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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 ..... rapali Group, the buyers' money which has been obtained has not been invested in the construction activities, rather it has been diverted to a great extent. Money obtained from the banks has also not been invested in the projects and has been diverted elsewhere to acquire other assets. 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? - HELD THAT:- 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 buyers have also to wait for the satisfaction of the dues. If the real estate business has to survive in India, it has to be answerable to the public and has necessarily to uphold the trust reposed in builders/promoters. They have been paid huge amounts not only by the home buyers but also, they have to pay a huge amount for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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 - HELD THAT:- As a matter of fact, the bank has not been able to show what steps it has taken to stop the diversion of funds to third parties on the same date of disbursal of the amount - in view of the finding of the Forensic Audit that there was no necessity of obtaining the loan from the Bankers as Amrapali Group had sufficient money from the home buyers, which has also been diverted and has not been utilised in the construction activities. Other assets have been created with the help of the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted fact. The provisions of the RERA are applicable is also not in dispute - 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. It is clear that RERA intends for completion of the project in case any fraud is committed by the promoter and the activity is not completed, the home-buyers cannot be left in lurch, allowing the prayer on behalf of Bankers as well as by the Authorities would amount to unfair treatment of home buyers in the facts of this case. It is too late for them to submit that home buyer has no rights in the teeth of the provisions contained in the RERA, which intends to prevent fraud - Once registration lapses on non-completion of project within the time stipulated or it is revoked the consequence ensue as enumerated in Section 8 of RERA, the Authority is enjoined upon the duty to consult with the appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NO.91/2018 WRIT PETITION (C) NO.56/2018 WRIT PETITION (C) NO.57/2018 WRIT PETITION (C) NO.74/2018 WRIT PETITION (C) NO.134/2018 WRIT PETITION (C) NO.131/2018 WRIT PETITION (C) NO.160/2018 WRIT PETITION (C) NO.164/2018 WRIT PETITION (C) NO.182/2018 WRIT PETITION (C) NO.199/2018 WRIT PETITION (C) NO.226/2018 WRIT PETITION (C) NO.245/2018 WRIT PETITION (C) NO.281/2018 WRIT PETITION (C) NO.306/2018 WRIT PETITION (C) NO.298/2018 WRIT PETITION (C) NO.246/2018 WRIT PETITION (C) NO.267/2018 WRIT PETITION (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 construc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f EMIs to the banks, thereby causing a double loss. Some of the consumers approached the National Consumer Dispute Redressal Commission (for short, the NCDRC') by filing Consumer Complaint No.213 of 2017 under Section 12(1)(c) of the Consumer Protection Act, 1986. 6. The Bank of Baroda had filed Company Petition No. (IB)- 121(PB)/2017 before the National Company Law Tribunal (for short, the NCLT ) under Section 7 of the Insolvency and Bankruptcy Code, 2016 for triggering the Corporate Insolvency Resolution Process in the matter of M/s. Amrapali Silicon City Private Limited, respondent No.3. The NCLT 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Greater Noida, but most of them have not been completed by the builders/promoters and they have siphoned buyers' money in large scale. No action has been taken by the Noida and Greater Noida Authorities against builders for cancellation of leases due to violation to fulfil their obligation. Bankers have financed to builder certain loan on the condition to invest in the projects, but they have also permitted the money to be used as for other purposes as apparent from the report of the Forensic Audit in the instant case which had been submitted by Auditors - Mr. Pawan Kumar Aggarwal and Mr. Ravinder Bhatia. The facts which are projected in the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When enquired by this court as to the guarantee for the implementation of the arrangements proposed for all practical purposes, Mr. Ranjit Kumar, on instructions, has submitted that to ensure that the works are completed by the time as proposed 12 developers in addition to the Galaxy group have given their letters to collaborate with the respondent promoters for the said purposes as testified by the documents available in compilation B . Learned counsel appearing for the home buyers, however, have expressed some reservation contending that the arrangements as proposed do not inspire confidence in view of the past experience and have pleaded that unless the 13 developers who undertake to collaborate with promotors of Amrapali Group are tied down with necessary conditions, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been utilised. It also transpired from documents that money had been transferred to certain other companies, thus, this Court has asked for the details of the composition of the transferee company including the names of the Director and for what purpose money was transferred and how it is to be retrieved and how projects are to be completed. 11. On 17.5.2018, this Court passed the following order: 1. Heard learned counsel for the parties. 2. Pursuant to our request made to the learned counsel, they have sat together and a joint statement has been filed for containing the proposal for completion of the various projects. A joint meeting had been conducted between the lawyers representing the buyers and builder of Amrapali Group and the representatives of Greater Noida and Noida. The proposals are in the form of four baskets with independent timelines and the co-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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work remains in three other towers, being towers N, O and P, which comprise 319 units. Time agreed for completion of same is 12 months and it has been proposed that M/s. Kanodia Business Pvt. Ltd. will be the co- developer. It is also agreed to that as there is no water tank, no lift in three towers, i.e., N, O P, the work of water tank and lifts in these towers shall be completed within six months from today. As the inhabitants are already occupying certain portion up to the fifth floor, let arrangements be made, as agreed to, for water tank on a priority basis. Adequate provision for electricity connection shall also be made within three months from today. We defer the order with respect to Amrapali Silicon project, as agreed to. THIRD BASKET Amrapali-the promoter has proposed certain projects in category-A, namely, Zodiac, Platinum, Titanium and Eden Park in this basket. The promoter of the Zodiac is M/s. Amrapali Zodiac Developers Pvt. Ltd., whereas the promoter of Platinum and Titanium is M/s. Ultra Home Construction Pvt. Ltd. and of Eden Park, the promoter is Amrapali Eden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Sahi Developers Pvt. Ltd. However, we permit the new codeveloper M/s. IIFL to be appointed for the said project so that owing to the interse dispute between the promoter and co-developer, the project may not be delayed. B.2. GOLF HOME : This project consists of two parts : (i) Golf Homes; and (ii) Kingswood. (i) Golf Homes : Golf Homes consists of 4210 units. The work shall be completed within the period of 6 months to 22 months and possession shall be handed over as soon as the project is completed. (ii) Kingswood : Kingswood comprises of 1596 units. The work shall be completed within nine months to 22 (twenty-two) months. The promoter of Golf Homes and Kingswood projects is M/s. Amrapali Smart City Developers Pvt. Ltd. and the co-developer is M/s. IIFL. B.3. TECH PARK : Tech Park project is located in Greater Noida. The promoter is M/s. Ultra Home Construction Pvt. Ltd. and the co-developer is M/s. IIFL The work shall be completed within the time limit of 18-24 months. PROJECT COSMOS KOCHI : I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ization and reflects the outer limit. Let undertaking of promoter and developer be filed within seven days with respect to all the projects. 4. It is apparent from the admission made by the promoter that the money to the extent of ₹ 2765 crores, out of the six projects in question, has been transmitted to other projects. Though we were inclined to direct the promoter to deposit the said amount in this Court, we are not doing this at this juncture, because of the singular reason that the various promoters of the projects have shown their willingness to complete these projects by engaging the services of the co-developer. It is made clear that co-developer is the agent of the promoter. No right or interest shall accrue to the co-developer and liability towards the buyer shall remain with the promoter. 5. At this stage, we deem it appropriate to direct that an escrow account has to be opened. The said account has to be opened in the UCO Bank, Supreme Court Branch, situated in the premises itself. At this juncture, we deem it appropriate to direct the promoters to deposit a sum of ₹ 250/- crores (Rupees Two Hundred Fifty Crores) in the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriodical reports of the progress of the construction, to this Court, consisting of the following members: i. Architect of the developer; ii. Structural Engineer of the developer; iii. Chartered Accountant appointed by the developer; as well as iv. Architect of buyers v. Structural Engineer of buyers vi. Chartered Accountant appointed by the buyers and apart from the above members, we appoint Mr. M.L. Lahoty, learned Advocate, as a member of the said Committee, so as to coordinate the effective functioning and to submit an appropriate periodical report in this Court. We appoint one nominee each of Greater Noida and Noida Authority, to be the member of said Committee. 10. There are certain unsold units in the various projects that have to be firstly adjusted by making swapping as agreed to, after that the remaining available units may also be permitted to be sold. In this regard, a proposal would be submitted as and when swapping process is completed and the details of property to be sold and amount of offer by the prospective buyers, be indicated by this Court. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ittee constituted by us is also requested to evaluate the work undertaken by M/s. Sahi Developers Pvt. Ltd. so far and submit a report in the 1 st week of July 2018. 17. Let nominations be made by the developers, flat buyers and authorities within seven days from today, under intimation to this Court. 18. The matter has been heard in part and requires a further hearing. List on 18.7.2018 at 2.00 p.m. 19. It is agreed to, that with respect to essential amenities, the order passed by this Court on 10.5.2018 shall also apply to Silicon City Phase I project and in case inhabitants are there in some towers, the same shall apply to Silicon City Phase-II project also. The aforesaid order was passed on the basis of the joint proposal, which was in the form of four baskets with independent timelines, submitted in this Court. 12. It was also mentioned in paragraph 4 of the above order that admission has been made by the promoters/builders that the money to the extent of ₹ 2,765 crores, out of six projects has been transferred to other projects. Though we were inclined to direct the promoter to deposit th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court observed that money could not have been diverted. That would prima facie tantamount to a criminal breach of trust. We directed that the individual bank accounts of the Directors of all the 40 companies be frozen and ordered attachment of the properties in the individual names of Directors and also put a restriction on the alienation of the properties in the names of individual Directors etc. Following order was passed by this Court: 1. On 17.5.2018, we have passed a detailed order in these cases after hearing learned counsel for the parties for several days. We need not reiterate the directions, statements, representations made to this Court and the orders which we have passed. Order dated 17.5.2018 is clear in this regard. As per the order passed by this Court, certain obligations were imposed and certain directions were issued which were to be complied with by the group of companies as well as the co-promoters, etc., as mentioned in the aforesaid order. The compliance has not been reported an effort was made to wriggle out of order passed on 17.5.2018. 2. When the matter was taken up on 18.7.2018, compliance of the order was not reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 very day which was presided over by the Secretary, Ministry of Housing, who is the Chairperson of the Committee and Secretary MoUHUA. Thereafter, pursuant to the said meeting it was stated today that NBCC India Limited, a Government of India enterprise, has invited Expression of Interest for joint development in real estate with respect to the development of residential and commercial real estate projects in Delhi and NCR region, inclusive of the Amrapali Group for which we have already passed orders on 17.5.2018. 4. In case the Committee constituted by the Government of Uttar Pradesh wanted to take up the matter of Amrapali Group in view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 from six projects to othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 2.8.2018, recalling the order dated 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 Unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 17.5.2018. It was also pointed out that one of co- developer, IIFL, has backed out, thus, it was not possible to comply with the order dated 17.5.2018 and same requires modification. The sum of ₹ 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtered Accountant of Serva Associates is also present in the Court. It is pointed out that the information furnished by them is contained on page 6 and 7 of the compilation Annexure X-1. It 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 ₹ 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court directed the forensic audit. Following order was passed on 4.9.2018 : We have heard learned counsel for the parties. A proposal has been submitted by the NBCC in the booklet form. Let it be placed on record along with an affidavit of a responsible officer of the NBCC. Let a copy of the 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Mr. Anil Mittal, to hand over the original records of Amrapali group of companies vide order dated 12.9.2018. This Court also directed remaining records from 2008 till date, be handed over within 10 days. Amrapali group of companies were also directed to hand over the documents required by the forensic auditors. The matter was taken up by this Court on 26.9.2018. Considering the non-cooperation of the Directors, the following order was passed by this Court on 26.9.2018 : Heard the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of secured and unsecured creditors project-wise and in total be submitted in this Court in a tabular form. Let total outstanding dues be stated, including that of Noida and Greater Noida authorities supported by affidavit. Mr. Anoop Kumar Mittal, Chairman of the NBCC and Ms. Pinky Anand, ASG are present. It was pointed out on behalf of the NBCC that detailed project report has to be prepared of Group A Project within 30 days and Group B and C Projects within 60 days. It was also pointed out that tenders may be permitted to be floated by NBCC Group A and B projects. The NBCC is permitted to float the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us figures as appearing in the tally data does not reconcile with the reserves and surplus as appearing in the last signed financials. The difference has also been pointed out in a tabular form. There were several advances, investments, utilisations, advances made to suppliers and payments made to Mr. Anil Sharma and Mr. Shiv Priya, Directors of the company for professional charges, etc. It was also pointed out that in spite of repeated reminders, groupings have not been supplied. Grouping is a process to indicate the process between the stage of trial balance, balance sheet, and profit and loss account. All files had not been handed over and Mr. Anil Mittal, the Statutory Auditor had sent one file late in the 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 ₹ 242.38 crores had been handed over to Gaurisuta Infrastructure Private Ltd., Vidhyashree Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in future he will render all cooperation to the Forensic Auditors rightly, honestly and diligently. He has admitted today that there was appointment order as CFO and there was an authorization in writing issued to him for dealing with the banks. He has virtually contradicted the entire statement which he had made and has feigned ignorance to the Forensic Auditors. Be that as it may. We give him the last opportunity to come out clean and live up to the reputation of a profession of a Chartered Accountant. Let him cooperate with the Forensic Auditors, supply entire information correctly, truly and diligently. In case any remiss is found, it is made clear not only to him but also to the statutory/internal auditors that we will be compelled to take appropriate action as against 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the money received from the Indian companies and in particular from Amrapali group of companies, all monetary transactions of J.P. Morgan, Mauritius and Singapore with Amrapali group of companies be disclosed with details on affidavit. We directed the Amrapali group of companies/statutory auditors as well as Anil Mittal, Ravi Kapoor and S.N. Dhawan and CFO to disclose the names of all the companies in which their family members or acquaintance were included as Director and all the transactions inter alia family members and relatives. It was also pointed out by Mr. Chander Wadhwa, CFO that though his salary was ₹ 15,000 per month, a car worth ₹ 43 lakhs was given to him by the company in lieu of his services. It was also pointed out that an amount of ₹ 2 crores has been paid on account of Chander Wadhwa s tax liability by Amrapali group of companies. Further directions 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o do. It is clear that they are obstructing the course of justice to the best of their ability. This state of affairs cannot be continued any further. For non-compliance of the directions issued from time to time, we have already drawn suo moto contempt and as subsequent orders have also been violated. For the purpose of taking the contempt proceedings to further logical end, before this Court passes any further order, we give an opportunity to the Amrapali Group of Companies and Directors to furnish their reply as to why they should not be punished for the contempt and the violation of the order passed by this Court from time to time by November 19, 2018. The case will be taken up for considering non- compliance of the order and for filing the wrong affidavits before this Court, on 20.11.2018 along with the suo moto contempt that has been registered vide order dated 12.10.2018. 9. We have two affidavits. One of Anil Mittal and another of Chander 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, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 99.89 % 93,85,260 2. Swapnil Shikha 0.03 % 2500 3. Suvash Chandra Kumar 0.08% 7500 Total 100 % 93,95,260 * In FY 2016-17 the shares of Ultra Homes Construction Pvt. Ltd. are transferred in the name of Gaurisuta Infrastructure Pvt. Ltd. Details of Inter Corporate Deposits (figures in crore) Sl. No. Name of company Amount 1. Ultra Home Construction Private Limited 5.36 2. Others 0.32 List of Present Directors Sl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 to propose how the actual valuation of the buildings constructed so far by the Amrapali Group of Companies on the spot can be made so as to ascertain the actual investments made and extent of diversion. Let the estimate and quantities of the bills be also furnished by Amrapali Group to the forensic auditors along with the names of all the suppliers and mode of payment. They may also collect information/documents from suppliers. Certain directions were also issued to DRT to make the valuation to sell the property. Other facts were also noted. 25. On 20.11.2018 this Court had noted non-compliance of various orders passed by this Court from time to time. Various sub-leases had also been created. We issued the directions vide order dated 20.11.2018 as under: 3. It appears that various sub-lessees have been created. It was informed to us by the learned senior counsel appearing on behalf of the Amrapali Group of Companies that certain structures have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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 worked as an Accountant with Amrapali Sapphire, stated that he made the entries up to August 2018 in the tally data on the basis of the documents/vouchers which were made available to him. Mr.Jagannath Sharma, who is a Chartered Accountant and partner in L.D.R. Company stated that they have prepared the balance sheet on the basis of the tally data provided to them for the years 2015 to 2018. However, when cross-checked with the Forensic Auditors, the Court was informed that the data from 2015 to 2018 has not been made available fully to them. It was also pointed out that there should be supporting documents/material to make these entries other than the Bank statement when these statements have been prepared that should also be clarified by Amrapali Group and supplied to the Forensic Auditors. We also directed details of unsold apartments and flats of the projects to be submitted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Valley) has further transferred the sub-lease of said project. Stunning construction is one of the Amrapali Group Company listed in 46 companies. ₹ 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. Developers Pvt Ltd (Total Area 19986 Sq Mts) o M/s J.M. Housing Ltd (Total Area 33537 Sq Mts) o M/s Samridhi Reality Homes Pvt Ltd (Total Area 27989) o Sum Total Area is 93991 Sq Mts Shri Balaji Hi-Tech Construction Pvt Ltd one of Amrapali Group company (Sr.53 Page 2913 of an affidavit by Mr. Anil Sharma as Affidavit Submitted in terms of order dated 26.09.2018, 31.10.2018. submitted on 12.11.2018, where Mr. Ajay Kumar Mr. Mukesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re was a report of loans and advances to the extent of ₹ 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 ₹ 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 ₹ 140 crores by M/s. Neelkanth and M/s. Rudraksha Forensic auditors pointed out that two persons namely Chandan Kumar, is a peon of Mr. Anil Mittal, statutory auditor and was working in his office and one is Vivek Mittal, nephew of Mr. Anil Mittal, who was doing petty jobs of sub-contractors, getting a monthly income of ₹ 15,000. They were stated to be Directors in the companies, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 auditors. The Police are directed to investigate the role of Mr. Anil Mittal, Statutory Auditor, and Mr. Chander Wadhwa, CFO as well. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Banks have failed to monitor utilisation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which they have been 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o exit the project; (iii) moratorium of two years on payment of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure thereon. In the instant case, no dues certificate had not been issued by the Noida authority nor any sub-lease deed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of Greater Noida Authority that FAR admissible is 02.75 only and not 3.50. The differential FAR of 0.75 is not purchasable. The calculations made by Amrapali based on FAR of 3.50 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in 2016 Amrapali group again started to infuse capital and manpower, proceedings were initiated in NCLT by Bank of Baroda as against Amrapali Silicon City Pvt. Ltd. and M/s. Ultra-Home Constructions 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 Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opriate Committee may be constituted for supervision. Amrapali group shall extend all help in the building of the projects. 47. With respect to the report of the Forensic Auditors, it has been submitted that there is no undervaluation in booking the flats. The 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, ₹ 4.3 crores were paid towards his taxes. The same has been adjusted against the salary due of ₹ 4.4 crores from various Amrapali group of companies. Salary of ₹ 1.6 crores is recoverable by Shiv Priya from Amrapali group ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of the company. With respect to cash in hand, there is no consistency in the report of the auditors. Only ₹ 9 crores were available in cash in various group companies. The entire amount was spent on payment of wages due to various labours at different times. With respect to other recoverable advanced to various parties amounting to ₹ 234.31 crores, the details are not available in the 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 ₹ 3,500 crores and bogus billing of ₹ 1500-1600 crores, out of the total amount received from home buyers of ₹ 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 ₹ 4,352 crores, after deducting the amount of payment to the authorities and banks of ₹ 1,000 crores and ₹ 1,300 crores respectively. With respect to non-genuine purchases from suppliers, though a sum of ₹ 554 crores was given to the income-tax authoritie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was paid by Ultra Home Constructions Pvt. Ltd. to Royal Golf. Interest @ 9% amounting to ₹ 5,83,42,977 has been paid to Ultra Home. Subsequently, the agreement has been entered into to repay ₹ 50,46,78,022 by 31.3.2017 or in lieu thereof 30 Villas have to be allotted by Royal Golf to Ultra Homes. This Court has attached 30 Villas allotted to Ultra Home. It is ready to give 30 Villas by 30.4.2021 or to refund the amount of ₹ 48,46,78,022 in 4 equal quarterly instalments in full and final settlement 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 ₹ 300 cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right to mortgage the property as per the mortgage deed. There was no bank charge on the property mortgaged by Amrapali group. As per clause 15 of the mortgage deed, the buyer shall have no right after paying all amounts. The developer shall continue to have full authority over the flat unless a registered deed is executed in favour of the allottee. It is also submitted that the home buyers are not secured creditors. The home buyers were to acquire the premises on sub-lease basis which was never intended or stated anywhere that a sale would take place. 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, cheated home-buyers for the title of flats and trapped home-buyers in rental returns. The Amrapali Group floated several companies. The public invested their hard earned money in Amrapali projects and the shareholders used these funds to infuse capital in other companies/entities. Home buyers were cheated by making false promises/claims for example selling of flats which were not even part of the master plan of projects or unapproved in the master plan, double booking of the same flat by different customers. The homebuyers funds were diverted to other companies/directors through payment of professional fees, by way of booking of bogus bills of ₹ 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 ₹ 3,000 crores to related entities and ₹ 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt verticals i.e. Education, Entertainment (in making movies), FMCG, infrastructure, Shopping Malls, technology parks, hotel etc. from the diverted Home Buyers funds. The Promoters didn t invest any paisa in such verticals and the whole empire was created out of the diversion. The Promoters created a web of more than 150 companies (Page No. 16-19 Volume I) for routing the funds and creating assets. About 100 Companies were under the supervision and control of promoters used mainly for the purpose of diversion of funds. The Directors and Shareholders of these Companies were benami and were the trusted junior employees of promoters. CFO and the Statutory Auditors. It is observed that the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Following Firms carried out the Audit of the Group Companies during the period: Anil Ajay Co. BSR Co. Deloitte Haskins Sells SN Dhawan Co. Chander Wadhwa Associates Manoj Usha Co. Agarwal Seth Co. Kumar Chopra Associates 4. Non genuine purchases from suppliers Purchase bills have been accounted for in the books of accounts without receipt of physical goods and purchase bills have been accounted for of suppliers who do not exist. There was an Income Tax search and seizure on 9th September, 2010 and 7th August, 2013. During the search held on 7th August, 2013, it was held by the Income Tax Authorities that purchases are being made from bogus suppliers without receiving the goods physically. The total amount of purchases from such suppliers as observed by the Income Tax department amounted to ₹ 842.42 Crores approximately.. In order to confirm the genuineness of these suppliers and a few other suppliers we have sent written communication/ letters by speed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with empty truck in 4-5 minutes. No satisfactory explanation has been furnished by the management regarding this issue. Sample of such instances have been enclosed below: Challan No. Truck No. Net weight in Kg Date Time of Gross Weight Time of tare weight Time taken 6524 HR74A-5331 30,720 2/3/2015 18:31 18:36 5 Min 6477 HR74A-3499 32,120 2/3/2015 18:34 18:39 5 Min 6437 HR74A-5331 29,230 23/2/2015 18:08 18:12 4 Min 6435 HR74 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 bil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Statements for the financial year 2010-11 as follows: Note 6 (A) During the F.Y. 2010-11 Income Tax Search Seizure operation conducted by the Income Tax Department on the company and company has surrendered a total income of ₹ 13,893,500 i.e. ₹ 10,043,500 for the F.Y. 2009-10 and ₹ 3,850,000 for the F.Y. 2010-11. Accordingly, the total income includes the above said income. Thus, it is can be easily inferred that the company has been regularly taking cash from its various home buyers but not recording these cash entries in the Books of Accounts. (Volume I Page No. 205) It is unclear how the surrender of ₹ 125 crore made during the Financial Year 2013-14 has been accepted by the Income Tax Authorities. In fact, no additional income has been shown on this search. Moreover, against the additions relating to Bogus Purchases made in the Assessment order for the Financial Year 2013-14, the Commissioner of Income Tax (Appeal), Central Circle has deleted all these additions. We are informed by the management that no further appeal has been preferred by the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Company has made unusual cash payments by transferring the cash to the site cash during the financial year 2016-17 by way of vouchers which are not supported/authenticated by the site cash in charge. It seems that all these entries have been manipulated to use the cash to decrease the balance as on 08/11/2016 being the date of demonetization. Some instances are as under: Financial Year Particulars Amount 30/04/16 Wages Paid 2,754,350 31/05/16 Wages Paid 2,637,050 30/06/16 Wages Paid 2,655,900 31/07/16 Wages Paid 2,645,450 31/08/16 Wages Paid 2,643,950 30/09/16 Wages P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, turned a Blind Eye to the various transfer of funds from one account to another for reasons best known to them. They didn t inquire the huge transfer of funds from various accounts which were being routed every day. Had they been slightly more vigilant to monitor and control transfer of funds, the Management would have not dared to launder the money from one Company to another according to their whims and fancies and the Bankers are solely responsible for the negligence on their part. Banks did not do any monitoring that whether the funds disbursed were used for approved purposes or not. The loan sanctioned as term loan were diverted on the very same day of receipt. The land payment were not paid etc. Bank of Maharashtra Term Loan has been released by transferring the amount to the Current account during the financial year 2009-10 to 2012-13. There has been no monitoring by the bank to ensure the end use of utilization of the funds. This amount was paid from the Current account for other than business activities of this Company. It is observed that there was no monitoring done by the officials of Bank of Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On 7.8.2012 - ₹ 5 Crores On 8.8.2012 - ₹ 50 Crores On 18.8.2012 - ₹ 30 Crores Total = ₹ 85 Crores ACPPL on receiving ₹ 85 Crores, allotted Equity Shares worth ₹ 85 lakhs to ASCPL and balance ₹ 84.15 Crores were treated as Share Premium Account. There is no Valuation Report available as to how this share premium of ₹ 84.15 Crores has been calculated. This transfer of fund by ASCPL to ACPPL is absolutely violative of FDI Rules and Agreement. The Second amount received in BOB Escrow Account was transferred from 8.8.2012 to 28.9.2012 on various dates in the Account of BOB, Sansad Marg Branch, and New Delhi and also used for payment of Term Loan Instalments of OBC and Bank of Maharashtra for repayment of their Term Loan instalments. It will therefore, be observed from the above, that the Company (ASCPL) did not use money for the project fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 too, Amrapali Group of Companies have defied all laws to transfer small and big amounts from one account to another to a third and so on and so forth on a single day with the connivan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity 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 ₹ 20 crore. Further, Amrapali Infrastructure had given an advance of ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 95 crore details were not made available to us. b) Gaurisuta Infrastructure Private Limited It lent and received funds from several parties without doing any business. Details of ₹ 25 crore received from third parties are as under: S.no. Name of party Amount Since date 1 Ams Powertonic Pvt Ltd 50,00,000 07-05-2012 2 Anuj Buildcon Pvt Ltd 50,00,000 10-05-2012 3 Asv Garments Pvt Ltd 50,00,000 07-05-2012 4 Bij Buildcon Pvt Ltd 50,00,000 10-05-2012 5 Carona Infra Projects Pvt. Ltd. 2,20,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 40,00,000 25-04-2012 25 Utkarsh Properties Solution 28,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p of Companies, its directors and their relatives including senior employees of the Amrapali Group of Companies. The company was under the direct control of CFO Chander Wadhwa and Company Secretary Pankaj Mehta. The amount of taxes paid by the company on behalf of promoters, directors, executives and their family members is ₹ 17.43 crore (net) and gross up is ₹ 24.9 crore is recoverable from promoters, directors, executives and their relatives. e) Kapila Buildhome Private Limited The company did not undertake any business. A sum of ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laundering (₹ 120 Cr.) and was incorporated to receive Funds from Amrapali Zodiac Developers Private Limited. The whole racket of money laundering and receiving money from these Companies i.e. Mannat Buildcraft Private Limited, Rudraksh Infracity Private Limited and Neelkanth Buildcraft private Limited are the brain child of Mr. Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor of Amrapali Group of Companies. Both these Companies are controlled by both of these persons and had been formed only for this Money Laundering Business. There are no transactions before or after these transfers of money and the same have been camouflaged to make it look with business transactions on the basis of the Valuation Report. h) Amrapali Magadh Developers Pvt Ltd - The company has not carried out principal business activities. There is no bank account. The purpose of creating the company is not clear. The shareholders paid the share application money in cash. The company is a dormant company did not have any significant transaction. i) Amrapali Mahi Developers Pvt Ltd - The company received share capital in cash and all the expenses we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g as well as investment/assets of these companies shall be attached 8. Companies created for building assets The following companies were created by the Group for building assets from homebuyer funds without contribution of any rupee by promoters and their relatives. The shareholding is held by the group companies and/or by shell companies and/or the trusted partners including individuals. Ultra Home Construction Pvt Ltd- Shareholders did not bring capital of their own, but used funds of home buyers in other entities/projects to pay for allotment of shares in UHCPL. Mr. Anil Kumar Sharma was allotted shares at premium for an amount of ₹ 22,82,40,810 on 4th Nov 2010 and ₹ 25,84,05,470 on 2nd March 2011 by adjusting receipts from Amrapali Infrastructure Ltd which further received from Amrapali Sapphire Developers Pvt Ltd, which received from homebuyers. Few instances are hereunder: Received in Amrapali Sapphire Developers Pvt Ltd primarily from home buyers Transferred to Amrapali Infrastructure Ltd Transferred to Ultra Home Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amrapali Power Cement Pvt Ltd Land from Charu Rai yet to be identified, Land from UPSIDC yet to be identified. Amrapali Buddha Developers Private Limited Shopping complex cum Mall at Gaya MSB Software Technology Private Limited Tower 1, Noida Gaurisuta Infrasolution Private Limited Flats in Amrapali Silicon City Private Limited, booking of bogus expenditure of ₹ 1.07 crore. Amrapali Hospitality Services Private Limited- Hotel at Deogarh, Jharkhand Mums Mega Food Park Private Limited- FMCG Factory at Buxar, Bihar, Land Building and Plant machinery RudrakshInfracity Private Limited - bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd. MannatBuildcraft Private Limited - bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd. Serious Observation Our investigation reveals that this company has been used to perpetuate a fraud enabling JP Morgan Investments to sell its shares of Amrapali Zodiac Pvt. Ltd. to other Group Companies of Amrapali group namely, R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts when the balance was reaching to the specified set minimum balance limit. The Professional fee paid to the directors, relatives of directors, and senior managers was a unique way of diverting money. Huge amounts were paid without any agreements at the whims and fancies of the directors and managers. Moreover it was tax free and the tax liability was discharged by another group company. The whole of professional fee received by the directors (as stated hereunder) is recoverable from them. (Volume II, Page no 416-417). Name of director Professional fee received(as per affidavit) Anil Kumar Sharma 29,13,23,580 Shiv Priya 26,43,64,571 Ajay Kumar 5,76,90,240 Suvash Chandra Kumar 5,11,21,752 Amresh Kumar 68,11,110 Total 67,13,11,253 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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) 18,600,000 transfers to family members 107,310,878 Payment by Stunning Construction Pvt Ltd of direct tax 44,510,320 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Khand, Indirapuram 56,31,000 Payment of housing loan for Pelican Villa Jaypee Green 37,55,784 Payment for LIC 2,56,53,384 Total 8,23,40,168 Funds transferred from Amrapali group of companies was withdrawn in cash from personal accounts of directors and diverted to undisclosed people. In case of Anil Kumar Sharma, it is seen that an amount of is ₹ 10.38 crore was withdrawn from June 2008 to May 2012 within a few days of transfer to bank account of Anil Kumar Sharma in Bank of Maharashtra. Several times, description of source of receipt or person to whom payment was made were not clear and such sources or application could not be identified. Several companies were incorporated to create assets or to hold investment in the group companies or outside the group companies having assets. The promoter directors or their family members became the shareholders in these companies without investing any paisa. Homebuyer funds we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. Jewelries worth is ₹ 3.39 crore b. Car through AMP Motors: is ₹ 0.56 crore c. Life Insurance Policies: is ₹ 1.82 crore (based on bank statements available, although in total amount invested in insurance policies amounted to is ₹ 4 crore) 3. Mr. Anil Kumar Sharma made following personal expenses of is ₹ 1.35 crore for wedding of his daughter out of amounts received from Amrapali Group of Companies: a. Payment made to Event Management Companies: is ₹ 0.90 crore b. Payment made to hotels: is ₹ 0.45 crore 4. Mr. Anil Kumar Sharma made payment of is ₹ 8.71 crore to following third parties out of amounts received from Amrapali Group of Companies: a. Chandan Homes Pvt Ltd: is ₹ 10,00,000 b. Kalpana Kumari: is ₹ 10,00,000 c. Sapphire Digital Printers: is ₹ 25,00,000 d. Shashank Manohar: is ₹ 36,00,000 e. Rajesh Malhotra : is ₹ 20,00,000 f. Manas Nursing Home: is ₹ 25,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Particulars Receipts Payments 16/07/2014 Neft-Amapali Aadya Trading 2,500,000 - 14/08/2014 Neft-Amapali Aadya Trading 1,000,000 - 14/11/2014 Neft-Amapali Aadya Trading 2,500,000 - 21/01/2015 Neft-Amapali Aadya Trading 500,000 - 15/04/2015 RTGS- Amapali Aadya Trading - 1,000,000 15/04/2015 Neft- Amapali Aadya Trading - 1,000,000 24/04/2015 RTGS- Amapali Aadya T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,500,000 - Total 26,500,000 25,500,000 Note: He has not disclosed his association With Amrapali Aadya Trading in his various affidavits furnished to the Hon ble Supreme Court of India. Shiv Priya 1. Mr. Shiv Priya received funds from Amrapali group of Companies which was used for acquiring personal properties, as stated hereunder: a. Property located at L 801, Pearl Gateway Towers, Sector 44, Noida -(Housing loan was paid for this property out of amount received from Group companies) b. Vehicle- Jaguar XJ having registration number UP16BA2001- (Loan was paid out of amount received from Group companies) 2. Mrs. Sonali Suman (Wife of Shiv Priya) made investments in different mutual funds amounting to ₹ 8.86 crore out of amounts received from Amrapali group of Companies. 3. Mr. Shiv Priya purchased following assets out of amounts received from Amrapali group of companies: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s search operation unaccounted cash was seized from the residence of directors namely Shri Shiv Priya amounting to ₹ 1 Crores. Unexplained jewellery was also seized from the residence of Mr. Shiv Priya amounting to ₹ 0.58 Crores. Thus, it apparently shows that he has unaccounted cash. Ajay Kumar 1. Mr. Ajay Kumar received funds from Amrapali group of Companies which was used for acquiring personal properties, as stated hereunder: a. Property located at Plot no: A-014 Savanna Villas, Jaypee Greens Sector-128, Noida; the property was not disclosed in affidavit submitted on 3rd December, 2018 -(Housing loans was paid for this property out of amount received from Group companies) b. Property located at IRS colony, Abhay Khand, Indirapuram, Ghaziabad- ₹ 1.38 crore. c. Property located at Plot No: A-014, Pelican Villa Jaypee Green Noida 201301- ₹ 1.11 crore. 2. Mrs. Seema Kumari (Wife of Ajay Kumar) made investments in different mutual funds amounting to ₹ 2.25 crore out of amounts received from Amrapali group of companies during August to September, 2018. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isuta Infrasolution Private Limited in which Mr. Sunil Kumar was the Director, it was observed by us that bogus commission of ₹ 1.07 crore was booked. This amount of ₹ 1.07 crore should be recovered from Mr. Sunil Kumar. 2. A sum of ₹ 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 of M/s Gaurisuta Infrasolution Private Limited. This Amount of ₹ 0.50 crore should also be recovered from Mrs. Sunita Kumari. Mr. Sudhir Kumar Choudhary He is director in Amrapali Biotech India Private Limited Gaurisuta Infrasolution Private Limited. As per his statement recorded, he was forced to become the director in first week of august 2018 with effect from 06th July 2018. We are of the view that this planning has been done by the Amrapali Management after the order of the Hon ble Supreme Court to accept the resignation of Mrs. Seema Kumari Wife of Sunil Kumar from the Directorship and to appoint Mr. Sudhir Kumar Choudhary as the director of the company. It was further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Secretary Pankaj Mehta and the Architect Vaibhav Jain along with their immediate coterie extended helping hand to the management in planning and execution of the scam. Mr. Mohit Gupta Marketing Director He was responsible for the whole marketing department, Customer Relationship Management of the Amrapali Group and he did not cooperate during the entire process of forensic audit. It is pertinent to note that till now a list of flat wise possession has not been provided to us. At first he did not submit us the cust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The company has purchased this land for the project at Greater Noida in FY 2015-16 amounting to ₹ 17.09 crore Vinayaka Square received ₹ 1 crore from Amrapali funds routed through Teks Tech Inspection India Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Audited Financial Sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period 2011 to 2018. These payments have been shown in the nature of cheques given /credit card payments which have been never been recovered. b) Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFO were in connivance with 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 ₹ 52.07 crore was adjusted against the payment due on acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Details of amount diverted (Amount in crores) First Diversion Bogus Expense page no 2827 of supplementary report Advances recoverable from third parties (₹ 234.21 crore plus ₹ 326 crore Volume IV, page no 1015- 1019) Undervalued flats page no 2811 of supplementary report Cash ULTRA HOME CONSTRUCTION PRIVATE LIMITED - 333.00 87.68 30.87 0.22 AMRAPALI HOMES PROJECTS PRIVATE LIMITED - 4.41 55.01 - 0.23 AMRAPALI PRINCELY ESTATE PRIVATE LIMITED 186.99 56.78 - 6.70 5.02 AMRAPALI SAPPH ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SHALIMAR COLONISERS PRIVA TE LIMITED - - - - - HI-TECH CITY DEVELOPERS PRIVATE LIMITED 2.42 1.96 8.91 - 0.46 AMRAPALI HEALTHCARE PRIVATE LIMITED - - 0.22 - - AMRAPALI HOSPITALITY SERVICES PRIVATE LIMITED - 0.02 13.55 - 0.01 AMRAPALI INFRASTRUCTUR E PRIVATE LIMITED - 65.61 40.24 - 3.16 MSB SOFTWARE TECHNOLOGY PRIVATE L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... POWER AND CEMENTS PRIVATELIMITED - - 0.91 - - AMRAPALI SMART CITY PRIVATE - 8.02 0.95 - 0.5 LIMITED AMRAPALI SPRING VALLEY PRIVATE LIMITED - - - - - HAWTHORNE INTELLECT MANAGEMENT SOLUTIONS PRIVATE LIMITED - - 0.17 - 0.01 NEELKANTH BUILDCRAFT PRIVATE LIMITED - - - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 25 crore advances to various parties as listed on pageno 92-93 Volume I 25.00 Further in Gaurisuta Infrastructure Private Limited,inventory of ₹ 89 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applying some basic checks. The whole racket of money laundering and receiving money from these Companies i.e. Mannat Buildcraft Private Limited and Rudraksh Infracity Private Limited are the brain child of Mr. Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor of Amrapali Group of Companies. Both these Companies are controlled by both of these persons and had been formed only for this Money Laundering Business. There are no transactions before or after these transfers of money and the same have been camouflaged to make it look with business transactions on the basis of the Valuation Report. JP Morgan invested ₹ 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 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (E) Clause No 10.4.3 in page No 21 of Shareholder s Agreement mentions that no action can be taken without investor s approval in relation to 10.4.3(xi) any payments made to related parties. (F) It was also mentioned in the agreement that statutory auditor and internal auditor cannot be appointed and removed without the approval of JPMorgan. (G) The following points indicate very clearly that JP Morgan was having full control on Amrapali Zodiac Developers Private Limited project and no material decision could have been taken without JP Morgan approval. On Page No 60 of Shareholder s Agreement in Note 1 it was agreed accepted that any surplus cash flow from the project will be first utilized for payment of land cost to Noida Authority. Documents to be submitted by 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 ₹ 425 crore and any additional cost over and above ₹ 425 crore shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the promoter for the last lag of the construction for its IRR (Internal Rate of Return) working. (M) JP Morgan was getting return at the rate of more than 20 % on its investment of ₹ 85 crore was agreeing with Amrapali Zodiac Developers Private Limited to invest in Amrapali Leisure Valley Developers Private Limited a substantial part of its investment i.e., 60 crore out of ₹ 85 crore at the rate 0.01%. It categorically demonstrates that JP Morgan invested ₹ 60 crore in Amrapali Leisure Valley Developers Private Limited without complying FEMA (Foreign Exchange Management Act) for its investment of ₹ 60 crore in Amrapali Leisure Valley Developers Private Limited. It is not out of place to mention that Amrapali Zodiac Developers Private Limited was a project where home buyers were required to pay on the basis of progress of the construction of the project. Meaning it was construction linked payment project. (N) We found that most of the time customers have paid more than what was spent in the project. The Amrapali Zodiac Developers Private Limited diverted home buyer s money there was no need of any investment from JP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34365 10 2910 10,00,02,10 29/07/2015 Rudraksh Infracity Private Limited 10/04/201 5 17180 10 2910 4,99,93,800 6/10/2015 Rudraksh Infracity Private Limited (C) Source: Data from Form FC-TRS From the table above it is clear that valuation exercise was done backwardly. For instances first we paid ₹ 100 crores, then ₹ 25 crores, then ₹ 10 crores and finally ₹ 5Cr.. EXTRACT from FEMA RULES; FEM (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 4. Restriction on an Indian entity to issue security to a person resident outside India or to record a transfer of security from or to such a person in its books. Save as otherwise provided in the Act or Rules or Regulations made thereunder, an Indian en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or gift the shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] held by him or it to any person resident outside India; (ii) A non-resident Indian may transfer by way of sale or gift, the shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] held by him or it to another non-resident Indian only; (iii) A person resident outside India holding the 6[shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] in accordance with these Regulations, (a) may transfer the same to a person resident in India by way of gift; (b) may sell the same on a recognized Stock Exchange in India through a register broker. In the valuation working, it is shown that all project cost was incurred by June, 2013. It is only additional cost of ₹ 125 crore marketing cost of ₹ 6.85 crore shown as to be incurred after that. (A) JP Morgan personnel have never met the buyer. Both the Companies Neelkanth Buildcraft Private Limited Rudraksh Infracity Private Limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. ECB can be accessed under 2 routes a) Automatic route and b) Approval route. A) Under Automatic route Eligible borrowers can be corporates, including those in the hotel, hospital, software sectors (registered under the Companies Act 1956) and Infrastructure Finance companies, Housing Finance companies and Non Banking Finance Companies. Recognised lenders can be international banks, suppliers of equipments, foreign collaborators and foreign equity holders All in cost ceilings for ECBs under automatic route are: Average maturity period 3 to 5 years- 300 basis points over 6 months London Interbank Offered Rate ( LIBOR ) Average maturity period more than 5 years 500 basis points over 6 months LIBOR ECBs are eligible for end use for investmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 authorised by the Articles of association of the Company; (b) A special resolution has been passed in the general meeting of the company authorising the buy-back. In the case of a listed company, this approval is required by means of a postal ballot. Also, the shares for buy back should be free from lock in period/non transferability. The buy back can be made by a Board resolution If the quantity of buyback is or less than ten percent of the paid up capital and free reserves; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 by an Indian entity which has total foreign investment in it or an Investment Vehicle in the capital instruments or the capital, as the case may be, of another Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 4 Amrapali Leisure Valley Pvt.Ltd. 1,887 267 - 1,586 35 5 Amrapali Centuiran Park Pvt.Ltd. 575 - 2 769 (196) 6 Amrapali Grand 16 - - - 16 7 Ultra Homes Construction Pvt.Ltd. 580 40 3 26 511 8 Amrapali Homes Project Pvt Ltd 7 - - - 7 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re yet to be examine. The detailed list of inventory is attached in ANNEXURE XXII.2. 15. Sale of Flats at lower prices (Under-Valued Transactions) While scrutinizing the record for sale of flats, we have observed that number of the flats were sold 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 ₹ 1,000 - ₹ 1,400 per square feet which is even lower than the cost of construction. No satisfactory explanation has been given to us for the same. Possibility of taking cash outside the books of accounts cannot be ruled out. Total Amount involved in under-valued transaction is enclosed Annexure 26-A (Volume III Page no 584-586 ) at Annexure S-7 (Supplementary Report page no 2842-2893). The amount shown below is the minimum and it may be in the range of 1,000 crore. Since the sample size is 5856 against the total number of more than 42,000 flats. S.no. Name of the company Number of Units ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 2000/- per sq. ft. and where flats were sold lesser than the rate of ₹ 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 Residentia, Vinayaka square, Heartbeat City, O2 Habitat. La Residentia A big project having more than 3,200 dwelling units was launched in 2010-11 having an equity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansferred 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 bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sky Tech Buildcon Private Limited 3,88,53,775 Skyline Tele Media Services Limited 3,48,02,771 Shantinath Enterprises 3,24,71,100 Red Star Tradex P Ltd. 3,00,00,000 Mohabbat S/o Abbas 2,66,99,000 Total of top 20 companies/parties 1,64,72,21,039 It can be seen from records that the recoverable are due since long and there are mostly no movements subsequently either in the form of booking of expenses or receipts. Out of the amounts recoverable from parties in case of Ultra Home Construction Pvt Ltd, 20 parties having huge balances recoverable were called for personal interviews. 7 parties appeared and no satisfactory explanation was provided (Refer Annexure X.1, Volume IV page no 1015-1019) 18. Assets created out of diverted funds Refer Page no 550 to 557 of Volume II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Park Pvt. Ltd. We sent Emails to him to confirm the same but did not get any satisfactory response from him. He did not come and avoided meeting us for last 5 months. 3) We found differences in amount shown as per the records i.e. amount received as per Customer data base sheet extracted from software FAR VISION and the amount actually paid by the customer. We came to know about the differences in receivable after sending e mails/ speaking over the phone to the customers. A list of such differences is given on sample basis (Page No. 483) 4) We found the following 2 customers who had been handed over the possession but still appearing in the Customer database as undelivered. Both have paid less than 50% as per company records. S. No. PROJECT NAME CUSTOMER NAME FLAT NO. POSSESSION(as per customer) POSSESSION(as per details provided to us) 1 Amrapali Zodiac MR. SAMEER KR. SUNEJA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n below. The detailed list of units (project wise) which we checked is also attached. (ANNEXURE-XV.28 page 2646-2658 vol. VIII) S. No. Project Name Customer Name Unit No Unit Cost (ex ST) 1 Amrapali Grand MORPHEUS SECURITY PVT. LTD T-7-G2 74,16,700 2 Amrapali Grand SANJEEV KUMAR T-6-G4 94,76,511 3 Amrapali Grand MAHESH KUMAR T-6-G2 84,99,961 4 Amrapali Eden Park IshwarKhandelwal D-2102 84,28,450 5 Amr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hana Karwa 2,500,000 T3-2301 26-05-16 Aayush Soni 2,013,750 2 Amrapali Princely Estate M-P01 07-11-15 Nilesh Karwa (HUF) 5,000,000 M-P01 15-10-16 Sanjeev Kumar Goel 6,344,460 3 Amrapali Princely Estate C-P03 07-11-15 Pramod Karwa (HUF) 5,000,000 C-P03 15-10-16 Shalabh Mittal 3,105,635 4 Amrapali Patel Platenium A-2303 26-03-10 Pramod Karwa (HUF) 2,000,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rore 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 was payable to him, however, as per books of accounts (in tally data), an amount of INR 1,70,00,000 was payable to him by UHCPL. Hi Tech City Developers Pvt Ltd has huge amount of Trade Receivables of INR 1.64 crores Whereas , the project under this Company i.e. Amrapali Empire has been completed. Most of the flats have been handed over and registry has been done. We fail to understand as to why the aforesaid amount is still appearing as recoverable from various home buyers. This implies it was received in cash and not accounted for. The complete list of all such flat owners along with their sale amount and amount received is enclosed below: Sr No UNIT NO. BUYER NAME Total Cost Total Received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,750,000 1,261,035 488,965 12 C-702 Manish Raj Sharma 1,913,625 1,302,510 611,115 13 C-905 M. A. Khan 2,004,750 1,603,951 400,799 14 C-1604 Bharat Lal Agrahari 1,900,000 1,624,794 275,206 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1,900,000 1,805,148 94,852 28 A-303 Manish Kumar 3,382,500 3,302,347 80,153 29 B-403 Anupama Tiwari 3,176,250 2,182,659 993,591 30 B-1902 Md. Merajul Hasan 2,527,000 2,191,025 335,975 31 B-1501 Rajesh Kumar 3,093,750 2,943,106 150,644 32 C-1806 Anand Shankar 1,900,000 1,504,737 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed 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 AND SUPPLIERS 833 Flats booked (identified till now) in the name of various vendors should be attached and be released at last till the last home buyers gets his/her flat.If there is a shortfall , then the flats should be treated as inventory and be sold . The following flats should be cancelled. These ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra 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 Amrapali Smart City Pvt Ltd 10% shareholding held by Mauria Udyog Ltd Amrapali Homes 5% - Mauria Udyog Ltd (₹ 20 crore given as an advance before 2008 and is recoverable) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amount os ₹ 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 ₹ 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 ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-12-2016 Bank Payment 750 Payment made without any narration on the voucher 19-04-2017 Transfer entry through MauriaUdhyog Limited 1,004 Being Amount transfer as per letter signed by Mr. Anil Sharma 19-04-2017 Transfer entry through Sarvomme Infrastructure Private Limited 960 Being Amount transfer as per 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. BiharijiIs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mprest 35,70,480 1.04.2008 to 24.12.2009 9 Amrapali Zodiac Developers Private Limited 19,20,000 27.06.2017 to 13.07.2017 10 Jhamb Finance and Leasing Private Limited 19,00,000 5.11.2015 11 Amresh Kumar 16,86,000 1.04.2007 to 15.09.2008 12 GK International 10,00,000 21.01.2007 13 Pallavi Mishra 6,07,080 12.07.2018 14 Mohit Gupta 5,80,000 25.06.2007 to 11.04.2008 15 P K Choubey 1,50,000 2.08.2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 2,610,239 Transportatio n Charges 12/1/201 4 Bill not available Jotindra Steels Tubes 247,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses amounting to INR 7.09 Crores, INR 59.53 Crores and INR 47.04 Crores has been made from this party in M/s Amrapali Infrastructure Private Limited during the financial year 2013-14, 2014-15 and 2015-16 respectively. While sample checking of the purchase bills, it was noted that the goods consignment notes enclosed with the purchase bill are issued by M/s Synergy Freightways Private Limited which is also a group Company of Jotindra Steel and Tubes Limited. Goods consignment note enclosed with the purchase bills don t seem to be genuine in view of the undermentioned observations: 1. We sent a letter to M/s Synergy Freightways Private Limited as per address on record which has been received back as undelivered. 2. Statement of Mr. Akhil Sureka, Managing Director of M/s Jotindra Steel and Tubes Limited was recorded and it was confirmed by him that most of the purchase/ sales transactions are back to back i.e. all such consignments are sent directly from their supplier to Amrapali Group of Companies. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10:09 11:57 6 07.02.2015 705 1,138,241 08.02.2015 705 10:54 14:58 7 07.02.2015 706 1,382,740 08.02.2015 706 14:43 18:04 8 08.02.2015 713 892,503 09.02.2015 713 9:20 14:29 9 08.02.2015 715 952,167 09.02.2015 715 14:28 17:23 1 08.02.2015 716 948,647 09.02.2015 716 14:23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 34-C. II. M/s Mauria Udyog Limited Ghaziabad While scrutinizing the ledger of this party it was observed as follows: a) During the month of December 2015 there were 7 purchase invoices from this party amounting to INR 0.65 Crores all dated 18/12/15. b) While scrutinizing the data called from M/s Mauria Udyog Limited it was noted that they have purchased these goods vide 7 purchase invoices dated 17/12/15 for INR 0.63 Crores. c) There is no other purchase/Sale by M/s Mauria Udyog Limited. d) Similarly, in other months also 100% of the sale is made to Amrapali Group of Companies. Since M/s Mauria Udyog Limited is a group company of Jotindra Steels Tubes Limited, there is very high possibility of accommodation bills being issued and all their purchases being Non-Genuine 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of any of the transactions and stated that all transactions were carried out in good faith under the advice instruction of Mr. Akhil Sureka. He further submitted that he never visited any of the Amrapali group office, he or his staff including employees has never visited any of the offices or site of Amrapali group. When questioned on supplies of scaffolding material and steel to and purchase sales reconciliation of supplies along with purchase orders and sales orders, he confirmed that it is not available. The amount so paid should be recovered from the SUREKA group companies. It was further confirmed that funds movement were also on behalf of Akhil Sureka carried out under good faith. 5. An amount of ₹ 55 crore was received from EXIM bank under line of credit for a project was to be done in Mozambique. The group submitted a bogus bank guarantee for the said advance to Mozambique client from a bank namely International Trade Bank Limited. Out of the funds of ₹ 55crore, major amount was transferred to Companies of Sureka group. On enquiry from the Amrapali Group we came to know that the bank guarantee was made available by Mr. Navn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions carried out by these companies. It is worthwhile to note that Mr. Vishnu Sureka, Mr. Navneet Sureka and Mr. Akhil Sureka were neither the shareholders nor the directors as well didn t attend any board meeting including AGM/EGM. However, out of three who were signatory to the bank in all the companies. Directors were not aware of who have been the signatories. When questioned . Vishnu, navneet and akhil Sureka could not reply why they were the signatories when they were neither shareholders, directors, employees. Mauria Udyog Limited It was submitted in affidavit of Mauria Udyog Limited that Mauria Udyog Limited is a manufacturer and traders. It is stated that in addition, to manufacturing of LPG Cylinders, MUL also manufactures world class Terry Towel and Apparels . Further MUL also trades internationally domestically in Steel Products in addition to Ferrous Non Ferrous metals. MUL also deals in agro commodities such as soya bean, refined oil deoiled cake used as fodder for the cattle feed/poultry industry.(from affidavit of MUL para 5 page 2) We scrutinized the annual accounts of Mauria Udyog Limited and found that the product that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espectively. We were not explained any reasons for making such payments. It is pertinent to note that the company is not doing any business and are used just for the purpose of money laundering. Shri Narayan Rajkumar Merchants Ltd A group company of Sureka group paid ₹ 1 crore to Amrapali Sapphire Developers Pvt Ltd. The entire amount along with interest payment of ₹ 1.11 crore was paid to Shri Narayan Rajkumar Merchants Ltd, surprisingly Amrapali group didn t charge any interest on payments made to Sureka group of companies but it had paid without fail interest @ 13.45% to Shri Narayan Rajkumar Merchants Ltd. Further an amount of ₹ 2 crore was paid to Shri Narayan Rajkumar Merchants Ltd on 31st March 2018, when the matter was pending before the Honourable Supreme Court. The amount of ₹ 2 crore should immediately be recovered from Shri Narayan Rajkumar Merchants Ltd and Sureka family. It is pertinent to note that the company is not doing any business and are used just for the purpose of money laundering. Conclusion We are of the opinion that this company flo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e from the Amrapali group of companies and these 27 companies were just the face created to comply the conditions of partners and also keeping in mind to demerge a part of the plot in furtue to the consortium partners. The funds contributed by these 27 companies were originated and routed from the Amrapali group companies. (ii) These companies were managed by CFO Mr. Chander Wadhwa, Company Secretary Mr. Pankaj Mehta and CA Mr. Anil Mittal. General: 1. The companies were formed for the purpose of acquiring the shares in the 47 group companies to gain the position of consortium partner, for villa in Goa, immovable property E/17 Surajkund Noida, D- 151 , Preet Vihar, NewDelhi, First Floor-E-57, Preet Vihar, New Delhi. for routing the cash during demonetization and booking flats in IT Park Greater Noida of Ultra Home Construction Private Limited. The cash on Hand of ₹ 1.98 crore. From these companies is not traceable and is misappropriated and be recovered from CA Anil Mittal The Directors in these companies are Junior employees of Anil Mittal Statutory Auditors namely 1. Pankaj Mehta Company Secretary of Amrapa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 25. Aksh Real Estates Private Limited 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00% 5 Kamayani Realtors Pvt Ltd 1,000 Amrapali Leisure Valley Pvt Ltd 10,000 4,57,334 10.00% 6 Chintapurni Estates pvt Ltd 1,000 Amrapali Leisure Valley Developers Pvt Ltd 10,000 6,00,000 10.00% 7 Aashirwad Linens Pvt Ltd 1,500 Amrapali Dream Valley Pvt Ltd 10,10,000 - 0.15% 8 Rainbow Cotton Pvt Ltd 1,000 Amrapali Dream Valley Pvt Ltd 10,10,000 - 0.10% 9 Rink ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.00% ₹ 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 Enterprises Ltd 10,00,000 Manjeet Singh 16,00,000 MSB Software Technologies 2,40,000 Anil Kumar Sharma 9,85,000 Bhushan Sharma 34,00,000 Digital India 19,59,110 KK Shukla 9,00,000 RV Consultant Service 95,00,000 Sundry Advances 26,99,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade out of receipts from FDR 31-07-2018 Less: Net Payment to Saffron Propmart Consultancy Private Limited 3,20,00,000 01-08-2018 Less: Payment to Vandana Wadhwa 2,00,00,000 23-10-2018 Less: Payment to Ample Hotels Resorts 1,00,00,000 23-10-2018 Less: Payment to Moral Sales 1,00,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ranted 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 was being undertaken as well as building under construction as well as material lying at project, leaving nothing with home buyers for recovery of their payments. 3. It is also observed that the loan funds were routed through several bank accounts of the same company and thereafter routed to third parties whereby trying to misguide the flow of funds. It clearly means these transactions had no substance and were made only to mislead. 1. In the case of Amrapali Zodiac Developers Pvt Ltd: Bank of Baroda (₹ 75 crore), Union Bank of India (₹ 50 crore) and Corporation Bank (₹ 25 crore) together approved term loan amounting to ₹ 150 crore to develop a group housing project at Sector-126, Noida. These funds wer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 Shiva Trders 2,00,00,000 9 Shiv Traders 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 Enterpris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36 A.B Enterprises 48,16,654 37 Amit Steel 40,00,000 38 Barnala Steel Industries Ltd 36,72,008 39 S.R Steel 34,92,054 40 Kumar Trading Company 32,45,859 41 Quality Synthetics Private Limited 25,00,000 42 Shri Bankey Bihari Trading Company 25,00,000 43 Jayem Manufacturing Co Pvt Ltd 23,15,400 44 SBL Construction Private Limited 22,10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date Particulars Vch Type Debit Credit Balance 05/10/2010 Bank of Baroda A/C No - 21580200000079 Payment 15000000.00 15000000.00 Dr 06/10/2010 Bank of Baroda A/C No - 21580200000079 Payment 5000000.00 20000000.00 Dr 15/10/2010 Bank of Baroda A/C No - 21580200000079 Payment 5000000.00 25000000.00 Dr 16/10/2010 Bank of Baroda A/C No - 21580200000079 Payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2093281.00 Dr 12/01/2011 STEEL Purchase U.P 1023600.00 1069681.00 Dr 13/01/2011 STEEL Purchase U.P 1097561.00 27880.00 Cr 31/03/2012 REBETE DISCOUNT Journal 27880.00 30027880.00 30027880.00 2. Shri Balaji Cement Hardware ₹ 2.08 crore was paid as advance to them towards the end of March 2011 against which expense was booked on 31st March 2011 and continued till 1st week of April 2011. It was noticed that the same person was sel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Purchase U.P 496650.00 18391539.00 Dr 31/03/2011 STEEL Purchase U.P 483946.00 17907593.00 Dr 31/03/2011 Cement Purchase U.P 505313.00 17402280.00 Dr 31/03/2011 BADARPUR Purchase U.P 525945.00 16876335.00 Dr 31/03/2011 STEEL Purchase U.P 27300.00 16849035.00 Dr 31/03/2011 Cement Purchase U.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 778260.00 6850855.00 Dr 31/03/2011 Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04/04/2011 Bricks Purchase U.P 876120.00 7172712.00 Dr 04/04/2011 Sand Purchase U.P 831527.00 6341185.00 Dr 05/04/2011 STEEL Purchase U.P 841333.00 5499852.00 Dr 05/04/2011 STEEL Purchase U.P 849350.00 4650502.00 Dr 06/04/2011 Bricks Purchase U.P 884147.00 3766355.00 Dr 06/04/2011 Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10,77,182 36,19,562 10/01/2011 STEEL Purchase U.P 10,73,193 25,46,369 11/01/2011 STEEL Purchase U.P 10,79,473 14,66,896 12/01/2011 STEEL Purchase U.P 8,08,790 6,58,106 13/01/2011 STEEL Purchase U.P 6,56,927 1,179 31/03/2011 Short Excess A/c Journal 1,179 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01/02/2011 Hardware Item Purchase U.P 9,06,780 3,78,16,789 01/02/2011 Hardware Item Purchase U.P 9,08,523 3,69,08,266 01/02/2011 Hardware Item Purchase U.P 7,38,203 3,61,70,063 01/02/2011 Hardware Item Purchase U.P 11,24,928 3,50,45,135 01/02/2011 Hardware Item Purchase U.P 9,70,305 3,40,74,830 01/02/2011 Hardware Item Purchase U.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .P 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hardware Item Purchase U.P 9,25,344 87,48,333 17/02/2011 Hardware Item Purchase U.P 9,03,231 78,45,102 18/02/2011 Hardware Item Purchase U.P 6,48,732 71,96,370 18/02/2011 Hardware Item Purchase U.P 8,02,578 63,93,792 19/02/2011 Hardware Item Purchase U.P 8,49,912 55,43,880 20/02/2011 Hardware Item Purchase U.P 9,77, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49,88,713 30/05/2011 STEEL Purchase U.P 20,00,371 29,88,342 31/05/2011 STEEL Purchase U.P 22,91,842 6,96,500 31/05/2011 STEEL Purchase U.P 21,58,699 14,62,199 31/05/2011 STEEL Purchase U.P 23,54,459 38,16,658 22/08/2011 STEEL Purchase U.P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 5,88,02,028 Closing Balance 2,88,02,028 5,88,02,028 5,88,02,028 1. In the case of Amrapali Princel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,70,25,946 12 GaurisutaBuildhome Pvt Ltd. 1,40,00,000 13 SBL Construction P Ltd (Tower C D) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ishaan Infotech 1.00 Ishaan Infraestates India Private Limited 1.00 Reinfo Tech Estates Private Limited 1.00 Gaurisuta Infrastructure Private Limited 2.48 S.R. Steels 0.50 Tashima Construction Private Limited 0.50 Witty One Stop Solution Private Limited 0.50 Happy Worker Private Limited 0.50 Spyy Traders Private Limited 0.50 New Tech Shelters Private 0.50 BOM-CA-60024309220 3.00 Dynamic Realcom Private Limited 2.00 Financial World Private Limited 2.00 Total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f fraud done by the Amrapali Group of Companies. The party has even written a letter to Police, Uttar Pradesh against the aforesaid fraud. Copy of the said letter to police along with the letter issued by IDBI Bank to Mr. Nikhil Kumar Datta has been enclosed as Annexure 34-D. 4. Closing Inventory as per Audited Financial Statement as on 31st March, 2015 There is no stock list, valuation certificate or any documentary evidence regarding physical verification with the company or in the Statutory Auditors file. We are of the view that these are only arbitrary figures shown in the Audited Financial Statements. 5. Fixed Assets a) Building Account During the financial year 2013-14 a sum of INR 80.34 crores has been capitalized to Building A/c by crediting various purchase/expense account as per journal voucher passed on 31/03/14 as per the copy of the voucher given below. This entry seems to be a mere adjustment entry since there is no Valuation report on the basis of which these expenses are capitalized to Building account and no working sheet of the same is availabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quotations for the same available. 26. STATUS OF DATA AVAILABILITY There is overlapping in accounting data from April 2016 to September 2016 and we found that few entries were entered in FARVISION and few in the tally for the said period. Due to scarcity of time audit not completed of following companies/entities/persons: Amrapali Princely Estate Pvt. Ltd. Jotindra steels tubes Ltd. The following companies were carved out by Amrapali Group, which are being audited and a report on these companies will be submitted. 1) Prem Mishra Indore. 2) O2 Valley Noida 3) Heart beat city projects Noida. 27. M.S. Dhoni It is observed that the Company Amrapali Sapphire Developers Private Limited has paid a sum of ₹ 6.52 Crores out of the total amount of ₹ 42.22 Crores paid from the Amrapali group of Companies to Rhiti Sports Management Private Limited during the years 2009 - 2015. This sum has been paid on account of Agreements executed by Shri Anil Kumar Sharma, CMD for and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts 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 Agreement was provided though it was agreed that it would be provided by 11th March, 2019. Expenses were reimbursed to Rhiti Entertainment Private Limited a group company, without any agreement. 28. Properties alienated Chart D The group started alienated the properties starting from 2015-16 , and many properties were transferred when the case was pending before the Honourable Court with a criminal mind to alienate the assets. The funds were routed from one account to another and properties were registered in benami names. For the assets sold up to 31/3/2015, we didn t generally find anything in contravention of the details submitted in affidavit Chart D. We have categorized the Chart-D transactions into foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bihariji High Rise Pvt Ltd 31202 sq. ft. A 10 th 2017 July 2782-2783 Amrapali Leisure Valley Pvt Ltd Bihariji High Rise Pvt Ltd 13928 sq. ft. A 10 th 2017 July 2782-2783 Amrapali Centurian Park Pvt Ltd Bihariji High Rise Pvt Ltd 7020 sq. ft. A 10 th 2017 July 2785-2786 Amrapali Centurian Park Pvt Ltd Bihariji Properties Pvt Ltd 22621 sq. ft. A 10 th 2017 July 2785-2786 Ultra Home Constru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2756-2758 Amrapali Hospitality Services Pvt Ltd Vaishnavi Vahini Mount Life Hospitality Pvt Ltd 10261 sq. ft. B 13 th November 2017 2758-2764 Sangam Colonizers Pvt Ltd Anjali Consultants 3.13 Hectare B 24 th April 2017 2753 Amrapali Hospitality Services Pvt Ltd Dr. J P Sharma 2.1 Bigha B June 2017 2764 Amrapali Homes Project Pvt Ltd Ajit Kumar Kriti Agarwal 11245 sq. ft. B 9 th October 2017 2780-2781 Amrapali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers Pvt Ltd Radheshyam Yadav, Keshav Yadav, Surender Yadav, Narayan Yadav Lakhan Yadav 3.28 Hectare C 19 th 2015 Feb 2754-2755 Amrapali Leisure Valley Pvt Ltd PSK Finance Solution Pvt Ltd 14853 sq. ft. C 15 th 2014 July 2782 Amrapali Leisure Valley Pvt Ltd Star Land Craft Pvt Ltd 23395 sq. mtr. C 31 st 2013 July 2784-2785 Amrapali Dream Valley Pvt Ltd Shri Balaji Hi Tech Construction Pvt Ltd 12479 sq. mtr. C 31 st 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 11573 Crore from th homebuyers and spent Only ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ultra Home Construction Pvt Ltd* 1123.12 945 Sub Total (A) 11573.13 7388.89 2 Sales of Property/FSI/Facilities 358.68 As per affidavit 3 Bank 2712.02 1827 The amount paid to bank as per Chart B of affidavit is 2394 crore. We could not verify the number of amount paid in absence of details being not available. We worked out the otstanding loan amount from audited financial statements of 2015. 4 FDI/Financial Institution ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sq. feet in Amrapali Leisure Valley Private Limited for ₹ 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 ₹ 1.29 crore. It depicts very clearly that there was no unit admeasuring an area of 20,200 sq feet and the amount was invested for a purpose to avail Capital Gain benefits and earn interest on investment at the rate 18% p.a. It is recommended that the units allotted as per Annexure S-2 of supplementary report page no. 2824 should be treated as vacant and be available for sale. 2. Mrs. Manju Rajpal Unit No A-396 admeasuring 17,675 sq. feet in Amrapali Leisure Valley Private Limited for ₹ 7.5 Cr claimed as Long term Capital gain. It is claimed, due to company s inability to handover the said villa, 53 units were allotted instead. Refer Annexure S-3 of supplementary report page no. 2825-2826. We found Unit No A-396 in Amrapa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 25 crores from Aditya Birla Finance Limited in the FY 2016-17 against the hypothecation of the property which was purchased for ₹ 1.59 crore. This indicates the property value was much higher on the date of transfer. (vi) The company has advanced ₹ 25.88 crores as short term loans advances to the following parties- 1. Chandan Homes Private Limited- ₹ 6.89 crores. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yers 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 In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52.30 7 Non genuine purchases from suppliers 842.42 8 Recovery from Others 32.69 9 Unexplained cash deposits/jewellery 14.94 Total 11,320.42 1. Sale of Flats at lower prices Total amount involved in under-valued transactions in respect of Companies audited by us is ₹ 321.31 Crores as per summary given below: S.no. Name of the company Number of Units Amount (In Crores) Refer Page Number 1 Amrapali Sapphire Developers Private Limited 315 76.02 Volume I Page No. 205 - Point No. 1 2 Amrapali Leisure Valley Developers Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S.no. Name of the company Amount (In Crores) Refer Page Number 1 Amrapali Sapphire Developers Private Limited2 46.44 Volume I Page No. 207 Point No. 2 2 Amrapali Leisure Valley Developers Private Limited 200.53 Volume I Page No.222 Point No. 2 3 Amrapali Smart City Developers Private Limited 400.00 Volume I Page No.232 Point No. 2 4 Amrapali Silicon City Private Limited 390.00 Volume I Page No.257 Point No. 2 5 Amrapali Dream Valley Private Limited 724.14 Volume I Page No.248 Point No. 2 6 AHS Joint Venture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recoverable from buyers of Commercial area. Detailed summary is asunder: S.no. Name of the company Amount (In Crores) Refer Page No. 1 Amrapali Sapphire Developers Private Limited 7.14 Volume I Page No.207- Point No. 3 2 Amrapali Leisure Valley Developers Private Limited 1.68 Volume I Page No.222- Point No. 3 3 Amrapali Smart City Developers Private Limited 19.58 Volume I Page No.232- Point No. 3 4 Amrapali Silicon City Private Limited 2.48 Volume I Page No.257- Point No. 3 5 Amrapali Dream Valley Private Limited 6.12 Volume I Page No.248- Point No. 3 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 4a 5 Amrapali Dream Valley Private Limited 1833 660.91 Volume I Page No.39- Point No. 4a 6 Amrapali Leisure Valley Pvt. Ltd.* 1203 412.91 Volume II Section XXII (Page No. 563 568) 7 Amrapali Centurian Park Pvt. Ltd.* 981+2 329.34 Volume II Section XXII (Page No. 563 568) 8 Amrapali Eden Park Developers Pvt. Ltd.* 4 2.47 Volume II Section XXII (Page No. 563 568) 9 Amrapali Princely Estate Pvt. Ltd.* 3 4.54 Volume II Section XXII (Page No. 563 568) 10 Amrapali Zodiac Devel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44.47 Volume I Page No.39- Point No. 4b 6 Amrapali Eden Park Developers Pvt. Ltd. 1 1.40 Volume II Section XXII (Page No. 563 568) 7 AmrapaliCenturian Park Pvt. Ltd. 17 5.71 Volume II Section XXII (Page No. 563 568) 8 Ultra Home Construction Pvt. Ltd. 318 + 487 271.00 Volume II Section XXII (Page No. 563 568) Total 345.78 5. Amount recoverable from Key Managerial Persons and their Relatives a) Professional fees paid to directors ₹ 100.53 crore Name of Director Professional Fees (As per Affidavit) R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17.43 6.4 5.57 1.7 3.76 3 Amrapali Smart City Developers Private Limited (Page No.- 229-244) 0.02 - - - 0.02 4 Amrapali Silicon City Private Limited (Page No. 255-266) 0.28 0.05 0.23 - - 5 AHS Joint Venture (Page No.- 273- 278) 9.58 6.18 3.12 0.28 - 6 Amrapali Infrastructure 113.54 73.25 35.15 5.14 - Private Limited (Page No. 286-306) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Amrapali Sapphire Developers Private Limited 0.11 3 Amrapali Leisure Valley Developers Private Limited 0.23 4 Amrapali Smart City Developers Private Limited 10.79 5 Amrapali Silicon City Private Limited 3.58 6 Amrapali Dream Valley Private Limited 8.02 7 Hi-tech City Developers Private Limited 0.46 8 Amrapali Infrastructure Private Limited 3.16 9 Sangam Colonizers Private Limited 0.15 10 Navodaya Properties Private Limited 0.24 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Texfab Private Limited 0.13 34 La Residentia Developers Private Limited 0.30 35 Amrapali Biotech India Private Limited 1.50 Total 69.36 a) Advance Recoverable from Non-Related Parties Amounts given as advances to third parties without any business transactions which have not been adjusted along with the amount received/paid for the Non Genuine transactions amounts to ₹ 256.22 crores + ₹ 326.46 crores and should be recovered from the management of the Amrapali group of Companies. The Company has given advances to various parties. The said advances that were given by the Company were neither adjusted nor squared off against any future purchases or services. No details regarding Pan, Address and Nature of Advance has been given to us. The actual amount may be much higher. S. no. Name of the Company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Private Limited 1.24 Volume I Page No.40- Point No.4c 14 Amrapali Hospitality Services Private Limited 13.55 Volume I Page No.40- Point No.4c 15 Kapila Buildhome Private Limited 0.41 Volume I Page No.40- Point No.4c 16 Mums Mega Food Park Private Limited 1.29 Volume I Page No.40- Point No.4c 17 Mannat Buildcraft Private Limited 0.99 Volume I Page No.40- Point No.4c 18 Amrapali Patel Platinum 7.85 Volume I Page No.40- Point No.4c 19 Stunning Constructions Private Limited 0.44 Volume I Page No.40- Point N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V 33 Amrapali Health care Pvt. Ltd. 0.22 Annexure X.2 Final Report Volume IV 34 Stunning Construction Pvt. Ltd. 14.61 Annexure X.2 Final Report Volume IV Total 582.68 Advance Construction co Pvt ltd is/was a partner holding 9% in Amrapali Patel Platinum and 66% in AHS Joint Venture Project with Ultra Home Construction Pvt Ltd. They overdrew 7.10 crore and 14.81 crore from the respective joint venture totaling to 21.91 crore While scrutinizing the documents sent by Advance Construction Company Private Limited, detail of capital contribution of the Advance Construction Company Private Limited as on 1st April, 2008 and thereafter is as under (as per tally data and confirmed by Advance Construction Company Private Limited): Particulars As on 31st March, 2007 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership 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 31 st March, 2008 As on 31 st March , 2009 As on 31 st March , 2010 As on 31 st March , 2011 As on 31 st March , 2012 As on 31 st March , 2013 As on 31 st March , 2014 As on 31 st March , 2015 Capital Account 4.22 4.25 4.26 4.32 4.35 4.35 4.30 4.30 Current Accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess number 2 is not there. iv. There is no copy of the resolution available authorizing Mr. Shiv Priya to sign the deed of dissolution. The Company has made cash payments to various parties exceeding INR 20,000 in contravention to The Income Tax Act 1961, to the tune of INR 45,768,482 in just one company namely Amrapali Sapphire Developers Pvt Ltd. This is just tip of the iceberg 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 exceeding₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 Hi Tech Developers Private Limited 2.42 Volume II Page No.281- Point No. 2 Total 1,588.59 7. Non genuine purchases from suppliers The total amount of non-genuine/ bogus purchases amounting to ₹ 842.42croresapproximately. Details are as follows: Non genuine purchases from Suppliers (Refer Page No. 2800 Supplementary Report Annexure No. S-4) ₹ 837.12 crore Add: Land development charges booked without supporting documents ₹ 7.30 crore Total ₹ 842.42 crore 8. Recovery from Others A sum of ₹ 32.69 croresis recoverable from others as per details given below: Sr. No. Name of the Company Amount in crores Refer Page No. 1 Advance Constructions Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Point no 6 1.00 Volume II - page no 422, Point no 11 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td 255.37 3 Amrapali Leisure Valley Pvt Ltd 914.33 4 AmrapaliCenturian Park Pvt Ltd 569.36 5 Amrapali Dream Valley Pvt Ltd 718.28 Total 3,085.4 Grand Total (a+b) 4,545 11. Balance payable against Term Loans Name of the Company Name of the bank Date of Confirmation Total (In Crores) Ultra Home Constructions Private Limited Indian Overseas Bank 31-12-2018 16.15 Corporation Bank 5/2/2019 91.49 Amrapali Smart City Developers Private Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al year 2016-2017 by transferring cash to the Site, but the same is not supported/authenticated by the Site Cash In-charge. Certain payments have not been found to be genuine. (f). The Group Companies purchased gold bar worth ₹ 5.88 crore, which is a personal expense and it should be recovered from the management of the company. (g). The amount disbursed by Banks was not utilised for constructions of projects and the funds of homebuyers as well as the amount disbursed from the Banks were diverted to unapproved uses, namely, creation of personal assets of Directors; creation of assets in closely held companies by Directors along with their partners and relatives; funds were used for personal expenses of Directors; funds were advanced to unrelated entities for several years without levying interest on unrealized amount, the recoverable amount from third parties has amounted to ₹ 326 crores; creation of discreet projects for personal income; and construction of assets for other projects. (h). There were negligence and non-monitoring by Bankers. There was a transfer of funds from one company to another company to a third company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 amounting to ₹ 875 crores to related and unrelated entities, which are recoverable. (2) Gaurisuta Infrastructure Private Limited It was also created for diverted funds. (3) Neelkanth Buildcraft Private Limited Similarly it was formed for the purpose of buying shares from J.P. Morgan at exorbitant rates, consisiting of office boys and relatives of Mr. Anil Mittal, Statutory Auditor. (4) Stunning Construction Private Limited As per findings of the Forensic Auditors, they should either surrender 19.75 percent of land or 632 flats. (5) Kapila Buildhome Private Limited It financed a sum of ₹ 392.68 crores. It accepted non-interest bearing inter-corporate deposits from non-group companies, which was used for money laundering. (6) Rudraksha Infracity Private Limited It was consisting of office bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rves 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 ₹ 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 Ozone GSP Infratech by routing it through Ultra Home Construction Private Limited. Bihariji High Rise Private Limited, Jotindra Steel Tubes Limited and Mauria Udyog Limited are owned by Surekha family. There was bogus booking of expenditure since March 2018 also of ₹ 2.86 crores and other bogus entries of huge amounts. (18) Amrapali Homes It has been found that Mauria Udyog Limited has to pay ₹ 20 crores and the same be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies 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 has not been disclosed in the audited financial statement. A sum of ₹ 52.07 crore was adjusted on account of professional fees due and to be paid on account of audit fees. Further, a sum of ₹ 16.36 crore was adjusted against a flat in Am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egistration 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 signatories in various companies. It is observed that ₹ 13.44 crores were paid to Surekha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ₹ 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 buyers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he acts on behalf of the State or public body is ultimately 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State, the ultimate sufferer is the common man because it is tax-payers money out of which damages and costs are paid. 75. In Association of Unified 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that, they have failed to act as per the statutory mandate, the regulations and the terms of the lease deed. The transfer of the plot by the lessee was only on fulfilment of certain conditions. The dues of lessor towards the cost of land 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:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for such extended period. 3. Extension of time, in any case, shall not be allowed for more than 60 days for each instalment to be deposited, subject to maximum of three (3) such extensions during the entire payment schedule. 4. For the purpose of arriving at the due date, the date of issuance of allotment letter will be reckoned as the date of allotment. 80. The lease was granted for a term of 90 years. It is specifically provided in lease deed condition 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) Every sale done by the Lessee shall have to be registered before the physical possession of the property is handed over. c) The Lessee has obtained building occupancy certificate from the Planning Department, Greater Noida. d) The Lessee shall submit list of individual allottees of flats within 6 months from the date of obtaining occupancy certificate. e) The Lessee shall have to execute sublease in favour of the individual allottees for the developed flats/plots in the form and format as prescribed by the LESSOR. f) The Sub-Lessee undertakes to put to use the premises for the residential 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 occupan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gulations made or directions issued under the Act. Clause 7 requires the lessor to monitor the implementation of the project. The applicants who do not have a firm commitment to implement the project within the time limits prescribed are advised not to avail the allotment. In larger public interest the lessor under clause 13 is also given a right to take back possession of the land/building by making payment at the prevailing rate. Condition Nos.6, 7 and 13 are extracted hereunder: 6. The Lease Deed/allotment will be governed by the provisions of the U.P. Industrial Area Development Act, 1976 (U.P. Act No.6 of 1976) and by the rules and/or regulations made or directions issues, under this Act. 7. The Lessor will monitor the implementation of the project. Applicants who do not have a firm commitment to implement 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 concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evailing at the time of transfer shall be payable to Noida. (iii) Each allottee/sub-lessee of the dwelling units shall have to intimate Noida of the creation of the mortgage in favour of bank/financial institutions/employer and the bank/financial institution/employee of the allottee shall also keep Noida informed about the dwelling units thus financed. (iv) It is further to inform you that in the case of cancellation of lease, Noida Authority will give 30 days notice to nationalised Banks/financial institutions/HUDCO, New Delhi prior to exercising its right of re-entry on the premises. (emphasis supplied) 84. The permissions to mortgage containing aforesaid clauses have been placed on record along with affidavit dated 22.11.2018. It is apparent from the second condition, subject to which permission to mortgage shall be effective on making full payment of the premium and up to date annual lease rent of group housing plot and after execution of the sub-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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as incumbent upon the bank officials in order to create a valid mortgage to ascertain from the Noida and Greater Noida Authorities that the condition imposed by them as condition precedent to create a mortgage had been fulfilled and to obtain clear NOC. But that is how in illegal manner the public money is obtained from banks for the purpose of construction activity and then it was not used for that purpose, as found in the forensic audit report in which it is rightly pointed out that there was a diversion of money. The amount of loan advanced by banks was not used for the purpose it had been obtained for a particular project and it was diverted to other companies. It was happening not only under the nose of Noida and Greater Noida authorities, but was directly in the knowledge and connivance of the bankers as day-to-day transactions in the bank accounts were pointing out that the money was being siphoned and diverted for other purposes routinely, not being utilised for the purpose it was given. Thus, all of them have helped in perpetuating the fraud on the home buyers by Amrapali group of companies, its various Directors, officials and others who have been specified in minute deta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g and post disbursal of loan by Bank of Baroda. As a matter of fact, the bank has not been able to show what steps it has taken to stop the diversion of funds to third parties on the same date of disbursal of the amount. The aforesaid stand of the Bank is falsified by the Forensic Auditors report. 87. The transactions of Amrapali Zodiac Developers Pvt. Ltd. with J.P. Morgan were clearly in order to avoid the provisions of the Companies Act. It is apparent that Mr. Anil Mittal, Statutory Auditor, did not report his interest and disclosed about his relatives and junior employee as Director and shareholders. Mr. Chandan Kumar was a junior employee and Mr. Atul Mittal was his relative. Thus, it is apparent that Rudraksha Infracity Pvt. Ltd. was created for money laundering as aforesaid two Directors and shareholders had no income, Rudraksha Infracity Pvt. Ltd. was incorporated to receive funds from Mannat Buildcraft which was also created by Mr. Chander Wadhwa, CFO through his close associates. After receiving money from Mannat Buildcraft Pvt. Ltd., the same was transferred to J.P. Morgan Investments for purchasing equity shares of Amrapali Zodiac Pvt. Ltd. at an exorbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form of ECB, following would have been the requirements: (i) obtaining Loan Registration Number from the RBI; (ii) file ECB-2 returns every month to the RBI, (iii) to pay tax on interest payment to J.P. Morgan; and (iv) to file income tax return. We are in agreement with the findings of the forensic auditors in this regard. It is clear that it was a methodology adopted by the group to siphon out the funds of the home buyers in violation of the FEMA rules and the notifications and by the creation of dubious companies for which appropriate action is warranted by the concerned authorities. 89. The report of Forensic Audit also indicates that the Company has received a sum of ₹ 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. 90. The IPFFI Singapore PTE Limited which was incorporated on 20.5.2011, entered into a Share Subscription Agreement with ASCPL on 23.8.2012 and paid a sum of ₹ 140 crores to ASCPL in the following manner on 7.8.2012: (a) INR 85 crores received in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt is not going to serve the purpose. More so, in view of the finding of the Forensic Audit that there was no necessity of obtaining the loan from the Bankers as Amrapali Group had sufficient money from the home buyers, which has also been diverted and has not been utilised in the construction activities. Other assets have been created with the help of the same and the borrowings have been used in order to siphon off the money by making payment of some unusual amount not only to J.P. Morgan, but also to IPFII Singapore in violation of the FEMA Rules and FDI Rules as found by the Auditors in the respective cases. 94. It was submitted that the Bank of Baroda has obtained the deed of corporate guarantee inter alia from Ultra Homes Construction Ltd, Rinku Clothing Creations Pvt. Ltd., Jotindra Steels and Tube Limited and Vidyashree Buildcon Pvt. Ltd. RoC search report and CA certificate had also been obtained. Lender's Legal Counsel Report dated 2.3.2012 verifying the validity and enforceability of financing documents and creation of securing on assets of ASCPL is also on record. Jotindra Steels and Tubes Limited issued a corporate guarantee, it was absolutely impro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof to be delivered to him and may for that purpose use or cause to be used such force as may be necessary. 96. The Authorities have failed to take action under the aforesaid provisions. The Authorities have also failed to perform the statutory duty cast upon them to take prompt action. Merely filing of the case against Unitech Builders by way of petition in this Court did not furnish any grounds to the Authorities to remain silent spectator on the perpetration of fraud committed on the home buyers by Amrapali Group of Companies. Public trust doctrine requires an affirmative action, which was envisaged not only statutorily but under the Scheme also. They were required to ensure that projects were completed within the stipulated period, otherwise, the very purpose of the grant would stand frustrated and colossal loss of public money. Amrapali Group did not pay even the amount due to be paid to the landowners on the part of land acquisition, it did not pay premium annual lease amount interest to Authorities. They have violated every condition, but still, Authorities were bent upon to condone everything. This reflects absolute dereliction of duty cast upon the Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the bounden duty of the Court is to act as parens patria not only to save the home-buyers but also to ensure that they are not cheated. 98. Authorities and Bankers have not acted in furtherance of public interest and failed to perform duties enjoined upon them. The kind of fraud that has taken place not only in Amrapali Group of Companies but at large as more than 70 percent of the various projects have not come up, is alarming to the Courts to take affirmative steps with the direction to prevent such frauds, restore the money of home-buyers and to punish incumbents responsible for such act. At the same time to ensure that buildings are completed. It cannot be denied that lifetime savings of home- buyers have been invested for purchase of a house with the faith and trust they have given the money. The scheme of the Government is to promote the real estate for which land had been acquired, even poor farmers have not been paid the compensation. The land allotted at throw away prices of 10%, the allotment premium has not been paid and in an illegal manner plots have been allotted on huge amount by builders is another fraud in collusion with Authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilder. It is also submitted on behalf of Authorities that in part completion also, the certificate can be issued against the part payment received, however, the completion certificate would be issued in the same proportion minus 10 percent so that financial interest of the Authorities is protected. Sub-lease deed would be executed as per the present policy up to 90 percent of the proportion in which part payment has been received. 101. In our opinion, in the ordinary course, there cannot be any dispute with respect to the aforesaid propositions. However, in the instant case, the facts indicate that 9000 families are residing for the last several years out of the sheer necessity of shelter place and they have not been provided with electricity connections and other facilities due to non-issuance of occupancy certificate by the concerned authorities. Most of them have paid the entire amount to the builders. The amount outstanding as against home buyers have to be used in completion of building. The payment to be made to concerned Authorities had also been collected by the builder from home buyers as component of price of flat, but has not been deposited with the concer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat everything is done to protect the interest of the home-buyers obviously without obliging the builders. Wherever we seek any favour for home- buyers, we see that defrauding parties i.e., promoters/builders are further obliged by making certain concessions by the Government that would amount to perpetrating further fraud and unjust enrichment of builder. The case poses challenge to the law enforcement agencies to act in tandem to book such culprits. 103. When there are defaults galore, creation of fake and dummy companies in an unbridled manner, it passes comprehension that how the Statutory Auditor has failed to discharge the duty cast upon him and the officials of the Amrapali Group also shared hard earned money of home- buyers in an illegal manner by siphoning it off. Directors had obtained salaries without doing anything. Money is diverted and siphoned off in other projects. Office junior employees, peons and relatives etc. were inducted as Directors just to defraud the home-buyers of their money and to siphon it out. Without material being supplied, a large amount of money had been paid by way of forge purchases as a method to divert money even through authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apartment or building, as the case may be, in an efficient and transparent manner and to protect the interest of consumers in real estate sector and establish the Real Estate Appellate Tribunal to hear appeals from the decisions, directions or orders of the Authority. 3. The proposed Bill will ensure greater accountability towards consumers, and significantly reduce frauds and delays as also the current high transaction costs. It attempts to balance the interests of consumers and promoters by imposing certain responsibilities on both. It seeks to establish symmetry of information between the promoter and purchaser, transparency of contractual conditions, set minimum standards of accountability and a fast-track dispute resolution mechanism. The proposed Bill will induct professionalism and standardisation in the sector, thus paving the way for accelerated growth and investments in the long run. 4. The Real Estate (Regulation and Development) Bill, 2013 inter alia provides for the following, namely:- (a) to impose an obligation upon the promoter not to book, sell or offer for sale, or invite persons to purchase any plot, apartment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for non-compliance of orders of Authority or Appellate Tribunal; (k) to empower the appropriate Government to supersede the Authority on certain circumstances specified in the proposed legislation; (l) to empower the appropriate Government to issue directions to the Authority and obtain reports and returns from it. (5) The Notes on clauses explain in detail the various provisions contained in the Real Estate (Regulation and Development) Bill, 2013. (6) The Bill seeks to achieve the above objectives. 105. It is apparent from the aims and objectives that Act ensures greater accountability towards consumers and significantly reduce fraud and delays. Accountability standards have been laid down where duties cast upon promotors as well as the effort has been made to make consumer also responsible. 106. Before coming to the rival submission with respect to RERA, we deem it appropriate to note certain provisions. Common areas have been defined under Section 2(n). The apartment has been defined under Section 2(e). Section 2(k) defines carpet area, whereas Section 2(q) defines completion ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to be audited in every six months and chartered accountant has to certify that amounts collected for a particular project have been utilised for that project and the withdrawal has been in compliance with the proportion of the percentage of the completion of the project. The provisions of Section 4(2)(l)(D) is extracted hereunder: 4. Application for registration of real estate projects.- (1)** (2) The promoter shall enclose the following documents along with the application referred to in sub-section (1), namely: - (l) a declaration, supported by an affidavit, which shall be signed by the promoter or any person authorised by the promoter, stating:- (A)** (B)** (C)** (D) that seventy per cent of the amounts realised for the real estate project from the allottees, from time to time, shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose: Provided that the promoter shall withdraw the amounts from the separate account, to cover the cost of the project, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpetent authority; the promoter is involved in any kind of unfair practice or irregularities. It is also independently provided that in case the promoter indulges in any fraudulent practices, the registration can be revoked. Upon revocation of the registration, the promoter shall be debarred from accessing the website in relation to that project under Section 7(4)(a). Under Section 7(4)(b), the Authority shall facilitate the remaining development works to be carried out in accordance with provisions of Section 8. Provisions of Section 7 is extracted hereunder: 7. Revocation of registration. - (1) The Authority may, on receipt of a complaint or suo motu in this behalf or on the recommendation of the competent authority, revoke the registration granted under section 5, after being satisfied that- (a) the promoter makes default in doing anything required by or under this Act or the rules or the regulations made thereunder; (b) the promoter violates any of the terms or conditions of the approval given by the competent authority; (c) the promoter is involved in any kind of unfair practice or irregularities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such further necessary actions, including consequent de-freezing of the said account, towards facilitating the remaining development works in accordance with the provisions of section 8; (d) may, to protect the interest of allottees or in the public interest, issue such directions as it may deem necessary. 111. It is clear that RERA intends for completion of the project in case any fraud is committed by the promoter and the activity is not completed, the home-buyers cannot be left in lurch, allowing the prayer on behalf of Bankers as well as by the Authorities would amount to unfair treatment of home buyers in the facts of this case. It is too late for them to submit that home buyer has no rights in the teeth of the provisions contained in the RERA, which intends to prevent fraud. 112. Once registration lapses on non-completion of project within the time stipulated or it is revoked the consequence ensue as enumerated in Section 8 of RERA, the Authority is enjoined upon the duty to consult with the appropriate Government to take such action as it may deem including the carrying out of the remaining development works by competent autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plot or building, as the case may be, 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 who has taken or agreed to take such apartment, plot or building, as the case may be; 114. It is clear that is the duty of the promoter to abide by the time schedule of the completion of the project of the allottee. The time of completion of the project is fixed from the date of the agreement. Though the RERA has come into force after the mortgage had been created, the intendment of RERA is that after the execution of the agreement no such mortgage or charge should be created. 115. Section 14 provides adherence to sanctioned plans and project specifications by the promoter. Section 15 deals with the obligations of the promoter in case of transfer of a real estate project to a third party. The promoter shall not transfer or assign his majority rights and liabilities to a third party without obtaining the prior written consent of two-thirds allottees and without the prior written approval of the Authority. Section 16 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tees are provided in Section 19, which is reproduced hereunder: 19. Rights and duties of allottees.- (1) The allottee shall be entitled to obtain the information relating to sanctioned plans, layout plans along with the specifications, approved by the competent authority and such other information as provided in this Act or the rules and regulations made thereunder or the agreement for sale signed with the promoter. (2) The allottee shall be entitled to know stage-wise time schedule of completion of the project, including the provisions for water, sanitation, electricity and other amenities and services as agreed to between the promoter and the allottee in accordance with the terms and conditions of the agreement for sale. (3) The allottee shall be entitled to claim the possession of apartment, plot or building, as the case may be, and the association of allottees shall be entitled to claim the possession of the common areas, as per the declaration given by the promoter under sub- clause (C) of clause (I) of sub-section (2) of section 4. (4) The allottee shall be entitled to claim the refund of amount paid along wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 contains provisions relating to offences, penalties, and adjudication and Chapter IX deals with finance, accounts, audits, and reports. 120. It is apparent that RERA intends protection of home-buyers and aims at completion of the buildings. The buildings have to be completed, for that, we are required to pass orders. We have already assigned the task to NBCC for completion of buildings as the promoters/builders have failed to complete the building within the time fixed and the time which could have been extended. Now, more than 10 years have passed and buyers were given the assurances that they would get flats within three years period by the promoter/builder. The maximum time fixed in RERA has also expired and extension could not have been beyond 1 year. 121. It is clear that common areas as provided under Section 17 have to be ultimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 incomplete projects also have to deposit the outstanding amount on their part in the aforesaid account opened in the UCO Bank and out of that amount, it has to be disbursed as per the orders to be passed by this Court for the purpose of construction and outstanding if any, shall be used for the purpose of payment of compensation to home buyers for the period of delay as per the agreement or as may be determined ultimately and other dues. 125. With respect to percentage of profit of NBCC, we fix it at 8 percent. As it is a Government Undertaking, NBCC has to ensure that DPR is prepared reasonably and the work to be completed as expeditiously as possible. 126. Learned senior counsel on behalf of Bank of Baroda submitted that Amrapali Group as per the conditions of the lease deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, subject to which the mortgage was permissible, had been violated. Thus, it cannot be said that any charge of the banks has been created on the projects. The charge would be on the property which has been purchased/created by dubious methods. It would be inequitable to fasten the charge against the investment made by the home buyers whereas they have not been benefited and rather have been cheated by the promoters for which bankers, as well as authorities, have to share the blame. We cannot perpetuate another fraud on the innocent home buyers in facts of the case of fastening liability of amounts payable to Authorities and Bankers. 128. Learned senior counsel on behalf of the Bank of Baroda, also submitted that the home buyers are not secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30. 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 is how Amrapali group is instrumental in not allowing the properties to be sold. There appears to be some invisible hand holding buyers out and even the bankers are not coming up to finance the purchasers, is the genuine grievance pointed out at the Bar. Be that as it may. Entire gamut of facts indicates the contumacious conduct of Amrapali Group, proper and correct disclosures on oath have not been made, even encumbrances are not being specified clearly in spite of repeated orders passed by us. They have sold several valuable properties during pendency of petitions as pointed out by the Forensic Audit Report. In the aforesaid circumstances, the submission raised on behalf of Amrapali group that under the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 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 provide that a document of title requires compulsory registration, no doubt registered document has to be executed that also has to be taken care of by the Court so as to protect the interest of home buyers. 133. Learned senior counsel appearing on behalf of the Bank of Baroda urged that by virtue of the provisions contained in section 11(4)(g) of the RERA Act, it is the duty of the promoter to pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the association of allottees, which he has collected from the allottees, for the payment of outgoings, including the land cost, ground rent, municipal or other legal taxes, char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pay all outgoings which he has collected from the allottees, the payment of outgoings includes land cost, ground rent, charges for water or electricity, maintenance charges etc. As per the proviso to Section 11(4)(g), the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges, if any, to the authorities. Outgoings which have been collected by the promoter can be and have to be recovered in the facts and circumstance of the case from them as intended by section 11(4)(g) of RERA. 134. Learned senior counsel on behalf of the Bank of Baroda submitted that the provisions of section 11(4)(h) of RER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 building in accordance with the terms of the agreement for sale or due to discontinuance of his business as a developer on account of suspension or revocation of his registration under the provision of the RERA or the rules and regulations made thereunder. He submitted that the right of the allottees is restricted to only receiving the compensation from the promoters. We wholly disagree with the submission. It is made in oblivion of the provisions of Section 8 of the RERA which provides for completion of the development projects by the competent authority or by the association of allottees or in any other manner, as may be determined a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pletion 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 the faith of public is not shaken in the real estate sector and such frauds are prevented in the future. We cannot permit the authorities in the facts and circumstances of the case to deal with the rights of the home buyers in arbitrary and in an unjust manner. 139. In case the authorities are making allotment of plots at a paltry sum of 10% and giving the builders. 8 years period to make payment of premium with a moratorium of 2 years then the period runs to 10 years and the project is to be completed within 3 years. It is clear that the authorities have to be very vigilant for securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 no interim stay granted by the High Court on construction work, is made clear by the Noida and Greater Noida authorities. There was no room to entertain any doubt as to the fact whether for a particular village the acquisition had been quashed. There was no quashing of land acquisition and moreover, there was no stay. Only higher compensation was ordered to be paid. There was no force majeure condition or any legal impediment as such the period from 2011 to 2015 cannot be treated as a moratorium period vis- -vis the dues of Noida and Greater Noida authorities. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who have prepared it and cross-checked from them and we are satisfied that the statement filed on the expenditure of ₹ 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 ₹ 2,996.20 crores to different group companies, mainly from following nine companies: CHART E DETAILS OF MAJOR COMPANIES FROM WHERE FUNDS WERE TRANSFERRED IN THE FORM OF ICD AND SHARE CAPITAL AS PER BALANCE SHEET TILL 2015 Consolidated Amount Transferred from Amrapali Group till 31 st March 2015 S. No. Name of Companies Net amount Transmitted/ Transferred from these companies of Amrapali Group of Companies (A) Amount in Cr, 1 Amrapali Smart City Dev. Pvt. Ltd. 53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answer to each and every entry which have been gone into by the Auditors. General and broad submissions have been made which are flimsy and have no legs to stand. Thus, the objections are rejected. The professional fee could not have been realised by the Directors. They were not the employees. They have not rendered any professional services. They along with other employees, statutory auditors, CFO, etc. have formed a cartel 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allotments of flats were made. There were other irregularities galore. 148. Because of their failure to fulfil the obligations towards the buyers and the serious kind of fraud which has been played by them upon the home buyers, the registration of Amrapali group of companies under the Real Estate Regulation and Development Act, 2016 deserves to be cancelled. 149. Because of the gross violations of the conditions of lease deeds executed by the Noida 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 du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their funds. The Noida and Greater Noida Authorities have to issue the Completion/ Part Completion Certificate, as the case may be, to execute tripartite agreement and registered deeds in favour of the buyers on part- completion or completion of the buildings, as the case may be or where the inhabitants are residing, within a period of one month. 154. Resultantly, we order as follows: (i) The registration of Amrapali Group of Companies under RERA shall stand cancelled; (ii) The various lease deeds granted in favour of Amrapali 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, as the Court Receiver. The right of the lessee shall vest in the Court Receiver and he shall execute through authorized person on his behalf, the tripartite agreement and do all other acts as may be necessary and also to ensure that title is passed on to home buyers and possession is handed over to them. (xi) We also direct Noida and Greater Noida Authorities to execute the tripartite agreement within one month concerning the projects where homebuyers are residing and issue completion certificate notwithstanding that the dues are to be recovered under this order by the sale of the other attached properties. Registered conveyance deed shall also be executed in favour of homebuyers, they are to be placed in the possession and they shall continue to do so in future on completion of projects or in part as the case may be. We direct the Noida and Greater Noida Authorities to take appropriate action to do the needful in the matter. The Water Works Department of the concerned area and the Electricity Supplier are directed to provide the connections for water and electricity to home buyers forthwith. 155. Let the cases be listed for further hearing before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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