The Supreme Court on September 4 ordered an examination of financial records of all the 40-odd companies of the embattled Amprapali group to track the amount of homebuyers’ money that had been diverted, lawyers present at the hearing said.

Meanwhile, the government's construction arm, NBCC submitted its report in the Court and said it was willing to work as project management consultant on Amrapali projects but would not spend a dime from its pocket. NBCC pegs the expenditure on completion of the pending 45,000 units at around Rs 8,500 crore, legal sources say.

NBCC said it will also not bear the responsibility of arranging funds required for the completion. The funds would be arranged in phases as per the directions of the Supreme Court and deposited in an escrow account.

NBCC proposed the projects be completed in phases within a period of six to 36 months from the date on which the amount was made available to it. The completed units will be handed over to the homebuyers in phases, sources said.

NBCC said some amount could be recovered from homebuyers’ dues and after selling the unsold inventory. The shortfall could be recovered by selling the unsold FSI that was available with Amrapali Group.

Auditors who had been asked to give details of the real estate companies' accounts, said some Rs 2,996 crore had been diverted from seven companies of Amrapali to other group companies, sources present at the hearing said.

NBCC has also reportedly proposed setting up an SC-appointed committee comprising a member of the judiciary, a technocrat and a bureaucrat to monitor the progress of the projects.

At the August 21 hearing, the Supreme Court had directed NBCC to undertake construction of unfinished housing projects of the embattled firm and file a comprehensive report on how it proposes to construct the housing units and the timeframe within which it plans to complete them within 30 days.

At an earlier hearing on May 17, the apex court had given the go-ahead to three co-developers to complete the stalled projects. It had also asked the embattled developer to deposit Rs 250 crore in four weeks in an escrow account that will have to paid to co-developers on completion of the projects. These co-developers included Noida-based Galaxy Group, IIFL-Viridian consortium and Kanodia Cement. The May 17 order was recalled at the last hearing.

The Supreme Court on August 20 had ordered attachment of the properties and bank accounts of all the directors of its 40 firms and had questioned NBCC’s offer to complete Amrapali’s projects when the apex court was hearing the matter.

On that day the SC had come down heavily on the Amrapali group for playing "fraud" and "dirty games" with the court and ordered attachment of all the bank accounts and movable properties of 40 firms of the realty firm. It had also directed the company to place before it details of all bank accounts from 2008 till today and ordered the freezing of bank accounts of all the directors of its 40 firms, besides attaching their personal properties.

The bench on August 21 also took note of the alleged diversion of Rs 2,765 crore by the Amrapali group and asked the auditor to submit a report on this. The apex court directed the statutory auditors of Amrapali Group Anil, Ajay and Company, to examine accounts of all 40 companies of the group and file the report on whether the company had indeed diverted the amount collected from homebuyers.

“If you have diverted money, we will squeeze every asset and bring back every money you have diverted, including compensation that you may have to pay to the buyers for the delay,” the bench comprising justices Arun Mishra and UU Lalit had told the builder.

The Supreme Court had also noted the 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.

The bench wondered as to how Rs 2,765 crore fund was allegedly diverted by the Amrapali Group for carrying out works in its other projects.

"How can they (chartered accountants) allow siphoning of money like this," the bench said, adding "money given by the investor to complete a particular project cannot be used for other projects as it amounts to criminal misappropriation."

"This (diversion of funds) is the malady which is affecting all the builders. We want to stop this nonsense once and for all," the bench said.

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."

In July, Amrapali group had informed the Supreme Court that it has submitted the proposal for construction of its unsold projects by the National Buildings Construction Corporation (NBCC) to the high-powered monitoring committee set up by the central government to look into delayed projects in Noida. #casansaar (Source - PTI, MoneyControl)