Noida: 30,000 homebuyers at a dead end
NOIDA: Thousands of homebuyers have watched in horror the story of Amrapali’s financial mishandling and diversion of funds unfold. With the directors in jail, and the company in the doldrums, the process to complete flats is at a standstill. Buyers hope the Supreme Court will come to their rescue and entrust someone to make the flats.
My home, my right — when technocrat-turned-builder Anil Sharma, chairman and managing director of the now embattled Amrapali Group, came up with this slogan in 2010, it captured the imagination of those looking to buy an affordable house. At Rs 1,250 per square feet, the flats on offer seemed like a steal.
In the years that followed, many people who invested in Amrapali — around 30,000 as of today — were kept waiting for the flats. The problem here is not restricted to the failure to meet deadlines. The owners of the company have been slapped with charges of fund diversion and are in jail.
Homebuyers have been citing this and other challenges that currently seem insurmountable — like finding the funds and a company willing to commit to the completion of so many flats — to argue before various forums that the Amrapali quagmire is deeper than even the Jaypee crisis. For one, the number of flats to be completed — Amrapali’s 30,741 to Jaypee’s 22,500 — is much larger. Besides, while Jaypee, despite its complexities, has institutionally begun a resolution process in which homebuyers have a say, people who have booked flats in Amrapali projects are at a dead end.
Numerous protests, pleading for government intervention, and watching in despair as the company unravelled, has knocked the wind out of buyers. “The truth is we all bought into the Amrapali story. But that does not mean the authorities can wash their hands off their responsibilities. Someone somewhere has definitely not been cautious enough to let such a huge empire be created on the basis of loans and homebuyers’ funds,” Bikram Chatterjee (42), a buyer at Amrapali Centurion, says.
Chatterjee was the first to move the Supreme Court in 2017 against the developer following which hundreds of buyers joined his petition. Chatterjee, who lives in a rented accommodation in Gurgaon, has participated in street protests, contested cases at the National Consumer Disputes Redressal Commission and now, finally, in the Supreme Court. He has also had several meetings with the Amrapali brass hoping to find a resolution. None has come so far. Amrapali has a total of 15 residential properties with 42,000 residential units, of which only around 12,000 have been completed.
Rise & Fall Of Amrapali
Once the poster boy of affordable realty, Anil Sharma’s fall from grace has shocked many. The IITian started Amrapali in 2003 with a project in Noida that had 107 flats. In the following years, he built commercial buildings and other projects. Soon, he was overshadowing competitors. He was elected president of the builders’ conglomerate, Confederation of Real Estate Developers Association of India (Credai), in NCR.
In 2009-10, Sharma launched Amrapali’s first affordable housing project, Exotica, in Sector 50 that had 140 flats. By 2012, Amrapali had established a pan-India presence — it had delivered 25 projects across the country and had another 50 in the works. The company made a mark in big cities, including Noida, Jaipur and Lucknow. In 2013, it ventured into FMCG, hospitality and entertainment. It also started 3-star hotels in UP’s Bareilly and Jharkhand’s Deoghar. Its entertainment arm, Amrapali Media Vision, came up with two movies, ‘Gandhi to Hitler’ in 2011 and ‘I Don’t Love You’ in 2013.
As the company’s fortunes rose, Sharma, who considered Donald Trump a role model, tried his luck in politics and contested on a JD(U) ticket from Bihar’s Jehanabad in the 2014 Lok Sabha elections, but lost.
But Amrapali still enjoyed a successful run. Its portfolio included projects like Sapphire and Platinum in Noida, and Empire in Ghaziabad. Former India captain Mahendra Singh Dhoni became the company’s brand ambassador, adding the glamour quotient (Dhoni parted ways with Amrapali later).
Amrapali’s troubles were first detected in 2017 when cheques to homebuyers for payment of interests due to delays began bouncing, leading to complaints of fraud against Sharma. The same year, the National Company Law Tribunal (NCLT) admitted a plea by Bank of Baroda (BoB) seeking initiation of proceedings under the Insolvency and Bankruptcy Code, 2016, against Amrapali Silicon City Private Limited. Once the insolvency plea was raised, Amrapali buyers, nervous about the possibility of loss of investment, moved the Supreme Court for protection of their rights as financial creditors in the resolution process.
“While we held rallies and roadshows, Amrapali initially tried to divert the buyers’ attention with false promises. There were marathon builder-buyer meetings. All of that led to nothing. Beyond the first lot of flats, delivery had completely stopped and among the ones which were delivered, there were massive complaints on construction quality and safety,” says Abhishek Kumar, a petitioner against Amrapali in the Supreme Court.
On May 10, 2018, after an audit detected a Rs 3,000-crore fund diversion by Amrapali, the Supreme Court asked the developer to deposit Rs 250 crore as security to protect buyers’ interest, which it failed to do. The top court then ordered the freezing of bank accounts of Amrapali and 40 of its sister companies. It also asked the builder to provide details of all movable and immovable assets owned by its directors, and said it would start with the sale of its directors’ personal assets since company assets would not be without encumbrances. In February this year, the court directed Delhi Police’s Economic Offences Wing to arrest Sharma, along with two other directors Shiv Priya and Ajay Kumar.
Who Will Finish Their Flats?
Despite insolvency proceedings and a multi-layered investigation, buyers have seen no headway in the aspect of the crisis that matters most: when their flats will be completed, or who will build them. So far, no one has come forward to shoulder the task which, according to government agencies’ estimates, may require Rs 8,500 crore.
“Completing Amrapali flats is a huge task. Not only are thousands of buyers involved, the projects can take at least Rs 8,500 crore to be completed. Who will bear that financial burden?” Balwinder Kumar, a member of UP-Rera, says.
In 2018, the hopes of buyers who were waiting for a fruitful resolution were rekindled when NBCC came forward and showed interest in taking over the project. Surveys were conducted and a ground report prepared. But the proposal fizzled out when the agency put a ticket price of Rs 850 crore to its service as consultants. In the final rounds of hearing, the Supreme Court sent the ball back into the court of the Greater Noida Industrial Development Authority (GNIDA), asking if it had the capability for completing the pending flats.
GNIDA does not want to get into this. Narendra Bhooshan, CEO of GNIDA, says, “Amrapali already owes us in terms of lease payment. We also do not have the expertise to complete the project.” Buyers had hoped some sort of a concession would be offered in the Union Budget, but nothing came. “It is surprising that the government is not stepping in because completion of the Amrapali projects is financially viable. If funds are infused and construction starts, there is still money to be collected from buyers that could restart the financial machinery behind the stagnated projects. To us, only this seems like a logical conclusion,” says Chatterjee.
Buyers have raised the demand for a stress fund to finish the flats. “It has been one long battle for us. We are both financially and emotionally drained. What we want now is that a stress fund be created so that we finally get our homes in some years,” says Harshyam Thakur, a buyer in Amrapali Dream Valley.
During a recent visit to Greater Noida, UP chief minister Yogi Adityanath met some Amrapali buyers. “The chief minister assured us of completion of all projects and that the only wait now is for the case to be free from judiciary. So for now, we have once again been put on hold,” said Thakur. The buyers now anxiously await the Supreme Court judgment, likely to be out soon. “For the last few years, our days have become charged with anxiety over the likelihood of losing our investments. We are all waiting with bated breath for the Supreme Court order,” says KK Kaushal, who booked an Amrapali Dream Valley flat for Rs 25 lakh in 2010 that was supposed to be delivered in 2013.
Source : The Times of India