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Amrapali flats: SBI Capital told to give funds

Last Updated: May 28, 2020, 11.40 AM IST

Summary The bench said it is the court which has taken on the task to complete the projects, which precludes any chance of misuse of funds. Supreme Court’s Amrapali order is expected to bring relief for 46,000 homebuyers.

amrapali flat
File photo of Amrapali flats
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(This story originally appeared in on May 28, 2020)
NEW DELHI: As NBCC faces a cash crunch in completing the construction of Amrapali's unfinished housing projects, the Supreme Court on Wednesday asked SBI Capital, which manages the Centre's real estate stress fund, to relax the norms for releasing funds for the projects.

The bench said it is the court which has taken on the task to complete the projects, which precludes any chance of misuse of funds. It said guidelines could be relaxed in Amrapali's case as the construction work is "court-sponsored" and being monitored by it.

The court’s directions will spell relief to around 46,000 homebuyers who had invested in Amrapali’s various projects more than a decade ago. Most of them have not been given possession of the flats as the projects could not be completed due to alleged diversion of money by the real estate firm and its directors.

Additional solicitor general Vikramajit Banerjee, appearing for the Centre, told the bench of Justices Arun Mishra and U U Lalit that officials of the finance ministry had taken up the issue with SBI Capital and it was for the bank to take a call on release of funds as per the guidelines. The bench, however, stressed that guidelines need not be complied with strictly in the Amrapali case as there was no private builder involved and construction was to be done by state-owned NBCC (India) Limited. The court had, on the last date of hearing, asked the Centre to consider releasing Rs 500 crore for the projects.

Banerjee said banks could also release money due to homebuyers as they have been given the flexibility to restructure home loans. Referring to banks declaring home loans as NPA, the ASG said banks have discretion to release money as NPA is not binding.

Senior advocate Harish Salve, appearing for SBI Capital, assured the court that he will “try his best to convince” the bank to release the amount and pleaded the court not to pass any order. Salve said he would take instructions and brief the court on the next date of hearing on June 3. “The money could be released in instalments. It will be a safe investment and the amount will not go into unsafe hands as there is no private builder involved in the projects,” the bench said. The estimated cost for construction of all the housing projects is Rs 8,500 crore

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