# BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS

- **Citation:** [2021] 6 S.C.R. 887
- **Court:** Supreme Court of India
- **Decided:** 2021-06-29
- **Case number:** I.A. No.168186 of 2018
- **Bench:** Uday Umesh Lalit, Ashok Bhushan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bikram-chatterji-ors-v-union-of-india-ors-34998
- **Pages:** 33

## Headnote

Housing: Residential project - Project to be developed by
the Company concerned was widely advertised through brochures
and advertisements as 'Amrapali La Residentia' project, promising
delivery of apartments within 36 months - Claim of flat buyers -
Writ Petition filed in Supreme Court submitting that amounts invested
by the apartment holders were siphoned away by the Amrapali Group
of Companies - While entertaining the writ petitions, Supreme Court
directed audit by forensic auditors - Observations of forensic
auditor quoted with approval by Supreme Court in its Judgment
dated 23.07.2019 - Another order dated 14.10.2019 subsequently
passed by Supreme Court - Prayer in interim applications either
seeking recall of Supreme Court orders dated 23.07.2019 and
14.10.2019 or revisit of the issue whether the Company ought to be
declared as part of the Amrapali Group of Companies - Tenability
- Held: Not tenable, more particularly because of the developments
with respect to the instant project - Unlike all the other projects of
the Amrapali Group which were made over to the NBCC, the
development with respect to the instant project has always been an
on-going process - Further, if the instant project is now handed
over to the NBCC, it would result in escalation in costs to the
detriment of the flat buyers - That apart, the interest of the Amrapali
Group of Companies and consequently that of the flat buyers who
had invested money in other Amrapali Projects already stood
quantified at 19.75% by Orders dated 23.07.2019 and 14.10.2019
[2021] 6 S.C.R. 887
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[2021] 6 S.C.R.
- Considering all the features of the matter, it would not be just and
proper to hand over the development at this stage to the NBCC - It
would not be appropriate to recall the orders dated 23.07.2019
and 14.10.2019 or to revisit the issue whether the Company could
be declared to be part of the Amrapali Group of Companies -
However, directions passed to secure the amounts receivable by
Amrapali Group of Companies through the instant project -
Applications under consideration accordingly disposed of.
CIVIL ORIGINAL JURISDICTION: I.A. No.168186 of 2018,
I.A. No. 109882 of 2020, I.A. No.114865 of 2020, I.A. No.153341 of
2019, I.A. No.120307 of 2020, I.A. No.123299 of 2020 And I.A. No.
6397 of 2021.
(In Re.: La-residentia Project)
In
Writ Petition (Civil) No. 940 of 2017.
(Under Article 32 of The Constitution of India)
Vikramjit Banerjee, ASG., R. Venkataramani, Parag Tripathi, Joy
Basu, Gopal Sankarnarayanan, Sr. Advs., Ravindra Kumar, M. L. Lahoty,
Paban K Sharma, Anchit Sripat, Himanshu Shekhar, Mukul Singh, Vibhu
Shankar Mishra, B. V. Balaram Das, Kanak Bose, Varun Sarin, Ms.
Mishika Bajpai, Ashok Mathur, Raj Kamal, Maheen Pradhan, Aseem
Atwal, Kartavya Batra, Avish Bhati, Mohit Chaudhary, Ms. Puja Sharma,
Kunal Sachdeva, Chowdhary Zulfar Ali, Ms. Garima Sharma, Ms.
Vardhan Gupta, Paras Mithal, Parveen Kumar for M/S. Kings And
Alliance LLP, MS. Sunita Yadav, Abhigya Kushwah, Siddharth Rajkumar
Murarka, Pradeep Kumar Dubey, Ms. Anamika Kushwaha, Ms. Nandita
Rao, Shashank Shekhar, Mrs. Mahija Reddy, K. N. Agnihotri, Virender
Arora, Sanjay Kapur, Ms. Megha Karnwal, V M Kannan, Arjun Bhatia,
Lalit Rajput, Yajur Bhalla, Vijay Kumar Diwedi, Akhilesh Kumar Pandey,
Ashish Bajpayee, Deepak Samota, Shubham Bhalla, R. K. Awasthi,
Prashant Kumar, Ms. Ritu Arora, Piyush Vatsa, Santosh Kumar-I, Vipul
Ganda, Vishal Ganda, Satyajit A. Desai, Satya Kam Sharma, Saransh
Kothari, Ms. Anagha S. Desai, Pradhuman Gohil, Ms. Taruna Singh
Gohil, Ashish Kabra, Mohammad Kamran, Ms. Ranu Purohit, Ms. Tanya
Srivastava, Ms. Jasleen Bindra, Divyakant Lahoti, Parikshit Ahuja, Ms.
Praveena Bisht, Ms. Madhur Jhavar, Ms. Vindhya Mehra, Kartik Lahoti,
Ms. Shivangi Malhotra, Dharmendra Kumar Sinha, Amit Sinha, Subodh
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Kr. Pathak, Sunil Rai, Ms. Richa Kapoor, Kunal Anand, Ms. Shalya
Agarwal, Ms. Surabhi Katyal, Ms. Monoj V George, Ranjit Philip,

## Text

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BIKRAM CHATTERJI & ORS
v.
UNION OF INDIA & ORS.
I.A. No.168186 of 2018, I.A. No. 109882 of 2020, I.A. No.114865 of
2020, I.A. No.153341 of 2019, I.A. No.120307 of 2020, I.A.
No.123299 of 2020 And I.A. No. 6397 of 2021
(IN RE.: LA-RESIDENTIA PROJECT)
In
(Writ Petition (Civil) No. 940 of 2017)
JUNE 29, 2021
[UDAY UMESH LALIT AND ASHOK BHUSHAN, JJ.]
Housing: Residential project - Project to be developed by
the Company concerned was widely advertised through brochures
and advertisements as 'Amrapali La Residentia' project, promising
delivery of apartments within 36 months - Claim of flat buyers -
Writ Petition filed in Supreme Court submitting that amounts invested
by the apartment holders were siphoned away by the Amrapali Group
of Companies - While entertaining the writ petitions, Supreme Court
directed audit by forensic auditors - Observations of forensic
auditor quoted with approval by Supreme Court in its Judgment
dated 23.07.2019 - Another order dated 14.10.2019 subsequently
passed by Supreme Court - Prayer in interim applications either
seeking recall of Supreme Court orders dated 23.07.2019 and
14.10.2019 or revisit of the issue whether the Company ought to be
declared as part of the Amrapali Group of Companies - Tenability
- Held: Not tenable, more particularly because of the developments
with respect to the instant project - Unlike all the other projects of
the Amrapali Group which were made over to the NBCC, the
development with respect to the instant project has always been an
on-going process - Further, if the instant project is now handed
over to the NBCC, it would result in escalation in costs to the
detriment of the flat buyers - That apart, the interest of the Amrapali
Group of Companies and consequently that of the flat buyers who
had invested money in other Amrapali Projects already stood
quantified at 19.75% by Orders dated 23.07.2019 and 14.10.2019
[2021] 6 S.C.R. 887
887
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SUPREME COURT REPORTS
[2021] 6 S.C.R.
- Considering all the features of the matter, it would not be just and
proper to hand over the development at this stage to the NBCC - It
would not be appropriate to recall the orders dated 23.07.2019
and 14.10.2019 or to revisit the issue whether the Company could
be declared to be part of the Amrapali Group of Companies -
However, directions passed to secure the amounts receivable by
Amrapali Group of Companies through the instant project -
Applications under consideration accordingly disposed of.
CIVIL ORIGINAL JURISDICTION: I.A. No.168186 of 2018,
I.A. No. 109882 of 2020, I.A. No.114865 of 2020, I.A. No.153341 of
2019, I.A. No.120307 of 2020, I.A. No.123299 of 2020 And I.A. No.
6397 of 2021.
(In Re.: La-residentia Project)
In
Writ Petition (Civil) No. 940 of 2017.
(Under Article 32 of The Constitution of India)
Vikramjit Banerjee, ASG., R. Venkataramani, Parag Tripathi, Joy
Basu, Gopal Sankarnarayanan, Sr. Advs., Ravindra Kumar, M. L. Lahoty,
Paban K Sharma, Anchit Sripat, Himanshu Shekhar, Mukul Singh, Vibhu
Shankar Mishra, B. V. Balaram Das, Kanak Bose, Varun Sarin, Ms.
Mishika Bajpai, Ashok Mathur, Raj Kamal, Maheen Pradhan, Aseem
Atwal, Kartavya Batra, Avish Bhati, Mohit Chaudhary, Ms. Puja Sharma,
Kunal Sachdeva, Chowdhary Zulfar Ali, Ms. Garima Sharma, Ms.
Vardhan Gupta, Paras Mithal, Parveen Kumar for M/S. Kings And
Alliance LLP, MS. Sunita Yadav, Abhigya Kushwah, Siddharth Rajkumar
Murarka, Pradeep Kumar Dubey, Ms. Anamika Kushwaha, Ms. Nandita
Rao, Shashank Shekhar, Mrs. Mahija Reddy, K. N. Agnihotri, Virender
Arora, Sanjay Kapur, Ms. Megha Karnwal, V M Kannan, Arjun Bhatia,
Lalit Rajput, Yajur Bhalla, Vijay Kumar Diwedi, Akhilesh Kumar Pandey,
Ashish Bajpayee, Deepak Samota, Shubham Bhalla, R. K. Awasthi,
Prashant Kumar, Ms. Ritu Arora, Piyush Vatsa, Santosh Kumar-I, Vipul
Ganda, Vishal Ganda, Satyajit A. Desai, Satya Kam Sharma, Saransh
Kothari, Ms. Anagha S. Desai, Pradhuman Gohil, Ms. Taruna Singh
Gohil, Ashish Kabra, Mohammad Kamran, Ms. Ranu Purohit, Ms. Tanya
Srivastava, Ms. Jasleen Bindra, Divyakant Lahoti, Parikshit Ahuja, Ms.
Praveena Bisht, Ms. Madhur Jhavar, Ms. Vindhya Mehra, Kartik Lahoti,
Ms. Shivangi Malhotra, Dharmendra Kumar Sinha, Amit Sinha, Subodh
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Kr. Pathak, Sunil Rai, Ms. Richa Kapoor, Kunal Anand, Ms. Shalya
Agarwal, Ms. Surabhi Katyal, Ms. Monoj V George, Ranjit Philip, Ms.
Bhavika, Ms. Shilpa Liza George, Syed Mehdi Imam, Mohd Parvez
Dabas, Uzmi Jameel Husain, Mohd. Aamir Dubas, Ms. Jasmine
Damkewala, Pallav Mongia, Ms. Vaishali Sharma, Dinesh Chander
Trehan, Bishwajit Dubey, Ms. Srideepa Bhattacharyya, Manpreet
Lamba, M/S. Cyril Amarchand Mangaldas, Janender Kumar Chumbak,
Ms. Radhika, Ms. Amita Singh Kalkal, Niraj Gupta, Mohd. Fuzail Khan,
Mrs. Anshu Gupta, Dheeraj Nair, Kislay Kumar, Ms. Vishrutyi Sahni,
Vaibhav Luthra, Ms. Mithu Jain, Shreyan Das, Rajesh P., Rahul Malhotra,
Ms. Himanshi Madan, Devendra Kumar Sing, Karunakar Mahalik, Ms.
Sonam Gupta, Anurag Tandon, Ms. Anuj Bhandari, Ms. Disha Bhandari,
Ms. Shobha Gupta, Ms. Medha Garg, Nirmal Kumar Ambastha, Ms.
Ashmita Bisarya, Dr. Amardeep Gaur, for M/S. V. Maheshwari & Co.,
Manoj Singh, Sanjay Kumar Visen, Arpit Rai, Aviral Kashyap, Rohit
Kumar Singh, Rahul Kumar Gupta, Rohit Amit Sthalekar, O. P. Gaggar,
Himanshu Shekhar, Vishnu Sharma, Ms. Rakhi Ray, Ms. Garima
Prashad, Mrs. Anil Katiyar, Mukesh Kumar Maroria, S. K. Verma, Kedar
Nath Tripathy, Brijesh Kumar Tamber, Christopher Dsouza, M/S. Devasa
& Co., Somesh Chandra Jha, Ramesh Babu M. R., Ms. Rajkumari Banju,
Vipin Kumar Jai, Praveen Chaturvedi, Ms. Anannya Ghosh, Aakarshan
Aditya, G. N. Reddy, Ms. Sneha Kalita, Mr. Prerna Mehta, B. K. Satija,
D. S. Chauhan, Ashwarya Sinha, T. Mahipal, Badri Prasad Singh,
Chandra Prakash, Alok Tripathi, Ms. Astha Sharma, Mishra Saurabh,
Aneesh Mittal, Mrs. Niranjana Singh, Sureshan P., Anas Tanwir,
Pawanshree Agrawal, Ms. Suruchii Aggarwal, M/S. Karanjawala &
Co., Ms. Anindita Pujari, Kaushik Choudhury, Jasmeet Singh, Pradeep
Misra, Raj Bahadur Yadav, Ms. Manisha Ambwani, Mushtaq Ahmad,
M. T. George, Ms. Divya Roy, Sumit Sinha, Ms. Anubha Agrawal, Aditya
Jain-1, Sonal Jain, Gaurav, Rajat Mittal, Ms. Indra Sawhney, Ms. Bharti
Tyagi, Umesh Kumar Khaitan, M/S. Shakil Ahmad Syed, Gaurav Goel,
Anil Kumar Mishra-I, Shantwanu Singh, Rameshwar Prasad Goyal,
Sanchit Garga, Pramod Dayal, Mrs. Swarupama Chaturvedi, Ms. Mayuri
Raghuvanshi, Vishal Gupta, Ms. Charu Mathur, Aman Gupta, B. Krishna
Prasad, Uddyam Mukherjee, Sanjai Kumar Pathak, Deepak Prakash,
Ms. Kamakshi S. Mehlwal, Ms. T. Archana, Ashok Mathur, Rishi
Matoliya, Mrs. Kirti Renu Mishra, Ms. Sujata Kurdukar, Abhinav
Ramkrishna, Ms. Dharitry Phookan, Advs. for the appearing parties.
Pavan Aggarwal, Ravinder Bhatia, Forensic Auditors.
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
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The Order of the Court was passed by
UDAY UMESH LALIT, J.
1. This Order shall dispose of following three sets of applications:-
A) I.A. No.168186 of 2018 (Z-68*), I.A. No.109882 of 2020 (Z309* and R-103*) and I.A. No.114865 of 2020 (Z-318*) filed by the
Association1 and by some applicants who have booked apartments in
the project developed by the Company2.
B) I.A. No.153341 of 2019 (Z-233*), I.A. No.120307 of 2020 (I155*) and I.A.No.123299 of 2020 (I-158*) filed by the Company; and
C) I.A.No.6397 of 2021 (Z-342*) filed by Religare Finvest
Limited, the creditor of the Company.
2. By lease deed dated 03.02.2011 executed between Greater
Noida Industrial Development Authority ('GNIDA', for short) and the
Company, plot bearing No.GH-06A SECTOR-TECH ZONE-IV, Greater
Noida was permitted to be developed by the Company on certain
conditions. It was specifically stated that the Company was a special
purpose company incorporated by the consortium of following six entities
against whose names the respective shareholding was mentioned. The
relevant clauses of the lease deed were:-
"...The registered consortium consists of following: -
Whereas the above-registered consortium who jointly qualify for
the bid and secured the allotment of said plot being highest bidder.
They through its lead member M/s. Vidhyashree Buildcon Pvt.
Ltd. have approached the lessor in accordance with clause C-8
* Court Volume Number
1 Amrapali La Residentia Flat Buyers Association
2 La-Residentia Developers Private Limited
S.No.
Name of member
Shareholding
Status
1.
M/s. Vidhyashsree Buildcon Pvt. Ltd.
26%
Lead Member
2.
M/s. Nishant Creations Pvt. Ltd.
19%
Relevant Member
3.
M/s. Anjali Buildcon Private Limited
20%
Relevant Member
4.
M/s. Agarwal Associates (Promoters) Ltd.
5%
Relevant Member
5.
M/s. Elegant Infracon PrivateLimited
19%
Relevant Member
6.
M/s. Stunning Constructions Private Limited
11%
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...
...
...
And it has been represented to the lessor that the CONSORTIUM
members have agreed amongst themselves that M/s. Vidhyashree
Buildcon Pvt. Ltd. having its registered office at H.No.195, 2nd
Floor, Back Side, Ram Vihar, Delhi-110092 shall remain lead
member of the consortium and lessee shall solely develop the
project on the demarcated Builders Residential/Group Housing
Plot No.GH-06A, Sector Techzone-IV, Greater Noida measuring
an area 80026.62 sqm."
3. The project to be developed by the Company was widely
advertised through brochures and advertisements as 'Amrapali La
Residentia' project, promising delivery of apartments within 36 months.
The relevant portion of the brochure was:-
"Amrapali has transformed the entire concept of living with its
various value added residential projects. Once more living up to
its reputation it is presenting a unique residential condominium
which is identified as Terrace Homes for its novel concept. Terrace
Homes are 2, 3 & 4 Bedroom Apartments with individual terraces
assigned to them. Three side open terrace that is virtually ocean
of fresh air is a star feature of every apartment of this modern
and architecturally improved apartment housing. The terraces are
just imitative of the lush green lawns in private villas and serves
Sl.
No.
Plot No.
Sector
Divided
Area
(in Sq.M.)
Name of member
Status
1.
GH-06A
Techzone-IV
80026.62
M/s. La Residentia
Developers
Pvt.
Ltd.
(SPC)
(SPC
of
M/s.
Vidhyashree
Buildcon
Pvt. Ltd., M/s. Nishant
Creations Pvt. Ltd., M/s.
Anjali Buildcon Private
Limited, M/s. Agarwal
Associates
(Promoters)
Ltd. And M/s. Stunning
Constructions
Private
Limited
Special
Purpose
Company
2.
GH-06B
Techzone- IV
17700
M/s.
Elegant
Infracon
Private Limited
Relevant
Member
of the brochure/bid document of the scheme to sub-divide the
said plot of land with the following status of holding lease rights:-
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
[UDAY UMESH LALIT, J.]
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as the lungs of the apartments. This heart of the apartment can
be used for multipurpose household occasions.
Where dedication is redefined
Real Estate and construction have been redefined by
Amrapali Group to such a grand extent that it has become a brand
name. Amrapali Group has successfully proved its forte in varied
Real Estate verticals from Residential Housing solutions to
Commercial edifices to IT parks and educational institutions. In
the last couple of years Amrapali Group has contributed in the
phenomenal growth of real estate and infrastructure industry with
many turnkey solutions. The Group strives for quality and ensures
the best of technology, planning, design and construction for all of
its projects. This has resulted in star projects like Amrapali Green,
Amrapali Royal, Amrapali Village, Amrapali Awadh, Amrapali
Vaishali and Amrapali Exotica Apartments."
4. Relying on the promises made in the brochure and believing the
representation that the project was of 'Amrapali Group', various interested
parties booked apartments paying booking amount running into several
crores. It appears that 3256 apartments were to be constructed and
developed in three phases; 1408 apartments in the first phase, 996
apartments in the second phase and 852 apartments in the third phase.
5. Writ Petition (Civil) No.940 of 2017 (Bikram Chatterji and others
vs. Union of India and others) and other connected matters filed in this
Court sought to highlight acts of commission and omission on part of the
Amrapali Group of Companies and persons in charge of the affairs and
submitted that the amounts invested by the apartment holders were
siphoned away by the Amrapali Group of Companies. While entertaining
these Writ Petitions, by Order dated 06.09.20183 this Court directed that
46 companies including the Company be audited by forensic auditors.
Accordingly, the forensic auditors considered various issues and submitted
their reports in February and April 2019. With regard to the project
'Amrapali La-Residentia', the forensic auditors noted:-
"La Residentia
A big project having more than 3,200 dwelling units was launched
in 2010-11 having an equity shareholding of 19.75% in the name
of Stunning Construction Pvt. Ltd.
3 (2020) 16 SCC 375
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•
Stunning Construction Private Limited ('Stunning'), an
Amrapali Group Company, holds 19.75% shares in the
company. Stunning has been a consortium partner since
beginning and land was allotted by Noida Authorities to the
5 members consortium including Stunning. The project was
launched as an Amrapali group project and was marketed
accordingly. As per the discussion with directors of La
Residentia Developers Private Limited, they broke up with
Amrapali group in 2017. 2017 is the year when writ petition
was filed before the Honorable Supreme Court. It is informed
to us that a marketing agreement was entered into between
La Residentia Developers Private Limited and Amrapali
group (name of the company not known) that Amrapali
group would market its project for a consideration of Rs.16
crore. It was informed by Mr. Sanjeev Kumar (director of
La Residentia Developers Private Limited and a very old
friend of Mr. Shiv Priya, director, Amrapali group) that though
the agreement was signed but Amrapali group didn't provide
a copy of the agreement. It proves that Amrapali director
were having significant influence on La Residentia
Developers Private Limited that they had an authority even
not to give a copy of the agreement to a person/entity who
has signed it.
•
Out of Rs.16 Crore, which were to be paid to Amrapali
Group as per the agreement, Rs.4 crore were paid to Saffron
Promart Consultancy Private Limited, owned and controlled
by CFO Chander Wadhwa) under a verbal instruction of
Mr. Adikhari, GM/DG accounts of Amrapali group. It is to
be noted that directors of La Residentia Developers Private
Limited were acting and working under the supervision of
Mr. Adhikari who was a middle level management officer.
It indicates that the project was conceived by Mr. Anil
Kumar Sharma & Mr. Shiv Priya, directors of Amrapali
group and Mr. Sanjeev Kumar, Mr. Mukesh Kumar Roy
and Others were only a front.
•
It is very clear that there was no contribution of funds from
the consortium partners. Whatever funds contributed by
the consortium partners were not only withdrawn within a
very short period but over and above that extra funds were
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
[UDAY UMESH LALIT, J.]
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given to them in the name of interest free loans and
advances.
•
Amrapali group companies have transferred some of their
buyers to the company. We found that the list of unsold
inventory was sent to Mr. Anil Sharma and it was he who
decided that the following buyers from Amrapali group
companies be shifted to La Residentia. This proves that La
Residentia was under the direct control of Mr. Anil Sharma
and Mr. Shiv Priya and is an entity of Amrapali group.
•
The company is also using the Brand name/trademark of
Amrapali group on its letterheads.
•
The website of the company is following
www.amrapalilaresidentia.com.
•
When we open the website of the company, advertisement
page was hiding details and it is a project of Amrapali group."
It was also observed:-
"As per Statement of Mr. Sanjeev Kumar, Director of La
Residentia Developers Private Limited recorded by us, he informed
that a sum of Rs.4 crores approximately, was paid as fees for use
of Amrapali Brand Name to Saffron Propmart Private Limited
(This Company is controlled by Mr. Chander Wadhwa CFO). No
Bills have been provided by him.
Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFO
were in connivance with each other and payments were made by
Shri Anil Mittal to Chander Wadhwa CFO for sharing fees received
from Amrapali group for the work awarded to Anil Mittal. Chander
Wadhwa is one of the masterminds along with the other promoters,
directors behind the whole scam. He facilitated movement of funds
by creating a web of companies within and outside the group. His
relatives were made partner investor in LA Residentia and
Heartbeat City Projects. Funds were invested in Patel Advance
JV (Neo Town Project Noida) and Euphoria Sports City."
6. The aforementioned observations of the forensic auditor were
quoted with approval by this Court in its Judgment dated 23.07.20194.
4 (2019) 19 SCC 161 - at pages 280 and 281
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6.1 It must also be noted here that with respect to another project
of Amrapali Group of Companies namely "Heartbeat City Project",
following observations were made in the aforesaid Judgment4.
"35. Heartbeat City Developers Private Limited
The project is in the name of 3 companies namely Pebbles Prolease
Private Limited, Three Platinum Softech Private Limited and
Baseline Infradevelopers Private Limited. The Project is an
Amrapali group's project which was carved out from Amrapali
Group of Companies while case was pending before Honorable
Supreme Court. Funds were invested in the project from Amrapali
Group through Mr. Amit Wadhwa, Mr. Amit Wadhwa was a
partner of 25% each in Pebbles Prolease Private Limited and
Three Platinum Softech Private Limited. Amrapali Group launched
and advertised the project as Amrapali Group project and the project
was named as Amrapali Heartbeat City Developers Private
Limited in the agreements. Corporate office was having the same
address as Amrapali Corporate Tower in Sector 62, Noida. The
purpose of carving out the project from Amrapali is not known. It
is informed that Mr. Vaibhav Jain and Mr. Sankalp Shukla are the
key managerial persons. In the absence of accounting records,
we could not proceed further on the issue."
6.2 In paragraphs 61 and 62 of said Judgment4 some of the
observations pertaining to La-Residentia, Heartbeat City, Stunning
Construction Private Limited were as under:-
"... ... (i). The Directors along with trust partners discreetly divided
the projects into two parts:
(i)
Projects in which home buyers funds were received
and funds were diverted from these projects;
(ii)
Projects to which home funds were diverted. These
projects were subsequently separated/demerged from
Amrapali Group, e.g., Heartbeat City, La Residentia,
Vinayaka Square.
(j). Several dummy companies were formed in the names of office
boys and peons. Technically, the allotments at the initial stage
were void ab-initio. The amount received by the Companies from
home- buyers was more than the amount spent on construction
and for payment of the land. The sole objective of taking a loan
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
[UDAY UMESH LALIT, J.]
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was to divert the funds to other ventures to create assets in the
name of family members and to make movies. Villas were bought
at tourist destination for fun at the expenses of the middle class
and low- income group people.
(k). Several companies were created solely for the purpose of
routing funds. These companies did not have any material
transaction as per the main object for which they were incorporated
and did not have a business since their incorporation.
62. As is apparent from the report, several companies were created
only to route the funds and transactions consisting of office boys,
persons with no income and dummy companies in which family
members and relatives were inducted as members only for few
transactions, which are as under:
(1)
Jhamb Finance & Leasing Private Limited.
It was under the control of Mr. Chander Wadhwa,
CFO. It has advanced loans amounting to Rs.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."
The observations in paragraph 153 and some of the conclusions
in paragraph 154 were:
"153. We have also found that non-payment of dues of the Noida
and Greater Noida Authorities and the banks cannot come in the
way of occupation of flats by home buyers as money of home
buyers has been diverted due to the inaction of Officials of Noida/
Greater Noida Authorities. They cannot sell the buildings or
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demolish them nor can enforce the charge against homebuyers/
leased land/ projects in the facts of the case. Similarly, the banks
cannot recover money from projects as it has not been invested in
projects. Homebuyers money has been diverted fraudulently, thus,
fraud cannot be perpetuated against them by selling the flats and
depriving them of hard-earned money and savings of entire life.
They cannot be cheated once over again by sale of the projects
raised by 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 to the buyers. The percentage of
commission of NBCC is fixed at 8 percent......"
7. Thus, the project 'Amrapali La Residentia' was found to be
coming in the second category where the funds of the home buyers
were diverted and where the projects were subsequently separated from
the Amrapali group. It was also found that 'Stunning Construction
Private Limited' ("Stunning" for short), one of the members of the
consortium which had set up the Company as a special purpose company,
was part of the Amrapali Group. Commensurate with the shareholding
of 'Stunning' in the Company, the direction was issued by this Court
that either 19.75 per cent of the land or 632 flats constituting about 19.40
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
[UDAY UMESH LALIT, J.]
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per cent of the total number of flats be surrendered by the Company; as
that would be equivalent to the contribution of flat buyers which was
diverted.
8. In the subsequent order dated 14.10.2019 passed by this Court,
the objections raised on behalf of the Company were noted and it was
observed:-
"We have heard Mr. Rakesh Khanna, learned senior counsel
appearing for La Residentia. The finding recorded in the Judgment
delivered by this Court that 632 flats or value of 19.75 per cent of
the share has to be recovered from La Residentia. It is also pointed
out that some cost of construction has been incurred by the La
Residentia. While handing over the flats or for selling them that
amount has to be paid to La Residentia and the remaining amount
has to come to the Amrapali Group. We direct the La Residentia
to submit an affidavit how much expenditure has been undertaken
in the construction of each of the flat and total amount invested in
the construction of 600 flats which are available for sale at present.
They are injuncted from selling flats which are available. Let the
affidavit be filed within fifteen days."
9. The present sets of applications are required to be considered
in the backdrop of the aforesaid orders passed by this Court on 23.07.2019
and 14.10.2019.
Pertinently, when said orders were passed, an application
submitted by 45 applicants being I.A. No. 168186 of 2018 (Z-68*) was
already on record of this Court. This application was filed on 19.11.2018
and after referring to the brochures circulated and advertised by the
Company, the application had asserted that the flat buyers had booked
their apartments believing their project to be Amrapali group project. It
was stated:-
"6. It is of lot of significance to state that the Coloured Brochure
bears the caption "Amrapali La-Residentia" and that the project
is not only designed and propagated by Amrapali Group but also
bears the reference of all other Amrapali Group Projects which
include "Amrapali Eden Park", "Amrapali Leisure Valley",
"Amrapali Sapphire" and "Amrapali Centurion Park". Further the
Allotment-cum-Flat Buyer's Agreement bears the registered
address too at Amrapali Corporate Tower C-56/40, Sector-62
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NOIDA, which is the corporate office of the Amrapali Group.
The Demand Letters to the Home Buyers from time to time have
also been issued and the name and bears the logo of "Amrapali
La-Residentia" and further the payment receipts have also been
issued under the same logo and head of Amrapali. Moreover, the
website also indicates that it is a Amrapali Project as the web is
titled as www.amrapali.in."
The application had principally prayed:-
"......
(b) pass appropriate order or direction directing delivery of the
dream homes of the Applicants in Amrapali La-Residentia situated
at GH-06A, Tech Zone-4, Noida Extension at the earliest;
(c) pass appropriate order fixing liabilities of the Directors of M/
s. La-Residentia Developers Pvt. Ltd. for delaying the project;
(d) pass appropriate order to attach the movable/ immovable
properties and bank accounts of M/s. La- Residentia Developers
Pvt. Ltd. as well as its all Directors........."
However, the prayers made in this application were not granted
by this Court either in its order dated 23.07.2019 or in the order dated
14.10.2019.
10. On or about 01.10.2019, IA No.153341 of 2019 (Z-233*) was
filed by the Company submitting that though Stunning had 19.75 per
cent shareholding in the Company, the Company had always maintained
an independent legal existence and there was no direct or indirect
financial dependence on the Amrapali Group. As regards the
arrangements entered into with the Amrapali Group, it was stated:
"The Applicant has not received any money from any group
company of the Amrapali Group, save and except paid up capital
of Rs. 13,580/- (Rupees Thirteen Thousand Five Hundred and
Eighty Only) in the nature of contribution towards paid-up capital,
received from Stunning. The said amount was received against
issue of 13.85% shares in the Applicant company at the time of
its inception. It is pertinent to state that even though Stunning is
Amrapali Group company, there has been no inflow of funds from
Stunning into the Applicant company other than the above-said
amount received by the Applicant against subscription of shares.
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
[UDAY UMESH LALIT, J.]
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The Applicant company had entered into a marketing arrangement
with Amrapali Group where it was agreed between the parties
that Applicant company would be allowed to use the name
'Amrapali' for marketing the Project. The brand 'Amrapali' at
such time was well established in the real estate sector and since
the Applicant was a new entrant in the business of real estate
development, management of the Applicant company was of the
opinion that the Project would benefit, from marketing/branding
perspective, if the name 'Amrapali' could be used for marketing/
branding the Project.
In light of above, for allowing the use of name Amrapali and
extending branding/marketing support, the Applicant company had
agreed to pay to Amrapali Group Rs.75/- per sq. ft. booked/sold
in the Project, as consideration."
The basic submissions in the application were:
"It is known to the Forensic Auditor that the Applicant is a
Private limited company and Stunning being a shareholder, is
only entitled to profits of Applicant company (if any) in form of
distributable dividend, which would be proportionate to it
shareholding in the Applicant company. Profits as such, by way
of cash or otherwise, cannot be legally distributed amongst the
shareholder.
Accordingly, Stunning as a shareholder would only be eligible
to 19.75% share in distributable dividend declared by the
Applicant company after profits (if any), which are determined
at the end of the Project.
Indulgence of this Hon'ble Court is also necessary to validate
the fact that the Project land cannot be apportioned/segregated
to the extent of 19.75% at this stage of the Project.
The Applicant would like to state that the rationale applied to
arrive at 632 flats is not just and proper and if the Applicant
was to comply to direction to surrender 632 flats, the number
of flats would vary for the same should be arrived at, if at all,
after apportioning 19.75% of the total built up space. The flats
forming part of unsold inventory may not confirm to the 19.75%
of the total built up space.
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Even otherwise, this should be subject to settlement of accounts
between Applicant and Amrapali Group, wherein the Applicant
is to receive amounts from Amrapali Group.
Also, it is submitted that 632 flats of unsold inventory are under
various stages of construction and are situated in different
towers within the Project. While some form part of the
inventory which is ready for handover, some are under
construction and some are yet to be constructed. Accordingly,
for material and actual handover of these 632 flats, complete
in all respects, it is necessary to maintain continuity in
construction through regular flow of funds, which will come
from sale of this unsold inventory. Further, so as to facilitate
overall development of the Project and handover of the units
to homebuyers, it is imperative that these flats be sold and the
amounts received from such sale be first utilized for construction
and completion of the Project.
The only viable option for the Applicant could be to offer 19.75%
in profits and loss of the Applicant company (arrived at the
stage of Project completion)."
Finally, the application prayed that the order dated 23.07.2019
passed by this Court be recalled or in the alternative the Company be
directed to deposit 19.75 per cent of the projected profits after making
due adjustments in respect of cost of construction and proportionate
costs towards the development of the entire project and other amounts
receivable from the Amrapali Group.
10.1 Similar submissions were thereafter made by the Company
in IA No.120307 of 2020 (I-155*), filed on 11.11.2020 and in IA No.123299
of 2020 (I-158*) filed on 25.11.2020. In both these applications, it was
submitted that the Company be allowed to raise funds through sale of
632 flats, without which it would not be possible for the Company to
raise finances and complete the project. In addition, certain directions
which according to the Company were necessary to be passed for overall
completion of the project, were also prayed for. It was submitted:
"56. That in addition to passing necessary directions to allow the
Applicant to raise funds through sale of unsold inventory and also
raise finance through bank/financial institution, the Applicant would
request for kind intervention of this Hon'ble Court to consider
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
[UDAY UMESH LALIT, J.]
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passing necessary directions, as under, which would be critical in
intervening circumstances, and beneficial for overall completion
of the Project:
A. To begin with, this Hon'ble Court may direct the receiver
appointed by this Hon'ble Court to set up, operate and be incharge of an escrow account wherein all receivables to the account
of Applicant company are deposited, whether received from sold
and/or unsold inventory, in addition to funds receivable other
sources (such as fresh finance raised from banks/financial
institutions).
B. Further, since during the pendency of present proceedings
validity of statutory approvals issued by the GNIDA has lapsed.
A copy of the last validated sanction plan, which expired during
November 2019, has been annexed herewith and marked as
Annexure L. To facilitate overall completion of the Project,
intervention of this Hon'ble Court is necessary to issue necessary
directions to GNIDA to extend validity of such license/permission
till anticipated date of completion of the Project i.e., December
2022.
C. Similarly, the proposed date of completion of the Project under
RERA registration has lapsed as of 15.06.2019. A copy of the
RERA registration has been annexed herewith and marked as
Annexure M. To facilitate overall completion of the Project,
intervention of this Hon'ble Court is necessary to issue necessary
directions to UP RERA to extend validity of such license/permission
till anticipated date of completion of the Project i.e., December
2022.
D. Intervention of this Hon'ble Court is also required in as much
as to issue appropriate directions to the UP RERA Authority to
recall its orders, not take any coercive measures against the
applicant and refrain from passing any such orders till the disposal
of the present proceedings before this Hon'ble Court.
E. In addition to foregoing, it is also imperative that directions are
issued to the relevant authorities like GNIDA, UP RERA etc. not
issue adverse rulings/orders/impositions against the Applicant
company till anticipated date of completion of the Project i.e.,
December 2022.
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F. It is necessary that GNIDA be directed to revalidate statement
of land dues after causing reduction in the penal interest levied on
land dues over last so many years. The Applicant considers itself
eligible for such respite since similar benefit has been extended
by this Hon'ble Court to other projects/developers as well. The
Applicant also considers itself to be eligible for such relaxation
since the case of Applicant company is much different from other
projects of Amrapali Group where GNIDA has not been paid any
amount after the initial 10% payment for the project land paid at
the time of allotment. The Applicant is all the more eligible for
such rebate/relaxation for the reason that the Applicant company
has repaid more than the principal amount that it originally owed
to GNIDA as land dues. The amount being claimed by GNIDA
as on date is highly inflated, as already elaborated upon in the
present application.
G. It is further submitted that GNIDA be directed to continue
registering sub-lease deeds in the name of home buyers as GNIDA
has paused further registrations on account of non-payment of
land dues by the Applicant. Since land dues payable to GNIDA
would require revalidation due to undue imposition of interest (as
per directions of this Hon'ble Court), it becomes necessary
registration of sale continues in favour of homebuyers of the
Project, who should not be made to suffer on this account. The
Applicant seeks necessary directions in this regard since the
position of Applicant before GNIDA is' not, in any way, similar to
other allottees/projects/developers who are before this Hon'ble
Court.
H. Intervention of this Hon'ble Court is also required particularly
to the issue of other impositions made by the GNIDA on land
dues payable by GNIDA. Other than the extending relaxation on
penal interest imposed by the GNIDA, the GNIDA should also be
issued necessary directions to withdraw certain undue impositions
upon the Applicant company. Many such undue and arbitrary
impositions in the name of land dues, are the reason for Applicant
company being a defaulter before GNIDA despite having paid
more than the principle amount originally payable to GNIDA.
In this regard, it is most important to note that the Project in question
remained adversely affected between July 2011 till May 2015, for
BIKRAM CHATTERJI & ORS v. UNION OF INDIA & ORS.
[UDAY UMESH LALIT, J.]
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reasons which were directly attributable to GNIDA and absolutely
beyond the control of the Applicant company.
The issues which hampered the Project during such period included
the issue of cancellation of land allotment, farmer protests and
agitation on land acquisition by GNIDA/UP State Government,
issue' regarding payment of enhanced compensation to the
farmers, and other related legal issues.
These issues practically detailed the progress of the Project on
more than one occasion and consequently penal obligations were
forcefully imposed by GNIDA upon the Applicant company for
such period of disruption, rather than adequately compensating
the Applicant company for stoppage of construction at the Project,
for causes which were directly attributable to GNIDA.
At such time, even the burden of payment of enhanced
compensation payable to farmers to end the dispute between
farmers and GNIDA/State Government in respect of land
acquisition, was conveniently passed onto allottees of project land
like the Applicant company, which was neither anticipated nor
accounted for by the Applicant company.
With respect to this issue, the Applicant company had filed a
representation before the GNIDA and subsequently, Applicant
company had to move a Writ Petition before the Hon'ble High
Court of Uttar Pradesh at Allahabad, for claiming benefits under
the 'Zero Period Policy'. However, for lack of action on part of
GNIDA, no benefit has been extended to the Applicant company
on this account till date, by the GNIDA.
It is therefore necessary that such benefit is now extended to the
Applicant company, firstly for the reason that such benefit is long
due to come from GNIDA who has been avoiding to settle this
issue with Applicant company, and also for the reason that in
absence of such relaxation/respite/adjustment from GNIDA, the
Project is unlikely to be net positive at the time of its completion.
I. Further, necessary directions are required for the homebuyers
who should be directed to strictly pay their dues regularly. The
ongoing state of affairs has resulted in homebuyers withholding
release of their dues to the Applicant company, such inflow of
funds being critical and necessary for overall completion of the
Project. It is a matter of record that such non-payment has had a
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direct impact on flow of funds and pace of construction of the
Project.
J. That another aspect, which if given due consideration, may
lead to better profitability in the Project is in respect of loan facility
availed by the Applicant Company from Religare (NBFC). The
Applicant Company has already repaid an Amount of
Rs.