SC orders freezing of bank accounts of Amrapali Group

It is alleged the firm diverted Rs 2,765-cr funds collected from the investors 

New Delhi: The Supreme Court cracked the whip on Amrapali Group of companies on Wednesday for playing fraud and dirty games with the court and ordered attachment of all bank accounts and movable properties of 40 firms of the real estate major.

The apex court also directed Amrapali Group of companies, which are yet to hand over possession of flats to around 42,000 hassled home buyers, to place before it details of all its bank accounts from 2008 till Wednesday and ordered freezing of bank accounts of all the directors of its 40 firms besides attaching their personal properties.

While taking note of alleged diversion of Rs 2,765 crore funds collected from the investors by the group, a Bench of justices Arun Mishra and UU Lalit said it prima facie amounted to criminal breach of trust and it would deal with the issue after hearing the parties.

The Bench also took umbrage as to how the National Buildings Construction Corporation (India) Ltd has issued advertisement inviting co-developers for doing the work related to Amrapali group without taking approval of the apex court.

The apex court summoned the chairman of NBCC (India) Ltd and the secretary of Ministry of Housing and Urban Affairs to explain their stand on the issue observing that the unfair move by the corporation was apparently to scuttle the court’s order.

The court expressed its displeasure as to how the NBCC could proceed with the matter and issue such advertisement without its approval when the apex court was seized of the matter.

“They feel that they can run a parallel sort of legal proceedings? It is not only contempt but it is a serious kind of fraud on the investors and the court,” the Bench said while asking how could NBCC intermingle with the court’s order.

The apex court said that it wanted to know who has issued the advertisement.

‘Diversion of funds by builders a malady’

  • The Supreme Court said on Wednesday that diversion of funds collected from investors by real estate developers was a malady and it wants to stop this nonsense once and for all.
  • The apex court observed that if builders were diverting money invested by a person in a particular housing or commercial project to complete other projects, it, prima facie, amounted to misappropriation and criminal breach of trust.
  • Referring to the issue of diversion of funds, the bench told the counsel appearing for the Amrapali Group, “Stand on your legs and not on the shoulder of investors.”
  • The top court said alleged diversion of funds by the group, prima facie, amounted to criminal breach of trust and it would deal with the issue after hearing the parties.

 This is not the way. It is sheer contempt of court. It is not fair. Totally unfair things are going on. Are they law to themselves? When we are seized of the matter then propriety demands that they should first come before us
-Apex court

The order

  • The court said the Amrapali group of companies shall not be entitled to deal with either the bank accounts or the movable properties in any manner whatsoever without its permission.
  • It directed Amrapali Group to place before it the names of chartered accountants, who were handling the accounts of these 40 firms. The apex court wondered how the funds were allegedly diverted for carrying out works in its other projects.
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