40,00,000 26-04-2012 &07-05-2012 20 R N Sangahi 24,37,480 11-04-2011 ;02-07-2011 &18-12-2012 21 S A Corrugators Pvt Ltd 20,00,000 01-08-2012 22 Sadbhavana Properties Pvt Ltd 4,00,00,000 08-06-2012 23 SpbPropcorn Pvt. Ltd. 50,00,000 25-04-2012 24 Technicare Biomed India Pvt Ltd 40,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relatives. e) Kapila Buildhome Private Limited - The company did not undertake any business. A sum of Rs. 392.68 Crores was advanced as loan or advances to the various group Companies. Further, it accepted non-interest bearing inter corporate deposits from non group companies with whom no other transactions were undertaken. We are of the view that these are accommodation book entries only in lieu of consideration given to them indirectly by the management. List is as stated hereunder: Name Amount In Rs. Date of Acceptance Ample Hotels and Resorts 20,000,000 20/04/12 Justify Vanijya Private Limited 4,000,000 22/06/12 Ladli ji Enterprises Private Limited 5,900,000 25/04/12 Madhav Fincap Private Limited 15,000,000 24/04/12 Pan Realtors Private Limited 100,000,000 23/08/10 Total 144,900,000 The above companies were used for the purpose of money laundering and required a detailed investigation. Further the amount as shown above is not payable to the party as indicated against. None of the parties (except PAN Realtors that also when we requested them otherwise they were silent for last 8 Years) as above has lodged any claim so far therefore it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd all the expenses were paid in cash only. Mr. Mahendra Singh Dhoni, husband of Ms. Sakshi Singh Dhoni (director of company) was the brand ambassador of Amrapali group and have carried out a number of transactions with respect to endorsement of Amrapali group's projects. He entered in agreements with other group company. j) Amrapali Spring Valley Pvt Ltd- the company is created for diversion of funds and Rs. 186 crore was diverted from Amrapali Smart City Pvt Ltd to buy shares of Ultra Home Construction Pvt Ltd and shareholders are promoter directors without doing any investments. Most of the above companies will qualify to be NBFC, which was reported neither by the management nor by the statutory auditors (except Jhamb Finance & Leasing Pvt Ltd). It is recommended that RBI shall investigate the affairs and compliances of the above companies. Amrapali Media Vision Pvt Ltd was also incorporated with a purpose to route funds for making movies to satisfy the ambitious desires of directors/family members. Most of the marketing and advertisement business of the group companies was given to the company with a profit margin on the cost. The group could have done this advertisement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch 2010 INR 1.13 crore on 8th March 2010 INR 2 crore on 9th March 2010 INR 2 crore on 9th March 2010 * Amrapali Homes Projects Private Limited -It has been observed that Mr. Prem Mishra was given INR 12.40 crore (under several ledgers) for purchase of land since 1st April 2008, out of which INR 10 crore are still receivable from him. The project was sold by Prem Mishra to various parties and received amount in his name. We are yet to complete the audit of Prem Mishra in Indore project. The company transferred funds to and fro with several parties which do not have any substance. It has several small and big debit balances as on date. * Amrapali Biotech India Pvt Ltd - Land & Building, Plant & machinery, a factory at Rajgir (Bihar) * Amrapali Healthcare Pvt Ltd - Hospital at Noida * Noida Texfab Pvt Ltd - Amrapali International Institute of Hotel management, Noida * Neelkanth Buildcraft Pvt Ltd - bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd. * MVG Techno Consultants Pvt Ltd - Tower at Noida * Amrapali Infrastructure Pvt Ltd - recast factory at Greater Noida * Sangam Colonisers Pvt Ltd- The Company has received an amount of Rs. 10.51 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the transactions. These companies were used for depositing cash during demonetisation. The companies were formed/acquired for routing funds and were not in any business. These were sham companies whose share capital was mostly subscribed in cash and the transfer of shares was also in cash leaving no audit trail. 9. Misuse of funds by directors involved in scam The directors and executives colluded with each other and diverted homebuyers funds. Directors received huge amount of money in the form of salary as well as professional fee, both together. A person could have been either in whole time employment of the company or render services as consultant. However, a person cannot enjoy salary income and earn professional income at the same time and also both cannot be earned at the same time from same company. But directors of Amrapali group withdrew sums using all possible ways, be it salary, professional fee, reimbursement of expenses, use of luxury cars or loans and advances to self/relatives/self controlled entities/trusted partners or booking of bills of self controlled entities/trusted partners. Further professional fee was booked without any agreement or proof of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment in shares & securities. The directors created discreet projects for personal income for example In the name of Amrapali Hospitality a hotel at Deogarh was constructed out of funds received from homebuyers without their knowledge of it. They used homebuyers funds in the form of construction of assets for other projects, examples constructed mall at Muzzafarpur, Bareilly etc, Hotel at Deogarh, Bareilly, Hospital at Noida etc. Few particulars of diversion of funds received from Amrapali group are as under: By Anil Kumar Sharma Particulars Amount Amount Paid for Housing Loan of Plot no 88, 2057/7 resi Magos Village, Goa 3,137,000 Amount Paid for Housing Loan of Jaypee Green E-11 Plot, Sector 128, Noida 3,796,452 Amount paid for purchasing shares 59,600,000 Purchased Jewellery 33,921,575 Purchased Car 5,613,572 Investment in LIC and Star Union Daichi -Insurance Policies 18,238,326 Expense done during wedding of Daughter Swapnil Shikha 13,500,000 Transfer to Surabhee Advertising Maharani Bagh Property 38,500,000 Transfer to Quality Synthetic Industries Limited Surekha Group 30,000,000 Transfer to others (Chander Wadhwa,Shashank Manohar, etc) 18,60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which were not required at all because the funds paid by homebuyer were in most of the cases were higher than the cost of construction and land payments, were diverted on the day of receipt itself to the closely held companies and to the companies created for the sole purpose for using them as a conduit for diversion and to the suppliers of bogus supplies. It is very surprising that when funds were borrowed a high rate of interest was paid ranging from 14 -18% to so called investors and the same investors were given loans to their group companies without charging any interest. In such a scenario, the possibility of taking cash in the form of interest cannot be ruled out. Directors sold number of flats at low prices as compared to the prices existing on or near to those dates and on which rates sales were made to other home buyers. It is further submitted that some of the flats have been sold even at rates as low as is Rs. 1,000 - is Rs. 1,400 per square feet which is even lower than the cost of construction. Possibility of taking cash outside the books of accounts cannot be ruled out. Instances of misuse of funds are hereunder: Anil Kumar Sharma Mr. Anil Kumar Sharma rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to family members: a. Self: Rs. 4,77,00,000 b. Pallavi Mishra (Wife) Rs. 60,00,000 c. Swapnil Shikha (Daughter) Rs. 48,00,000 d. Raj Dulari devi (Mother) Rs. 52,00,000 e. Ranjit Kumar Rs. 9,90,000 7. Unexplained cash deposits of Rs. 5.73 crore were received by Mr. Anil Kumar Sharma in his bank accounts from November to December, 2016 i.e during demonetization period. 8. Mr. Madan Mohan Sharma (Father of Anil Kumar Sharma) received Rs. 2 crore from Amrapali Grand during month November and December, 2007. 9. Unexplained cash deposits of Rs. 0.13 crore were received by Mrs. Raj Dulari Devi (Mother of Anil Kumar Sharma) during from April to July, 2018. 10. Following are the details of lockers held by family members of Anil Kumar Sharma: * Pallavi Mishra - a) in UCO bank account no 1557010000618 b) in HDFC Bank account no 50100162844761 locker no 9250500004564240 * Raj Dulari Devi in Yes Bank account no 8599300000716, Locker no 11606082018 11. There are substantial transactions with Amrapali Aadya Trading in his bank account of IndusInd Bank Account no.100028567700 as per details given below: Date Particulars Receipts Payments 16/07/2014 Neft-Amapal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oducts, lights etc) Rs. 56,53,268 b. Helicopter services Rs. 6,20,000 c. Art designing Rs. 10,00,000 d. Bed Linen, Table linen and art designing Rs. 20,36,290 e. Wooden doors and Furnitures: Rs. 74,76,644 f. Payment made for clearing dues of American Express Credit Card: Rs. 1,06,78,273 5. Mr. Shiv Priya made payment of Rs. 1.75 crore to following third parties out of amounts received from Amrapali Group of companies: a. Quality Synthetic Industries Limited Rs. 1,50,00,000 b. Cozy Habitat Builders Pvt Ltd Rs. 15,00,000 c. S N Dubey Rs. 10,00,000 6. Unexplained cash deposits of Rs. 6 crore were received by Mr. Shiv Priya in his bank accounts during December, 2016 i.e during demonetization period. 7. Mrs. Sonali Suman (Wife of Shiv Priya) re-paid loan from bank amounting to Rs. 0.45 crore out of amount received from Amrapali group of Companies. It is to be seen what the purpose was for which the bank granted loan for 6 months for the said amount. 8. Shiv Priya is holding demat account no 1206420001934748 and Sonali Suman is holding demat account no 1206420001936308 with HDFC bank, of which details have not been provided to us. 9. Mrs Sonali Suman holds mutua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e market value amounting to Rs. 0.48 crore as on 28th February 2019. 8. Bank Statement of Anandi Singh of IndusInd Bank Account no.150019032006 A sum of Rs. 1.73 crore has been transferred from Seema Kumari on 09/08/2018. Further a sum Rs. 2.25 crore has been invested in Mutual Funds as per details given below: Date Particulars Amount 16/08/2018 Mirae Asset MF 5,000,000 16/08/2018 Aditya Birla Mutual Fund 5,000,000 18/08/2018 Kotak Mutual Fund 5,000,000 11/09/2018 HDFC Mutual Fund 5,000,000 12/09/2018 Tata Mutual Fund 2,500,000 Total 22,500,000 Note: This amount can be attached and recovered by encashment of these investments. Sunil Kumar and Sunita Kumari (wife of Sunil Kumar) 1. While scrutinizing the Accounts of Gaurisuta Infrasolution Private Limited in which Mr. Sunil Kumar was the Director, it was observed by us that bogus commission of Rs. 1.07 crore was booked. This amount of Rs. 1.07 crore should be recovered from Mr. Sunil Kumar. 2. A sum of Rs. 0.50 crore has also been paid as Salary to Mrs. Sunita Kumari in M/s Gaurisuta Infrasolution Private Limited which is not genuine as per detailed report given in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the Affidavits filed by the directors are incorrect to this extent. 10. Executives who colluded with directors The executives of the Group colluded with the management to avoid proper recording of transactions in books of accounts. To avoid the traceability of the transactions, the executives recorded the financial transactions up to March 2015 in Accounting Package tally, then shifted to FARVISION from April 2015 and continued till March 2016, and thereafter partially recorded transaction in tally and a for a few companied in FARVISION. At the time of switchover, even the opening balances were not properly entered, thereby leading to a huge difference in the data provided to us. In November 2016, the Group left Farvision half way and started recording transactions for partial period in tally. The executives intentionally recorded transactions by switchover of accounting package improperly so that complete trail could not be established. Subsequently, the companies of the group even stopped getting the annual accounts prepared and filing returns to ROC and Income tax The Sales and Marketing head Mohit Gupta, CFO Chandar Wadhwa, Accounts head Adhikari Das, Company Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with us. Adhikari Dash also did not disclose the details of flats booked in the name of various parties without receipt of any amount from them just by passing journal entry. From the above it is clear that it defies the order of Honorable Supreme Court and has violated the order and is responsible for the gross contempt of the Honorable Court. He along with his brother exercised direct control over below companies: (i) Teks Tech Inspection India Private Limited (ii) Teks Tech IT Services India Private Limited (iii) Vinayaka Square Private Limited (iv) Shri Vinayaka Buildspace Private Limited (v) Milestone Highrise Private Limited Vinayaka Square Private Limited * The company has a commercial project named "Beta Plaza" at Greater Noida which received funds from Teks Tech Inspection India Private Limited (controlled by Mr. Adhikari), APJ Finmart Private Limited, Opulent Inn Private Limited, Tasty Feast Private Limited, Opulent Holidays and Travels (P) Limited. The chairman of four companies CA Pankaj Mittal appeared before us and could not explained the reasons for giving loans @ 6% p.a. to a real estate project whereas the bank rate on FDR is 7% and more. * T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd every meeting was held with him only. (page no 209 Volume 1) Mr. Pankaj Mehta -Company Secretary He was responsible for the secretarial compliances of the companies. He incorporated more than 50 additional companies to create a cobweb. He was a director in many of these companies and was an important link in the transfer of funds through various group companies. He was also signatory to the bank account of Stunning Construction Private Limited. He resigned from the services of the Company in December, 2016. However even after his resignation, on the instructions of Mr. Chander Wadhwa, CFO, he continued to operate the Bank Accounts of Stunning Construction Private Limited. After his resignation in the Amrapali Group, he started working as a partner of Saffron Consultants LLP with Mr. Chander Wadhwa. Also Mr. Anil Kumar is still working as an employee with Mr. Chander Wadhwa. On the instructions of Mr. Chander Wadhwa CFO manipulative entries were recorded for adjustment of payment dues of Mr. Pankaj Mehta against his Flat No. E-1502, Silicon City, Sector - 76, Noida. 11. Non compliance of statutory obligations (i) The group companies have not filed annual returns and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th each other and these payments have been made by Shri Anil Mittal to Chander Wadhwa CFO for sharing fees received from Amrapali group for the work awarded to CA Anil Mittal. CA Anil Mittal blindly signed all the accounts and is grossly involved along with Mr. Chander Wadhwa in making various manipulation in the accounts. c) Audit files handed over by Shri Anil Mittal Statutory Auditor are grossly deficient and they do not contain the documents which are normally required in the statutory audit files as per guidelines and directions issued by The Institute of Chartered Accountants of India. d) Statutory Auditor CA Anil Mittal has received the payment on account of professional charges in the name of the companies in which his relatives are directors. This fact has not been disclosed in audited financial statements. e) A sum of Rs. 52.07 crore was adjusted against the payment due on account of Flat number P-1203 in Amrapali Princely Estate on account of professional fees due and to be paid on account of Audit fees. f) Further a sum of Rs. 16.36 crore was also adjusted against the flat number P-1104 in Amrapali Princely Estate on account of Professional fees due and to be pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 6.70 5.02 AMRAPALI SAPPHIRE DEVELOPERS PRIVATELIMITED 113.98 85.45 73.06 76.02 0.11 AMRAPALI SILICON CITY PRIVATE LIMITED 391.57 97.87 50.41 73.05 3.58 AMRAPALI EDEN PARK DEVELOPERS PRIVATELIMITED - 12.67 3.02 - 2 AMRAPALI ZODIAC DEVELOPERS PRIVATELIMITED 286.00 70.60 28.07 6.75 3.84 AMRAPALI CENTURIAN PARK PRIVATE LIMITED 518.78 5.20 - 43.12 7.45 AMRAPALI DREAM VALLEY PRIVATE LIMITED 445.33 5.63 3.23 24.11 8.02 AMRAPALI LEISURE VALLEY DEVELOPERS PRIVATE LIMITED 237.53 26.45 19.67 5.88 0.23 AMRAPALI LEISURE VALLEY PRIVATE LIMITED 431.11 16.20 51.62 8.53 9.79 AMRAPALI SMART CITY DEVELOPERS PRIVATELIMITED 538.59 39.27 17.20 18.97 10.79 SANGAM COLONIZERS PRIVATE LIMITED - - 0.36 - & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;- - - GAURISUTA INFRASOLUTION PRIVATE LIMITED - - 1.24 - 0.01 LA RESIDENTIA DEVELOPERS PRIVATE LIMITED - - 23.35 - 0.3 Amrapali Grand - 3.98 29.17 - 0.5 AHS Joint Venture - 0.08 15.81 - Amrapali Homes - 2.86 21.41 - 0.19 Amrapali Patel Platinum - - 7.85 27.31 - Hi Tech City Developer Pvt Ltd 7.30 Total 3,152.30 842.42 582.68 321.31 69.36 Particulars Amount in crores Grand Total 4,968.07 Further Gaurisuta Infrastructure Private Limited gave Rs. 25 crore advances to various parties as listed on pageno 92-93 Volume I 25.00 Further in Gaurisuta Infrastructure Private Limited,inventory of Rs. 89 crore unidentifiable page no 96 Volume I 89.00 FDR as on 31st March 2015 page no 175 Volume I 61.97 Professional Fees Paid to Directors 100.53 Taxes paid by Stunning Construction on behalf of promoters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . JP Morgan invested Rs. 85 crore in the year 2010 with an understanding to have a preferential claim on profits called distributable surplus in the ratio of 75% to JP Morgan and 25% to promoters namely Amrapali Homes Project Private Limited and Ultra Home Construction Private Limited with the following main condition in Shares Subscription Agreement dated 9th September, 2010 amongst Ultra Home Construction Private Limited, Amrapali Homes Project Private Limited, JP Morgan & Amrapali Zodiac Developers Private Limited The Company shall provide evidence of the aforesaid investment in the Investee Company to the Investor. (Rs. 60 Cr. in Leisure Valley Developers) (A) There was a prescribed methodology and procedures defined of computation of Fair Market Value at the time of the exit to be worked out in the agreement on Page No 51, schedule 6 of Shareholder's Agreement, which was not followed at the time of any of the exits. Clause 4.2 (iii) - The Company shall grant an interest free loan of Rs. 85,000,000 (Rupees Eighty Five Million Only) to UHCPL. Clause 4.2(iv) - The Company shall remit Rs. 600,000,000 (Rupees Six Hundred Million Only) to the Investee Company for subscribi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amrapali Zodiac Developers Private Limited to JP Morgan: (i) Monthly progress report signed by director & CFO. (ii) No delay report in specified format. JP Morgan insisted that the cost shall be restricted to Rs. 425 crore and any additional cost over and above Rs. 425 crore shall be brought in by Amrapali Group promoter. The additional cost considered was Rs. 125 crore to be brought in by promoters. (H) Zodiac has followed recognition of revenue on the basis of Project Completion Method - Accounting Standard - 7 (Construction Contracts). As per Project Completion Method as given in Accounting Standard - 7, the profit cannot be recognized until the project is completed and as per Clause No 7.3 of Shareholder's Agreement the distributable amount is the balance amount representing the aggregate of all profits, after considering the payments referred to in clause 7.1 and 7.2 , including any amounts transferred to the reserves accounts of the Company shall for the purpose of this clause 7 are referred to as the "Distributable Amount". (I) From the above it is clear that in absence of recognition of profit in the agreement there cannot be any distributable amount for distribut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the project. The Amrapali Zodiac Developers Private Limited diverted home buyer's money & there was no need of any investment from JP Morgan. It was accepted by Mr Suraj Chhabria that there was no restriction on the Company to invest the money in the project & it was in his knowledge & the knowledge of JP Morgan that the money has been diverted, Transferred Valuation (A) The valuation did not follow the correct methodology of DCF (Discounted Cash Flow). The valuation is without any sanctity & validity. The valuation was carried out to cause wrongful loss to the homebuyers of Amrapali Zodiac Developers Private Limited and to give advantage to JPMorgan. (B)Name of the firm - Sudit K. Parekh & Co. Chartered Accountants Name of the Partners- I. Mr. Durgaprasad Khatri II. Mr. Tanwir Shirolka III. Mr. Srikant V Jilla IV. Ms. Deepti K.Ahuja Ms Ahuja, then partner in SKP&Co.Chartered Accountants informed that JP Morgan, Mumbai office in Andheri/ Santacruise did not allow to take any of the details/ abstract from the share purchase agreement. It is to note that at the time of exit, it was predetermined that Zodiac Developers would not pay the lease rent as well as the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant Schedule of these regulations. Further, subject to minimum lock-in period of one year or minimum lock-in period as prescribed under Annex-B of Schedule 1 whichever is higher, a person resident outside India holding the shares or convertible debentures or warrants] of an Indian company containing an optionality clause in accordance with these Regulations and exercising the option/right, may exit without any assured return, subject to the following conditions: (i) In case of listed company, at the 6[market price prevailing on the floor of the recognized stock exchanges] (ii) In case of equity shares, preference shares or debentures of unlisted company, at a price not exceeding that arrived at as per any internationally accepted pricing methodology for valuation of shares on arm's length basis, duly certified by a Chartered Accountant or a SEBI registered Merchant Banker. The guiding principle would be that the non-resident investor is not guaranteed any assured exit price at the time of making such investment/agreements and shall exit at the price prevailing at the time of exit, subject to lock-in-period requirement. (2) (i) A person resident outside India, not bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ephew of Statutory Auditor Mr Anil Mittal & does small timejobs Facts Amrapali Zodiac Developers Pvt Ltd incorporated on 18th December 2009. As per the Share Subscription Agreement dated 9th September, 2010, JP Morgan invested 85 crore on 20th October 2010 with an understanding to have a preferential claim on profits called distributable surplus in the ratio of 75% to JP Morgan and 25% to promoters namely Amrapali Homes Project Private Limited and Ultra Home Construction Private Limited. The said investment was repatriated to JP Morgan as under: * Rs. 100 crore on 30th December 2013; * Rs. 25 crore on 30th September 2014; * Rs. 10 crore on 29th July 2015; and * Rs. 5 crore on 6th October 2015. FEMA Extracts of Master Circular no.8/2010-11 dated July 01, 2010 on External Commercial Borrowings and Trade Credits External Commercial Borrowings ('ECBs') refer to commercial loans in the form of bank loans, buyers credit, suppliers credit, securitized instruments (eg floating rate notes and fixed rate bonds, non convertible, optionally convertible or partially convertible preference shares) availed of from non-resident lenders with a minimum average maturity of 3 years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from close of the month. Companies Act 1956 Amrapali Zodiac Developers Pvt Ltd could not have bought back its own shares from JP Morgan as a company cannot buy back its own shares as per the provisions of section 77 of the Companies Act 1956. Section 77 states "(1) No company limited by shares, and no company limited by guarantee and having a share capital, shall have power to buy its own shares, unless the consequent reduction of capital is effected and sanctioned in pursuance of sections 100 to 104 or of section 402." Even otherwise, as per Section 77A, a company can purchase its own shares from (i) free reserves; Where a company purchases its own shares out of free reserves, then a sum equal to the nominal value of the share so purchased shall be transferred to the capital redemption reserve and details of such transfer shall be disclosed in the balance-sheet or (ii) securities premium account; or (iii) proceeds of any shares or other specified securities. A Company cannot buyback its shares or other specified securities out of the proceeds of an earlier issue of the same kind of shares or specified securities. Conditions of Buy Back (a) The buy-back is author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ley Developers Pvt Ltd as ECB without obtaining approval from competent authority. Immediately on receipt of funds by Amrapali Leisure Valley Developers Pvt Ltd, the funds were transferred to promoters and associate companies of the group. Had JP Morgan invested in the form of ECB, following would have been the compliances to be fulfilled by recipient: a) obtaining Loan Registration Number from RBI; b) file ECB-2 returns every month to the RBI; c) withhold tax on interest payment to JP Morgan under section 195 of the ITA. As per Article 11 of the Avoidance of double taxation agreement between India and Mauritius tax shall be charged @7.5% of the gross amount of interest. d) In fact JP Morgan would have to file its income tax return u/s 139 of ITA in India due to withholding tax on its interest income borrower. Relevant questions from FAQ issued by RBI with regard to the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017 dated November 7, 2017 as amended from time to time: "Q.29: What is the concept of downstream investment and Indirect Foreign Investment? Answer: Downstream investment is investment made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 16 7 Ultra Homes Construction Pvt.Ltd. 580 40 3 26 511 8 Amrapali Homes Project Pvt Ltd 7 - - - 7 9 Amrapali Dream Valley Pvt Ltd 1,435 - - 1,657 (222) 10 Amrapali Silicon City Pvt Ltd 558 - - 477 81 11 Amrapali Smart City Developers Pvt Ltd 489 - - 846 (357) 12 Amrapali Leisure Valley Developers Pvt.Ltd. 309 - - 322 (13) 13 Amrapali Sapphire Developers Pvt Ltd 69 - - 90 (20) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 #Amrapali Leisure Valley Private Limited 122 8.53 2811 (Supplementary Audit Report) 7 #Ultra Home Construction Private Limited 524 30.87 2811 (Supplementary Audit Report) 8 #Amrapali Centurian Park Private Limited 1,912 43.12 2811 (Supplementary Audit Report) 9 #Amrapali Princely Estate Private Limited 146 6.70 2811 (Supplementary Audit Report) 10 #Amrapali Zodiac Developers Private Limited 107 6.75 2811 (Supplementary Audit Report) 11 #Amrapali Patel Platinum 179 27.31 2811 (Supplementary Audit Report) Total 5,856 321.31 Note: *These calculations are based upon the rates, where the sale consideration of the flat is less by more than 25% of the average sale price of the project. # These calculations are based upon the rate of Rs. 2000/- per sq. ft. and where flats were sold lesser than the rate of Rs. 2000/- per sq. ft. 16. Group investment in other projects The group started demerging and delinking the good projects from the brand name "Amrapali" though these projects were initially launched as Amrapali projects. The said projects identified till the date of writing of the report are La Resident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m in the name of interest free loans and advances. * Amrapali group companies have transferred some of their buyers to the company. We found that the list of unsold inventory was sent to Mr. Anil Sharma and it was he who decided that the following buyers from Amrapali group companies be shifted to La Residentia this proves that La Residentia was under the direct control of Mr. Anil Sharma and Mr. Shiv Priya and is an entity of Amrapali group. * The company is also using the Brand name/trademark of Amrapali group on its letterheads. * The website of the company is following www.amrapali- laresidentia.com. * When we open the website of the company, advertisement page was hiding details and it is a project of Amrapali group. 17. Summary of amounts recoverable standing as debit balances in books of accounts Amrapali group of companies had several amounts lying in debit balances in the form of advances recoverable on account of long term loans to third parties, short term loans given to third parties, advances given for purchase of plots, advances given to creditors for materials/others etc. Amrapali group of companies were mostly diverting loan funds as well as home buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y entries in the books of accounts and receiving any money from the transferees. Moreover, the cars were transferred in the name of the persons who was not associated with the company which originally bought the cars. We have already reported the matter in the court hearings and the honourable court has ordered for the sale of the said luxury cars. Out of the above 15 cars only 9 were made available for physical verification. 20. HOMEBUYERS The group constructed and booked/sold residential and commercial units: a) before launch of the projects; b) at the launch of the projects; and c) Continued to book till any inventory was left over in the projects. The customers booked the flat for: a) Abode; b) Investment; c) barter in advance; d) adjusting their amounts in respect of work done in same project (creditors of same projects) e) adjusting their amounts in respect of work done in other projects (creditors of other projects) f) booked in the name of unidentifiable/untraceable persons/entities. During this procedure, we were informed that the data related to customers was maintained in the software FAR VISION as well as manually of some of the projects. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8) The supplier of material and provider of services were unsecured creditors for the amount claimed by them. There are a number of flats booked against the amount claimed as due. All this was done in 2015-17. There are flats allotted to parties (unsecured creditors) in different projects irrespective of whether any service was provided/ material supplied to the same project or not. We propose the following order for allotment of flats to the persons/ entity who have booked the flats subject to the verification of their claim: (a) For abode; (b) For investment without interest and payments made by bank; (c) For investment against barter in advance if services rendered/supplies made to the same project; (d) To the creditor if services rendered/supplies made to the same project; and (e) The last should be the person/ entities who have supplied and services rendered to the group companies 9) We checked the customer data on the basis of a selected criteria (customers having two or more than two units& customers not having KYC details) and found that no money is received against the sale of those units. The units are booked by just passing a JV. A few examples are shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09-11-15 Nilesh Karwa (HUF) 2,500,000 T2-2403 28-07-16 Ajit Pal Singh 312,500 8 Silicon City G1-104 24-03-11 Nilesh Karwa & Seema Karwa 1,250,000 Tower has not been constructed and Fake allotment is been made to Nilesh Karwa & Seema Karwa Silicon City G1-204 24-03-11 Nilesh Karwa & Seema Karwa 1,250,000 Total Amount Received 23,500,000 18,633,736 Ultra Home Construction Pvt Ltd allotted flats to buyers on false promises and forged documents. An instance being in the case of Mr. Mohammad Kaif where he was allotted 3 flats i.e G-2502, G 2501 and LG-1 vide agreements dated 22nd August 2012, 19th September 2012 and 9th January 2013, through their consortium- Amrapali Patel Platinum and UHCPL received INR 2 crore on assured return basis. However, subsequently, it came to the knowledge that flats mentioned in the buyer agreement never existed as 25th floor did not exist in the approved building plan. Further, as per details provided by Mr. Kaif, as on 31st March 2017, an amount of INR 1,40,00,000 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bsp; 275,206 15 C-1701 Sanjay Kumar 2,023,675 1,375,525 648,150 16 C-1705 Syed Sharique Ali 2,308,500 2,035,125 273,375 17 C-1901 Uday Shankar Rai 2,004,750 1,000,185 1,004,565 18 C-1902 Suresh Chandra Mandal 2,004,750 1,414,459 590,291 19 C-1904 Mrs. Annu (Gulshan Driver) 1,645,000 921,525 723,475 20 C-2001 Shailendra Kumar 2,357,800 2,308,500 49,300 21 C-2002 Mrs.Nivedita Singh 2,333,500 871,103 1,462,397 22 C-2003 Dheerendra Kumar/Shailendra kumar 1,111,500 663,834 447,666 23 C-2004 Manjari Smrita 1,148,200 1,111,500 36,700 24 D-102 Prasanna Kumar Das ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e many more such cases. Project Customer Name Unit No Area Unit Cost Discount Amrapali Leisure Valley M/S. AMCON BUILDCON PVT. LTD. A-002 2525 80,38,484 80,38,484 We are informed that Mr.Adhikari Debi Prasad Das (GM/DGM Accounts) and Mr. Mohit Gupta (Director Marketing) were directly responsible for accounting and collection of receivables and marketing of flats. We interviewed both the persons several times. Both kept on changing their stand/answers and did not cooperate in answering our queries. Their answer to every question was that they are not aware. They did not provide many documents and the laptops which are in their possession. In spite of repeated reminders, Mr. Mohit Gupta has not made available the complete data with respect to home buyers/flat owners. We found Mr Mohit Gupta and Mr Adhikari Devi Prasad Das directly responsible for all the wrongdoings in booking of receivables, marketing of the flats and in handing over the possession of the flats. Utilities like Milk booth, Nursery schools, Senior secondary schools, Nursing homes allotted to various parties should be cancelled. LIST OF FLATS (Residential & Commercial) ALLOTED TO BROKERS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prolease, Three Platinum Softech. Apart from subscribing to share capital, the further investment was made directly as advance or billing from Amrapali Group to these companies and some through shell companies as well. Further they did a project in Ultra Home Construction Private Limited with Mozambique. This project was planned, coordinated and managed by Mr Navneet Sureka in the name of Ultra Home Construction Private Limited and whatever advance was sanctioned and disbursed by the Government of Mozambique through EXIM bank to Ultra Home Construction Private Limited was eventually diverted to Sureka family through billing from Jotindra Steel and Tubes Limited, Mauria Udyog Limited, etc. A separate bank account of Ultra Home Construction Private Limited was opened in State Bank of Patiala, Faridabad branch where signatory was Mr Akhil Sureka who used to operate the account from there. The entire transactions of LC and EXIM bank was routed from that account. Navneet Sureka visited more in the period of contract finalization to Mozambique Partner in the following projects: * Amrapali Sapphire Developers Pvt. Ltd. - 10.52% of shareholding BihariJi Ispat Udyog Limited * Amrapa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot only FSi should be canceled but the amount os Rs. 80 crore is recovereable from them. They adopted the same methodoly. Formed various business entities, appointed small time employees the directors in these companies and routed fundsof 100s of crores and it may be in the range of 1000s crores.. None of the directors were knowing about any of the business transactions. Further more most of the directors never attended any board meetings,knew about nature of business the company does, name of other directors in the company and so on. We are not sure who was teacing the fraudlent practices to whom, whether Sureka to Amrapali or vice versa. It was observed Rs. 13.44 crore paid to Sureka Public Charitable Trust were transferred to donation account subsequently. It is submitted that Sureka Public Charitable Trust is a group institution of Jotindra Steels & Tubes Limited, which is also under the forensic audit. This should be recovered from the Jotindra Steels & Tubes Limited. Sureka group used several companies to route funds from Amrapali group to Sureka group, an example being in the case of Amrapali Infrastructure Pvt Ltd, where the company received Rs. 3.23 crore from "Syner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter signed by Mr. Anil Sharma Total 2,714.02 Further, there is no Name, Pan or Address available in the records of M/s RN Traders. It was further observed that there are no business transactions with M/s RN Traders. It is possible that this amount of INR 2,714.02 Lakhs has been withdrawn by the management for their own personal use and should be recovered from the management. BiharijiIspat Udyog Limited being one of the partners of Amrapali Grand always had negative capital. They withdrew much more than what they brought into the business. There is no substance in them being called as capital contributors to the business of Amrapali Grand. As on 1st April 2008 they had withdrawn INR 12 crore and invested a capital contribution of INR 1.5 crore. As on 31st July 2018, they have debit balance of INR 1.67 crore and negative capital of INR 30,380. They always withdrew homebuyers funds for misusing for their own agendas apart from the business. Out of INR 12 crore given to BihariJiIspat Udyog Limited, they returned INR 6.45 crore through bank and the balance amount was adjusted against receivables from Ultra Home Construction Pvt Ltd and against capital contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Letter of Credit. The letter of credit has been discounted by M/s Jotindra Steel with the banks. The discounting charges of INR 1.30 Crores have been debited by M/s Jotindra Steel to M/s Amrapali Infrastructure. We fail to understand the reason for this treatment. In normal course of business, the supplier is the person who bears the discounting charges in respect of the transactions as the margin when sold on Letter of Credit are generally higher. This amount of INR 1.30 Crores on account of discounting charges of Letter of Credit Should be recovered from M/s Jotindra Steel and Tubes Limited. i. It has also been observed that M/s Jotindra Steel and Tubes Limited has issued service invoices for erection, shifting and transportation charges amounting to INR 96 lakhs approximately during the financial year 2014-15 as per details given below: Date Bill number Name of the Party Gross Amount Tax Total Nature of the Service 6/6/2014 JST/FBD/SG/000 1 Jotindra Steels & Tubes 5,000,00 0 618,00 0 5,618,000 Erection Charges 6/6/2014 JST/FBD/SG/000 2 Jotindra Steels & Tubes 2,532,00 0 78,239 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In these circumstances it is not understood by us that how the consignment notes of M/s Synergy Freightways Private Limited have been enclosed with most of the purchase bills, if the transactions were back to back for their supplies. 3. On scrutiny of the tally data/documents of Amrapali Infrastructure Private Limited and JST, it has been observed that no freight has been paid to M/s Synergy Freightways Private Limited either by Amrapali Infrastructure Private Limited or by JST. This clearly establishes that all the GRs issued by M/s Synergy Freightways Private Limited are not genuine. Further, most of the purchase invoices of JST have been shown as sale on the same date with similar particulars/ quantity by raising the invoice on Amrapali Infrastructure Private Limited. We are of the view that these sales invoices raised by JST are also not genuine and are mere accommodation entries only. Sample details of such transactions for 2 days are enclosed below: Sr. No. Date of the bill Bill No. Amt. of Bill (In Rs.) Date of the GR GR No. Time In Time Out 1 07.02.2015 698 1,652,641 07.02.2015 698 15:48 18:12 2 07.02.2015 699 1,462 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amounting to INR 5.28 Crores for financial year 2015-16. e) It is further observed that all the payments against these purchases' bills have been made by issuing letter of credit. It seems that the Company is getting the LC's discounted from the bank against these non-genuine bills. When we questioned Mr. Navneet Sureka who approached Amrapali group from trust side and who was approached in Amrapali group. He answered "he is not able to recollect". He didn't cooperate otherwise how it is possible that such a huge amount donated by Amrapali group companies and he is not able to remember the basic question. We recommend the amount donated should be recovered from the Sureka group. We are of the opinion that the supplies and services provided by Jotindra Steel & Tubes Limited (Rs. 321 crore) and Mauria Udyog Limited (Rs. 128 crore) are prima facie bogus in nature. 1. The 2 directors namely Mr. Akhil Sureka and Mr. Navneet Sureka are equally responsible for companies having shareholding/capital/profitsharing and should be held responsible for shortfall in cost of construction and land dues to Noida authorities. (Refer annexure S-11 page 2960 Supplementary report) 2. Mr. Akh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to Companies of Sureka group. On enquiry from the Amrapali Group we came to know that the bank guarantee was made available by Mr. Navneet Sureka, Managing Director of Mauria Udyog Limited and that no bank exist/existed by the name International Trade Bank Limited. It was also informed that the project was under direct control and supervision of Mr. Navneet Sureka. It shows active involvement of Mr. Navneet Sureka in the project. Mr. Prashant Kumar and Mr. Ram Kumar are the persons who were travelling to Mozambique and know about the project but we could not get the contact details of these 2 persons 6. Quality Synthetics (Sureka Group) had given a loan to Amrapali Sapphire of Rs. 3 crore in March, 2009 at the rate of interest of 14% p.a. The company kept on paying to Quality Synthetics when it was having no funds for construction. The Amrapali Group was giving advances to various vendors/parties interest free and taking loan from Quality Synthetics, at the rate of 14% p.a. It is pertinent to note that the said amount of Rs. 3 crore along with all interest due totaling to Rs. 3,86 crore was repaid in March, 2018 when there were no funds available for construction of flat and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that is TMT bars are supplied only to Amrapali Group companies and a very minuscule quantity to other companies. In the 2010-11, TMT bar supplied for Rs. 52.97 crore and the payment received Rs. 29 crore and that is also a major part of the payment of Rs. 16.5 crore was received in March. Similarly, in the year 2012-13, supplies were made of TMT bar and the payment was received in the month of March 2012 just before closing of the year. Suddenly in the year 2012-13, trend is changed and Ultra Home Construction Pvt Ltd gave an advance of Rs. 33 crore on various dates which was returned subsequently in the month of February and March. The above transactions are dubious in nature because we scrutinized the supply bills of Mauria Udyog Limited and found that Mauria Udyog Limited has supplied TMT bars only to Amrapali group of companies. It is not an item in which Mauria Udyog Limited has dealt with any other party except a miniscule quantity of 2-3 customers who in turn has also supplied to Amrapali group. There was no purchase order from Amrapali group to Mauria Udyog Limited even the size of TMT bar was not mentioned on the invoice of Mauria Udyog Limited. The rate charged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplementary report. The modus operandi adopted by Sureka family was the same as adopted by Amrapali Group i.e. they formed the companies, their employees who were paid salaries in the range of Rs. 20,000-Rs. 60,000 the shareholders and directors in these companies. It is pertinent to note that their signatory to the bank are family members. Mr. Navneet Sureka and Mr. Akhil Sureka used these companies for the purpose of money laundering of funds of Amrapali Group. The bank guarantee was bogus and we couldn't find the bank name which issued the bank guarantee, it appears that there was a criminal conspiracy and the bank was not in existence. Mr. Navneet Sureka was in full control of Amrapali group companies which is very clear and can be understood from the transactions of donation. On the instructions of Mr. Navneet Sureka, GM/DGM accounts Mr. Adhikari was transferring funds to the trust from various group companies of Amrapali as and when desired by him and instructed by him. None of the directors ever attended a board meeting it was informed that the directors signed the paper under the instructions and directions of Mr. Akhil Sureka. The fact was accepted by Mr. Akhil Sur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhavya Housing Projects Private Limited 3. Bushells Developers Private Limited 4. Chintapurni Estates Private Limited 5 DH Education Services Pvt Ltd 6. Earthwell Developers Pvt Ltd 7. Eklavya Building Solutions Pvt Ltd 8. Bushells Reality Solution Private Limited 9. Saffron Propmart Consultancy Private Limited 10. GaurisutaBuildhome Private Limited 11. Gaurisuta Real Estate and Developers Private Limited 12. Kamyani Realtors Private lImited 13. Kapila Building Solution Private Limited 14. MahamayaBuildcon Private Limited 15. Rinku Clothing Creation Private Limited 16. RRS Properties Private Limited 17. Spacewell Developers Private Limited 18. StatelinesBuildwell Private Limited 19. Mansarovar Textiles Private Limited 20. Rainbow Cotton Private Limited 21. Kamakshi Buildwell Private Limited 22. Golden Portfolio Consultant Private Limited 23. Double Esh Infrastructure Private Limited 24. Aashirwad Linens Private Limited & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nbsp; 1,000 Amrapali Smart City Pvt Ltd 10,000 - 10.00% 1,000 Amrapali Smart City Dev. Pvt Ltd 6,91,42,401 - 0.00% 12 Sapcewell Developers Pvt ltd 1,000 Amrapali Smart City Pvt Ltd 10,000 - 10.00% 1,000 Amrapali Smart City Dev. Pvt Ltd 6,91,42,401 - 0.00% 13 GaurisutaBuildhome Pvt Ltd 200 Mums Megha Food Park Ltd 10000 2.00% 14 Rinku computech Pvt Ltd 23,94,000 Amrapali Biotech India Pvt Ltd 1,20,00,000 19.95% 15 Kamakshi Buildwell Private Limited 500 Mums Megha Food Park Ltd 10000 5.00% Rs. 100 of Crores of home buyers funds in active connivance of CFO Chandar Wadhwa and Statutory Auditors Anill Mittal were routed through 1. Rinku Computech Private Limited Patel Advance JV 8,25,00,000 Case En ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amrapali group of companies obtained funds primarily from following sources: a) Home buyers funds against construction linked progress; b) In the form of loans (term loan, working capital/cash credit limits) from banks against construction linked progress; and c) Homebuyers also availed housing loans from banks for purchasing flats in Amrapali projects Banks granted loans to Amrapali group under certain terms and conditions which included utilisation of loan funds for: a) Payment of cost of land and lease rental to Noida authorities; b) Payment of construction cost of projects. Observation 1. The amounts disbursed were not utilised for payment of cost of land or for payment of lease rentals or for payment of construction cost. The banks did not monitor utilisation of funds granted by them. In fact, these funds were diverted as loans to related and/or unrelated entities which was ultimately utilised in building assets/purposes which were unapproved by the banks. The banks acted as mute spectator to unapproved diversion which was almost happening evidently in all banking transactions. 2. While obtaining loan funds, Amrapali group hypothecated land on which project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers 1,75,00,000 10 Om Traders 1,35,00,000 11 Lakshmi Steel 1,20,81,351 12 Mahaveer Enterprises 1,00,00,000 13 Sidhivinayak Trading Company 1,00,00,000 14 Rama Trading Company 75,00,000 15 Uday Enterprises 69,50,500 16 Orient Trading Company 68,96,800 17 Kartikey Enterprises 68,72,600 18 Dayal Traders 68,42,300 19 R.K. Enterprises 67,50,500 20 MahaLuxmi Traders 67,32,500 21 Purnima Steel Syndicate 65,71,972 22 New Payal Traders 64,50,500 23 Shyam Sales Corporation 64,38,700 24 Kishan Steel Corporation 62,53,700 25 Shri Ganesh Trading Company 62,50,500 26 Arhaan Enterprises 62,17,570 27 Gayatri Traders 59,42,500 28 Lakshmi Steels 53,42,600 29 Guru Kripa Traders 50,00,000 30 Guru Nanak Trading Company 50,00,000 31 R R Enterprises 50,00,000 32 Rohit Steel 50,00,000 33 Shree Ji Trading Company &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Purchase U.P 1127296.00 26630252.00 Dr 01/01/2011 STEEL Purchase U.P 1081575.00 25548677.00 Dr 01/01/2011 STEEL Purchase U.P 1114169.00 24434508.00 Dr 02/01/2011 STEEL Purchase U.P 1096914.00 23337594.00 Dr 02/01/2011 STEEL Purchase U.P 1078802.00 22258792.00 Dr 03/01/2011 STEEL Purchase U.P 1091563.00 21167229.00 Dr 03/01/2011 STEEL Purchase U.P 858603.00 20308626.00 Dr 04/01/2011 STEEL Purchase U.P 1107007.00 19201619.00 Dr 04/01/2011 STEEL Purchase U.P 1084429.00 18117190.00 Dr 05/01/2011 STEEL Purchase U.P 1077003.00 17040187.00 Dr 05/01/2011 STEEL Purchase U.P 1062433.00 15977754.00 Dr 05/01/2011 STEEL Purchase U.P 1054560.00 14923194.00 Dr 06/01/2011 STEEL Purchase U.P 1112498.00 13810696.00 Dr 06/01/2011 STEEL Purchase U.P 1118674.00 12692022.00 Dr 07/01/2011 STEEL Purchase U.P 1034488.00 11657534.00 Dr 07/01/2011 STEEL Purchase U.P 1087996.00 10569538.00 Dr 08/01 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 27300.00 16849035.00 Dr 31/03/2011 Cement Purchase U.P 493763.00 16355272.00 Dr 31/03/2011 BADARPUR Purchase U.P 476280.00 15878992.00 Dr 31/03/2011 STEEL Purchase U.P 470905.00 15408087.00 Dr 31/03/2011 Cement Purchase U.P 502425.00 14905662.00 Dr 31/03/2011 BADARPUR Purchase U.P 510678.00 14394984.00 Dr 31/03/2011 STEEL Purchase U.P 469124.00 13925860.00 Dr 31/03/2011 Cement Purchase U.P 501843.00 13424017.00 Dr 31/03/2011 BADARPUR Purchase U.P 438375.00 12985642.00 Dr 31/03/2011 Cement Purchase U.P 750750.00 12234892.00 Dr 31/03/2011 BADARPUR Purchase U.P 754950.00 11479942.00 Dr 31/03/2011 STEEL Purchase U.P 766725.00 10713217.00 Dr 31/03/2011 Cement Purchase U.P 782513.00 9930704.00 Dr 31/03/2011 BADARPUR Purchase U.P 754320.00 9176384.00 Dr 31/03/2011 STEEL Purchase U.P 767644.00 8408740.00 Dr 31/03/2011 Cement Purchase U.P 779625.00 7629115.00 Dr 31/03/2011 BADARPUR Purchase U.P 778260.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bit Credit Balance 09/10/2010 Bank of Baroda A/C No - 21580200000079 Payment 2,00,00,000 2,00,00,000 11/12/2010 STEEL Purchase U.P 10,39,959 1,89,60,041 13/12/2010 STEEL Purchase U.P 10,39,964 1,79,20,077 14/12/2010 STEEL Purchase U.P 8,31,947 1,70,88,130 15/12/2010 STEEL Purchase U.P 12,47,950 1,58,40,180 16/12/2010 STEEL Purchase U.P 12,47,945 1,45,92,235 17/12/2010 STEEL Purchase U.P 14,55,941 1,31,36,294 18/12/2010 STEEL Purchase U.P 12,47,958 1,18,88,336 20/12/2010 STEEL Purchase U.P 10,39,965 1,08,48,371 01/01/2011 STEEL Purchase U.P 8,47,103 1,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Steel Purchase Purchase U.P 9,77,734 8,680 14/09/2010 HDFC BANK(L.N) Payment 50,00,000 49,91,320 22/09/2010 BOM-SEC51 A/C No - 60036386553 Payment 60,00,000 1,09,91,320 27/09/2010 Bank of Baroda A/C No - 21580200000079 Payment 85,00,000 1,94,91,320 01/10/2010 Bank of Baroda A/C No - 21580200000079 Payment 50,00,000 2,44,91,320 22/10/2010 BOM-SEC51 A/C No - 60036386553 Payment 1,50,00,000 3,94,91,320 25/10/2010 HDFC BANK(C.P)- 14018640000045 Payment 1,00,00,000 4,94,91,320 01/02/2011 Hardware Item Purchase U.P 9,90,150 4,85,01,170 01/02/2011 Hardware Item Purchase U.P 9,49,200 4,75,51,970 01/02/2011 Hardware Item Purchase U.P 9,98,025 4,65,53,945 01/02/2011 Hardware Item Purchase U.P 9,48,518 4,56,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; 8,56,800 2,31,76,353 03/02/2011 Hardware & Sanitary Items Purchase U.P 11,98,050 2,19,78,303 04/02/2011 Hardware & Sanitary Items Purchase U.P 9,85,950 2,09,92,353 05/02/2011 Hardware & Sanitary Items Purchase U.P 10,58,925 1,99,33,428 06/02/2011 Hardware Item Purchase U.P 9,39,750 1,89,93,678 07/02/2011 Hardware Item Purchase U.P 8,04,825 1,81,88,853 08/02/2011 Hardware Item Purchase U.P 9,50,250 1,72,38,603 09/02/2011 Hardware Item Purchase U.P 8,80,824 1,63,57,779 09/02/2011 Hardware & Sanitary Items Purchase U.P 8,30,771 1,55,27,008 10/02/2011 Hardware & Sanitary Items Purchase U.P 7,70,921 1,47,56,087 11/02/2011 Hardware & Sanitary Items Purchase U.P 7,88,130 1,39,67,957 12/02/2011 Hardware Item Purchase U.P &nbs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... STEEL Purchase U.P 17,43,440 82,56,560 14/01/2011 STEEL Purchase U.P 17,87,807 64,68,753 14/01/2011 STEEL Purchase U.P 17,77,211 46,91,542 14/01/2011 STEEL Purchase U.P 17,81,419 29,10,123 16/01/2011 STEEL Purchase U.P 22,16,525 6,93,598 20/01/2011 STEEL Purchase U.P 2,96,570 3,97,028 20/01/2011 STEEL Purchase U.P 2,97,012 1,00,016 30/03/2011 Bank of Baroda A/C No - 21580200000079 Payment 2,00,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 23,08,793 1,50,53,651 22/08/2011 STEEL Purchase U.P 22,68,774 1,73,22,425 22/08/2011 STEEL Purchase U.P 22,56,451 1,95,78,876 01/01/2012 STEEL Purchase U.P 22,46,743 2,18,25,619 01/01/2012 STEEL Purchase U.P 23,01,728 2,41,27,347 01/01/2012 STEEL Purchase U.P 23,25,626 2,64,52,973 01/01/2012 STEEL Purchase U.P 23,49,055 2,88,02,028 3,00,00,000 &nb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 1,30,77,888 14 Shri Balaji International 1,19,58,509 15 Jaypeeco India 1,11,79,965 16 Lakshmi SteelB/p 1,00,00,000 17 Amrapali Sapphire Developers Pvt Ltd 84,22,323 18 SPS Buildtech Pvt Ltd (Tower-B & K) 84,06,223 19 Syndicate Bank A/c No-87801010004689 32,00,000 20 Shriv Build Mat Pvt Ltd. 20,00,000 21 Ashtech Marketing Pvt Ltd. 16,62,747 22 GAURISUTA INFRASOLUTION PVT.LTD 10,00,000 23 AAUSH RAJ 7,95,339 24 Pradhan Projects 1,02,271 TOTAL 51,29,19,265 (i) Fixed deposit - The Company made a fixed deposit of Rs. 8.25 Crore and out of which Rs. 3.75cr was outstanding as on 31st March 2015 which we could find if utilized for business purpose. Rs. 4.50 cr. was used for repayment of Loan (ii) Radius Synergies Pvt Ltd - It is seen that Rs. 1.55 crore was given as advances since 2013 and continued giving advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e were the invoices raised for services rendered or were adjustments. The properties/flats were booked in the name of DFC group about which the directors Mr.Pankaj Sharma and Mr.VinayRai showed total ignorance. Consequent to the questioning they agreed to surrender the flats. (Refer ANNEXURE XIII.6) 3. Chaudhary ENT Udyog (Supplier of Bricks) As per the copy of the receipts issued by Amrapali Group of Companies, it has been observed that the party had paid INR 500,000 in cash on 24th February, 2017 vide receipt number 3074 Dated 24.02.2017 (Copy enclosed) on account of flat Number T6-G06 that was allotted to the said party in Amrapali Grand on account of outstanding amounts due from Amrapali Group of Companies. The Company has not recorded the receipt of the aforesaid amount of INR 500,000 in their books of account. This shows that this money has been taken away by the Management and hence should be recovered from them. It was further informed by the supplier, that Amrapali Group of Companies committed a fraud since this flat is already sold to Mr. Nikhil Kumar Datta. The party came to know of this on 31st August, 2018, when he received a letter dated 18th August ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amrapali Infrastructure Pvt. Ltd. (Infra) was the Supplier of Precast Building material and they were to supply these materials for "Hemisphere" project worth INR 67 crores approximately. However, Infra could supply only 24% of the contract value and due to difference between Amrapali Group and Royalgolf, the contract was terminated in June, 2017. Proceedings under IBC 2016 were initiated by Royalgolf against Infra and they filed a claim for INR 17.50 crores with the IRP appointed by NCLT. The matter is still in dispute at NCLT for the claimed loan of 17.50 crores lodged by Royalgolf on Amrapali Infra. 7. Hire Charges Received The Group companies had paid hire/erection charges from the various group companies for example Amrapali Infrastructure received Rs. 170.15 crores during the period 2008-15. (Volume II - Page 306) It was further observed that there have been no details regarding the equipment given on hire to each company and the basis of raising bills on account of hire charges. It seems that bills for hire charges have been raised on arbitrary basis and there are no comparative quotations for the same available. 26. STATUS OF DATA AVAILABILITY There is overlappin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be recovered from them as the said Agreement in our opinion do not stand the test of Law. Amrapali Mahi Developers Pvt Ltd * Mr. Mahendra Singh Dhoni, husband of Ms. Sakshi Singh Dhoni (director of company) was the brand ambassador of Amrapali group and have carried out a number of transactions with respect to endorsement of Amrapali group's projects. He has entered in agreements with other group company. * We are informed verbally that this company was incorporated for development of a project in Ranchi. An MOU was also entered between the parties though we were not provided a copy of that. We understand that copy of MOU is available with Mr. Adhikari. In Amrapali Sapphire Developers Private Limited a Flat (Flat No - TC- P04) has been booked in the name of Rhiti Sports Management Private Limited by passing an adjustment entry. However Mr Sanjay Pandey of Rhiti Sports Management Pvt Ltd denied booking of any such flat. He also confirmed that neither the company nor any individual has any flat in Amrapli Group. Mr Pandey confirmed that no due diligence was carried out before accepting the brand endorsement though he informed that brand value and paying capacity was seen. No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2790 Amrapali Leisure Valley Developers Private Limited Sarvome Housing Pvt Ltd 16500 sq. ft A 10th 2017 July 2775-2776 CATEGORY-B Hi-Tech City Developers Pvt Ltd Anita Chandok 4027.31 sq. yards B 21st 2016 July 2755-2756 Amrapali Smartcity Developers Pvt Ltd SBL Construction Pvt Ltd 14500 sq. ft. B 23rd August 2016 2765 Amrapali Smartcity Developers Pvt Ltd SBL Construction Pvt Ltd 18450 sq. ft. B 23rd August 2016 2765 Amrapali Smartcity Developers Pvt Ltd Bhatia Properties 6120 sq. ft. B Availab le 2766 Amrapali Leisure Valley Developers Pvt Ltd Bhatia Properties 22200 sq. ft. B 6th 2015 May 2777 Hi-Tech City Developers Pvt Ltd Sarbjit Leasing and Finance Company 1245.23 sq. yards B 23rd 2016 July 2756-2758 Amrapali Hospitality Services Pvt Ltd Vaishnavi Vahini Mount Life Hospitality Pvt Ltd 10261 sq. ft. B 13th November 2017 2758-2764 Sangam Colonizers Pvt Ltd Anjali Consultants 3.13 Hectare B 24th April 2017 2753 Amrapali Hospitality Services Pvt Ltd Dr. J P Sharma 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... li Smartcity Developers Pvt Ltd PSK Finance Solution Pvt Ltd 12500 sq. ft. C 15th April 2016 2766 29. Further Assets To be Attached * Inventory of plots at Jaipur - of company names Sangam Colonisers Pvt Ltd * Amrapali Power & Cement Pvt Ltd - Land from Charu Rai yet to be identified, Land from UPSIDC yet to be identified. * Vinayaka Projects at Greater Noida 30. Statement of cash flow Receipt and Payment Statement (Amount in crores) S.No Name of the Company Amount received as per Chart-B of affidavit of promoters submitted on 3rd Dec'18 Cost of Construction taken from latest audited financial statements available Remarks/Assumptions 1 Received from Customers Amrapali Centurian Park Pvt Ltd 1050.83 573 The group received Rs. 11573 Crore from th homebuyers and spent Only Rs. 7,389 Crore on construction including land payment to authorities. It is pertinent to note it includes borrowing cost also. Any amount of expenditure which was outstanding is not considered in the given tabe and it is prepared on the bsia of audited financial statements latest available upto March 2015 except one company for which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Ramesh Rajpal Mrs. Manju Rajpal and Mr. Ramesh Rajpal HUF each invested Rs. 7.5 crore in May 2011 on interest in Amrapali Leisure Valley Private Limited. The rate of interest is 18%. However he claimed in his submission that it was an investment in residential property for his staff because he was having a plan to shift his business operations in Noida. He submitted that he acquired this property for residence of his staff. On reviewing the return of income of Mrs. Manju Rajpal (Refer annexure S-1 of supplementary report page no. 2823) and Mr. Ramesh Rajpal we found that amount invested in various units as given below: 1. Mr. Ramesh Rajpal - Unit No A-388 admeasuring 20,200 sq. feet in Amrapali Leisure Valley Private Limited for Rs. 7.5 Cr. However, due to company's inability to handover the said villa, 8 units were allotted instead. Refer Annexure S-2 of supplementary report page no. 2824 We found Unit No A-388 in Amrapali Leisure Valley Private Limited is booked in the name of Mr. Joginder Sharma on 13th February, 2016 admeasuring area 2525 sq. feet for a value of Rs. 1.29 crore. It depicts very clearly that there was no unit admeasuring an area of 20,200 sq feet and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of the company M/s Surbhaee Advertising Private Limited. The shares of M/s Surbhaee Advertising Private Limited were purchased by Mr. Paramjeet Gandhi & M/s Special Tools Private Limited (a company owned by him & his family) for Rs. 1.59 crore for which no agreement was provided by them. (ii) It was informed that principal business of the company is Advertising of Projects. However no income has been earned from its principal business activity or any other source. (iii) The company is holding an immovable property at A3A Maharani Bagh, New Delhi admeasuring approximately 800 sq yards. It is also stated that the family of Mr. Anil Kumar Sharma is residing in the same house against which no rent deed is agreed between Mr. Anil Kumar Sharma & Mr. Paramjit Gandhi (Surbhaee Advertising Private Limited) (iv) When asked to Mr. Paramjit Gandhi who resides in Ghaziabad that why he purchased the property in New Delhi 4-5 years back, he replied that he wanted to shift to this property. However the fact is that he has never shifted to Delhi & all the renovation & maintenance work was overlooked by Mr. Anil Kumar Sharma. (v) The company has also taken loan of Rs. 25 crores from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further found that there is no account in the name of the said buyers in many cases to whom the facilities were sold. It is recommended that the facilities sold so far should be attached. 34. Mr.Prem Mishra We are of the opinion and also given to understand from various sources that the group diverted funds in the range of 500-600 crore in Madhya Pradesh projects in particular Indore. Mr.Prem Mishra has appeared in response to the court notice and he was non-cooperative. We have also received a communication supporting our views, reproduced below- "Good Evening Sir, Hope you are doing well, this is regards Amrapali Scam of CMD Anil Sharma, as per my information CMD has transferred 1 thousand crore to the different Amrapali Townships project of M.P. through Mr. Prem Mishra. The details of the same on paper is available with me. If you can arrange some time and allow me to have a detail discussion of the same, that would be great.Kindly inform me two days prior to the meeting date, as I am from XXXXXX. need to do some arrangements for the same, its a request. Waiting for your response." We could not complete the examination of Mr.Prem Mishra in Indore project due to pauc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Point No. 1 2 Amrapali Leisure Valley Developers Private Limited 70 5.88 Volume - I Page No. 222 - Point No. 1 3 Amrapali Smart City Developers Private Limited 261 18.97 Volume - I Page No. 232 - Point No. 1 4 Amrapali Silicon City Private Limited 468 73.05 Volume - I Page No. 257 - Point No. 1 5 Amrapali Dream Valley Private Limited 1,752 24.11 Volume - I Page No. 248 - Point No. 1 6 Amrapali Leisure Valley Private Limited 122 8.53 2811 (Supplementary Audit Report) 7 Ultra Home Construction Private Limited 524 30.87 2811 (Supplementary Audit Report) 8 AmrapaliCenturian Park Private Limited 1,912 43.12 2811 (Supplementary Audit Report) 9 Amrapali Princely Estate Private Limited 146 6.70 2811 (Supplementary Audit Report) 10 Amrapali Zodiac Developers Private Limited 107 6.75 2811 (Supplementary Audit Report) 11 Amrapali Patel Platinum 179 27.31 2811 (Supplementary Audit Report) Total 5,856 321.31 2. Amount Recoverable from Home Buyers A sum of Rs. 3624.65 crores is recoverable from home buyers. Detailed summary is as under: S.no. Name of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imited 6.12 Volume - I Page No.248- Point No. 3 6 Ultra Home Construction Private Limited 38.03 Volume - II Section XXII (Page No. 563 - 568) 7 7Amrapali Princely Estate Private Limited 5.50 Volume - II Section XXII (Page No. 563 - 568) 8 Amrapali Zodiac Developers Private Limited 2.08 Volume - II Section XXII (Page No. 563 - 568) 9 Amrapali Leisure Valley Private Limited 3.58 Volume - II Section XXII (Page No. 563 - 568) 10 Amrapali Eden Park Private Limited 3.64 Volume - II Section XXII (Page No. 563 - 568) Total 89.83 4. Unsold Inventory There is unsold inventory of flats and Commercial areas amounting to Rs. 2337.47Crores approximately as per details given below: * Unsold Inventory of Flats S.no . Name of the company Number of Units in Residential Approximate Realizable Value (In Crores) Page No. Reference 1 Amrapali Sapphire Developers Private Limited 14 14.45 Volume - I Page No.39- Point No. 4a 2 Amrapali Leisure Valley Developers Private Limited 329 100.67 Volume - I Page No.39- Point No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XII (Page No. 563 - 568) Total 345.78 5. Amount recoverable from Key Managerial Persons and their Relatives a) Professional fees paid to directors Rs. 100.53 crore Name of Director Professional Fees (As per Affidavit) Rs. in Cr. (Under Disclosure in Affidavit)Rs. in Cr. Anil Kumar Sharma 29.13 8.75 Shiv Priya 26.43 24.65 Ajay Kumar 5.76 - Suvash Chandra Kumar 5.11 - Amresh Kumar 0.68 - Total 67.13 33.40 b) Advances recoverable A sum of Rs. 152.24 crores is recoverable from the Directors on account of their taxes paid, advance given for purchase of Shares and Other Advances given including their family members. The companies gave advances which were neither adjusted nor squared off against any future purchases or services under taken by the companies from the said parties nor were received back by the companies Stunning Construction Private Limited had made payments of Direct Taxes which were neither received back by the Company nor adjusted against any services. In other words the said advances are still standing to the debit (recoverable from these parties) in the books of the Company. This includes a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited 0.15 10 Navodaya Properties Private Limited 0.24 11 Hawthorne Intellect Management Solutions Private Limited 0.01 12 MSB Software Technology Private Limited 0.70 14 GaurisutaInfrasolution Private Limited 0.01 17 Amrapali Hospitality Services Private Limited 0.01 18 KapilaBuildhome Private Limited 0.03 19 MannatBuildcraft Private Limited 0.20 20 Ultra Home Construction Private Limited 0.22 21 AmrapaliCenturian Park Private Limited 7.45 22 Amrapali Eden Park Developers Private Limited 2.00 23 Amrapali Grand 0.50 24 Amrapali Homes 0.19 25 Amrapali Homes Projects Private Limited 0.23 26 Amrapali Leisure Valley Private Limited 9.79 27 Amrapali Media Vision Private Limited 9.67 28 Amrapali Princely Estate Private Limited 5.02 29 Amrapali Smart City Private Limited 0.50 30 Amrapali Zodiac Developers Private Limited 3.84 31 Gaurisuta Infrastructure Private Limited 0.02 32 MVG Techno Consultants Private Limited 0.13 33 Noida Texfab Private Limited 0.13 34 La Residentia Developers Private Limited 0.30 35 Amrapali Biotech India Private Limited 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Point No.4c 19 Stunning Constructions Private Limited 0.44 Volume - I Page No.40- Point No.4c 20 Amrapali Dream Valley Private Limited 3.23 Volume - I Page No.40- Point No.4c 21 Amrapali Grand 29.17 Annexure X.2 Final Report Volume - IV 22 Amrapali Homes 21.41 Annexure X.2 Final Report Volume - IV 23 La residential Developers Pvt. Ltd. 23.35 Annexure X.2 Final Report Volume - IV 24 Amrapali Eden Park Developers Pvt. Ltd. 3.02 Annexure X.2 Final Report Volume - IV 25 Gaurisuta Infrastructure Pvt. Ltd. 0.46 Annexure X.2 Final Report Volume - IV 26 Jhamb Finance & Leasing Pvt. Ltd. 5.93 Annexure X.2 Final Report Volume - IV 27 Ultra Home Construction Pvt. Ltd. 87.68 Annexure X.2 Final Report Volume - IV 28 Amrapali Homes Project Pvt. Ltd. 55.01 Annexure X.2 Final Report Volume - IV 29 Amrapali Zodiac Developers Pvt. Ltd. 28.07 Annexure X.2 Final Report Volume - IV 30 Amrapali Smart City Pvt. Ltd. 0.95 Annexure X.2 Final Report Volume - IV 31 Amrapali Leisure Valley Pvt. Ltd. 51.62 Annexure X.2 Final Report Volume - IV 32 Amrapali Media Vision P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s Ultra Home Construction Private Limited. However, the amount of Rs. 7.10 Crores was not adjusted and was shown as payable to Amrapali Patel Platinum by Advance Construction Company Private Limited since 2014 till 2018. Further, The Audited Financial Statements of Amrapali Infrastructure Private Limited for the financial year 2013-14 and thereafter don't reflect any investment in Amrapali Patel Platinum. All the aforesaid facts clearly depict that the aforesaid supplementary partnership cum deed of retirement, ledger of Amrapali Patel Platinum in the books of Advance Construction Company Private Limited are contradictory and fabricated. While scrutinizing the Audited financial statements/Tally data detail of capital contribution of the Advance Construction as on 1st April, 2008 and thereafter is as under: (Amount in Crores) Particulars As on 31st March, 2008 As on 31st March , 2009 As on 31st March , 2010 As on 31st March , 2011 As on 31st March , 2012 As on 31st March , 2013 As on 31st March , 2014 As on 31st March , 2015 Capital Account 4.22 4.25 4.26 4.32 4.35 4.35 4.30 4.30 Current Account (12.56) (14.82) (14.82) (14.82) ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erg and actual amount may be much much higher. Most of these payments are not supported by evidence. It was further observed that neither the Statutory auditor has mentioned these cash payments exceedingRs. 20,000 in his report and nor any addition has been made by the Income Tax department in framing the Assessments for the Assessment year 2014-15 vide order dated 31.03.2016. Financial Year Name of Party Expense Debited Amount 2012-13 Staff Incentive 2,252,720 2014-15 Unity Contractor Labour 1,600,000 charges of Contractor 2014-15 ShailenderaDhwaj (T Z- 803) - 1,399,500 2013-14 MV Ayer (TL-506) - 1,000,000 Other Petty Amounts between 20,000 to 10 Lakhs 39,516,262 Total 45,768,482 6. Diversion of home buyer's funds Further as per financial statements and the books of accounts scrutinized by us up to 31st March 2015, a sum of Rs. 1,588.59 Crores has been diverted to other projects, other group companies, directors and their relatives and senior employees. As per summary given below: S.no. Name of the company Amount (In Crores) Refer Page ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Shiv Priya (Jewellery) 0.58 Volume II - page no 422, Point no 11 Total 14.94 10. Balance due to Noida Authority and Greater Noida Authority as per affidavits submitted by them before Hon'ble Supreme Court of India The Group paid only 1st installment to Noida and Greater Noida authorities and did not pay in almost all the cases the installment due, lease rent and interest under one pretext or another. The Group has not made any provision for additional interest due to delay in payments of installments. We had issued a letter dated 30th January, 2019 to Noida Authority to send us the complete information/ documents regarding the amounts due from Amrapali Group of Companies. But we have not received any such details from the Noida Authority. In these circumstances balance due to Noida Authority Couldn't be verified by us. It was further informed to us by the management of Amrapali that Noida and Greater Noida authorities have submitted three claims before the Honourable Supreme court. We were produced one of the annexure of the affidavit and the same is reproduced below. We found that Noida/Greater Noida authority administration was non active for reasons be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with the principal amount, even though it did not book gains within the business of the company. (b). The report also reveals various disturbing features that no accounts were prepared from 2015 to 2018 and money was withdrawn out of it and diverted from one company to another. The entire transactions were not being entered into Tally. The opening balances were not entered properly. In April 2015, the Amrapali Group introduced Far Vision an ERP, which was also not implemented properly. (c). There was no information about purchases from the supplier. During a search in 2013, it was held by Income Tax Authorities that purchases are being made from bogus suppliers without receiving the goods physically. Bogus expenses and cash has been surrendered by Amrapali Group in the income tax search. (d). The amount shown as developmental charges is not supported by evidence or vouchers. The total bogus expense has been ascertained to Rs. 842.42 crores. An amount of Rs. 0.25 crore was paid to Mr. Alok Ranjan towards brokerage. (e). The company has also made unusual cash payments in the financial year 2016-2017 by transferring cash to the Site, but the same is not supported/authenticat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (j). Several dummy companies were formed in the names of office boys and peons. Technically, the allotments at the initial stage were void ab- initio. The amount received by the Companies from home-buyers was more than the amount spent on construction and for payment of the land. The sole objective of taking a loan was to divert the funds to other ventures to create assets in the name of family members and to make movies. Villas were bought at tourist destination for fun at the expenses of the middle class and low-income group people. (k). Several companies were created solely for the purpose of routing funds. These companies did not have any material transaction as per the main object for which they were incorporated and did not have a business since their incorporation. 62. As is apparent from the report, several companies were created only to route the funds and transactions consisting of office boys, persons with no income and dummy companies in which family members and relatives were inducted as members only for few transactions, which are as under: (1) Jhamb Finance & Leasing Private Limited. It was under the control of Mr. Chander Wadhwa, CFO. It has advanced loans am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is stated in the report that plot allotted to Amrapali Smart City Private Limited was cancelled, therefore, money receivable from Greater Noida is Rs. 18.35 crores. (14) Amrapali Biotech India Private Limited It was created for routing funds. The ICD's are either from the group companies or received from outside the group companies through adjustment entries. (15) Amrapali Healthcare Private Limited It formed the property by funds of Ultra Home Construction Private Limited created from home buyers' funds. It deserves to be sold. (16) Amrapali Centurian Park Private Limited The Forensic Auditors have found bogus booking of expenditure and certain adjustments against bogus billings of River Sand for an amount of Rs. 3.60 crores. (17) Amrapali Leisure Valley Private Limited Mr. Akhil Kumar Surekha became the Director and thereafter most diversions of funds took place through the current account. The funds of the company were transferred to and fro with companies in which Surekha family had control. FSI was sold without taking approval from Great Noida Authority. The money received from Bihari High Rise Private Limited was diverted to Jotindra Steel & Tubes Limited and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e nature of transactions of the company. It was for routing funds form one entity to another to hidden objective. Banks loans were diverted as advances to third parties. The funds were diverted for purposes other than development. 63. Several companies were created for building assets. There was no compliance of the statutory obligations by the companies. The annual returns and audited financial statements have not been filed after 31.3.2015. The Registrar of Companies has disqualified the Directors, namely, Mr. Anil Kumar Sharma, Mr. Amresh Kumar, Mr. Shiv Priya, Mr. Ajay Kumar and Mr. Suvash Chandra Kumar for a period of 5 years under Section 164(2) of the Companies Act, 2013. The Company has not been regular in payment of TDS and service tax and has also not filed relevant returns after 31.3.2015. Mr. Anil Mittal, CA (Statutory Auditor) and Mr. Chander Wadhwa, CFO were in connivance with each other. Mr. Anil Mittal, CA blindly signed the accounts and along with Mr. Chander Wadhwa, CFO is grossly involved in making manipulation in the accounts. He has received payment on account of professional charges in the name of companies in which his relatives were Directors and this fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... organ without obtaining approval from the competent authority so as to make investment in the form of ECB. It is necessary to comply with the following : (a) obtaining Loan Registration Number from R.B.I.; (b) file ECB-2 returns every month to the R.B.I.; (c) withhold tax on interest payment to J.P. Morgan under Section 195 of the Income Tax Act. As per Article 11 of the Avoidance of Double Taxation Agreement between India and Mauritius, the tax shall be charged @ 7.5 percent of the gross amount of interest; (d) J.P. Morgan would have to file its income tax return under Section 139 of the Income Tax Act in India due to withholding tax on its interest income borrower. 66. The Forensic Auditors have also reported duplicate allotment of flats. They have provided the details of flats. Flats were alloted (residential and commercial) to the brokers and suppliers of which list has been given. Utilities like Milk Booth, nursery schools, senior secondary schools, nursing homes alloted to various parties should be cancelled. 67. With respect to Sureka Group, it is pointed out in the Forensic Audit Report that they have been a partner in various projects and were authorised cheque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after on the basis of joint note, this Court directed Amrapali group of companies to complete the projects but the order was not complied with. Various wrong representations were made in this Court. Developers backed out and an application was filed to waive the condition of deposit of Rs. 250 crores to start work by the Amrapali group that shows that its action was mala fide and it never intended to complete various projects as rightly found by the forensic auditors and that their intention was to divert the funds and this they had done at a large scale as is borne out from their report. 71. The question involved in the case is whether the builders and promoters can be permitted to usurp and divert the money of home buyers and home buyers can be left in the lurch as a silent spectator. As per the Noida and Greater Noida authorities, in case the lease-deed is snapped, the entire constructed buildings shall have to be demolished within 3 months. As per the bankers, they have a charge on the property as the land has been mortgaged to them and until and unless their amount is paid, the builder will have no right on the property which has been constructed by their money, and the buyer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accountable to the people in whom the sovereignty vests. As such, all powers so vested in him are meant to be exercised for public good and promoting the public interest. Every holder of a public office is a trustee. *** *** *** 40. The Public Trust Doctrine is a part of the law of the land. The doctrine has grown from Article 21 of the Constitution. In essence, the action/order of the State or State instrumentality would stand vitiated if it lacks bona fides, as it would only be a case of colorable exercise of power. The Rule of Law is the foundation of a democratic society. (Vide Erusian Equipment & Chemicals Ltd. v. State of W.B., AIR 1975 SC 266, Ramana Dayaram Shetty v. International Airport Authority of India, AIR 1979 SC 1628, Haji T.M. Hassan Rawther v. Kerala Financial Corpn., AIR 1988 SC 157, Shrilekha Vidyarthi v. State of U.P., AIR 1991 SC 537; and M.I. Builders (P) Ltd. v. Radhey Shyam Sahu, AIR 1999 SC 2468). *** *** *** 41. Power vested by the State in a Public Authority should be viewed as a trust coupled with duty to be exercised in larger public and social interest. Power is to be exercised strictly adhering to the statutory provisions and fact-situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied Tele Services Providers & Ors. v. Union of India & Ors. (2014) 6 SCC 110, the Court observed: "4. We have indicated, the worth of spectrum to impress upon the fact that the State actions and actions of its agencies/ instrumentalities/ licensees must be for the public good to achieve the object for which it exists, the object being to serve public good by resorting to fair and reasonable methods. State is also bound to protect the resources for the enjoyment of general public rather than permit their use for purely commercial purposes. Public trust doctrine, it is well established, puts an implicit embargo on the right of the State to transfer public properties to private party if such transfer affects public interest. Further, it mandates affirmative State action for effective management of natural resources and empowers the citizens to question ineffective management." 76. In the instant case, it is apparent that there are colossal dues of Noida and Greater Noida Authorities. The dues of Noida Authorities as on 30.4.2019 are Rs. 2191.38 crores and dues of Greater Noida authority are stated to be Rs. 3234.71 crores as on 15.1.2019. Thus, the total dues of Noida and Greater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd were to be cleared in accordance with the schedule of payment. Following provision is contained in lease deed dated 3.8.2010 entered into between Greater Noida Industrial Development Authority and M/s. Amrapali Leisure Valley Developers Pvt. Ltd. The relevant provision with respect to the transfer of the plot is extracted hereunder: "TRANSFER OF PLOT Without obtaining the completion certificate the Lessee shall have the right to sub-divide the allotted plot into suitable smaller plots as per planning norms and to transfer the same to the interested parties up to 30.0.2010, or as decided by the Lessor, with the prior approval of LESSOR on payment of transfer charges @ 2% of allotment rate. However, the area of each of such sub-divided plots should not be less than 20,000 sq. mtrs. However, the individual flat/plot will be transferable with prior approval of the LESSOR as per the following conditions:- (i) The dues of LESSOR towards the cost of the land shall be paid in accordance with the payment schedule specified in the Lease Deed before executing of sub-lease deed of the flat. (ii) The lease deed has been executed. (iii) Transfer of flat will be allowed only after ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No.(ii)(c) that the lessee shall use the allotted plot for construction of group housing/flats/plots. Condition No.(ii)(c)(iii) deals with the part transfer of the plot. It lays down normally the permission for part-transfer of the plot shall not be granted under any circumstances. The lessee shall not be entitled to complete the transaction for sale, transfer, assign or otherwise part with possession of the whole or any part of the building constructed thereon before making payment according to the schedule specified in the lease deed of the plot to the lessor. Relevant condition No.2(c)(iii) is extracted hereunder: "(c) The Lessee shall use the allotted plot for construction of Group Housing/flats/plots. However, the Lessee shall be entitled to allot the dwelling units on a sub-lease basis to its allottee and also provide space for facilities like Roads, Parks, etc. as per their requirements, convenience with the allotted plot, fulfilling requirements or building bye-laws and prevailing and under mentioned terms and conditions to the Lessor. Further transfer/sublease shall be governed by the transfer policy of the Lessor. i) Such allottee/sub Lessee should be a citizen of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l use only." (emphasis supplied) 81. In view of the aforesaid clause, by way of sub-lease of the plot, the transfer of plots could not have been made by the lessee. The lessee was required to start construction within 12 months from the date of possession. The date of execution of lease deed shall be treated as the date of possession. The lessee shall be required to complete the construction of minimum 15% of the total FAR of the allotted plot as per the approved layout plan and get occupancy/completion certificate within 3 years from the date of execution of the lease deed. Cancellation of lease deed is also provided in the case of violation of directions, or rules, regulations or in case of the default on the part of the lessee for breach or violation of terms and conditions of the registration/allotment/lease and/or non-deposit of allotment amount. In the case of cancellation, if the plot is occupied by the lessee, an amount equivalent to 25% of the total premium of the plot shall be forfeited and possession of the plot will be resumed by the lessor with structure thereon, if any, and the lessee will have no right to claim compensation thereof. The provision relating in lease ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement the project within the time limits prescribed are advised not to avail the allotment. 13. The Lessor in larger public interest may take back the possession of the land/building by making payment at the prevailing rate." (emphasis supplied) Thus, it is apparent that the officials of the concerned authorities have not discharged their duty in accordance with the trust enjoined upon them under aforesaid terms and conditions of lease deed, thus, by their inaction, enabled cheating of the home buyers at a large scale. They were well aware of what was happening on the spot. IN RE: MORTGAGE 83. With respect to the creation of mortgage deed in favour of bankers etc., Noida Authority has submitted that every mortgage permission is granted by the Noida Authority to the individual company of Amrapali group wherein a provision is made that Noida Authority has first charge/priority over all other charges including those created in favour of banks and financial institutions. The conditions on which permission to mortgage had been granted are as under: "This is to inform you that Noida shall have no objection for the purpose of financing his investment in the project on Group Housi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-lease deed in favour of the allottee of the dwelling unit, the allottee/sub-lessee shall be governed by the terms and conditions of allotment/lease deed of the plot to be executed and sub-lease deed to be executed in favour of the allottee/sub-lessee. Since at no point of time, payment of premium due had been made and up to date annual lease rent had not been paid, no mortgage could have been created in favour of the bank in view of specific condition No.2 extracted above. Thus, when the conditional permission granted by the authority was furnished to the bank for obtaining the loan by promoters/builders, it was incumbent upon Bank officials to ascertain from the concerned authorities that the premium due under the leases has been paid and lease rent due up to date has also been paid. In order to create a mortgage, it was necessary to obtain clear NOC in order to create effective mortgage deed. As that has not been done so far, no mortgage in the eye of law has been created in favour of the bank. It was not open to the bankers to mortgage the land in view of the conditional permission to create mortgage, the mortgage created in violation of condition cannot be said to be effectiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpetuating the fraud on the home buyers by Amrapali group of companies, its various Directors, officials and others who have been specified in minute details in the forensic audit reports. The case also indicates that not only the banks have failed to ensure that mortgage was effected in accordance with the law, but also they have failed to check whether money was in fact, required for the projects and was used for purpose it was lent. By the collusion, the money paid by home buyers to builders which included money payable to the Authorities could be diverted, had the deposit made by home buyers been unutilised, money due under lease would have been paid to authorities before the creation of the mortgage. Money borrowed from bank, in fact, was not required for completion of these projects as the money paid by the buyers was enough for that purpose, but that was also diverted and the money obtained from the banks was also not utilised for the purpose it was taken and it was well within the knowledge of the bankers and Authorities that the funds were being diverted, but they remained mute spectators. DIVERSION OF FUNDS 86. It has been observed in extensive detail in the forensic au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransferred to J.P. Morgan Investments for purchasing equity shares of Amrapali Zodiac Pvt. Ltd. at an exorbitant price. There was no transaction before or after these transfers of monies in the aforesaid dummy companies. To suit the requirement of J.P. Morgan Investments, in entirety incorrect valuation report was prepared by M/s. Sudit K. Parikh & Co., Chartered Accountants. The methodology and procedures defined of computation of fair market value were not followed at the time of exit. J.P. Morgan was having full control on Amrapali Zodiac Developers and no action could have taken as per clause 10.4.3 without investors' approval. The profit cannot be recognised until the project is completed. Thus, there cannot be any distributable amount as profit for distribution to J.P. Morgan. It has also been found by the Forensic Auditors that J.P. Morgan was in the knowledge of the fact that Amrapali Zodiac Developers had paid the money received to other companies of Amrapali group. Advances exceeded the limits specified in the shareholders' agreement, but J.P. Morgan did not ensure bringing back the money. It was accepted by Mr. Suraj Chhabria that it was in his knowledge and that of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) INR 85 crores received in Axis Bank, Indirapuram Branch on 7.8.2012. (b) INR 55 crores received in BOB Escrow Account on 7.8.2012. Thus, a total sum of Rs. 140 crores was received in Axis Bank. The amount was received in Axis Bank of INR 85 crores was transferred to Amrapali Centurian Park Pvt. Ltd. in three proportion. On 7.8.2012, Rs. 5 crores were transferred. On 8.8.2012, an amount of Rs. 50 crores was transferred and on 18.8.2012, Rs. 30 crores were transferred. The ACPPL on receiving Rs. 85 crores allotted equity shares worth INR 85 lakhs to ASCPL and balance INR 84.15 crores were treated as share premium account. There is no valuation report available as to how the share premium of INR 84.15 crores had been calculated. This transfer of fund by ASCPL to ACPPL is termed as absolutely violative of FDI Rules and agreement. With respect to Rs. 55 crores routed from IPFFI Singapore in the Escrow Account of Bank of Baroda, Escrow Account was transferred from 8.8.2012 to 28.9.2012 in the account of Bank of Baroda and used for payment of term loan instalments of OBC and Bank of Maharashtra for repayment of their term loan instalment. This money was not meant for payment of te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Jotindra Steels and Tubes Limited was not ready to subscribe to the capital was no ground for Bank of Baroda to discharge Jotindra Steels and Tubes Limited. Once guarantee has been given and in view of the finding recorded by the Forensic Auditors as to the nature of bid by the Jotindra Steels and Tubes Limited and other persons, it is apparent that action was illegal. 95. The leases had been granted by Noida and Greater Noida Authorities subject to the provisions contained in U.P. Industrial Area Development Act, 1976. Section 13 of the U.P. Industrial Area Development Act, 1976 deals with imposition of penalty and mode of recovery of arrears, which states that where any transferee makes any default in the payment of any consideration money or instalment thereof or any other amount due on account of the transfer of any site or building by the Authority or any rent due to the Authority in respect of any lease or where any transferee or occupier makes any default in payment of any amount of fee or tax levied under the Act, in addition to the amount of arrears, a further sum not exceeding that amount shall be recovered from the transferee or occupier by way of penalty. Under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ali Group. The buyers' money had been diverted, which was meant for construction on payment of dues of Authorities in case they were paid timely by the Amrapali Group to the Authorities and to the Banks substantively liability would have been cleared. But by their inaction and rather conniving, the buyers were cheated by the Amrapali Group. Authorities did not object when mortgages were effected in favour of Banks in violation of conditions. Bankers could not have violated conditions. Now, whatever complete/incomplete structures are there, the Authorities are claiming that buyers have no right and they have the first charge on the structure as they have to recover the amount, only thereafter if anything is left out, can be paid to the buyers. In case the submission is accepted, it would amount to playing further fraud upon the fraud. It was incumbent upon the Authorities as well as the Banks to prevent the fraud. Now, if Banks, as well as the Authorities, are permitted to recover the amount from the home-buyers' investment, in that case, it would be equally unjust and would be against the conscience of the law and nothing would be left for buyers not even a brick and the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everal years and no construction activities have taken place. For several years, no accounts were maintained from 2015 till date and a lot of money had been withdrawn from the Banks. The orders passed by this Court on 22.11.2017 to deposit 10 percent of the amount was not complied with by the Amrapali Group. Thereafter again on 17.5.2018, this Court permitted them to carry forward the project, but they did not do so and were not ready to deposit the amount of Rs. 250 crores to show their bona fide to undertake construction activity and efforts had been made to wriggle out of assurances on which basis this Court had passed the orders. 100. On behalf of Authorities provisions contained in Section 13 of the Uttar Pradesh Apartment (Promotion of Construction, Ownership, and Maintenance) Act, 2010 has been pressed into service. It is submitted that transfer cannot be made in favour of home-buyer without executing the Transfer Deed. As per Section 5 of Act of 2010, flat buyers become entitled to ownership and possession of the Apartment and undivided interest in the common areas as specified in the deed of the Apartment. It is further submitted that tripartite sub-lease deed has to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been different as it stands today. However, since we have attached various other properties where home buyers' money has been invested, the rights of the Authorities as well as bankers to get the money recovered from the other properties of the builder Amrapali Group/Directors and where they have invested money and belonging to the guarantors in the various transactions. However, at the same time for want of payment to Authorities and Bankers by the builder under these facts and circumstances, it would be absolutely improper for the Authorities to deny issuance of occupancy or completion certificate, especially on the ground of non-payment of dues. As per the interim orders, we have ensured that fire safety devices are fitted in buildings at appropriate places wherever necessary and in case it is lacking at any place we have to ensure that they are fitted and there are no other violations pointed out in the construction so far made. Thus, the concerned Authorities have to issue occupancy certificate as well as completion certificate with respect to the projects in which home buyers residing without insisting for the payment of their dues. This Court has to monitor the payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ob done by the Forensic Auditors to unearthed the fraud. They have gone into minute details forensically and done their job extremely well, due to which serious kind of fraud has been unearthed with the involvement of so many persons as referred to by them. We direct the concerned Authorities to look into the violation of the FEMA and FDI norms as projected by the Forensic Auditors in their report and to submit progress report in this Court. IN RE: RERA 104. The Bill was passed in the Rajya Sabha on 10.3.2016 and in the Lok Sabha on 15.3.2016. The Bill intended to standardise business practices and transactions in the real estate sector. It intends to ensure consumer protection. It intends to regulate transaction related to both residential and commercial projects. The Statement of Objects and Reasons are as under: "STATEMENT OF OBJECTS AND REASONS The real estate sector plays a catalytic role in fulfilling the need and demand for housing and infrastructure in the country. While this sector as grown significantly in recent years, it has been largely unregulated, with absence of professionalism and standardisation and lack of adequate consumer protection. Though the Consumer P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estate agent not to facilitate sale or purchase of any plot, apartment or building, as the case may be, without registering himself with the Authority; (d) to impose liability upon the promoter to pay such compensation to the allottees, in the manner as provided under the proposed legislation, in case if he fails to discharge any obligations imposed on him under the proposed legislation; (e) to establish an Authority to be known as the Real Estate Regulatory Authority by the appropriate Government, to exercise the powers conferred on it and to perform the functions assigned to it under the proposed legislation; (f) the functions of the Authority shall, inter alia, include - (i) to render advice to the appropriate Government in matters relating to the development of real estate sector; (ii) to publish and maintain a website of records of all real estate projects for which registration has been given, with such details as may be prescribed; (iii) to ensure compliance of the obligation cast upon the promoters, the allottees and the real estate agents under the proposed legislation; (g) to establish an Advisory Council by the Central Government to advice and recommend the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of apartments or converts an existing building for the purpose of selling to other persons; a person who develops land into a project; any development authority or any other public body; an apex State level co-operative housing society etc.; any other person who acts himself as a builder, coloniser, contractor, developer, estate developer or by any other name; and such other person who constructed any building or apartment for sale to general public. 107. It is provided under Section 3 that no promoter shall advertise, market, book, sell or offer for sale any plot, apartment or building in any real estate project or part of it without registration with the Real Estate Regulatory Authority established under the Act. The provisions of the Act have also been made applicable to the ongoing projects on the date of commencement of the Act and for which completion certificate has not been issued, the promoter shall make an application to the Authority for registration of said project within three months from the date of commencement of the Act. The projects of Amrapali Group have registration under the RERA is an admitted fact. The provisions of the RERA are applicable is also not in di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proportion to the percentage of completion of the project. Explanation.- For the purpose of this clause, the term "schedule bank" means a bank included in the Second Schedule to the Reserve Bank of India Act, 1934 (2 of 1934);" 109. When we consider the provisions in the instant case, it was necessary to deposit the amount in the account. In the year 2015, the RERA was in contemplation and certain provisions came into force on 1.5.2016 and some more Sections i.e., 3 to 19, 40, 59 to 70 and 79 and 80 came into force with effect from 1.5.2017. 110. A blatant violation of the provisions of RERA has been done by the Amrapali Group. Since RERA contemplates timely completion of projects once registration has been granted under Section 5 and extension of registration under Section 6, it is only in the event of force majeure in case there is no default on the part of the promoter, registration can be extended in aggregate for the period not exceeding one year. Force majeure shall mean a case of war, flood, drought, fire, cyclone, earthquake or any other calamity caused by nature. The registration granted under Section 5 is valid for a period declared by the promoter. Section 7 provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romoter under section 5 shall not be revoked unless the Authority has given to the promoter not less than thirty days notice, in writing, stating the grounds on which it is proposed to revoke the registration, and has considered any cause shown by the promoter within the period of that notice against the proposed revocation. (3) The Authority may, instead of revoking the registration under sub-section (1), permit it to remain in force subject to such further terms and conditions as it thinks fit to impose in the interest of the allottees, and any such terms and conditions so imposed shall be binding upon the promoter. (4) The Authority, upon the revocation of the registration,- (a) shall debar the promoter from accessing its website in relation to that project and specify his name in the list of defaulters and display his photograph on its website and also inform the other Real Estate Regulatory Authority in other States and Union territories about such revocation or registration; (b) shall facilitate the remaining development works to be carried out in accordance with the provisions of section 8; (c) shall direct the bank holding the project back account, specified under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Section, the promoter shall be responsible to obtain the completion certificate or the occupancy certificate. He shall also be responsible for providing and maintaining the essential services on reasonable charges, till taking over of the maintenance by the association of the allottees. The promoter shall enable the formation of an association or society or co-operative society or federation of allottees. He shall pay all outgoings until he transfers the physical possession to the allottee. After he has executed an agreement for sale for any apartment, plot or building, he may not mortgage or create a charge on such an apartment, plot or building and if any such mortgage or charge is made or created then notwithstanding anything contained in any other law for the time being in force, it shall not affect the right and interest of the allottee. It is clearly provided under Section 11(4)(h), which is extracted hereunder: "11. Functions and duties of promoter.- (4) The promoter shall- (h) after he executes an agreement for sale for any apartment, plot or building, as the case may be, not mortgage or create a charge on such apartment, plot or building, as the case may be, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of any local law, conveyance deed in favour of the allottee or the association of the allottees or the competent authority, as the case may be, under this section shall be carried out by the promoter within three months from date of issue of occupancy certificate." 116. It is apparent that after the transfer of conveyance deed, the title vests in the allottee and of the common area in the association of the allottees or the competent authority as the case may be. No title remains with the promoter. 117. Section 18 deals with the return of amount and compensation. In case promoter fails to complete or is unable to give possession of an apartment, plot or building, he shall be liable on demand to the allottees. In case the allottee wants to withdraw from the project, without prejudice to any other remedy available, the promoter has to return the amount received in respect of that apartment, plot, building with interest in this behalf including compensation in the manner as provided under the Act. 118. The rights and liabilities of allottees are provided in Section 19, which is reproduced hereunder: "19. Rights and duties of allottees.- (1) The allottee shall be entitled to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection (6) and the liability towards interest under sub-section (7) may be reduced when mutually agreed to between the promoter and such allottee. (9) Every allottee of the apartment, plot or building as the case may be, shall participate towards the formation of an association or society or cooperative society of the allottees, or a federation of the same. (10) Every allottee shall take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or building, as the case may be. (11) Every allottee shall participate towards registration of the conveyance deed of the apartment, plot or building, as the case may be, as provided under sub-section (1) of section 17 of this Act." 119. Certain rights and duties as well as the liabilities to pay interest in case of default on the part of allottees are also provided in the provisions contained in Section 19. Chapter V provides for Real Estate Regulatory Authority, whereas Chapter VI deals with the Central Advisory Council. The provisions relating to Real Estate Appellate Tribunal are provided in Chapter VII. Chapter VIII con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... care of in a similar manner. The money payable to the Authorities had been diverted and huge amount of buyers' money had not been invested in the projects neither any part of the money of bank borrowings, in fact, were spent in the construction as found by the Forensic Auditors. The promoters are held accountable for the diversion of the money paid by the buyers as component of price of flats even on account of payment to Authorities. 124. There appears to be non-issuance of the completion certificate, whereas the buildings are being occupied, we direct issue of completion certificate. This Court has to monitor the payment of dues of the Authorities and Banks and that outstanding are not going to create hurdle in the execution of the registered document/conveyance deed in favour of home buyers. It has to be executed by the concerned Authorities as well as by the Court Receiver and by the home buyers. The amount which is due on the part of home buyers has to be deposited in the account, which has been opened, in the UCO Bank by this Court. It has to be utilised firstly for the purpose of completion of the buildings and for providing other facilities and the home buyers of incomplet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act, no necessity for raising the loans from the bank. The money borrowed from banks was used to create other assets worth thousands of crores. Thus, the banks can realise their money from those assets and from guarantors and not from the investment of home buyers, not from the buildings in which loans granted by banks have not been invested, which have been erected partially or some are at the nascent stage, for which hard-earned money has been paid by the home buyers. Home buyers are not direct party to the bank loan, thus it was the duty of the bankers and Noida authorities, if they wanted to impose their charge, to ensure that no fraud takes place and money is invested in the projects for the purpose for which it has been taken not only the money paid by the home buyers but obtained from the banks and due to be paid to Noida authorities, is not usurped illegally by promoter/builder. Though it was realised as part of the component of the price of flat from the home buyers, by the promoters/builders its illegal diversion was permitted by Amrapali Group in connivance with the officers of the authorities and the bank. Thus, the very condition of investment in the project by bankers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sited by the Amrapali group to show its bona fide. The Group never intended right from the beginning to complete the construction work, has been rightly observed by Forensic Auditors. Thereafter, we have assigned the work to the NBCC. But at the same time, the effort has been made by Amrapali Group/ its Directors to sell the property which has been created by diversion of home buyers' funds. Incorrect facts have been stated and suppressions have been made in various affidavits filed in this Court that the certain properties are not encumbered. Various applications are being filed one after the other by the encumbered holders with respect to several properties that they have the charge over the said property. 130. That apart, several attached properties have been put to sale by DRT under the orders of this Court. In most of the cases, no buyers have turned up and/or the price offered by forming a cartel are too low. The property cannot be sold at throw away price. For example, in the case of a hospital situated at Noida, the very group of doctors wanted to purchase, it who are running it, at a paltry sum by forming a cartel. Aforesaid is one of the examples of cartel formation that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the courts to do complete justice between the parties and to protect the investment so made and interests of home buyers and to ensure that they get the perfect title and the fruits of their hard earned money and lifetime savings invested in the projects. 132. On behalf of Bank of Baroda, learned senior counsel submitted that the agreement of promoter/builder with home buyers is unregistered as such, no right has been created in the immovable property in view of the provisions contained in section 49 of the Registration Act. The submission ignores and overlooks the provisions of RERA which intends to prevent such frauds on home buyers and ensure completion of projects and that of the agreement between promoters and buyers. There are various rights under the agreement as well as under the RERA. The agreement entered into at the time of allotment is the basis of the investment in the projects made by home buyers, it cannot be said to be a scrap of paper. It is their valuable investment which is required to be protected and cannot be permitted to be taken away by builder or secured creditors in an illegal manner. The provisions of section 17 of the Registration Act no doubt provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpression "which are related to the project" would mean that that amount recoverable from the allottee is the one which has been invested in the project. A third person can be held liable for the money payable to secured creditors in case it has been invested in the project, in case it has not been spent in constructions, same cannot be permitted to be realised from the project/home buyers, the investment of home buyers cannot be frittered away and to fasten liability upon the innocent buyers/allottees in that event would tantamount to perpetrating yet another fraud on them. Accountability, as per law, has to be fastened on promoters/builders and all concerned. It would amount to total deprivation of money of home buyers without any fault on their part or legal liability. It would amount to fastening liability upon them once over again by misuse of the process of law. The factual matrix unfolded on forensic audit indicates serious kind of fraud that has taken place which would shut the enforcement of liability clause as against the home buyers. The provisions of the first and second charge cannot come to the rescue of Authorities/Bankers. Under Section 11(4)(g) the promoter has to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; money. Thus, in the peculiar facts and circumstances of the case, we hold that rights or interests of the allottees are not at all affected by the mortgage created by the bankers or by the dues of the Noida or Greater Noida authorities. 135. On behalf of the Bank of Baroda, Shri Maninder Singh learned senior counsel has submitted that section 4(2)(1) of the RERA requires the promoter to disclose the prior encumbrance. Therefore, the RERA contemplates the creation of encumbrance even before the project is registered and such a plot can be offered to allottees. Basically, a declaration is required under section 4(2)(l)(A) that the land is free from all encumbrances or as the case may be, details of the encumbrances, if any, on such land, should be disclosed. The intention is that the allottee should know about the encumbrance if any. The provision does not espouse the cause of the bank in any manner whatsoever. 136. On the strength of the provision of section 19(4) of RERA, learned senior counsel has submitted that the allottee should be entitled to claim the refund and compensation, if the promoter fails to comply or is unable to give possession of the apartment, plot or buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the said statute. We are not absolving the home buyers from the discharge of their liability if any. At the same time, they have the right of enforcement of their right for compensation due to undue delay in completion of the project. 138. It was submitted by learned senior counsel on behalf of the Greater Noida authority that title has to pass in home buyers by way of registered document as provided in section 17(1)(b) of the Registration Act and section 13 of the U.P. Apartments Act, 2010 and also the provisions of the lease deed. The deed of transfer will be a tripartite sub-lease deed. Completion certificate has to be obtained, for that it has to be applied for. Dues of the authorities have to be paid before a completion certificate is issued. The charge of Noida and Greater Noida authority has priority over other charges. None of the aforesaid submissions impress us so as to defeat the rights of home buyers. We have already dealt with that the dues have to be recovered in accordance with law from the properties which have been created by the funds which have been diverted and the property of the directors etc. In order to do complete justice between the parties so that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... molished. Buildings have to come up and completed even the ones which are at the nascent stage as mandated by RERA. No doubt about it that in case of failure to pay the dues the onus of payment of land dues has to be passed on to the buyers on pro-rata basis but in the instant case they have already paid the substantial amounts, huge amount has been permitted to be diverted by the authorities and bankers as such they have to wait for recovery and cannot act in a manner further detrimental to the interests of the home buyers. 141. On behalf of Amrapali group, learned senior counsel submitted that there were force majeure conditions in completing the projects. There were legal impediments in the completion of projects within the period given in the flat-buyers agreement during the period from 2011-15. The submission is baseless. It is apparent that the Full Bench of the High Court though held that the land acquisition was vitiated but still it was upheld. The High Court did not quash it for the reason that development has taken place. Higher compensation was ordered to be paid. That order was affirmed by this Court in 2015 in Savitri Devi v. State of U.P. (2015) 7 SCC 21. There was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e machinery. Question is of will power to extend the clutches of law to do the needful. We hope and trust that hope and expectation of home buyers are not going to be belied. 142. We are not impressed by the submission that Amrapali Group had taken the lands and had paid a part of dues and has invested a certain amount. The statement of the expenditure of the money of the home buyers, in the construction activity that has been filed in the Court, is not supported by documents and is prima facie a scrap of paper. We have called the concerned incumbents who have prepared it and cross-checked from them and we are satisfied that the statement filed on the expenditure of Rs. 10,000 crores is nothing but a scrap of paper not supported by the books of account, supporting documents. It has to be outrightly rejected as there is an attempt made on siphoning off, apparent from the report of the Forensic Auditors also. 143. In his affidavit, Anil Kumar Sharma has given details of companies from which funds were transferred to the extent of Rs. 2,996.20 crores to different group companies, mainly from following nine companies: CHART "E" DETAILS OF MAJOR COMPANIES FROM WHERE FUNDS WERE TRANSF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el to defraud the home buyers for siphoning off their money. Dummy companies were created in the names of peons, boys of office, the relation of statutory auditor, CFO, etc. and several companies were created only for the purpose of few transactions. The fact discloses how the fraud has been perpetrated upon the home buyers which defies description which could not have been unearthed except by skilful exercise done by the Forensic Auditors. Thus, we have no word to specify the extent of fraud played. Least said is better as to the entire gamut of the facts and entire scenario of the case. 146. It is apparent from the report of the forensic audit submitted by Forensic Auditors that there is a serious kind of fraud played upon the buyers in active connivance with the officials of the Noida and Greater Noida Authorities and that of the banks. The money of the home buyers has been diverted. The Directors diverted the money by the creation of dummy companies, realizing professional fees, creating bogus bills, selling flats at undervalue price, payment of excessive brokerage, etc. They have obtained investment from J.P. Morgan in violation of FEMA and FDI norms. The shares were overvalu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Greater Noida Authorities in favour of Amrapali group of companies with respect to various projects, are liable to be cancelled and the rights thereupon shall vest in the Court Receiver. 150. There was no valid mortgage created in favour of Banks and there was a huge diversion of money paid by homebuyers which were more than required for payment of dues of the Noida/ Greater Noida Authorities and banks. The buyers have paid the dues of Noida and Greater Noida authorities as a component of the price for flats. Thus, the premium and other dues payable under the lease deeds to the Noida and Greater Noida Authorities, cannot be recovered from the home buyers or the projects in question. The dues as may be ordered shall be recovered by sale of other properties which have been created by the diversion of funds and have been attached by this Court. The banks have also failed to ensure that the money was used in the projects. As found in the forensic audit, there was no necessity of obtaining loans from the banks and it has not been used for the purpose it was obtained. The Authorities and Bankers have violated the doctrine of public trust and their officials, unfortunately, acted in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Group of Companies by Noida and Greater Noida Authorities for projects in question stand cancelled and rights henceforth, to vest in Court Receiver; (iii) We hold that Noida and Greater Noida Authorities shall have no right to sell the flats of the home buyers or the land leased out for the realization of their dues. Their dues shall have to be recovered from the sale of other properties which have been attached. The direction holds good for the recovery of the dues of the various Banks also. (iv) We have appointed the NBCC to complete the various projects and hand over the possession to the buyers. The percentage of commission of NBCC is fixed at 8 percent. (v) The home buyers are directed to deposit the outstanding amount under the Agreement entered with the promoters within 3 months from today in the Bank account opened in UCO Bank in the Branch of this Court. The amount deposited by them shall be invested in the fixed deposit to be disbursed under the order of this Court on phase-wise completion of the projects/work by the NBCC. (vi) In view of the finding recorded by the Forensic Auditors and fraud unearthed, indicating prima facie violation of the FEMA and other fraud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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