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REPORTABLE  

 IN THE SUPREME COURT OF INDIA  

CIVIL ORIGINAL/ APPELLATE JURISDICTION  

WRIT PETITION (C) NO.940/2017  

 BIKRAM CHATTERJI & ORS.    ..PETITIONER(S)  

VERSUS  

UNION OF INDIA & ORS.     ..RESPONDENT(S)  

WRIT PETITION (C) NO.947/2017  

WRIT PETITION (C) NO.971/2017  

WRIT PETITION (C) NO.942/2017  

SPECIAL LEAVE PETITION (C) NO.1879/2018  

WRIT PETITION (C) NO.1041/2017  

WRIT PETITION (C) NO.1018/2017  

WRIT PETITION (C) NO.1116/2017  

WRIT PETITION (C) NO.1144/2017  

WRIT PETITION (C) NO.1156/2017  

WRIT PETITION (C) NO.1206/2017  

WRIT PETITION (C) NO.8/2018  

WRIT PETITION (C) NO.1242/2017  

WRIT PETITION (C) NO.58/2018  

WRIT PETITION (C) NO.21/2018  

WRIT PETITION (C) NO.52/2018  

WRIT PETITION (C) NO.91/2018  

WRIT PETITION (C) NO.56/2018

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WRIT PETITION (C) NO.57/2018  

WRIT PETITION (C) NO.74/2018  

WRIT PETITION (C) NO.134/2018  

WRIT PETITION (C) NO.131/2018  

 WRIT PETITION (C) NO.160/2018  

WRIT PETITION (C) NO.164/2018  

WRIT PETITION (C) NO.182/2018  

WRIT PETITION (C) NO.199/2018  

WRIT PETITION (C) NO.226/2018  

WRIT PETITION (C) NO.245/2018  

WRIT PETITION (C) NO.281/2018  

WRIT PETITION (C) NO.306/2018  

WRIT PETITION (C) NO.298/2018  

 WRIT PETITION (C) NO.246/2018  

WRIT PETITION (C) NO.267/2018  

WRIT PETITION (C) NO.288/2018  

WRIT PETITION (C) NO.460/2018  

WRIT PETITION (C) NO.353/2018  

WRIT PETITION (C) NO.378/2018  

WRIT PETITION (C) NO.742/2018  

WRIT PETITION (C) NO.829/2018  

SMC (CRL.) NO.4/2018  

WRIT PETITION (C) NO.1397/2018  

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J U D G M E N T  

Arun Mishra, J.    

1. These writ petitions pertain to the projects of various companies of  

Amrapali Group in the Noida and Greater Noida.    

2. It is submitted on behalf of the petitioners that in 2011 in Noida and  

Greater Noida various real estate projects for housing were started.  In the  

various projects, the Amrapali Group of Companies proposed to construct  

approximately 42,000 flats.  Various brochures were published and it was  

assured that the delivery of possession shall be made in 36 months and  

other world-class amenities were also promised.  

3. Various home buyers booked their apartments during the period  

2010-2014.  The buyers signed the Standard Form of Allotment-cum-Flat  

Buyers Agreement and even after payment of 40 to 100 percent of total  

consideration, they are faced with the threat of forfeiture of huge booking  

amount.  The agreement contained specific terms as to interest.  Under  

Clause 14 of the agreement, the builder authorised itself to finance loan  

from any financial institution by way of mortgage/charge/securitization of  

receivable of the land and flats and the allottees will have no objection in  

this regard.  Clause 15 also authorised the builder to keep full authority  

over the flat depriving the allottees of any lien or interest despite payment  

of entire amount thereof.  

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4. The builder under Clause 19(a) was obliged to complete the flats of  

M/s. Amrapali Centurion Park Private Limited within 30 months from the  

date of commencement of excavation/signing of the agreement, which may  

vary for plus/minus 6 months. Under Clause 19(c), builder fixed a paltry  

sum of Rs.5 per square feet super area per month for the period of delay,  

which would include any/all damages, compensation, claims for delayed  

possession.  

5. The buyers invested their life savings and some of them had obtained  

the loan from the Bank.  Most of the buyers have made the payment to the  

extent of 50 percent to 100 percent abiding by the payment schedule.  The  

dreams of the buyers of obtaining house were given serious jolts when M/s.  

Amrapali Silicon City Private Limited and M/s. Amrapali Centurian Park  

Private Limited, respondent Nos.3 and 4 herein respectively were found in  

serious breach of their obligation to deliver the flats within 36 months.   

They did not pay the amount either to the Noida or Greater Noida Authority  

and also to the Banks.  Several revised dates of possession were fixed  

unilaterally, but they failed to deliver the flats.  The Amrapali Group has  

failed to comply with its obligation under the subvention scheme, the  

tenure of which was approved by the bank/financial institution.  The  

builder had failed to comply with the abovementioned scheme as the buyer  

making the payment of EMIs to the banks, thereby causing a double loss.   

Some of the consumers approached the National Consumer Dispute  

Redressal Commission (for short, ‘the NCDRC') by filing Consumer

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Complaint No.213 of 2017 under Section 12(1)(c) of the Consumer  

Protection Act, 1986.  

6. The Bank of Baroda had filed Company Petition No. (IB)-

121(PB)/2017 before the National Company Law Tribunal (for short, ‘the  

NCLT’) under Section 7 of the Insolvency and Bankruptcy Code, 2016 for  

triggering the Corporate Insolvency Resolution Process in the matter of  

M/s. Amrapali Silicon City Private Limited, respondent No.3.  The NCLT  

appointed the Interim Resolution Professional (in short, the ‘I.R.P').   

Moratorium was also declared thereby restricting the institution of any  

suits against the corporate debtor including execution of any judgment,  

decree or order; transferring, encumbering, alienating or disposing of by  

the corporate debtor any of its assets or any legal interest therein; and any  

action to foreclose, recover or enforce any security interest created by the  

corporate debtor in respect of its property under the Securitisation and  

Reconstruction of Financial Assets and Enforcement of Security Interest  

Act, 2002 (for short ‘the SARFAESI Act').  The order of NCLT has a direct  

bearing on the home buyers of M/s. Amrapali Centurian Park Private  

Limited, respondent no.4, which is virtually owned by M/s. Amrapali  

Silicon City Private Limited with 98.84 percent shareholding.  Both the  

companies are run by the almost same set of Directors including Mr. Anil  

Kumar Sharma and Mr. Shiv Priya.  Thus, in order to secure the interest of  

home buyers, in the instant petitions under Article 32, a plethora of  

intervention applications have been filed.

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7. It is submitted on behalf of petitioners that home buyers have put  

their lives at stake by paying their lifetime savings and hard-earned money  

in the purchase of flats.  As such, they cannot be categorised as ordinary  

financial creditors to rank pretty low in the order of priority under Section  

53.  Corporate builder heavily counts upon the home buyers as  

stakeholders to sustain in the market.  Section 53 of the Insolvency and  

Bankruptcy Code, 2016 is irrational and violates the rights of the home  

buyers guaranteed under Article 21 as by subjecting the home buyers to  

the liquidation proceedings of discriminatory nature.  The very survival of  

home buyers has been seriously jeopardised.  Not only they are going to  

lose the entire money with accrued interest, but they also become  

financially crippled for all time to come even close to the dream of a new  

home, let alone purchase it.  There is no equal protection under the  

Insolvency and Bankruptcy Code, 2016.  The moratorium imposed by  

NCLT directly affecting not only the home buyers of M/s.Amrapali  

Centurion Park Private Limited, but also similarly situated lakhs of home  

buyers in various other projects.  They cannot be deprived of their legal  

rights.  Similar plight has been averred by the other buyers in the other  

several projects.  

 8.  The matter projects the issue of larger public interest.  The real estate  

business has developed and it mainly survived by the money invested by  

the buyer for the purchase of the house.  They have the right to obtain  

houses.  The facts of the instant case project that Noida and Greater Noida

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have allotted huge plots to the builders by charging a sum of approximately  

10 percent and in most of the cases, thereafter no money has been paid.   

The large number of projects which have come up not only in Noida and  

Greater Noida, but most of them have not been completed by the  

builders/promoters and they have siphoned buyers' money in large scale.   

No action has been taken by the Noida and Greater Noida Authorities  

against builders for cancellation of leases due to violation to fulfil their  

obligation.  Bankers have financed to builder certain loan on the condition  

to invest in the projects, but they have also permitted the money to be used  

as for other purposes as apparent from the report of the Forensic Audit in  

the instant case which had been submitted by Auditors - Mr. Pawan  

Kumar Aggarwal and Mr. Ravinder Bhatia.  The facts which are projected  

in the Forensic Auditor Report speaks for itself.  

9. Before we consider the Forensic Audit, it would be appropriate to  

refer to certain orders which were passed from time to time by this Court.   

This Court on the application filed by petitioner - Bikram Chatterji, passed  

an order on 22.11.2017, directing builder to deposit 10 percent of the dues  

to Noida Authorities.  This Court also directed that the phase in respect of  

which Occupancy Certificate and No Objection Certificate, if granted, the  

possession of flats shall be handed over to the respective flat buyers.   

Liberty was granted to flat owners to complete the finishing work.   

Thereafter, an order was passed on 31.1.2018, requesting the builder to  

deposit amount as ordered on 17.11.2017.  It was also pointed that in

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several places firefighting devices were not installed though the places were  

occupied by thousands of families of Phase-I of Silicon City of Amrapali in  

Sector 76, Noida.  Directions were issued to do the needful.  We also  

directed to submit the proposal within one week with respect to all the  

projects, which were incomplete.  On 22.2.2018, the following order was  

passed by this Court:  

“Applications for impleadment(s) is/are allowed to the extent of  intervention only.    IN W.P.Nos.160,91,164 of 2018 AND D. NO. 6636 OF 2018  Issue notice on the petition as well as on the prayer for interim relief  returnable within two weeks.    Dasti, in addition, is also permitted.    IN W.P.(C) Nos. 942/2017 AND 8 OF 2018  Heard learned senior counsel for the parties.    Pursuant to the order passed on 21.02.2018, Mr. Ranjit Kumar,  learned senior counsel assisted by Mr. Gaurav Bhatia and Alok  Aggarwal, appearing on behalf of the promoters of Amrapali Group  has produced a compilation ‘A’ before this court on behalf of the  said promotors disclosing the particulars of the on-going projects,  stages of the work vis-a-vis the towers involved, the likely time to  complete the remaining works and the cost of construction therefor.    Mr. Ranjit Kumar, learned senior counsel, has in particular drawn  the attention of this court at pages 4 & 5 of the compilation ‘A'  which deal with 19 towers as mentioned therein of Amrapali Leisure  Valley Developers Pvt. Ltd. (Leisure Park). In the chart, on these two  pages of the compilation amongst others the number of units,  saleable area, the proposed/likely time to complete the finishing  work, the total balance amount payable by the home buyers and the  total expenditure to be incurred in completing the work, have been  indicated. As this chart reveals the likely time to complete the work  and to deliver possession in accordance with the law, ranges from 3  to 15 months. According to the respondent, an amount of Rs.87.28  crores is required to complete the finishing works in fairness as  mentioned therein.    When enquired by this court as to the guarantee for the  implementation of the arrangements proposed for all practical  purposes, Mr. Ranjit Kumar, on instructions, has submitted that to  ensure that the works are completed by the time as proposed 12  developers in addition to the Galaxy group have given their letters to  collaborate with the respondent promoters for the said purposes as  testified by the documents available in compilation ‘B’.   

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 Learned counsel appearing for the home buyers, however, have  expressed some reservation contending that the arrangements as  proposed do not inspire confidence in view of the past experience  and have pleaded that unless the 13 developers who undertake to  collaborate with promotors of Amrapali Group are tied down with  necessary conditions, the very executability of the project would be  doubtful. To this Mr. Ranjit Kumar, learned senior counsel has  urged that adequate undertakings would be given by the promoters  of Amrapali Group as well as the other developers.    Having regard to the rival submissions made and the attendant  facts and circumstances and also considering the predominant  interest of the home buyers, we are of the view that it would be in  the fitness of things to permit the promotors of Amrapali Group to  immediately start the finishing work as proposed in the units of the  

towers as listed at pages 4 & 5 of Compilation ‘A' on the basis of the  arrangements as proposed.    In order to examine the bonafide of the proposal and the progress of  the works that would be achieved, list these matters on 27th March  at 2 P.M. By then the promotors of Amrapali Group would furnish  to this court complete details of the proposals in all respects made  by the collaborators/developers and ensure completion of the  projects/finishing work as indicated in chart.    We part with the belief that the respondents-developers would be  true to their assurances to this court and also to the home buyers.  Needless to say that all promotors of Amrapali Group shall furnish  their undertaking by 7th March 2018. Further orders in this regard,  as considered necessary, would be passed on the next date i.e. on  27.03.2018.    In response to the prayer made on behalf of the developers that the  insolvency proceedings before the NCLT ought to be stayed, we on  this stage leave the parties to make the appropriate prayer as  advised before the said Forum.”      

10. Keeping in view the predominant interest of the home buyers, vide  

above order we directed the Amrapali Group to complete the projects and  

the finishing work as assured, but it was not done as apprehended by the  

home-buyers.  This Court vide order dated 15.3.2018, directed to submit a  

joint proposal with respect to providing project wise information of the  

stages of various building.  Thereafter, on 27.3.2018, learned senior  

counsel appearing for Amrapali Group stated that they are ready to  

undertake the completion of the projects of Amrapali Group and we

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requested the I.R.P. of Amrapali Group not to proceed any further, in view  

of the assurances given by the Amrapali Group to undertake works.  This  

Court on 10.5.2018 has passed an order for installation of lifts in the  

Towers and also to make certain lifts functional.  We also asked the  

promoters/ developers to submit the statement of the total price of the  

flats, the total amount paid to the builder by the flat buyers, the total  

amount spent by the builder on the construction and how the remaining  

part of the money paid by buyers has been utilised.  It also transpired from  

documents that money had been transferred to certain other companies,  

thus, this Court has asked for the details of the composition of the  

transferee company including the names of the Director and for what  

purpose money was transferred and how it is to be retrieved and how  

projects are to be completed.  

 11. On 17.5.2018, this Court passed the following order:  

“1. Heard learned counsel for the parties.    2. Pursuant to our request made to the learned counsel, they have  sat together and a joint statement has been filed for containing the  proposal for completion of the various projects. A joint meeting had  been conducted between the lawyers representing the buyers and  builder of Amrapali Group and the representatives of Greater Noida  and Noida. The proposals are in the form of four baskets with  independent timelines and the co-developers had been chosen to  undertake the completion of the projects and remaining work at the  site. The independent proposals given by Amrapali along with the  proposed co-developer had been placed before the concerned  lawyers representing the flat owners in those projects and lawyers of  Noida and the representatives of Greater Noida and broad  consensus has been reached.    3. The following are the basket-wise proposals:   

 FIRST BASKET  

 I. SAPHIRE – PHASE-I IN NOIDA :

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 In relation to Saphire Phase-I, consisting of 1033 units, the time  given is of 10+2 months for completion of the project.    II. SAPHIRE-PHASE-II :   It consists of 1308 units and the time sought for completion of the  project is 12 to 15 months.     The promoter of the Saphire Phase I & II projects is M/s. Amrapali  Saphire Developers Pvt. Ltd. The developer chosen by the promoter  is M/s. Galaxy Dreamhome Developers Pvt. Ltd. With respect to  Saphire Phase II project, as agreed to by the promoter, the relevant  agreements entered into with co-developers to be placed within one  week. The documents shall be filed afresh, even if the same had  been filed earlier, duly supported by an affidavit. Let the  undertaking of concerned promoter/co-developer be also placed on  

record within seven days.     III. LEISURE PARK :   This project comprises of 2993 units. There are three categories of  this project, namely:    i) The first category comprises of the following 19 towers with 1665  units and the time limit of 15 months is fixed :   

1. E1 2. E2 3. E3 4&5. E4 (Two Towers)   6. B2 7. B3 8. B4 9. B5   10. A1 11. A2 12. A3 13. A4   14. A5 15. A6 16. F1 17. F2   18. F3 19. F4     

ii) The second category comprises of 3 towers, i.e., towers C1, C2,  and F5. There are 411 units and time limit, as agreed to for  completion is up to 22 (twenty-two) months.     (iii) The third category (River view) comprises of 7 towers, i.e., D1 to  D7. There are 917 units in this category and time, as agreed to for  completion is 29 (twenty-nine) months.     The co-developer of the first basket is M/s. Galaxy Dreamhome  Developers Pvt. Ltd.   

 SECOND BASKET  

PRINCELY ESTATE :   The promoter of the project is M/s. Amrapali Princely Estates Pvt.  Ltd. There are 1919 units. Out of these, minor work is required to  be carried out in 1600 units, possession of which have already been  handed over to buyers and some work remains in three other  towers, being towers N, O and P, which comprise 319 units. Time  agreed for completion of same is 12 months and it has been  proposed that M/s. Kanodia Business Pvt. Ltd. will be the co- developer.     It is also agreed to that as there is no water tank, no lift in three  towers, i.e., N, O & P, the work of water tank and lifts in these  towers shall be completed within six months from today.    

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 As the inhabitants are already occupying certain portion up to the  fifth floor, let arrangements be made, as agreed to, for water tank on  a priority basis. Adequate provision for electricity connection shall  also be made within three months from today.     We defer the order with respect to Amrapali Silicon project, as  agreed to.   

THIRD BASKET    

Amrapali-the promoter has proposed certain projects in category-A,  namely, Zodiac, Platinum, Titanium and Eden Park in this basket.     The promoter of the Zodiac is M/s. Amrapali Zodiac Developers Pvt.  Ltd., whereas the promoter of Platinum and Titanium is M/s. Ultra  Home Construction Pvt. Ltd. and of Eden Park, the promoter is  

Amrapali Eden Park Developers Pvt. Ltd. The following agreement  has been reached with respect to the aforesaid category ‘A’ projects :     A.1. ZODIAC :   Zodiac comprises of 2230 units. It is agreed that the work in the  said units shall be completed within 12 months. The co-developer is  M/s. India Infoline Limited (IIFL) & M/s. Galaxy Dreamhome  Developers Pvt. Ltd.     A.2. PLATINUM & TITANIUM :   (a) Platinum comprises of 888 units, and (b) Titanium comprises of  54 units. The work in the said units shall be completed within 7  months. The codeveloper being M/s. IIFL or M/s. Galaxy  Dreamhome Developers Pvt. Ltd.     Let the requisite undertaking by the concerned promoter and co- developer be filed within seven days in this Court.     A.3. EDEN PARK :   Eden Park comprises of 316 units. The work shall be completed  within 7 months. The co-developer is M/s. Galaxy Dreamhome  Developers Pvt. Ltd.     Let the promoter and co-developer to file a requisite undertaking  within 7 days from today.     CATEGORY B PROJECTS :   The following are category ‘B’ projects :     B.1. CENTURIAN :     A. CENTURIAN PARK:   Centurian Park comprises of low rise 600 units. The work shall be  completed within 10 months.     B. TERRACE HOMES :   Terrace Homes comprises of 3481 units. The work shall be  completed within 21 months.     C. TROPICAL :   Tropical comprises of 1240 units. The work shall be completed

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 within 30 months.     D. O-2 Valley :   O-2 Valley comprises of 800 units. The work shall be completed  within 12 months.     The proposed promoter is M/s. Amrapali Centurian Park Pvt. Ltd.  and co-developer is M/s. IIFL.    It appears that earlier M/s. Sahi Developers Pvt. Ltd. was appointed  as co-developer under a Joint Development Agreement. There is  some interse dispute with respect to the work undertaken by the  said codeveloper and the promoter. Be that as it may. The co- developer M/s. Sahi Developers Pvt. Ltd. to file the details of the  investment made by it in the projects. Let the promoter also file a  

reply to the same and appropriate orders would be passed by this  Court with respect to the interest of M/s. Sahi Developers Pvt. Ltd.  However, we permit the new codeveloper M/s. IIFL to be appointed  for the said project so that owing to the interse dispute between the  promoter and co-developer, the project may not be delayed.    B.2. GOLF HOME :   This project consists of two parts : (i) Golf Homes; and (ii)  Kingswood.  (i) Golf Homes :   Golf Homes consists of 4210 units. The work shall be completed  within the period of 6 months to 22 months and possession shall be  handed over as soon as the project is completed.     (ii) Kingswood :   Kingswood comprises of 1596 units. The work shall be completed  within nine months to 22 (twenty-two) months.     The promoter of Golf Homes and Kingswood projects is M/s.  Amrapali Smart City Developers Pvt. Ltd. and the co-developer is  M/s. IIFL.     B.3. TECH PARK :   Tech Park project is located in Greater Noida. The promoter is M/s.  Ultra Home Construction Pvt. Ltd. and the co-developer is M/s. IIFL  The work shall be completed within the time limit of 18-24 months.     

PROJECT COSMOS KOCHI :   In COSMOS KOCHI, the project at Kochi, the time limit for  completion is fixed from 9 to 18 months. The promoter of the  Vananchal ‘Kochi', the project is M/s. Ultra Home Constructions  Pvt. Ltd.     In VANANCHAL CITY, Ranchi project also, the promoter is M/s.  Ultra Home Constructions Pvt. Ltd.     The co-developer for both the Vananchal projects is M/s. IIFL.   

 FOURTH BASKET  

I. DREAM VALLEY :   The promoter of Dream Valley is Amrapali Dream Valley Pvt. Ltd.

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 This project comprises of Dream Valley Villa and Enchante, with  respect to which proposal has been filed.     a) Dream Valley (Villa): This project comprises of 379 units. The  work shall be completed within 6-15 months in a phase-wise  manner.     b) Dream Valley-2 (High Rise): This project comprises of 8302 units.  The work shall be completed within 9-35 months.     c) Enchante: This project comprises of 1508 units. The work shall  be completed in a phase-wise manner within 42 months.     The co-developer is M/s. Galaxy Dreamhome Developers Pvt. Ltd.  Requisite undertaking by the promoter and the co-developer shall  

be filed within seven days.     II. LEISURE VALLEY :   a) Leisure Valley Villas – which comprises of 887 units, the work  shall be completed within 6-15 months.    b) Verona Heights & Jaura Heights – comprise of 4964 units and  the work shall be completed within 42 months.     c) Adarsh Awas Yojna - comprises of 1904 units and the work shall  be completed within 30 to 42 months.     The promoter of the projects is M/s. Amrapali Leisure Valley Pvt.  Ltd. and the co-developer is M/s. Galaxy Dreamhome Developers  Pvt. Ltd.    III. HEARTBEAT CITY 1 & 2 :   a) In a Heartbeat City-1 project, the number of units is 759 plus  shops. The time limit is 10-18 months; and     b) In a Heartbeat City-2 project, the number of units is 1217 plus  shops. The time limit is from January 2020 to December 2020.     The promoters of these projects are M/s. Pebble Prolease Pvt. Ltd.  and M/s. Three Platinum Softech Pvt. Ltd. The co-developer is M/s.  Galaxy Dreamhome Developers Pvt. Ltd.     

The aforesaid period wherever fixed includes the period of  mobilization and reflects the outer limit. Let undertaking of  promoter and developer be filed within seven days with respect to all  the projects.    4. It is apparent from the admission made by the promoter that the  money to the extent of Rs.2765 crores, out of the six projects in  question, has been transmitted to other projects. Though we were  inclined to direct the promoter to deposit the said amount in this  Court, we are not doing this at this juncture, because of the  singular reason that the various promoters of the projects have  shown their willingness to complete these projects by engaging the  services of the co-developer. It is made clear that co-developer is the  agent of the promoter. No right or interest shall accrue to the co-

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 developer and liability towards the buyer shall remain with the  promoter.    5. At this stage, we deem it appropriate to direct that an escrow  account has to be opened. The said account has to be opened in the  UCO Bank, Supreme Court Branch, situated in the premises itself.  At this juncture, we deem it appropriate to direct the promoters to  deposit a sum of Rs.250/- crores (Rupees Two Hundred Fifty  Crores) in the said escrow account, and money shall be deposited  on or before 15th June 2018.     6. A proposal has also been submitted on behalf of the promoters of  the aforesaid projects to sell some of the unencumbered property,  details of which have been given at page 28 of the affidavit dated  16.5.2018. Out of the aforesaid proposal, we find that the properties  

mentioned at serial numbers 11 and 15 are of high value. The  unlaunched part of M/s. Amrapali Leisure Valley Pvt. Ltd., land of  project is in Greater Noida, is held on the basis of the leasehold  interest from the Greater Noida Industrial Authority, the realizable  value is shown to be is Rs.917.29 crores (Rupees Nine Hundred  Seventeen Crores Twenty Nine Lakhs). There is no bank loan but  however, there appear to be some dues to the Greater Noida  Authority on this particular property. The distress sale value is  shown at Rs.491 crores (Rupees Four Hundred Ninety-One Crores).  The property mentioned at serial number 15 is a part of the  unlaunched property of Amrapali Centurion Park (Commercial) held  on a leasehold basis from the Greater Noida Industrial Authority  and its distress value is Rs.246 crores (Rupees Two Hundred Forty- Six Crores).     7. There are some other commercial properties, which are in the  form of hotels and other commercial properties comprising of malls,  etc. and those can also be sold for completion of projects. As and  when a concrete proposal is submitted before us for sale, the same  shall be considered and appropriate orders would be passed in this  regard. However, the amount of Rs.250 crores (Rupees Two  Hundred Fifty Crores) has to be deposited by 15th of June, 2018  without fail, in the escrow account to be opened with the UCO Bank  of this Court.     8. There are certain outstanding dues of the buyers. It would be  open to the buyers to deposit the said amount in the said escrow  

account. However, as soon as the projects are completed, we  propose to give them reasonable time to deposit the outstanding  dues. As soon as the promoter and co-developer are in a position to  hand over the possession, the buyers shall have to deposit the  outstanding amount in the escrow account to be opened in the UCO  Bank, within three months time from the date of issuance of offer of  possession.  

 9. We also propose to form a Committee to submit periodical reports  of the progress of the construction, to this Court, consisting of the  following members:   

i. Architect of the developer;   ii. Structural Engineer of the developer;   iii. Chartered Accountant appointed by the developer; as well

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 as –   iv. Architect of buyers   v. Structural Engineer of buyers   vi. Chartered Accountant appointed by the buyers and apart  from the above members, we appoint Mr. M.L. Lahoty, learned  Advocate, as a member of the said Committee, so as to  coordinate the effective functioning and to submit an  appropriate periodical report in this Court. We appoint one  nominee each of Greater Noida and Noida Authority, to be the  member of said Committee.     

10. There are certain unsold units in the various projects that have  to be firstly adjusted by making swapping as agreed to, after that  the remaining available units may also be permitted to be sold. In  this regard, a proposal would be submitted as and when swapping  

process is completed and the details of property to be sold and  amount of offer by the prospective buyers, be indicated by this  Court. The proposal will be submitted for consideration so that  appropriate orders may be passed by this Court. Let the Committee  constituted by us also to supervise the swapping part.     11. Eight weeks’ time is granted to the buyers for the purpose of  applying for swapping and decision shall be taken within 15 days  from the date of application for the purpose of swapping is filed  before the promoters. In case there is any difficulty in swapping, the  Committee is authorized to take care of the grievances and to guide  the promoters as well as the buyers.     12. As there are certain dues of Noida and Greater Noida  Authorities and that of the secured creditors and  operational/unsecured creditors, let the proposal be submitted by  the promoters in this regard, on or before 07.07.2018. We also place  on record that approximately a sum of Rs.4,300-4,900/- crores will  be required for completion of the various projects as pointed out by  promoters.     13. There are certain ‘C’ category projects. With respect to those  projects also, as they are not taken care of during swapping or there  may be certain buyers not willing for swapping or certain amount  may be required to be refunded to the buyers, who are not  intending to purchase now and not opting for swapping or/and is  not feasible, to take up those projects. The promoter shall also file  

its proposal with respect to such buyers who want their money to  be refunded. Let that proposal be also filed after swapping is done  indicating therein as to how many persons require to refund the  money. The buyers in ‘C' category projects only who are intending to  obtain a refund, may also submit their proposal to the concerned  promoter in the meantime, within one month from today.    14. The promoters with respect to Silicon Valley have applied for  connection for electricity, sewerage, and water, as per the order  passed by this Court on 10.5.2018. The aforesaid order is carried  out punctually. The promoters of Silicon Valley has undertaken to  make the payment of dues onwards.     15. The joint statement that has been filed has been signed in the

17  

 Court by the learned counsel for the promoters as well as by  learned counsel for the authorities and the flat buyers, is placed on  record and made part of this order as “Annexure-A”.     16. The aforesaid Committee constituted by us is also requested to  evaluate the work undertaken by M/s. Sahi Developers Pvt. Ltd. so  far and submit a report in the 1 st week of July 2018.     17. Let nominations be made by the developers, flat buyers and  authorities within seven days from today, under intimation to this  Court.     18. The matter has been heard in part and requires a further  hearing. List on 18.7.2018 at 2.00 p.m.     

19. It is agreed to, that with respect to essential amenities, the order  passed by this Court on 10.5.2018 shall also apply to Silicon City  Phase I project and in case inhabitants are there in some towers,  the same shall apply to Silicon City Phase-II project also.”    

The aforesaid order was passed on the basis of the joint proposal,  

which was in the form of four baskets with independent timelines,  

submitted in this Court.  

12. It was also mentioned in paragraph 4 of the above order that  

admission has been made by the promoters/builders that the money to the  

extent of Rs.2,765 crores, out of six projects has been transferred to other  

projects.  Though we were inclined to direct the promoter to deposit the  

said amount in this Court, we refrained from directing as the willingness to  

complete the projects was shown by engaging services of co-developers and  

builder assured that it would undertake the work.  It was proposed to sell  

certain unencumbered properties of Amrapali Group for payment of these  

projects, however, this Court directed to deposit an amount of Rs.250  

crores in the escrow account to be opened in the UCO Bank, Supreme  

Court Branch on or before 15.6.2018.  This order was again not complied  

with and the work was not undertaken and inability was shown to deposit

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the amount in the escrow account as ordered.  When the case was listed on  

18.7.2018 in this Court, learned counsel appearing on behalf of promoters  

was to place progress report, but in order to wriggle out of the compliance  

of order, totally a different stand was taken in this Court and it was stated  

that a notice dated 13.7.2018 has been issued by the Ministry of Housing  

and Urban Affairs, which was placed on record, indicating that a High-

Level Committee has been created by the Government of U.P. to redress the  

issues of home buyers and the affected parties of incomplete/stalled house  

projects in the Noida/ Greater Noida/Yamuna Expressway under the  

Chairmanship of Secretary, Ministry of Housing and Urban Affairs.  It was  

submitted on behalf of Amrapali Group that a meeting was held today and  

prayed that something concrete is likely to happen within ten days.  We  

deferred the hearing up to 1.8.2018.  However, at the same time, we  

directed the builder to file the accounts with effect from 1.4.2008 till date  

under the certificate of Chartered Accountant and also a list of all assets in  

a sealed cover in this Court.  As a matter of fact, there was no compliance  

of the order dated 17.5.2018 of this Court, but the totally indifferent stand  

was taken so as to wriggle out of their obligation under said order was  

passed by this Court on the basis of the joint statement.  

13. This Court has passed an order on 1.8.2018, wherein it was observed  

that in order to scuttle the hearing in this Court, it was stated that the  

meeting was held on the very same day.  The order passed by this Court on  

17.5.2018 to deposit Rs.250 crores had not been complied with.  There was

19  

also an admission made by Amrapali Group that there was a diversion of  

more than Rs.2,765 crores from six projects.  This Court observed that  

money could not have been diverted.  That would prima facie tantamount  

to a criminal breach of trust.  We directed that the individual bank  

accounts of the Directors of all the 40 companies be frozen and ordered  

attachment of the properties in the individual names of Directors and also  

put a restriction on the alienation of the properties in the names of  

individual Directors etc.  Following order was passed by this Court:  

"1. On 17.5.2018, we have passed a detailed order in these cases  after hearing learned counsel for the parties for several days. We  need not reiterate the directions, statements, representations made  to this Court and the orders which we have passed. Order dated  17.5.2018 is clear in this regard. As per the order passed by this  Court, certain obligations were imposed and certain directions were  issued which were to be complied with by the group of companies  as well as the co-promoters, etc., as mentioned in the aforesaid  order. The compliance has not been reported an effort was made to  wriggle out of order passed on 17.5.2018.    2. When the matter was taken up on 18.7.2018, compliance of the  order was not reported and on the other hand, a letter dated  13.7.2018 signed by Mr. Akhil Saxena, Deputy Secretary to the  Government of India, was placed on record. The letter is extracted  hereunder :    

"No.D.17024...sic  Government of India  

Ministry of Housing and Urban Affairs    

Nirman Bhawan, New Delhi  Dated July 13, 2018  

Meeting Notice    

Subject: Meeting to discuss the issues of homebuyers  and affected parties of Noida/Greater Noida/Yamuna  Expressway scheduled to be held on 18.07.2018 at  11:00 A.M. - 1.00 P.M. - regarding.     The undersigned is directed to state that a High-Level  Committee has been constituted by the Government of  UP to redress the issues of homebuyers and affected  parties of incomplete/stalled housing projects in the  Noida/Greater Noida/ Yamuna Expressway under the  Chairmanship of Secretary, Ministry of Housing and  Urban Affairs.

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   2. In this regard the Chairman of the Committee and  Secretary MoUHUA will hold a meeting with the  developers/promoters (Amrapali Group Jaypee  Infratech Limited, Three C Group of Companies and  Unitech Limited) on 18 July, 2018 at 11:00 A.M. - 1:00  PM in Room No.123-C, Conference Room, 1st Floor,  Nirman Bhawan, New Delhi. You are requested to  kindly make it convenient to attend the meeting  personally. You may also bring the details of the  housing projects promoted by your company along  with your specific plans as to how earliest you can  deliver the flats/houses to the home buyers who have  made payments towards the same to your company.    

3. A line in confirmation on email,  housingministry@gmail.com will be highly appreciated.    

Sd/-  (Akhil Saxena)  

Deputy Secretary to the Govt. of India  Tel No.23062280  

 To  1. Shri Shiv Priya, ED, Amrapali Group, C-56/40  Sector-62, Noida-2301307.  2. Shri Nirmal Singh, Three C Group of Companies,  Tech Boulevard Central Block, Plot No.6, Sector 127,  Noida-201307.  3. Shri Manoj Gaur, Jaypee Infratech Limited, Sector  128, Noida-201304 (U.P.), India.  4. Dr. Ramesh Chandra, Chairman, Unitech Limited,  6, Community Centre, Saket, New Delhi-110017.    Copy to :  1. Sr.PPS to Secretary, Ministry of Housing and Urban  Affairs.  2. PPS to Additional Secretary (Housing), Ministry of  Housing and Urban Affairs.  3. PS to Economic Adviser (Housing), Ministry of  Housing and Urban Affairs.  4. Deputy Secretary (Housing), MoHUA    

Sd/-  (Anil Saxena)  

Deputy Secretary to the Govt. of India  Tel. No.23062280"  

 3. In order to scuttle the hearing in this Court on 18.7.2018 on  which the case was listed, it was reported to us that meeting was  held on that very day which was presided over by the Secretary,  Ministry of Housing, who is the Chairperson of the Committee and  Secretary MoUHUA. Thereafter, pursuant to the said meeting it was  stated today that NBCC India Limited, a Government of India  enterprise, has invited "Expression of Interest" for joint development  in real estate with respect to the development of residential and

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 commercial real estate projects in Delhi and NCR region, inclusive  of the Amrapali Group for which we have already passed orders on  17.5.2018.    4. In case the Committee constituted by the Government of Uttar  Pradesh wanted to take up the matter of Amrapali Group in view of  the order dated 17.5.2018, it was necessary for them to seek the  express permission from this Court, as this Court was in seisin of  the matters, before transacting any business in this regard. But  that has not been done and when the order of this Court stands, it  was not at all appropriate or permissible to take up the matter by  the Committee and intermeddle with the order passed by this Court  when the matter is pending in this Court. The action has a clear  effect on rendering order passed by this Court ineffective. In the  circumstances, we deem it appropriate to direct the presence of the  

Secretary to the Ministry of Housing and Urban Affairs and the  Chairman of the NBCC India Limited and to file their affidavit in  this Court and produce entire record so as to show how they have  convened the meeting and acted in the manner in the matter  pending in this Court, without permission of this Court before  dealing with the matter of Amrapali Group. Let them be present  before this Court tomorrow, i.e., on 2.8.2018, at 2.00 p.m. to  explain their stand.    5. Mr. Anil Kumar Sharma, Chairman and Managing Director  (CMD) of Amrapali Group of Companies were personally present in  this Court. He has stated that there are 40 companies in the  Amrapali Group of Companies. They are as follows:    

1. Ultra Home Pvt. Ltd.  2. Amrapali Silicon City Pvt. Ltd.  3. Amrapali Zodiac Developer Pvt. Ltd.  4. Amrapali Sapphire Developer Pvt. Ltd.  5. Amrapali Princely Estate Pvt. Ltd.  6. Amrapali Eden Park Developer Pvt. Ltd.  7. Amrapali Smart City Developer Pvt. Ltd.  8. Amrapali Smart City Pvt. Ltd.  9. Amrapali Leisure Valley Pvt. Ltd.  10. Amrapali Leisure Valley Developer Pvt. Ltd.  11. Amrapali Centurian Park Pvt. Ltd.  12. Amrapali Dream Valley Pvt. Ltd.  13. Amrapali Homes Project Pvt. Ltd.  14. Hi-Tech City Developer Pvt. Ltd.  15. Sangam Coloniger Pvt. Ltd.  16. Shalimar Coloniger Pvt. Ltd.  17. Amrapali Infrastructure Pvt. Ltd.  18. Amrapali Aerocity Pvt. Ltd.  19. Amrapali Mahi Developer Pvt. Ltd.  20. Amrapali Buddha Developer Pvt. Ltd.  21. Amrapali Hospitality Pvt. Ltd.  22. Amrapali Biotech Pvt. Ltd.  23. Amrapali Health Care Pvt. Ltd.  24. Amrapali Hospitality Pvt. Ltd.  25. Amrapali Power & Cement Pvt. Ltd.  26. Stunning Construction Co. Pvt. Ltd.  27. Kapila Build Home Pvt. Ltd.

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 28. Gaurisuta Infrastructure Pvt. Ltd.  29. Gaurisuta Infra Solution Pvt. Ltd.  30. MSB Software Pvt. Ltd.  31. MVG Techno Consultant Pvt. Ltd.  32. Noida Text Fab Pvt. Ltd.  33. Navodya Properties Pvt. Ltd.  34. AHS Joint Venture  35. Amrapali Homes  36. Amrapali Grand  37. HIMS Pvt. Ltd.  38. Amrapali Spring Valley Pvt. Ltd.  39. Amrapali Patel Platinum  40. Amrapali Media Vision Pvt. Ltd.  

 6. The order passed by this Court of depositing 250 crores of rupees  

has not complied. There is an admission already made by Amrapali  Group that there was a diversion of more than 2765 crores of  rupees from six projects to other projects. In the circumstances, we  direct the Bank accounts of all the aforesaid 40 companies be  frozen forthwith. We forthwith attach the entire immovable  properties of these 40 group of companies. They shall not be  entitled to deal with the same in any manner whatsoever without  the express permission of this Court.    7. There was a diversion of the funds, prima facie it is apparent that  when the money was paid by the buyers for the purpose of  investment in the particular project, it could not have been diverted.  That would prima facie tantamount to a criminal breach of trust.  We are not expressing any final opinion in this regard at this  moment. However, at the same time, we propose to take a call on  this after hearing the parties on this aspect. However, so as to  further ascertain the extent of internal and external diversion from  all the projects. The names of all the Chartered Accountants of all  the aforesaid 40 companies be disclosed to us and their reports  from 2008 till today be placed on record by tomorrow.    8. The individual Bank accounts of the Directors of all the 40  companies are also freezed and they shall not be entitled to operate  the same with immediate effect. Let details of all Bank accounts be  furnished by tomorrow of companies and their Directors and of  personal accounts of Directors. The properties in the individual  names of the Directors are also attached and the same shall not be  

disposed of or alienated in any manner without the express order of  this Court.    9. Let the matter be listed tomorrow, i.e., on 2.8.2018 at 2.00 p.m.  Mr. Anil Kumar Sharma, Mr. Shiv Priya and Mr. Ajay Kumar of  Amrapali group of companies to remain personally present in this  Court tomorrow, along with the aforesaid officials.”    

  14. It was stated by Secretary, Ministry of Housing and Urban Affairs that  

he was not aware of the order passed by this Court on 17.5.2018,

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appointing promoters and time frame and stated that he never intended to  

violate the order passed by this Court.  On 2.8.2018, we have recalled the  

order dated 17.5.2018, considering the dubious and unfair conduct of the  

Amrapali Group of Companies and on each and every day they have been  

shifting their stand.  Earlier, they have filed affidavits making certain  

representations and now want to wriggle out of it.                                      

Following order was passed on 2.8.2018, recalling the order dated  

17.5.2018:  

"1. Pursuant to the order passed yesterday, i.e., on 1.8.2018, Mr.  Durga Shankar Mishra, Secretary, Ministry of Housing and Urban  Affairs, has stated that a Committee has been constituted by the  Government of Uttar Pradesh under his chairmanship to look into  the problems of three lakhs home buyers of Noida, Greater Noida,  and Yamuna Expressway. The Committee has been constituted so  as to take a policy decision so as to solve the problems of the home  buyers. On 25.6.2018, the first meeting of the then Chief Executive  Officers (CEOs) of the Noida and Greater Noida, real estate  representatives, etc. was held and thereafter, second meeting was  held on 10.7.2018, which was attended by 32 persons, inter alia  including certain representatives of the Flat Owners Welfare  Association, Joint General Manager, ICICI Bank, AGM of the Bank  of Baroda, General Manager of HDFC Bank and Chairman of  CREDAI had also attended the meeting. Thereafter, no meeting of  the Committee has been held. However, a discussion with the  Chairman of representatives of the four builders, i.e., Amrapali  Group, Jaypee Infratech Ltd., Three C Group and Unitech Limited  was held on 18.7.2018, along with details of the housing projects  promoted by their companies and with the specific plans as to how  earliest they could deliver the flats/houses to the home buyers who  have made payments towards their companies. It was also stated by  the Secretary that he was not aware that this Court has passed an  

order on 17.5.2018 appointing promoters etc. and the time frame  within which the projects have to be completed. He has also stated  that he never intended to violate the orders passed by this Court.  The statement made by Mr. Mishra is placed on record.    2. It was also submitted that NBCC issued advertisement on  30.7.2018 and the Chairman of the NBCC has informed us that the  said advertisement was not issued specifically for Amrapali Group  of companies. Similar advertisements have been issued earlier too.  However, it was stated by the Chairman that they are ready to  undertake the Amrapali Group projects and to complete them, after  making the detailed study of the stage and investment which is  required to be made in the projects that are incomplete.   

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 3. Pursuant to the directions issued by the Court, Amrapali Group  has placed on record the account numbers and other details of 38  of Amrapali Group of companies only, but not that of the personal  accounts and the accounts in names of its Directors, as per the  order passed by this Court on 1.8.2018. They have furnished the  details of 38 companies out of 40. They are contained in Annexures  marked as X-1 and X-2.    4. We direct the Registry to apprise the concerned Banks along with  the text of the order and the account numbers so furnished. Let the  copy of the order be sent to the Banks for its due compliance.     5. It was stated that the personal Bank accounts in the names of  the Directors of aforesaid 40 companies are in the process of  compilation and that the account numbers shall be furnished to  

this Court by Monday, i.e., 6th August 2018. On the account  number being furnished, the Registry is directed to intimate the  order to the said Banks also regarding the order passed by this  Court on 1.8.2018.    6. Two applications, i.e., I.A.Nos.82917/2018 and 92775/2018 in  W.P.(C)No.942/2017 have been filed by the Amrapali Silicon City  Flat Owners Welfare Society and Heartbeat City for modification of  order dated 17.5.2018. It was also pointed out that one of co- developer, IIFL, has backed out, thus, it was not possible to comply  with the order dated 17.5.2018 and same requires modification. The  sum of Rs.250 crores has also not been deposited. An application  has been filed so as to waive that requirement also. When we see  the conduct of the promoter on the various stages, it is apparent  that on 18.7.2018 on behalf of the promoter it was stated before us  that the Committee has been constituted by the Government of  Uttar Pradesh under the Chairmanship of the Secretary, Ministry of  Housing & Urban Affairs, as such we should wait for the outcome of  same. Yesterday, i.e., on 1.8.2018 it was stated before us that  NBCC is now considering to take over the entire project of Amrapali  Group as it has issued an advertisement for the purpose and as  such the Court should stay in our hands. In the circumstances, it is  apparent that the Amrapali Group does not intend to abide by order  dated 17.5.2018 and its conduct is dubious. Thus, we have no  hesitation in recalling the order dated 17.5.2018 permitting  Amrapali Group to complete the projects. We hereby recall the order  entrusting the project to the Amrapali Group of companies for  

completion, along with co-promoters, and we place it on record that  the conduct of Amrapali Group of companies is wholly unfair and  on each and every date they have been shifting their stand before us  and it was absolutely improper on their part to do so. They have  violated our order also. They have earlier filed affidavits making  certain representations and now want to wriggle out of that. Be that  as it may. We recall the order dated 17.5.2018 under the aforesaid  circumstances.    7. In the circumstances, as the Chairman of the NBCC is present  before us and has shown willingness to undertake the projects, the  matter cannot be left at that. Let the NBCC complete the projects,  let it undertake the study and work out the details. Though the time  of 45 days was prayed, considering the urgency of the matter, we

25  

 grant 30 days' time, as the people are deprived of basic necessities  of life, and they are residing in some incomplete buildings. We  appreciate the gesture of the Chairman of NBCC, who has assured  us to complete the projects as may be directed and to submit a  proposal in this Court within 30 days. Let a proposal be submitted  in 30 days before us.    8. In the circumstances, we direct the promoters and also request  Mr. M.L. Lahoty and two other representatives to be nominated by  home buyers to assist and submit the details and all requisite  documents to the Chairman, NBCC as also to the Chairman of the  Committee. Noida authority and Greater Noida authority shall also  furnish to them all the documents which are in their possession.  Let promoter, Noida authority, Greater Noida authority and buyers  furnish all the documents/pleadings they have submitted to this  

Court, within three days from today.    9. We also place on record the appreciation to the offer made by the  Chairman, NBCC, and also by Mr. Mishra, Chairman of the  Committee. Let them make an endeavour to form policy and to solve  problems of other groups of companies also. However, the matters  are pending in the Court, they have to appraise this Court of their  proposals and only thereafter to take steps in this regard.    10. Mr. Anil Mittal, the Chartered Accountant of Anil Ajay &  Company, who is the statutory auditor for most of the companies, is  present in the Court. Similarly, Mr. Ravi Kapoor, the Chartered  Accountant of Serva Associates is also present in the Court. It is  pointed out that the information furnished by them is contained on  page 6 and 7 of the compilation Annexure X-1. It is stated by Mr.  Anil Mittal that his engagement as statutory auditor has begun in  the year 2008 and continued up to 2015. He was the auditor from  2008 and has also stated before us that after 2015 no papers have  been given to him. It was stated by Mr. Gaurav Bhatia, learned  counsel, that at present S.N. Dhawan & Company is doing the audit  of the Company.    11. Since we find that various documents have been placed on  record indicating transfer/diversion of the fund by the Amrapali  Group itself, the Amrapali Group has admitted that out of the six  projects, there was transfer/diversion of Rs.2765 crores. Though it  was submitted that the amount was transferred to other projects, in  

our opinion, this was clearly diversion of funds. The amount given  by the home buyers for the completion of their projects/houses  could not have been diverted before the completion of the projects.  We request the auditors to find out how much money has been so  transmitted/diverted to other projects and how it has been used.  Let projectwise information of all projects be furnished. The  Amrapali Group of Companies shall furnish the requisite  information and documents and shall cooperate with the statutory  auditors. Let the auditor certify how much money has been diverted  from which project and how it has been used in other projects,  including the projects of Heartbeat city. The internal auditor is  requested to assist Mr. Anil Mittal in this regard.  

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 12. It was stated before us that the bank accounts of Amrapali  Healthcare Pvt. Ltd. have also been frozen and it is necessary to run  the hospital to keep the accounts operational. Considering the fact  that the hospital requires money on a day-to-day basis, we order  de-freezing of account of Amrapali Healthcare Pvt. Ltd. only.  However, at the same time, we direct that let the details of the bank  account(s) of it be placed before us right from 2008 till date. Interim  order dated 1.8.2018 to continue unless otherwise ordered.    13. For the purpose of assessing the proposal to be submitted by  the NBCC and to pass requisite orders in this regard, we fix the  hearing on 4.9.2018 at 2.00 p.m. Let the aforesaid reports be  submitted by Mr. Anil Mittal and Mr. Ravi Kapoor, Chartered  Accounts before 4.9.2018.     

For further order of other IAs. and arrangement of funds to be  provided to NBCC and regarding furnishing of accounts, let matters  be listed on 8.8.2018 at 2.00 p.m. Personal presence of Secretary,  Housing and Urban Affairs and Chairman, NBCC, is dispensed  with.”  

 15. There are various order sheets indicating how the wrong and  

incomplete information had been submitted on behalf of Directors of  

Amrapali Group of Companies.  

 16. The National Building Construction Corporation Ltd. had been  

appointed by this Court to complete the construction vide order dated  

12.9.2018.  

 17. Vide order dated 8.8.2018, this Court had directed the Directors of  

various companies including the Managing Directors to file affidavits  

regarding immovable properties and moveable properties and their  

valuation. We had earlier asked the statutory auditors of Amrapali group of  

companies to conduct the audit. However, it was pointed out on 4.9.2018  

that there was the necessity of appointing independent auditors so as to

27  

conduct a forensic audit. On 6.9.2018 this Court directed the forensic  

audit. Following order was passed on 4.9.2018 :  

"We have heard learned counsel for the parties. A proposal has been  submitted by the NBCC in the booklet form. Let it be placed on record  along with an affidavit of a responsible officer of the NBCC. Let a copy of  the same be circulated to the learned counsel appearing for the parties.    Let Amrapali Group of Companies file a response to the NBCC’s proposal  for completion of the project.   

 We have heard Sh. Gaurav Bhatia about the property which can be sold.  He has attracted our attention to the affidavit of Shri Anil Kumar Sharma  

in terms of the Court’s order 10.5.2018 filed with respect to I.A. No. 7366  of 2018 in W.P. No. 942 of 2017.  

 He has submitted that Saleable Area Commercial is described at page 20  of the affidavit. The value is given as per the development model, not the  Distress Sale Value. Let Distress Sale Value be also stated on affidavit  and with respect to the fact that what are the encumbrances and also the  dues of Noida/Greater Noida Authorities as against the property as  mentioned at page 20 of the affidavit.  

 He has also attracted our attention to the list of encumbered property on  page 27 of the affidavit and list of unencumbered property on page 28.   

 Let affidavit be filed specifically stating with respect to the nature and  extent of encumbrances with respect to encumbered property and how  much is the amount due and what are the documents executed.  

 With respect to list of the unencumbered property also mentioned at page  28 there are certain dues of Noida/Greater Noida Authority that may be  clearly specified and let affidavit also specifically state that these  properties are otherwise unencumbered properties. Affidavit in detail be  filed in this regard too.  

 With respect to the audit, the accounts for three years have not been  made available to statutory Auditor as pointed out by Mr. Anil Mittal of  Anil Ajay & Co., appointed by this Court.  Mr. Maninder Singh learned senior counsel has urged that there is the  necessity of appointing independent auditors so as to conduct a forensic  audit. He has prayed for time to suggest the names in this regard. It was  also pointed out by the learned counsel appearing for the Bank of Baroda  that certain audit exercise has been undertaken on behalf of the Bank of  Baroda with respect to the transaction entered into with Bank of Baroda  which was the subject matter of other proceedings. Let the names of  Auditor be suggested so as to conduct a deep and pervasive forensic audit  of the Amrapali Group of Companies.  

 Suggestions be made on the next date of hearing.  

 Mr. Shyam Diwan and Mr. Siddharth Luthra learned senior counsel have  pressed I.A. Nos. 124711-124712 of 2018 and I.A. No. 36562 of 2018.  These I.As are to be considered after forensic Audit is concluded and a

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 report is received.  

 List on 6th September 2018."  

18. This Court appointed Mr. Ravi Bhatia of M/s. Bhatia & Co. and Mr.  

Pawan Kumar Aggarwal of M/s. Sharp & Tannan Company to conduct the  

forensic audit, which was ordered to be conducted with effect from the year  

2008 till date, to be completed within two months. On 12.9.2018, a list of  

properties was submitted which was to be sold by the Debt Recovery  

Tribunal, Delhi, (DRT) and the details of properties, title deeds and maps  

were to be submitted to the DRT. This Court directed statutory Auditor, Mr.  

Anil Mittal, to hand over the original records of Amrapali group of  

companies vide order dated 12.9.2018. This Court also directed remaining  

records from 2008 till date, be handed over within 10 days. Amrapali group  

of companies were also directed to hand over the documents required by  

the forensic auditors. The matter was taken up by this Court on 26.9.2018.  

Considering the non-cooperation of the Directors, the following order was  

passed by this Court on 26.9.2018 :  

“Heard the learned counsel for the parties.    It was pointed out by Mr. M.L.Lahoty, learned senior counsel that there  

are certain existing Directors, namely, Mr. Anurag Sanghai, Mr.Vinay  Vishal and Mr.Sankalp Shukla, particulars of their properties, etc. have  not been filed as ordered by this Court and there are several other  existing or former directors whose names have not been disclosed. Let the  names of all the directors be disclosed without remiss before the next  date fixed along with details of asset etc. as already ordered by this Court.     It was also pointed out by Mr. Lahoty in I.A. No.116688/2018 that ‘O’ 2  valley particulars have not been disclosed by the group of companies. Let  reply to the said I.A be filed by the Amrapali Group of companies and  details of ‘O’ 2 Valley be also disclosed.    It was also pointed out that DRT has initiated the proceedings and has  directed the production of the original documents, sanctioned plans and  other relevant documents available with Amrapali Group of Companies. It

29  

 was also submitted that valuation has also been ordered. We direct the  Amrapali Group of companies and the Directors viz. Mr. Anil Kumar  Sharma, Ms. Shiv Priya, and Mr.Ajay Kumar to submit Maps clearly  delineating an unencumbered portion of their properties and other details  which have been asked by the DRT. Let them be present before the DRT  on each and every date until and unless it is specifically dispensed with  by the DRT. Let the order of DRT be complied with by the Amrapali Group  of the company before 4.10.2018.    With respect to the handing over the documents by the Statutory  Auditors as well as by the Amrapali Group of companies, we note it  regrettably that order passed by this Court has been violated and the  documents have not been handed over in spite of clear and categorical  direction to hand over the documents to forensic auditors within ten  days. However, it was pointed out by Mr. Gaurav Bhatia, learned counsel  

that statutory auditors are going to hand over the document, etc. w.e.f.  2008 to 2015 by tomorrow to the forensic auditors. Let all the necessary  documents which may be in possession of Amrapali Group of companies  in addition to statutory auditors be also handed over from 2008-2015 and  also all the papers of Amrapali Group of companies 2015-2018 by  tomorrow. We make it clear that the documents with respect to 2015- 2018 shall be handed over by the Amrapali Group companies along with  all the original documents necessary to do audit shall be handed over to  the forensic auditors by tomorrow. Let account books in whatever status  they are, at present, be also handed over.     We request the forensic auditors to send their representative on the next  date of hearing to apprise us of compliance of this order.    Before IRB certain proceedings are pending for recovery of dues and inter  alia, there are dues of Bank of Maharashtra, etc also as pointed out  including that of Bank of Baroda.    Let the details of all the outstanding dues of secured and unsecured  creditors project-wise and in total be submitted in this Court in a tabular  form. Let total outstanding dues be stated, including that of Noida and  Greater Noida authorities supported by affidavit.    Mr. Anoop Kumar Mittal, Chairman of the NBCC and Ms. Pinky Anand,  ASG are present. It was pointed out on behalf of the NBCC that detailed  project report has to be prepared of Group A Project within 30 days and  Group B and C Projects within 60 days. It was also pointed out that  

tenders may be permitted to be floated by NBCC Group A and B projects.  The NBCC is permitted to float the tenders and also to go ahead with the  preparation of the DPRs and also to submit detailed proposals, terms,  and conditions in this Court as prayed by them. Existing architects of  Amrapali Group of Companies to ensure cooperation with the NBCC.  Non-cooperation shall be viewed seriously by this Court.    Let DRT go ahead with the process of finding out the encumbrances. We  also permit the Bank of Maharashtra and all other such creditors who  may have a charge on the unencumbered property to state their claim  before DRT.    Let reply be filed in IA No.139255/2018, 117300/2018,95140/2018,  135446/2018, 138400/2018.

30  

   All applications for impleadments to the extent of intervention are  allowed.    List on 9.10.2018.”  

19. On 9.10.2018 when despite the orders dated 12.9.2018 and  

26.9.2018, orders were not complied with, records were not handed over  

and there was utter violation of orders passed by this Court, we directed  

the Police to seize all the documents and to hand them over to the Forensic  

Auditors from the possession of 46 companies and their Directors. We  

directed all the Directors to surrender their passports and hand them over  

to the Police. The observations made by this Court were being misused by  

Amrapali group of companies, "No coercive action will be taken by any  

authority with respect to the building where completion is going on under  

the order passed by this Court". As observed on 27.3.2018, we clarified  

that the observations did not deal with any police investigation in any  

criminal case or in FIR which may have been registered with the Delhi  

Police, EOW, to make investigation in any case which is required to be  

made. Police was free to make an investigation. On 10.10.2018 this Court  

directed the concerned police officers to seal all the seven premises situated  

at Noida and Greater Noida. On 11.10.2018 certain directions were issued  

so as to facilitate the forensic audit. After audit work was over for the day,  

on a prayer made by learned counsel on behalf of the three Directors of  

Amrapali group of companies, they were permitted to stay overnight in  

Hotel Park Ascent but they shall not be allowed any access to the mobile  

phone or the facility of telecommunication without permission in writing of

31  

the police. This Court also directed issuance of a formal notice on the suo  

moto contempt.  

 20. On 24.10.2018 the forensic auditors were present. They have  

disclosed as to diversion of funds of more than Rs.100 crores to a firm  

known as GauriSuta Infrastructures Pvt. Ltd. in which Ashish Jain and  

Vivek Mittal were the Directors. They are stated to be the relatives of the  

Statutory Auditors. We directed the personal presence of Chander Wadhwa,  

CFO of Amrapali group of companies on the next date. On 26.10.2018 the  

Forensic Auditors submitted an interim report.  It was pointed out that the  

tally data of 23 companies, reserves and surplus figures as appearing in  

the tally data does not reconcile with the reserves and surplus as  

appearing in the last signed financials. The difference has also been  

pointed out in a tabular form. There were several advances, investments,  

utilisations, advances made to suppliers and payments made to Mr. Anil  

Sharma and Mr. Shiv Priya, Directors of the company for professional  

charges, etc. It was also pointed out that in spite of repeated reminders,  

groupings have not been supplied. Grouping is a process to indicate the  

process between the stage of trial balance, balance sheet, and profit and  

loss account. All files had not been handed over and Mr. Anil Mittal, the  

Statutory Auditor had sent one file late in the evening. This Court ordered  

that in case documents were not handed over, the same shall be viewed  

seriously and the incumbents punished suitably. The last opportunity was  

granted to hand over the requisite documents to the Forensic Auditors. We

32  

directed Statutory Auditors to comply with the requisition made by the  

Forensic Auditors.  It was also noted by this Court that a sum of Rs.242.38  

crores had been handed over to Gaurisuta Infrastructure Private Ltd.,  

Vidhyashree Buildcon Private Ltd., Mannat Buildcraft Private Ltd. This  

Court observed in para 5 thus :  

“5. It has also been pointed out by Shri Pawan K. Aggarwal in his  report that so far with respect to four companies, namely,  Gaurisuta Infrastructure Pvt. Ltd., Vidhyashree Buildcon Pvt. Ltd.,  

Mannat Buildcraft Pvt. Ltd. And Jhamb Finance & Leasing Pvt.  Ltd., only it has been noticed that a sum of Rs.242.38 crores has  been handed over to them and in most of these firms Shri Ashish  Jain and Shri Vivek Mittal are the Directors. Beside, it was stated  before us by Shri Anil Mittal, statutory auditor, that his nephew- Vivek Mittal joined as a Director on the request made by Shri  Chander Wadhwa, CFO, to create a company and he has in turn  asked Shri Ashish Jain, an employee of his client, to join as  another Directory of at least 10 companies, created at the request  of the CFO and Amrapali Group of Companies. It is a shocking  state of affairs that the statutory auditor himself was responsible  for the creation of companies in an aforesaid manner. Shri Anil  Mittal has also stated before us that he was aware that the money  was flowing to the said companies through bank statements.  However, on a specific query made by this Court to him, he has  admitted that this fact of flow of money was not reflected in the  audit report, which was signed by him in the audited Balance  Sheet, in spite of knowing the fact that money has flown out of the  accounts of the Amrapali Group of Companies to aforesaid  companies."    

About the creation of companies consisting of his nephew as Director  

on the request made by Mr. Chander Wadhwa, CFO for asking Ashish Jain,  

an employee of his client, to join as another Director. The Company agreed  

at the request of the CFO and Amrapali group of companies.   

 21. Since the CFO did not reply to the questions put by the Forensic  

Auditors to him, his conduct has been noted by this Court thus:  

"6. We regretfully also note the conduct of the CFO, who is  personally present before us today. His questions and answers  have been placed on record by Shri Pavan K. Aggarwal, Forensic  Auditor, along with his report and today we find that Shri Chander

33  

 Wadhwa has contradicted his version which he had made to the  Forensic Auditor. He has apologized for making wrong statements  to the Forensic Auditor and has assured us that in future he will  render all cooperation to the Forensic Auditors rightly, honestly  and diligently. He has admitted today that there was appointment  order as CFO and there was an authorization in writing issued to  him for dealing with the banks. He has virtually contradicted the  entire statement which he had made and has feigned ignorance to  the Forensic Auditors. Be that as it may. We give him the last  opportunity to come out clean and live up to the reputation of a  profession of a Chartered Accountant. Let him cooperate with the  Forensic Auditors, supply entire information correctly, truly and  diligently. In case any remiss is found, it is made clear not only to  him but also to the statutory/internal auditors that we will be  compelled to take appropriate action as against them in the  

aforesaid factual situation, including the one for the professional  misconduct."  

22. It was further pointed out by the forensic auditors that there were 23  

more groups of companies to whom money had been diverted and these  

companies had been created by Amrapali group of companies. This Court  

directed disclosure of these companies in the order dated 26.10.2018 thus:  

"7. Shri Pavan K. Aggarwal has also pointed out to us that there are 23  groups of companies to whom the money has been diverted and these  companies have been created. Let the names of the companies be  disclosed to the Amrapali Group of Companies and we direct the police to  seize all the documents of these 23 companies to which money has been  diverted and be handed over to the Forensic Auditors.    9. We also direct the Directors of other 23 companies, which have been  identified so far by the Forensic Auditors, to file their detailed affidavits in  this Court, disclosing the amount received by them, dates of receipt, for  what purpose and how it is utilized and invested by them.”  

23. We had also directed Mr. Chander Wadhwa, CFO to file affidavit  

pointing out appointment order, authorisation, authority to sign any  

voucher and his entire role in the organisation thus:  

"13. Let Shri Chander Wadhwa, CFO, file his affidavit in this Court  placing the appointment order; authorization made to him from time to  time; his authorization letters; details of attendance, if any, at the Board  meetings; authority to sign any voucher; and his entire role which he has  performed in the organization. Besides, it was also stated by Shri  Chander Wadhwa, CFO, that he was one of the Directors of the Amrapali  Development UK Ltd. and Saffron LLP, Delhi. Let the details of the

34  

 Articles of Association of these companies be placed on record and the  present composition of the Directors and the entire transactions be  disclosed on affidavit, along with the documents of these companies and  returns, if any, which have been filed, be also handed over to the Forensic  Auditors and affidavit be filed in this Court in this regard.    14. It was also stated by Shri Chander Wadhwa that his nephew is one of  the Directors in M/s. Rinku Computech, one of the shareholders of the  Amrapali Biotech India Pvt. Ltd. His disclosure on affidavit be also made  by Shri Chander Wadhwa."    

24. We also issued other directions to ensure that laptops and computers  

were made available to forensic auditors. On 31.10.2018 this Court noted  

that certain transactions of Amrapali group to Zodiac/J.P. Morgan,  

Mauritius/Singapore by the creation of various companies. We directed the  

bank statement of J.P. Morgan from 2008 till date to be filed. With respect  

to the money received from the Indian companies and in particular from  

Amrapali group of companies, all monetary transactions of J.P. Morgan,  

Mauritius and Singapore with Amrapali group of companies be disclosed  

with details on affidavit. We directed the Amrapali group of  

companies/statutory auditors as well as Anil Mittal, Ravi Kapoor and S.N.  

Dhawan and CFO to disclose the names of all the companies in which their  

family members or acquaintance were included as Director and all the  

transactions inter alia family members and relatives. It was also pointed  

out by Mr. Chander Wadhwa, CFO that though his salary was Rs.15,000  

per month, a car worth Rs.43 lakhs was given to him by the company in  

lieu of his services. It was also pointed out that an amount of Rs.2 crores  

has been paid on account of Chander Wadhwa’s tax liability by Amrapali  

group of companies. Further directions were also issued to make the

35  

disclosures. This Court has noted the conduct of non-compliance of the  

order vide order dated 13.11.2018 thus:  

“4. This Court has drawn suo moto contempt on 12.10.2018 and that is  listed on 20.11.2018. In spite of the aforesaid observation made in the  order dated 26.10.2018, still there is gross disobedience of the directions  issued by this Court and in the affidavit filed in compliance of the order  dated 26.10.2018, the various disclosures as ordered have not been  made. Besides that, there is a failure to hand over to the forensic  auditors, the relevant material as pointed out by them.    5. The names of all the related companies have also not been disclosed  with which the transactions have taken place. No such statement has  been made categorically in terms of the order passed by this Court on  31.10.2018 and absolutely vague averments have been made. This  tantamount to deliberate noncompliance of the orders of this Court  despite several opportunities having been granted.    7. An affidavit has also been filed by Mr. Anil Sharma of Amrapali Group  of Companies in which names of the companies which were ordered to be  disclosed have not been disclosed and no statement has been made as  ordered on 31.10.2018. It is a gross violation of the orders passed by this  Court. There are certain averments in the affidavit which shows that  certain properties have been sub-leased, out of Dream Valley, Centurian  Park, Amrapali Leisure Valley. The subleases have been created. Full  disclosures have not been made as to subleasing since earlier affidavits  were contrary to it, it was shown as unencumbered property. we direct  the Directors of Amrapali Group of Companies to disclose entire  transaction and relevant documents as well as Greater Noida Authorities  to file the documents about sub-leases, who is holding the land as on  today, its considerations, how it has been used, how much consideration  was received and where the amount is lying, and the sub-lease deeds be  also placed on record. We order that there shall not be any further  alienation of the sub-leased property by anyone.    8. Statements of various bank accounts have also not been furnished  besides other particulars. Learned counsel has again surprisingly prayed  for three weeks’ further time to furnish the details though sufficient time  had been given. No direction is being complied with. The Directors are  filing the affidavit on each and every date making improvement as the  forensic audit progresses. They are not making full disclosures and  concealing the facts and have not mentioned in the affidavit what they are  ordered to do. It is clear that they are obstructing the course of justice to  the best of their ability. This state of affairs cannot be continued any  further. For non-compliance of the directions issued from time to time, we  have already drawn suo moto contempt and as subsequent orders have  also been violated. For the purpose of taking the contempt proceedings to  further logical end, before this Court passes any further order, we give an  opportunity to the Amrapali Group of Companies and Directors to furnish  their reply as to why they should not be punished for the contempt and  the violation of the order passed by this Court from time to time by  November 19, 2018. The case will be taken up for considering non- compliance of the order and for filing the wrong affidavits before this

36  

 Court, on 20.11.2018 along with the suo moto contempt that has been  registered vide order dated 12.10.2018.    9. We have two affidavits. One of Anil Mittal and another of Chander  Wadhwa. Both are passing liability on each other for creating certain  additional companies. None want to own the responsibility. We require  Amrapali Group of Companies and their Directors to file a reply to the  affidavit, filed by their CFO Chander Wadhwa and Anil Mittal. Let the  copies of affidavits of Chander Wadhwa and Anil Mittal be furnished to  the Advocate on Record, Amrapali Group of Companies. Let para-wise  and point-wise reply be submitted as to what has transpired in the Court,  as recorded in order-sheets, including what they have stated in their  affidavits.    12. It was also pointed out that Computech Pvt Ltd. is in possession of a  

substantial amount. The forensic auditors are in the process of examining  the details. However, at this juncture pursuant to findings of forensic  auditors, it was pointed out by Mr. Vikas Singh, learned counsel  appearing on behalf of Chander Wadhwa, CFO that a sum of Rs.7.58  crore from Rinku Computech Private Limited and Rs.4.1 crore is lying  with Chander Wadhwa, said amount is out of the transactions with the  Amrapali Group of Companies. He has volunteered to deposit the amount  within three weeks from today. Let it be deposited in the account opened  with the Registrar of this court, within three weeks.    14. From the forensic auditors' report, it is prima facie clear that  Amrapali Healthcare Private Limited, as pointed out in Annexure 11 is  created out of funds belonging to the Amrapali group. That is extracted  hereunder:  

Annexure-11    

Amrapali Healthcare Private Limited  (As per Audited financials 2015-16)  Details of Asset            (Figures in crore)    

Sl. No. Asset Book value Address  1. Land 0.53 Amrapali Hospital  

P2, NH-34 Omega 1,  Greater Noida, Uttar  Pradesh-201310  

2. Building 4.43 Amrapali Hospital  P2, NH-34 Omega 1,  Greater Noida, Uttar  Pradesh-201310  

 Date of transaction  Area (sq. meters)-  Constructed area-    

Sl. No. Shareholder’  Name  

% holding No. of shares  

1. Ultra Home  Constructions  Private  Limited  

99.89 % 93,85,260  

2. Swapnil 0.03 % 2500

37  

 Shikha  

3. Suvash  Chandra  Kumar  

0.08% 7500  

Total 100 % 93,95,260       * In FY 2016-17 the shares of Ultra Homes Construction Pvt. Ltd. are  transferred in the name of Gaurisuta Infrastructure Pvt. Ltd.    Details of Inter Corporate Deposits     (figures in crore)    

Sl. No. Name of company Amount  1. Ultra Home  

Construction  

Private Limited  

5.36  

2. Others 0.32    List of Present Directors    

Sl. No. Name Begin Date  1. Swapnil Shikha 27/11/2012  2. Suvash Chandra  

Kumar  27/11/2012  

   It has also been pointed out that this hospital is, in fact, owned to the  extent of 99.89 percent by Ultra Home Constructions Pvt Ltd. and  funding has been made by the said company. It is one of the companies  out of the Amrapali Group of Companies involved in the case. Thus, it is  apparent that this property has to be sold as it has been purchased out of  money of buyers, in order to make available the money for the  construction of the buildings.    17. It is a case where we find ourselves in a situation that the money of  Greater Noida and Noida Authorities has not been paid, buyers have also  been duped. Other financial institutions have not been paid. Construction  has not been completed. Money paid by buyers has been diverted for the  creation of various companies and assets have been created. All these  assets are accountable and have to be sold as it is not the independent  investment made by these directors. It is a patent and blatant fraud  

which appears to have been played, the way in which the money has been  transacted and creation of companies has taken place in connivance with  the CFO, statutory auditors. It was also pointed out that there are various  related companies in which money has been transferred. We restrain all  monetary transactions out of bank accounts or any kind of alienation of  the property held by the related group of companies where the money has  been siphoned and has been used for the creation of the assets. Any  transfer made in any manner shall be illegal, void and inoperative.    20. It is also necessary in order to find out the actual amount invested in  building activities, out of the funds collected. It also appears that certain  companies were created only for the purpose of purchasing raw materials.  Whether actual transactions of purchase have taken place is required to  be ascertained. Let all the vouchers of the purchase, Bills, orders, etc.,

38  

 which are in possession of Amrapali Group of Companies and the  estimates of various raw materials for each and every building without  which construction of a building is not possible to be undertaken to be  positively handed over to the forensic auditors within a week. We also  request the forensic auditors to propose how the actual valuation of the  buildings constructed so far by the Amrapali Group of Companies on the  spot can be made so as to ascertain the actual investments made and  extent of diversion. Let the estimate and quantities of the bills be also  furnished by Amrapali Group to the forensic auditors along with the  names of all the suppliers and mode of payment. They may also collect  information/documents from suppliers."      

Certain directions were also issued to DRT to make the valuation to  

sell the property. Other facts were also noted.  

25. On 20.11.2018 this Court had noted non-compliance of various  

orders passed by this Court from time to time. Various sub-leases had also  

been created. We issued the directions vide order dated 20.11.2018 as  

under:  

"3. It appears that various sub-lessees have been created. It was  informed to us by the learned senior counsel appearing on behalf of the  Amrapali Group of Companies that certain structures have been raised  by the sub-lessees. We have asked them to disclose all the information  on affidavit, but the order still remains uncomplied. Various directions in  this regard have been issued in paragraph 7 of the order dated  13.11.2018. There are various other directions issued time to time also  and compliance thereof is still wanting, though time fixed is over.    4. In the circumstances, we give one last opportunity to the Amrapali  Group of Companies, particularly to all the Directors of the company and  also those who have filed a reply in the Suo Motu Contempt. They have to  file their further affidavits in compliance with the aforesaid directions as  to what they have done and to make the disclosure as envisaged in  various orders.”  

We had also directed that any non-cooperation with the Forensic  

Auditors shall be viewed seriously. Statements of accounts of banks were  

also ordered to be issued by the banks.  In order dated 5.12.2018 this  

Court observed that let the Amrapali group of companies and their  

Directors Mr. Chander Wadhwa, CFO and Mr. Anil Mittal to explain as to

39  

why criminal action be not initiated against them on the basis of affidavits,  

various documents and the statements made in this Court on various dates  

and why their conduct as projected in the case be not reported to the ICAI  

to inquire. We directed the production of details of immovable properties as  

well as the movables etc. This Court also noted that DRT has pointed out  

that there was non-cooperation and non-compliance on the part of  

Amrapali group of companies. It was also pointed out to this Court that  

certain buyers/companies who have booked the flats by making payment  

of a paltry amount for the purchase of several flats/plots, did not appear to  

be genuine buyers. We have directed the Forensic Auditors to look into this  

issue. We also directed all the Directors of companies, their relatives, family  

members, Mr.Chander Wadhwa, CFO and statutory auditors who were in  

receipt of money of home buyers, to deposit the same in this Court. The  

last opportunity was given to do so.  

26. On 12.12.2018 in para 4 we have observed thus:  

"4. Pursuant to our order dated 05.12.2018, Mr. Adhikari Devi Prasad,  Mr. Bhuvan Pant, Mr. Prasanna Kumar Rout, Mr. Jagannath Sharma,  Mr. Tarun Kumar Sharma, and Mr. Sunil Kumar and also Mr. Anil  Sharma, Director, Amrapali Group of Companies are present in the  Court. We generally asked them how the accounts for the period 2015 to  2018 were prepared by them and submitted in the Court. They have  stated that it was based on tally data which was given to them. In  addition, Mr.Prasanna Kumar Rout, who worked as an Accountant with  Amrapali Sapphire, stated that he made the entries up to August 2018 in  the tally data on the basis of the documents/vouchers which were made  available to him. Mr.Jagannath Sharma, who is a Chartered Accountant  and partner in L.D.R. Company stated that they have prepared the  balance sheet on the basis of the tally data provided to them for the years  2015 to 2018. However, when cross-checked with the Forensic Auditors,  the Court was informed that the data from 2015 to 2018 has not been  made available fully to them. It was also pointed out that there should be  supporting documents/material to make these entries other than the  Bank statement when these statements have been prepared that should

40  

 also be clarified by Amrapali Group and supplied to the Forensic  Auditors.”    

We also directed details of unsold apartments and flats of the projects  

to be submitted in this Court. It was also pointed out that the methodology  

has been adopted by creating sub-leases as a mode of siphoning off the  

amount of the buyers. This Court noted the following facts and issued the  

requisite directions:  

“8. Mr. Lahoty, the learned counsel, also pointed out that the  methodology which has been adopted for creating the subleases was, by  and large, a mode of siphoning the amount. He has given the following  details as Annexure E, which is extracted below:-     

“CREATION OF SUB-LEASES  I. Amrapali Centurian Park: (Current Status: 228646 Sq. Mts.)   As per the lease deed, Lessor here is Greater Noida Authority  1. Lessee here is Amrapali Centurian Park Pvt Ltd (Total Area – 2,72,916  Sq Mts)  2. Sub- Lessee of Amrapali Centurian Park here are:   o Hawelia Builders Pvt. Ltd (Hawelia Valenova Park – 14920 Sq Mts)   o DSD Homes Pvt Ltd (Novena Green – 14760 Sq Mts)  

• In DSD Homes, Mr. Nishant Mukul (brother in law of Chairman  Mr. Anil Sharma) Ex-Director of Amrapali Group was also a director.  

o Elegant Infracon Pvt Ltd (Elegant Villa Phase I, III, & IV - 14590 Sq Mts)  • In the Elegant Infracon following are consortium partners with  shareholding:   Vidhyashree Buildcon Pvt Ltd (26%)  Nishant Creation Pvt Ltd (19%)  Anjali Buildcon Pvt Ltd (20%)  Agrawal Associates (Promoters) Ltd (5%)  Elegant Infracon Pvt Ltd (19%)  Stunning Construction Pvt Ltd (11%)    

• Vidhyashree Buildcon is one of the companies as mentioned in an order  

dated 26.10.2018 page 13, point 5, to whom sum of Rs.242.38 crores has  been handed over. Mr. Pankaj Jain (current director of Amrapali Group)  was also a director in Vidhyashree Buildcon Pvt Ltd.     

• Sushma Bajaj & Kulbhushan Bajaj (Current directors of Amrapali  Group) are also directors in Nishant Creation Pvt Ltd.     

• Mukesh Kumar Roy (DIN: 2175661) who is presently director of  Amrapali Group (listed in 46 companies LA Residentia) is also director of  Anjali Buildcon.     

• In Anjali Buildcon Mr. Sanjiv Kumar (DIN: 03136323) is also one of the  directors, who is the director of New Tech La Palacia to whom Shri Balaji

41  

 Hi-Tech Construction Pvt Ltd (A sublessee of Amrapali Dream Valley) has  further transferred the sub-lease of said project.     

• Stunning construction is one of the Amrapali Group Company listed in  46 companies.     

• Rs 46 Crs (Approx) amount which is to be paid by sublessee/s    II. Amrapali Dream Valley: (Current Status: 260307)    As per the lease deed, Lessor here is Greater Noida Authority.     1. Lessee here is Amrapali Dream Valley Pvt Ltd (Total Area – 354298 Sq  Mts)    2. Sub- Lessee of Amrapali Dream Valley Pvt Ltd here are:   

o M/s Shri Balaji Hi-Tech Construction Pvt Ltd (Total Are – 12479  Sq Mts)   o M/s K.V. Developers Pvt Ltd (Total Area – 19986 Sq Mts)   o M/s J.M. Housing Ltd (Total Area – 33537 Sq Mts)   o M/s Samridhi Reality Homes Pvt Ltd (Total Area – 27989)   o Sum Total Area is 93991 Sq Mts     

• Shri Balaji Hi-Tech Construction Pvt Ltd one of Amrapali Group  company (Sr.53 Page 2913 of an affidavit by Mr. Anil Sharma as Affidavit  Submitted in terms of order dated 26.09.2018, 31.10.2018. submitted on  12.11.2018, where Mr. Ajay Kumar & Mr. Mukesh Kumar Roy were  directors.     

• Shri Balaji Hi-Tech Construction Pvt Ltd has further transferred the  sub-lease to a new company namely New Tech La Palacia Pvt. Ltd, which  has applied for a revised sanction plan dated 21.01.2013 and it's not yet  approved. (page 18 of GNOIDA affidavit)     

• In New Tech La Palacia Mr.Sanjiv Kumar (DIN: 03136323) is a director  who is also a director of Anjali Buildcon (one of the shareholders of  Elegant Infracon Pvt. Ltd. who is sub-lessee of Amrapali Centurian Park.     

• Rs. 91.89 Crs (Approx) amount which is to be paid by sublessee/s    III. Leisure Valley: (Current Status: 396124.20 Sq. Mts  

 As per the lease deed, Lessor here is Greater Noida Authority.     1. Lessee here is Amrapali Leisure Valley Pvt Ltd (Total Area – 419519.20  Sq. Mts.)     2. Sub- Lessee of Amrapali Leisure Valley Pvt Ltd here are:    

a. M/s Start Landcraft Pvt. Ltd. (Total Are – 23395 Sq Mts)     Rs.3.2 Crs. (Approx) amount which is to be paid by sublessee/s”    9. We have directed Mr. Anil Sharma, Director of Amrapali Group of  Companies and other Directors to explain the sub-leases and place the

42  

 documents regarding the creation of subleases on record. Mr. Anil  Sharma stated before us that approximately a sum of Rs.66 Crores has  been received by the creation of these sub-leases and that amount has  been accounted for in the accounts of concerned Amrapali Group of  Companies. With respect to the money utilization in an aforesaid manner,  companies, names of Directors, relationship and activity made by sub- lessee so far, let details be filed on an affidavit. We also request the  Forensic Auditors to look into this aspect and submit a report before us  on the next date of hearing along with other aspects mentioned in the  above-quoted details filed on behalf of the flat buyers."  

 27. The directions were also issued to DRT to make a further valuation of  

Tech Park (Hotel) in Greater Noida. On 25.1.2019 we issued certain  

directions. On 11.2.2019 we directed M/s. J.P. Morgan to disclose the  

names of the investors and beneficiaries who invested in the Mauritius  

Fund which had invested in Amrapali INR Rs.85 crores. On 14.2.2019,  

dues were pointed out against individuals and Directors also. Against  

Directors there was a report of loans and advances to the extent of  

Rs.161.51 crores as noted in the order. We issued certain directions with  

respect to M/s. Golf Link City Projects Private Ltd. as well as M/s. Royal  

Golf Link City Projects Pvt. Ltd. We directed Mr. Anil Kumar Sharma to  

deposit an amount; whereas the non-compliance made by Amrapali was  

also pointed out by the buyers which had been noted. As inability was  

expressed on behalf of M/s. J.P. Morgan to explain valuation report dated  

23.10.2013 submitted by Mr. Sudit K. Parikh & Co., Chartered  

Accountants, they were ordered to explain the valuation report on the basis  

of which Rs.140 crores had been withdrawn by M/s. J.P. Morgan. It was  

also pointed out in this connection that the shares of Amrapali Zodiac were  

ultimately purchased for Rs.140 crores by M/s. Neelkanth and M/s.  

Rudraksha Forensic auditors pointed out that two persons namely

43  

Chandan Kumar, is a peon of Mr. Anil Mittal, statutory auditor and was  

working in his office and one is Vivek Mittal, nephew of Mr. Anil Mittal, who  

was doing petty jobs of sub-contractors, getting a monthly income of  

Rs.15,000. They were stated to be Directors in the companies, i.e., M/s.  

Neelkanth and Rudraksha. They were not having any capacity to give  

Rs.140 crores to M/s. J.P. Morgan. This Court has noted the facts thus:  

“As inability was expressed on behalf of M/s. J.P. Morgan as well as  other counsel to explain the report dated 23.10.2013 submitted by  Mr. Sudit K. Parikh & Co., Chartered Accountants. In the  circumstances, so as to find out the basis of the valuation, it is  necessary to call Mr. Sudit K. Parikh [Address : Ballard House, 2nd  Floor, Adi Marzban Path, Ballard Pier, Fort, Mumbai – 400 001] to  explain the valuation report on the basis of which Rs. 140 crores  had been withdrawn by M/s. J.P. Morgan. Let the Registry send a  communication to Mr. Sudit K. Parikh to appear before this Court  on the next date of hearing.    It was pointed out that shares of Amrapali Zodiac were ultimately  purchased for Rs.140 crores by M/s Neelkanth and M/s Rudraksha.  It is pointed out by forensic auditors that there are two persons,  namely, Chandan Kumar, who is a peon of Mr. Anil Mittal, Statutory  Auditor, and working in his office and another one is Vivek Mittal,  who is the nephew of Mr. Anil Mittal, and is doing petty jobs of sub- contractors and having a monthly income of Rs.15,000/-. It is  stated by the learned counsel appearing on behalf of M/s J.P.  Morgan that in one company, Chandan Kumar and Atul Mittal were  Directors. M/s Neelkanth and M/s Rudraksha are the private  limited companies in which the abovementioned persons are named  as Directors. They are not having the capacity to give an amount of  Rs,140 Crores to be paid to M/s J.P. Morgan.    This is a serious kind of fraud apparent from the aforesaid facts. On  being asked, Mr. Anil Kumar Sharma has shown reluctance to  disclose about Atul Mittal, who was the Director of M/s Rudraksha  along with Chandan Kumar. It is apparent that it was not a fair  transaction of sale. That fact is required to be gone into. Let Mr. Anil  Mittal and Directors of Amrapali Zodiac and Mr. Anil Sharma  explain the situation by filing their personal affidavits from where  the money came to be paid to M/s J.P. Morgan, who managed the  money and how the companies were framed and for what purpose."         

    28. On 28.2.2019, this Court considered IA No.35430/2019 filed by  

Deputy Commissioner of Police, EOW, Delhi Police, seeking permission to

44  

take into custody various Directors namely Anil Kumar Sharma, Shiv Priya,  

and Ajay Kumar. This Court has passed the following order:  

“I.A.No. 35430 of 2019  This application has been filed by the Deputy Commissioner of Police,  Economic Offences Wing, Delhi Police, seeking permission to arrest and  take into custody various Directors, namely, Anil Kumar Sharma, Shiv  Priya, and Ajay Kumar. They are presently in the custody of Noida Police  vide our order dated 11.10.2018. We make it clear that the Delhi Police is  free to arrest/take into custody any or all the other Directors of Amrapali  group of companies. Any order passed by this Court, in this case, shall  not come in their way to do so.    Let the Police investigate the entire gamut of the scenario of the various  projects, as projected in this case and various orders passed and  investigate the entire matter. Prima facie, we find that the case requires  serious investigation in the facts projected by the Directors, CFO, and the  statutory auditors.     The Police are directed to investigate the role of Mr. Anil Mittal, Statutory  Auditor, and Mr. Chander Wadhwa, CFO as well. The Police may  interrogate them and find out their criminality, if any, in the matter.    Let various order sheets of this Court as well as the affidavits of Mr.  Chander Wadhwa and Mr.Anil Mittal and Directors of Amrapali Group of  Companies indicating the operational methods of diversion of funds and  creation of companies be also furnished to the Deputy Commissioner  forthwith.    The application is allowed.”  

This Court also issued other directions with respect to the persons  

who were called by the Forensic Auditors but did not report. Other  

directions were also issued.  

29. On 9.4.2019 we requested the parties to address this Court how to  

protect the interests of the buyers so that they can get a clear title after  

completion of the projects. In view of the dues of Noida and Greater Noida  

authorities and other secured creditors, such as banks, etc. how to work  

out equities in the circumstances and requested the parties to address this  

Court. Amrapali group of companies to address how much investment they

45  

have made in the project and what they have done with the money of the  

buyers and to inform us as to diversion of the money of home-buyers, how  

to secure it and why they should not be suitably dealt with in accordance  

with law for what they have done. In view of the aforesaid facts projected in  

various affidavits of the Directors and the interim report of forensic  

auditors.  This Court listed the case for hearing on various issues. We have  

heard Forensic Auditors, Mr. Krishnan Venugopal, learned senior counsel  

and Mr. M.L. Lahoty, learned counsel, on 30.4.2019. Thereafter, we further  

heard the matter on 1.5.2019.  They concluded the arguments. Mr. C.A.  

Sundaram learned senior counsel was also heard and the learned counsel  

on behalf of Bank of Maharashtra and Bank of Baroda as well as Ms. Geeta  

Luthra and Mr. Gaurav Bhatia, learned senior counsel on behalf of  

Amrapali group. On 2.5.2019 and on 8.5.2019 certain directions were  

issued. On 10.5.2019 arguments were further heard and the case was  

reserved for orders.  

SUBMISSIONS  

30. Mr. M.L. Lahoty, learned counsel appearing on behalf of 49,575 home  

buyers submitted that under section 8 of the Real Estate Regulation and  

Development Act, 2016 (for short, ‘the RERA’) and also in view of the  

provisions contained in sections 13 and 14 of the U.P. Industrial Area  

Development Act, 1976 (for short, ‘the Industrial Development Act’), the  

lease deeds granted by Noida and Greater Noida authorities were ordered to  

be cancelled. In the lease deed also, there is a specific stipulation as to

46  

cancellation clause in case of cancellation and imposing penalty and for  

such other actions against the builder in case of default. Home buyers  

further submitted that after payment of first 10% of the lease premium,  

Amrapali Group has not paid any of the 20 half-yearly instalments from  

2010 onwards. The Noida and Greater Noida authorities have been liberal,  

and not taking any stringent action against Amrapali Group which had  

been mandated by virtue of the provisions contained in the lease deed. The  

dues of Noida and Greater Noida authorities cannot be treated at par with  

the dues of home buyers. Home buyers further submitted that so far as the  

dues of the banks are concerned, they are not placed on any better footing  

and Forensic Auditors in their report have stated that but for the  

connivance of the bank officials, the act of money siphoning on such large  

scale would not have taken place. Banks have failed to monitor utilisation  

of the borrowed funds and they acted as mute spectators to the diversion of  

funds by Amrapali Group of Companies, its Directors and officials. Mr.  

Lahoty, on behalf of home buyers further submitted that the Reserve Bank  

of India has issued Master Circulars from time to time since 2014 onwards  

as to the obligations of the Banks and specifically directed that banks must  

necessarily monitor the ‘end use' of the loans granted by them and call for  

periodical reports thereof. In the case of diversion and siphoning of loan  

funds, banks must invariably take action against defaulters. Reliance has  

been placed on RBI's Master Circulars of July 2009, 2014 and 2015. In  

case after the cancellation of the leases, they are not able to construct, they  

may enter into an arrangement with any reputed builder like NBCC or L&T,

47  

etc.  A roadmap thereof need be drawn to be monitored by a Monitoring  

Committee which duly represents the interest of the home buyers, may also  

be directed to be constituted which will not only oversee the work but also  

oversee the construction activities and also submit a report to this Court so  

that the needs of the home-buyers are finally achieved. A further audit of  

connected companies may be ordered.  Bank accounts with Bank of  

Baroda are operationalised towards maintenance and electricity as families  

are residing in 21 Towers have been regularly depositing the electricity and  

other dues in their accounts which have become defunct after the  

discharge of IRP vide order dated 8.8.2018 passed by this Court. The  

amount be utilised for pending bills from August to October 2018 towards  

electricity and maintenance services by nominating a Joint Signatory in  

place of IRP.  

31. Mr. Krishnan Venugopal, learned senior counsel appearing for home-

buyers has urged that there is the distinction between mortgage and  

charge as a mortgage involves the transfer of interest, whereas, in case of a  

charge, there is no transfer of interest. He has further urged that non-

production of relevant documents despite the court order, leads to a  

presumption of an adverse inference. As Amrapali Group has failed to  

comply with the court's order, an adverse inference may be drawn against  

them. He has also pressed into service public trust doctrine and submitted  

that the State or the public authority which holds the property for the  

public or which has been assigned the duty of grant of largesse, etc. acts as

48  

a trustee, and therefore, has to act fairly and reasonably, promote public  

good and public interest. Public trust doctrine is a part of the law of the  

land. The doctrine is a facet of Article 21 of the Constitution. The action  

has to be bona fide. Public property cannot be transferred to private  

property in case it affects the public interest. General welfare and common  

good are to be kept in view by the public authorities exercising public  

power and discharging public duty.  

32. Mr. Krishnan Venugopal, learned senior counsel further urged that in  

view of the findings recorded by the Forensic Auditors, section 8 of the  

RERA has to be invoked. He further submitted that even though Amrapali  

was defaulting on payments of lease rents, authorities continued to allot  

further plots to them. The first lease had been granted on 1.5.2007 and the  

last on 30.7.2010. Despite default, they continued to issue permission to  

mortgage/NOCs for that purpose between 24.12.2009 and 27.2.2013, in  

spite of the fact that there was no payment of premium and advance  

annual lease rent up to date. The authorities have acted in breach of clause  

7 of the conditions of the lease deed, they failed to monitor the progress of  

the project to protect the interest of the public.  

33. In reference to banks, Mr. Venugopal submitted that banks were  

giving loans to finance Amrapali, in spite of the fact that they were diverted  

to other accounts and not utilised for construction. Banks do not even have  

effective mortgages because of NOCs. clearly, state that they would become  

effective only when Amrapali makes up to date payment of the premium

49  

and advance annual lease rent, and under the conditional NOCs., the  

banks were required to obtain confirmation from the authorities as to  

payment of premium and lease money for the mortgage to become effective.  

The banks have not handed over copies of mortgage deeds despite orders.  

Moreover, the banks have a second charge after all dues of the Noida and  

Greater Noida authorities are realised. The authority's ownership rights  

over the plots are paramount. The public sector banks are also subject to  

public trust doctrine to the extent that they are custodians of public funds  

and are beneficiaries of the Banking Companies (Acquisition and Transfer  

of Undertaking) Act, 1970 and Banking Companies (Acquisition and  

Transfer of Undertaking) Act, 1980 passed in pursuance of the Directive  

Principles under Article 39(b) and (c)  of the Constitution. The facts  

demonstrate the collusion between Amrapali Authorities and the banks.  

The home buyers who invested their hard-earned money, cannot be  

cheated and deprived of their money as well as their houses. Authorities  

cannot seek to recover any additional amount from the home buyers. They  

must be directed to complete the construction by realising only the  

remaining dues from home buyers under their agreements with Amrapali,  

by selling off unsold inventory of flats, etc. available with it and by selling  

off excess land allotted to Amrapali. The Committees of home buyers must  

be set up for each project to monitor the quality and progress of the  

construction as well as the costs involved so as to ensure that contractors  

do not engage in fraud or inflate construction costs in the course of  

completing the projects.

50  

34. On behalf of the home buyers Association, it was submitted that by  

promoters of the real estate sector in India from 2008-2009, home buyers  

have been promised the houses of which they have been deprived of on a  

large scale in spite of the fact that they have paid a substantial amount of  

money. Construction has not progressed and money has been diverted  

elsewhere. There is a charge of the money of the home buyers must be  

treated as the highest priority. They have paid towards dues of Authorities  

also which amount has been diverted.  Banks and authorities have failed to  

discharge their duties. Banks have granted loans to the projects in some  

cases which were not sanctioned even on the date of grant of loan. For  

example, Phase III of Amrapali Adarsh Awas Yojana Project. Banks have  

released the complete payment amounts to the builder without the  

construction having been reached even 10 to 20%.   As such lending was  

not permissible. The current scenario is that the construction of the  

various projects is stalled and the home buyers are without any hope of the  

promised homes. Certain incumbents who have taken loan are compelled  

to repay the loan and money has been siphoned out.   As such appropriate  

relief be granted to home buyers in view of the facts found in the report of  

the Forensic Auditors.  

 35. On behalf of the home buyers, reliance has been placed on the  

provisions contained in section 4(5) of the U.P. Apartments (Promotion of  

Construction, Ownership, and Maintenance) Act, 2010 (for short, the ‘U.P.  

Apartments Act, 2010’).  It is provided that the completion of the

51  

construction works of a building as a whole or the completion of an  

independent block of such building, as the case may be.  The completion  

certificate can be issued for the blocks which have been completed. Noida  

and Greater Noida authorities are not issuing NOC for the reason that  

payment of land dues has not been made by the builder, for which  

authorities are also responsible. The non-payment of dues by the builder  

should not come in the way as more than 9000 home buyers are already  

residing in the buildings. Most of them have paid the entire amount to the  

promoter.  Others are waiting for the completion of buildings.  

 36. On behalf of Noida Authority, learned senior counsel submitted that  

public trust doctrine is not attracted to the facts in the instant case as  

there is no breach of trust. The decision to transfer lease at 10% was the  

carefully thought out policy of Noida approved by the State Government. It  

was applied uniformly to all and not restricted only to the Amrapali Group.  

It was submitted that allotment of group housing plots is made by Noida  

authority in accordance with the prevailing policies and rates which have  

kept changing with times. In 2007, the allottees were required to pay 10%  

of the total premium of the plot as reservation money, before formal  

allotment letter was issued. Then, a further amount of 30% had to be paid  

within 60 days from the time of allotment. Thus, 40% premium was  

required to be paid. Balance 60% had to be paid in eight half-yearly  

instalments along with interest.

52  

37. It was further submitted on behalf of the Noida Authority that  

primarily on account of the global recession in the world economy, in the  

year 2008 a decision was taken to revise the rate of allotment money to  

10%. Thus, the total sum of 20% was to be paid before handing over  

possession. In the year 2009, the rate of allotment money along with  

registration money was revised to 10% of the total premium for the  

possession to be handed over. However, steps were taken to provide (i)  

facility of re-scheduling of payments in case the allottees intended to  

complete his project as per agreed policy; (ii) to exit the project; (iii)  

moratorium of two years on payment of balance premium; (iv) facility of  

sub-division of plots of area larger than 10 acres so as to make the larger  

projects financially viable.  

 38. It was also submitted on behalf of Noida Authority that after 2005, a  

total of 114 plots had been allotted to various group housing societies. 81  

have been handed over the possession on payment of 10% of the total  

premium.  29 projects, out of these 81, have been completed. Out of other  

33 allotted earlier, 11 had been completed, and 7 have obtained part-

completion certificates. Noida Authority, being a responsible public  

organisation, has been diligent in pursuing Amrapali Group, it has not  

taken the drastic recourse of terminating the lease deed as that would  

entail demolition of the existing structures as per the provisions of the  

lease deed. In terms of the lease, home buyers have no title or legal rights  

to possession of the flats they are occupying. As the projects have been

53  

completed to some extent, it would have been unfair to leave the home  

buyers in the lurch. The occupancy certificate is issued in accordance with  

the provisions of the New Okhla Industrial Development Area Building  

Regulations, 2010 (for short, ‘the Regulations of 2010’). Clause 20.0 of the  

Building Regulations requires the allottee to submit a notice of completion  

of the building, inter alia, with a structural safety certificate, NOCs from  

the Fire Department, Explosives department and Environment department.  

No building erected, re-erected, can be occupied in whole or in part unless  

occupancy certificate is issued by the CEO of the Authority as per clause  

20.1.1 of the Regulations. The lessee/promoter is entitled to allot the  

dwelling unit on a sub-lease basis. However, he has to make the payment  

of premium of the plot to Noida authority when permission to transfer  

built-up flats or part with possession of the whole or any part of the  

building which has been constructed is granted. The physical possession of  

flats can be given to home buyers only after execution of sub-lease deed  

and sale deed has also to be registered before actual physical possession of  

the flat is handed over as required under the provisions of Registration Act,  

1908. The declaration required to be made under section 12 of the U.P.  

Apartments Act, 2010 is also to be filed.  

39. It was further urged on behalf of the Noida Authority that the Noida  

Authority had the first charge including those created in favour of banks  

and financial institutions. The mortgage could have been effected in favour  

of Banks/financial institutions recognised by the RBI, National Housing

54  

Bank, HUDCO, New Delhi and the charge of such institution shall be the  

second charge on the dwelling units, thus, being financed. The permission  

to mortgage shall be effective only on making full payment of premium and  

up to date annual lease rent of group housing society. An intimation shall  

be given to the Authority about the creation of the charge by way of  

mortgage. The mortgage permission shall be granted as per the terms of the  

lease only on payment of dues of authorities.  

 40. It is submitted that it is open to the authority to cancel or terminate  

the lease. In the case of misrepresentation, suppression or violation of the  

conditions of lease and in the case of default and at the time of  

cancellation, an amount equivalent to 25% of the total premium of the plot  

shall have to be forfeited and possession of plot shall have to be resumed  

by Noida Authority with structure thereon. In the instant case, no dues  

certificate had not been issued by the Noida authority nor any sub-lease  

deed has been executed. The possession by various home buyers in respect  

of constructed flats is contrary to the provisions of the lease deed. The  

builder could not have handed over the possession.  Any occupation of flats  

by the home buyers without compliance of mandatory provision of  

occupancy certificate and without payment of statutory dues, both to Noida  

Authority and to the Collector of Stamps and without execution of tripartite  

sub-lease deed may not be termed as legal and as such which could have  

resulted in their eventual eviction.  

55  

41. It was further submitted on behalf of the Noida Authority that  

pursuant to order dated 27.11.2017 passed by this Court, on depositing  

10% of the dues to issue completion certificate such NOC could not be  

issued and the order passed by this Court has not been complied with by  

builder/promoter as such possession could not be handed over.  In spite of  

reiterating the aforesaid direction of this Court on 31.1.2018, it has not  

been complied with by the promoter/leaseholder.  It is submitted by the  

Noida Authority that its dues to Amrapali group exceed Rs.2191.38 crores  

till 30.4.2019. It is in public interest to ensure payment of premium/lease  

money with penal interest etc. so that the development of the various  

projects at Noida is not impeded. Prayer has been made that in whatever  

manner practicable and by whatever scheme this Court may think fit and  

proper, aforesaid dues of the authority may be secured and ordered to be  

recovered.  

 42. On behalf of Greater Noida Industrial Development Authority, it was  

submitted that its dues were Rs.3,234.71 crores as on 15.1.2019 in respect  

of 5 group housing plots of Amrapali group. These dues inter alia comprise  

of the amounts payable against the premium plus the penal interest for  

default, additional compensation and interest thereon, the lease rent and  

interest thereon and time extension charges for each of the five plots. Title  

in the flats can pass only by way of execution of a registered instrument.  

However, before that procedural requirements pointed out on behalf of the  

Noida Authority have to be complied with. Once completion certificate is

56  

issued, the rights in the flat will pass on to the flat buyers and then they  

would contend that the dues of the authority should be recovered from the  

builders who have defaulted in making payment and not the flat buyers.  

On the basis of that privity of contract, they would contend that the  

liability to make payment of the premium and other dues payable to  

Greater Noida authority, by lessee/builder is between them and they are  

not parties to the lease deed.  

43. It is further submitted on behalf of Greater Noida Authority that even  

with regard to the issuance of completion certificate for a part of the  

projects, the existing policy is that against the part-payment received,  

completion certificate would be issued in the same proportion minus 10%,  

so that the financial interest of the authority is protected. Therefore, sub-

lease deeds too would be executed up to 90% of the proportion in which  

part-payment has been received. It was further submitted by the Greater  

Noida Authority that section 19(10) of RERA also provides for taking over of  

physical possession after issuance of completion certificate. The provisions  

of the U.P. Apartments Act, 2010 are also similar as well the provisions in  

the lease deed.  

44. It is further submitted on behalf of Greater Noida Authority that FAR  

admissible is 02.75 only and not 3.50. The differential FAR of 0.75 is not  

purchasable. The calculations made by Amrapali based on FAR of 3.50 is  

itself wrong. FAR has not yet been purchased by Amrapali group by  

depositing the charges and submission of consent of two-thirds of the

57  

apartment owners. Under section 4(2)(1)(D) of RERA, 70% of the amount  

received from home buyers is to be put in a separate account to be  

maintained in a scheduled bank and is to be used towards construction  

and land cost.  The land dues payable to Greater Noida authority constitute  

an encumbrance as provided in section 4(1)(b) of the U.P. Apartments Act,  

2010. As per section 11(4)(c) of RERA, it is the duty of the promoters to  

certify that all dues and charges have been paid. Thus, it follows that  

money received from the flat buyers is to be spent on construction and  

payment of land dues. Therefore, payment of land dues cannot be denied to  

it.  Land dues are in the nature of public money. Amrapali group is bound  

to pay it. The amount is payable in instalments as such same is interest  

bearing for availing the facility of payment in instalments as such the land  

cost payable increases. In case of default, penal interest follows. There was  

no order passed by the Allahabad High Court for staying construction on  

the leased plots. Amrapali Group was in possession of the allotted land and  

was proceeding with the construction. For 4 years, it has prayed for zero  

periods of interest to which the group is not entitled. It would lead to  

unjust enrichment by Amrapali as they have realised dues from home  

buyers and have not paid to the Authority. The order passed by the NGT  

with respect to Okhla Bird Sanctuary case was not applicable to the land in  

question. The dues payable to the authority are recoverable as the arrears  

of land revenue. The authority has the first charge. The permission to the  

mortgage was conditional one, it has not been complied with, in particular,  

conditions B, C and D. The mortgage had to be renewed every year and is

58  

subject to the payment of land premium, etc. The Greater Noida authority  

has written numerous letters to Amrapali group of companies to make the  

payment of its dues.  In the case of Unitech, yet another Group, the  

Authority has cancelled the allotment which was questioned in this Court.  

As the cancellation of the allotment in case of Amrapali could have led to  

greater complications as construction had commenced with third-party  

interest created. It would have opened floodgates to litigation. As such  

cancellation of lease deeds was not resorted to.  

45.  Ms. Geeta Luthra and Mr. Gaurav Bhatia, learned senior counsel  

appearing on behalf of Amrapali group of companies, have urged that  

Amrapali group started its activities in the name of M/s. Ultra Home  

Construction Pvt. Ltd. in the year 2003 with the purpose of providing low-

cost housing to projects in Indirapuram (Ghaziabad) Noida, Lucknow,  

Indore, Bhilai, and more than 15,000 flats were handed over by the  

developers to flat owners in 5 different housing projects in Indirapuram  

and Greater Noida. The balance sheets of Amrapali group of companies at  

2007-08 shows that it had carried forward the money earned by the  

company to launch the projects after 2009-10 upon allotment of plots by  

Noida and Greater Noida authorities in their respective areas. Immediately  

after the allotment of land, the work was started and the Allahabad High  

Court quashed acquisition. It had to be stopped as per the order passed by  

the Allahabad High Court.  When in 2016 Amrapali group again started to  

infuse capital and manpower, proceedings were initiated in NCLT by Bank

59  

of Baroda as against Amrapali Silicon City Pvt. Ltd. and M/s. Ultra-Home  

Constructions Pvt. Ltd. There were legal impediments/force majeure  

conditions in completing the projects within the period given in the flat  

buyer agreement. The Allahabad High Court finally decided the matter in  

Gajraj Singh & Ors. v. State of U.P. on 21.10.2011. The Patwari Village issue  

was pending before this Court till 2015. On 14.5.2015 this Court finally  

decided the matter in the case of Savitri Devi v. State of U.P. It was an  

order passed by the National Green Tribunal with respect to Okhla Bird  

Sanctuary which also hindered the work. Higher compensation was  

ordered to be paid by the Allahabad High Court in 2011. The period of  

litigation ought to have been treated as zero periods for the purpose of  

payment of dues by Noida and Greater Noida authorities. Amrapali Silicon  

City was affected on account of litigation and land acquisition issues. The  

work of Leisure Valley, Dream Valley, and Leisure Park were also affected.  

There was an issue of the approach road with the farmers with respect to  

Sapphire Housing Project.  Other projects were also affected due to farmers'  

agitation, want of proper roads, etc. The authority was required to give  

electricity, sewer and water connections. Proper facilities were not extended  

timely.  

46. It was further submitted on behalf of Amrapali Group that a High-

Power Committee has been constituted by the State of U.P. A sum of Rs.  

2,715 crores are to be paid to the authorities including the interest and  

purchasable FSI costs. The outstanding of banks is Rs.985 crores. It was

60  

submitted that the projects are viable in case some relief is granted  

towards land dues of authorities and dues of the banks. The joint  

inspection indicated that substantial construction had been carried out.  

The cost of construction to complete the launched projects, as per NBCC is  

Rs.6827 crores; whereas the cost as per Amrapali group is Rs.5630 crores.  

Calculation of NBCC is wrong. The projects are divided into 3 categories: (i)  

where the allottees were living; (ii) advanced stage of construction; and (iii)  

work is at a nascent stage. The amount defaulted by buyers is Rs.511  

crores, total receivables from them are Rs.5,332 crores. The encumbered  

and unencumbered assets can be sold to complete the project. The  

valuation worked out by the DRT comes to Rs.7,353 crores considering the  

maximum permissible FAR of 3.50. The order may be passed in respect of  

amounts due from Raipur and Bhubaneswar Housing Board which are  

recoverable from them to deposit in Court. Certain suggestions have also  

been made on behalf of Amrapali group for arranging the required funds.  

That home buyer may be directed to pay the cost. Unsold inventory of the  

launched projects on sale would generate Rs.1,922 crores. In case of any  

shortfall, there can be a sale of unencumbered assets of the company.  

Reputed builders may be engaged for undertaking the construction of the  

various projects. Amrapali has spent Rs.10,630 crores as against  

Rs.11,652 crores received from home buyers. As per the affidavits dated  

16.5.2018 and 3.12.2018, the total cash outflow is Rs.395 crores utilised  

by the group in the creation of assets whose current valuation as per DRT  

is Rs.1200 crores. The Noida and Greater Noida authorities have partial

61  

registration policies as provided in Building Regulations and the Act and an  

appropriate Committee may be constituted for supervision. Amrapali group  

shall extend all help in the building of the projects.  

47. With respect to the report of the Forensic Auditors, it has been  

submitted that there is no undervaluation in booking the flats. The value of  

flats depends upon the situation etc. as the flats were booked at different  

times, they have different prices as per the prevailing market. In certain  

cases, the customers took possession of various Towers in partially  

unfinished conditions and managed the pending work by themselves. In  

some projects, lifts were installed by the customers' associations. In some  

other cases, interiors of the flats were finalised by the customers  

themselves. Amrapali group reduced the value of such flats in their books  

accordingly.  

48. With respect to other amounts recoverable from  

KMPA/relatives/Directors, as per the affidavit submitted by Shiv Priya on  

20.11.2018, Rs.4.3 crores were paid towards his taxes. The same has been  

adjusted against the salary due of Rs.4.4 crores from various Amrapali  

group of companies. Salary of Rs.1.6 crores is recoverable by Shiv Priya  

from Amrapali group of companies. As per the affidavit of Mr. Ajay Kumar,  

Rs.1.21 crores were paid by the company towards his taxes out of his  

outstanding salary up to 31.3.2015. Though his salary for the financial  

years 2016-18 is still to be mentioned in the books of accounts on account  

of his due salary. A sum of Rs.25 lakhs has been paid by him to Ultra

62  

Home Construction Pvt. Ltd.; in addition, a sum of Rs.25 lakhs paid to  

Yogesh Chand is duly debited in his ledger and as mentioned in his  

affidavit.  

49. With respect to Amrapali Infrastructure Pvt. Ltd., it was submitted  

that an advance to Directors of Rs.113.54 crores was used by the Directors  

to purchase shares of Ultra Home Construction Pvt. Ltd. Ideally, the shares  

should have been issued in the name of Amrapali Infrastructure Pvt. Ltd.  

The money moved from Amrapali Infrastructures Pvt. Ltd. to Ultra Home  

Construction Pvt. Ltd.   Precast Factory’s valuation is Rs.179 crores. Mr.  

Anil Kumar Sharma has surrendered the shares in favour of Amrapali  

Infrastructure Pvt. Ltd. to the extent of INR 73.2 crores. Mr. Shiv Priya has  

surrendered the shares in Amrapali Infrastructure Pt. Ltd. during 2018-19  

of Rs.35.1 crores.  

50. With respect to Amrapali Hospitality Services Pvt. Ltd., it was  

submitted that the company gave Rs.6.62 crores to Directors as advances  

out of which Rs.6.55 crores were given to Mr. Anil Kumar Sharma and his  

family. In the financial year 2017-18, Rs.2.25 crores were used by Mr. Anil  

Kumar Sharma for payment of housing loan of Jay Pee Green Property.  

Rs.1.25 crores were deposited with this Court by way of Demand Draft,  

Rs.0.85 crores were paid to settle the bank loan of Leisure Valley Villa and  

Rs.0.5 crores were transferred for payment of TDS liability of Amrapali  

hospital.

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51. With respect to Hi-Tech City Developers Pvt. Ltd., the Auditor's report  

indicates that a sum of Rs.4.24 crores was given as an advance to Mr. Anil  

Kumar Sharma in 2009-10 which was used by him for purchasing shares  

of Ultra Home Construction Pvt. Ltd. Ideally, the shares should have been  

issued in the name of Amrapali group of companies. No transfer of money  

was there. Mr. Anil Kumar Sharma had surrendered shares in favour of  

Amrapali Infrastructure Pvt. Ltd., during the year 2018-19 but this has not  

been reflected in the books of the company. With respect to cash in hand,  

there is no consistency in the report of the auditors. Only Rs.9 crores were  

available in cash in various group companies. The entire amount was spent  

on payment of wages due to various labours at different times. With respect  

to other recoverable advanced to various parties amounting to Rs.234.31  

crores, the details are not available in the report. These advances are  

against genuine business transactions. There is a possibility that such  

expenses have not been booked and squared off.  

52. With respect to the diversion of home buyers amount to the extent of  

Rs.3,500 crores and bogus billing of Rs.1500-1600 crores, out of the total  

amount received from home buyers of Rs.11,652 crores would leave INR  

6,652 crores for carrying out the existing construction at sites. The total  

sum available for construction purposes comes to Rs.4,352 crores, after  

deducting the amount of payment to the authorities and banks of Rs.1,000  

crores and Rs.1,300 crores respectively. With respect to non-genuine  

purchases from suppliers, though a sum of Rs.554 crores was given to the

64  

income-tax authorities, on appeal the error had been corrected by the  

income-tax authorities. There was an error in the report of the forensic  

auditors. The report of the forensic auditors as to non-existing companies  

is also not correct. It is further submitted that Gaurisuta Infrasolution Pvt.  

Ltd., which manufactures PVC doors and windows had business  

transactions with Amrapali group, payment/advances were made to them.  

It is a fact that parties are related. It does not mean that all transactions  

are dubious. Law does not prevent such transactions. The short term and  

long-term loans to third parties were not for diverting loan funds and home  

buyer funds to group companies.  

53. With respect to Auditors’ list of 27 companies formed for the purpose  

of routing the cash of the companies, were formed before demonetisation.  

With respect to J.P. Morgan Property Mauritius Company-II, Amrapali  

Zodiac Developers Pvt. Ltd. transferred money to another company to buy-

back stake in J.P. Morgan but did not do it directly as share buy-back  

rules did not permit such transactions. It may be maximum violations of  

the Companies Act but is not a diversion of money. With respect to FEMA,  

it is submitted that again it is a violation of ECB guidelines but again it  

was not a case of diversion of money. Money was needed for construction,  

therefore, arrangement with J.P. Morgan was made.  

54. With respect to doubt of Forensic Auditors as to the genuineness of  

interest paid by Amrapali Silicon City Pvt. Ltd. to IPFFI and claiming  

interest @ 17% which is very high, it was submitted that rate of interest

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depends upon the money lending transactions and is not illegal or  

prohibited in law.  

 55. With respect to charging for professional services and fee by  

Directors, it was stated that a person rendering professional services  

should have a membership of professional bodies and have some certificate  

of practice. A lot of companies pay a professional/consulting fee to  

outsiders to assist them in their business. Amrapali group has also paid  

salaries and consultation fees to Directors as they were providing their  

expertise and skill. Ultimately prayer had been made to evolve some  

mechanism for completion of housing projects.     

56. On behalf of Royal Golf Link City Projects Pvt. Ltd., it is submitted  

that a loan of Rs.50 crores or Rs.48,52,05,100 was paid by Ultra Home  

Constructions Pvt. Ltd. to Royal Golf. Interest @ 9% amounting to  

Rs.5,83,42,977 has been paid to Ultra Home. Subsequently, the agreement  

has been entered into to repay Rs.50,46,78,022 by 31.3.2017 or in lieu  

thereof 30 Villas have to be allotted by Royal Golf to Ultra Homes. This  

Court has attached 30 Villas allotted to Ultra Home. It is ready to give 30  

Villas by 30.4.2021 or to refund the amount of Rs.48,46,78,022 in 4 equal  

quarterly instalments in full and final settlement of all claims of Amrapali  

group.  

 57. On behalf of Bank of Baroda, it has been submitted that Forensic  

Auditors have made adverse comments without any basis. Bank of Baroda

66  

had deployed suitable methods to monitor the utilisation of funds. No  

diversion of funds was permitted by Bank of Baroda. Monitoring of the loan  

was done and before sanction of the loan, the net worth of the  

promoters/Directors of ASCPL was ascertained. Bank of Baroda relied  

upon a letter dated 29.7.2010 from Noida to ASCPL. The term loan  

agreement was executed amongst ASCPL, Bank of Baroda, Bank of  

Maharashtra and Oriental Bank of Commerce "Consortium" for a term loan  

of Rs.300 crores. After execution of due documents and deeds of corporate  

guarantee issued in favour of Bank of Baroda, corporate guarantees were  

submitted by Ultra Homes Construction, Jotindra Steels and Tubes Ltd.  

along with Vidhyashree Buildcon. Pvt. Ltd. RoC search report of guarantors  

was also obtained. NOC of Noida dated 21.2.2012 for mortgaging the  

project site to procure a term loan from the consortium was also obtained.  

A detailed project report was issued by Solomon Consulting Pvt. Ltd. There  

was the appointment of independent lender's Engineer and thereafter  

accounting was done, post-disbursal of loan by Bank of Baroda. The money  

was released on the basis of lenders Engineers advice of Rs.49 crores out of  

Rs.55 crores. Thus, there was no lack of due diligence and considering the  

progress of construction, steps had been taken by the Bank of Baroda to  

protect its interests after the account became NPA. Active steps were taken  

to recover the amount. The similar mechanism had been adopted for  

Amrapali Infrastructure Pvt. Ltd. With respect to Ultra Homes Construction  

Pvt. Ltd., also a loan of Rs.75 crores was sanctioned out of which Rs.65.84  

crores were disbursed for the construction and development of an

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Integrated Information Technology Park, (IT Park), Hotel, Commercial  

complex, service apartments and residential complex on Plot No.59, Sector  

Knowledge Park-V, Greater Noida,  which were executed by Mr. Anil Kumar  

Sharma, Mr. Ajay Kumar, Mr. Shiv Priya and Mr. Madan Mohan Sharma.  

Amrapali Zodiac Developers Pvt. Ltd. was granted a loan of Rs.75 crores. It  

was not utilised for payment of the cost of land or for payment of  

construction cost. The amount has been repaid and the account has been  

closed. The money may have been routed through various suppliers and  

contractors. The remittance of money is nothing but an example of due  

conduct of business. With respect to the release of the corporate guarantee  

of M/s. Jotindra Steel and Tubes Pvt. Ltd., it is submitted that they were  

unable to infuse share capital as required and seemed unable to do so in  

the future as well. The shares due to M/s. Jotindra Steel and Tubes Pvt.  

Ltd. were also allotted to M/s. Ultra-Homes Construction Pvt. Ltd. Thus,  

the Bank of Baroda granted the request for release of the corporate  

guarantee in favour of M/s. Jotindra Steel and Tubes Pvt. Ltd. Amrapali  

group had the right to mortgage the property as per the mortgage deed.  

There was no bank charge on the property mortgaged by Amrapali group.  

As per clause 15 of the mortgage deed, the buyer shall have no right after  

paying all amounts. The developer shall continue to have full authority over  

the flat unless a registered deed is executed in favour of the allottee. It is  

also submitted that the home buyers are not secured creditors. The home  

buyers were to acquire the premises on sub-lease basis which was never  

intended or stated anywhere that a sale would take place. The allottee shall

68  

not have any lien or interest on the flat unless sub-lease deed is executed.  

Therefore, they are not secured creditors, they have no right, title or  

interest or lien on the basis of allotment from flat buyer agreement. It is  

further submitted that the agreement does not create any rights in  

praesenti with a promise to enter into a future agreement. It does not  

create any right, title, interest or claim in the immovable property. In the  

absence of registration of document under the Registration Act, no rights  

are created in the immovable property in question under section 49 of the  

Registration Act.   

58. With respect to RERA provisions, it has been submitted by Bank of  

Baroda that section 11(4) of RERA deals with the interaction between  

repayment to secured creditors and rights of allottees. Sub-section (h) of  

section 11(4) states that the promoter shall not create a mortgage or charge  

after an agreement to sell has been executed. Therefore, the promoter is  

permitted to create such mortgage or charge prior to the execution of an  

agreement to sell. Section 4(2)(1) of RERA requires the promoter to disclose  

the prior encumbrance to the real estate authority. Under section 34(b) it is  

required to publish and maintain a website of records. Section 19(4)(1) of  

RERA provides that if the promoter fails to complete or is unable to give  

possession of an apartment, plot or building, the rights of allottees are  

restricted to receive the compensation from the promoter. The rights of  

allottees under section 19 of RERA can be contrasted with the right of the  

mortgagee who secured creditors under section 58 of the Transfer of

69  

Property Act, 1882. The RERA is restricted to protect the rights and  

interests of the allottees from the promoters and developers. RERA  

recognises and protects the rights of the lenders and does not in any  

manner take away any right under the existing statutes like the T.P. Act,  

SARFAESI, etc. RERA has not brought any change in the nature of the  

rights of home buyers. The Bank is entitled to receive its money along with  

interest in the event of failure to repay by builder/ promoter.  

IN RE: FORENSIC AUDITORS  

59. The Forensic Auditors have submitted their report running into eight  

volumes.  It has been observed that the Amrapali Group was started in  

2003 by Mr. Madan Mohan Sharma.  Later on, it was managed by his son  

Mr. Anil Sharma.  He gradually expanded his team and Mr. Shiv Priya, Mr.  

Ajay Kumar, Mr. Nishant Mukul, Mr. Chander Wadhwa, Mr. Mohit Gupta,  

Mr. Adhikari Das, and others joined in.  By 2010, the Amrapali Group was  

leading real estate development firms, promising to offer luxury and  

comfort.  In the beginning, the Amrapali Group has constructed and  

completed certain projects and earned the goodwill of the general public in  

the real estate business.  The Amrapali Group used unfair means to  

promote themselves.  It made false promises to lure the public to invest in  

its projects, purposefully delayed construction, cheated home-buyers for  

the title of flats and trapped home-buyers in rental returns.  The Amrapali  

Group floated several companies.  The public invested their hard earned  

money in Amrapali projects and the shareholders used these funds to

70  

infuse capital in other companies/entities.  Home buyers were cheated by  

making false promises/claims for example selling of flats which were not  

even part of the master plan of projects or unapproved in the master plan,  

double booking of the same flat by different customers.  The homebuyers  

funds were diverted to other companies/directors through payment of  

professional fees, by way of booking of bogus bills of Rs.837 crores, by  

selling flats as undervalued prices in book and received differential market  

value in cash, by paying commission and brokerage on bogus booking of  

flats and by way of granting inter-corporate deposits of Rs.3,000 crores to  

related entities and Rs.500 crores to unrelated entities/trusted partners for  

ultimately diverting funds to unapproved uses.  

 SUMMARY OF REPORT OF FORENSIC AUDIT  

60. The summary of report submitted by Forensic Auditors in the Court  

is as under:  

1. Brief Introduction  

Amrapali Group started its operations in the year 2003 in Delhi. It was  started by Mr. Madan Mohan Sharma who managed it for a brief period.  Thereafter the operations of the Group were managed by his son - Mr. Anil  Sharma. Gradually, he expanded his team and Mr. Shiv Priya, Mr. Ajay  Kumar, Mr. Nishant Mukul, Mr. Chander Wadhwa, Mr. Mohit Gupta, Mr.  Adhikari Das and other trusted partners/executives joined in. The Group  was into the business of construction of residential complexes, townships,  offices, commercial complexes. The Group built good reputation in the  public and launched several projects in various cities in India. By 2010,  the Group was a leading real estate development firms in India and  particular in North India, promising to offer luxury and comfort in every  project that it takes up. Subsequently, Mr. Mahender Singh Dhoni became  brand ambassador of the Group.     

To achieve good standing in the eyes of public, the Group used unfair  means to promote themselves. The Group made false promises to lure  public to invest in its projects, purposefully delayed construction, cheated  homebuyers over title of flats, trapped homebuyers in rental returns, sold  flats at exorbitantly low prices and recovered market price in cash from  them, among other unfair means adopted by them. The Group floated

71  

 several companies through its directors, staff, trusted partners which were  incorporated solely to divert homebuyers funds. The Group collaborated  with external parties like JP Morgan in contravention of FEMA and  distributed returns along with principal amount, even though it did not  book gains within the business of the company. Similarly, it collaborated  with several other third parties and invested in other projects and built a  cycle of returns in the form of unaccounted cash. The Group treated  moneys received from home buyers as its own capital and used this money  for investing in exclusively personal purposes, for example in constructing  Amrapali hospital, hotels, malls, making movies etc. The Group booked  bogus expenses and routed funds to trusted partners. The Group also  used homebuyers funds for building personal properties, investment in  mutual funds, expenses in daughter’s wedding, purchase of luxury cars,  watches, building luxurious houses for directors etc. The Promoters  diversified to different verticals i.e. Education, Entertainment (in making  

movies), FMCG, infrastructure, Shopping Malls, technology parks, hotel  etc. from the diverted Home Buyers funds. The Promoters didn’t invest any  paisa in such verticals and the whole empire was created out of the  diversion.    

The Promoters created a web of more than 150 companies (Page No. 16-19  Volume I) for routing the funds and creating assets. About 100 Companies  were under the supervision and control of promoters used mainly for the  purpose of diversion of funds. The Directors and Shareholders of these  Companies were benami and were the trusted junior employees of  promoters. CFO and the Statutory Auditors.    

It is observed that the Company, i.e. management, CFO, the Statutory  Auditors and key managerial persons deliberately and for reasons best  known to them did not prepare the accounts till 31st March, 2018 or  thereafter as nobody wanted to let anybody know where the funds moved  from 31.3.2015 onwards. In absence of Book of Accounts, we are  constrained to report that the management deliberately withdrew the Bank  Balances for making payments to some person and brought down the  huge bank balance to negligible amount.    

The management has diverted the Home Buyers’ funds from one Company  to another Company in a very clever, pre-planned and clandestine  manner.  The management could not have done this without the full  support of its CFO and the Statutory Auditors. As per the submissions  

made, many companies were controlled by CFO and the Statutory  Auditors to which huge funds have been transferred.  It can therefore, be  easily said that both CFO and the Statutory Auditor were Master Mind  behind these types of planning for diversion and the misuse of funds.  It  may be important to mention here that funds were transferred from one  Company to another and to third and to fourth and so on thereby  absolutely confusing any person to find out the real trail where the money  has gone, since there are more than 100 Companies through which these  funds have been routed over the period.     

 2. HISTORY OF ALLEGATIONS  

Bank of Baroda and several other banks filed a petition before NCLT under  section 7 of the Code for triggering Corporate Insolvency Resolution

72  

 process in the matter of Amrapali Group Companies.    

Homebuyers filed petition seeking construction and possession of around  42000 flats booked in Amrapali Group  

On 6th September 2018, Supreme Court appointed Mr. P K Aggarwal and  

Mr. Ravi Bhatia as joint forensic auditors to audit into the matter.  

ACCOUNTING PACKAGE  

The group was using Tally till March, 2015 for all of its group companies.  In April 2015, it introduced Far Vision an ERP which was not implemented  properly. The opening balances were not properly entered.  In November 2016, the group left half way Far vision and started recording  partial transaction in tally.     

To avoid the traceability, of the transactions, the Promoters and CFO and  Adhikari (G.M Accounts) recorded the financial transactions up to March  2015 in Accounting Package tally, then shifted to FARVISION from April  2015 and continued till March 2016, and thereafter  partially recorded  transaction in tally and a for a few companies in FARVISION and  thereafter in tally. This was intentionally plan. The companies of the group  stopped getting the annual accounts prepared and filing returns to Roc  and Income tax.      3. Auditors   

The Following Firms carried out the Audit of the Group Companies  during the period:  

• Anil Ajay & Co.   

• BSR & Co.  

• Deloitte Haskins & Sells  

• SN Dhawan & Co.  

• Chander Wadhwa & Associates  

• Manoj Usha & Co.  

• Agarwal Seth & Co.  

• Kumar Chopra & Associates    

4. Non genuine purchases from suppliers  

Purchase bills have been accounted for in the books of accounts  without receipt of physical goods and purchase bills have been  accounted for of suppliers who do not exist. There was an Income Tax  search and seizure on 9th September, 2010 and 7th August, 2013.  During the search held on 7th August, 2013, it was held by the Income  Tax Authorities that purchases are being made from bogus suppliers  without receiving the goods physically. The total amount of purchases  from such suppliers as observed by the Income Tax department  amounted to Rs.842.42 Crores approximately..   

73  

 In order to confirm the genuineness of these suppliers and a few other  suppliers we have sent written communication/ letters by speed post to  them in order to confirm the transactions with the Amrapali Group of  Companies. Most of these letters have been received back with the  remarks “No such firm exists at the specified address”.     

In addition to above, there is no system of calling quotations for  purchases and there is no internal control with respect to inventory. We  have spotted out further certain non-genuine supplies as per details  given below:    (i) M/s B S Promotors  

There have been sales to M/s B S Promoters amounting to Rs. 21.15  Crores during the period 2013-16 from one Company of Amrapali  

Group and the same goods were re-purchased into another Company of  Amrapali Group at a margin of 5% approximately.     

These transactions seem to be mere accommodation entries, where all  purchase/ sales are recorded on a single day only. Further, it was also  explained that M/s B S Promotors have made the sales against Bank  Letter of Credit which has been discounted by them from their bankers.  This seems to be a case of manipulation with the banks also since there  is no movement of goods but entries within the Amrapali Group only.    

Further, it is observed the balance outstanding of INR 5.11 Crores due  to the B S Promotors as on 31st March, 2016, has been adjusted against  payment made by home buyers directly to the B S Promotors and by  allotting a flat to M/s B S Promotors. However, the authorized  representative of the B S Promotor has refuted this fact vehemently and  asserted that it has not received any payment from the home buyers of  the Amrapali Group, nor it has received any flat. Thus, the flat allotted  to B S Promoters on paper needs to be attached and put to sale.  Moreover, a sum of INR 1.06 crores as 5% of the margin earned by M/s  B S Promoters needs to be recovered from him as they have neither  received goods nor supplied any good and only acted as Billing agent for  which they need not be claiming INR 1.06 crores as their margin.  

(ii) Kanodia Cements  

While scrutinizing the purchase bills of this supplier it was noted that  

the slips of Weigh Bridge in the case of purchase of Bajri trucks show  time interval of 4-5 Minutes only. This doesn’t seem to be possible that  a full truck of Bajri takes only 4-5 minutes to enter into the site and  come back on the weigh bridge again with empty truck in 4-5 minutes.  No satisfactory explanation has been furnished by the management  regarding this issue. Sample of such instances have been enclosed  below:  

Challan  No.   

Truck No.  Net  weight  in Kg  

Date  Time of  Gross  Weight  

Time of  tare  weight  

Time  taken  

6524 HR74A-5331 30,720 2/3/2015 18:31 18:36 5 Min  

6477 HR74A-3499 32,120 2/3/2015 18:34 18:39 5 Min

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 6437 HR74A-5331 29,230 23/2/2015 18:08 18:12 4 Min  

6435 HR74A-8194 31,020 23/2/2015 17:55 18:00 5 Min  

6429 HR74A-8194 30,640 22/2/2015 15:50 15:55 5 Min  

6289 HR74A/5331 29,150 17/2/2015 15:08 15:13 5 Min  

6291 HR74A/8194 30,240 17/2/2015 15:00 15:05 5 Min  

6250 HR74-9144 30,710 12/2/2015 18:25 18:30 5 Min  

6176 HR55T/5754 30,090 15/2/2015 15:54 15:58 4 Min  

6265 HR74A-8194 29,490 15/2/2015 15:52 15:56 4 Min  

6179 HR74A-1620 28,270 8/2/2015 16:39 16:43 4 Min  

6261 HR74A-8194 30,930 14/2/2015 17:32 17:36 4 Min  

6220 HR38T-2855 33,780 8/2/2015 15:43 15:48 5 Min  

6227 HR74A-5331 29,290 9/2/2015 15:09 15:13 4 Min  

6172 HR55T-5896 29,640 7/2/2015 16:56 17:00 4 Min  

6210 HR74A-8194 29,560 7/2/2015 16:59 17:02 3 Min  

6169 HR55T 5896 30,910 6/2/2015 15:32 15:36 4 Min  

6170 HR55T 8339 31,270 6/2/2015 15:35 15:37 2 Min  

6263 HR74A 1680 30,090 14/2/2015 19:09 19:13 4 Min  

As these bills of Kanodia Cements are prima facie held to be bogus, the  entire sum of INR 11.69 Crores booked as purchases from Kanodia  Cements should be recovered from them or from the Management for  inflating their purchase by debiting bogus invoices.    

Bogus expense and cash surrendered in income tax search   

Cash has been surrendered by the Amrapali group in the first Income  Tax search conducted on 9th September, 2010. No source of this cash  has been explained by the management.     

According to the Balance sheet of Amrapali Sapphire Developers Private  Limited examined by us, cash surrendered is shown as miscellaneous  income in the profit and loss account during 2010-11 amounting to  Rs.1.39 Crores.    

It is further submitted that in the second search conducted by Income  tax Authorities on 7th August, 2013, the Amrapali group had  surrendered an additional income of Rs.125 crores.    

Both these facts clearly depict that Amrapali group was having inflow of  unaccounted cash collected from either the Home Buyers or collected  cash from Bogus purchases made or by advancing money to various  parties and taking cash from them.    

While scrutinizing the Audited Financial Statements of the Companies

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 for the Financial Year 2013-14, it is observed that no additional income  has been shown. There is only jugglery of accounting transactions  where sales have been shown by way of part completion method and the  relevant cost is also debited to this part completion sale by changing the  Accounting Method which was being followed by the Amrapali Group of  companies in the earlier years. This method of accounting was changed  for 2 financial years only i.e. for Financial Year 2012-13 and Financial  Year 2013-14.  This method was changed just to make adjustment in  accordance with the letter of surrender. In fact, there is no surrender of  additional income, it only amounts to preponement of sale being shown  in these years instead of it in the later years.    

Cash has also been surrendered in the first search conducted on 9th  September, 2010 and no source of this cash has been explained by the  

management. This clearly explains that there was flow of un-accounted  cash from various sources to the Amrapali Group of Companies.   

A note was also stated in the Audited Financial Statements for the  financial year 2010-11 as follows:  “Note 6 (A) During the F.Y. 2010-11 Income Tax Search & Seizure  operation conducted by the Income Tax Department on the company and  company has surrendered a total income of Rs. 13,893,500 i.e. Rs.  10,043,500 for the F.Y. 2009-10 and Rs. 3,850,000 for the F.Y. 2010-11.  Accordingly, the total income includes the above said income.”    Thus, it is can be easily inferred that the company has been regularly  taking cash from its various home buyers but not recording these cash  entries in the Books of Accounts. (Volume –I Page No. 205)    It is unclear how the surrender of Rs.125 crore made during the  Financial Year 2013-14 has been accepted by the Income Tax  Authorities. In fact, no additional income has been shown on this  search.    Moreover, against the additions relating to Bogus Purchases made in  the Assessment order for the Financial Year 2013-14, the Commissioner  of Income Tax (Appeal), Central Circle has deleted all these additions.    We are informed by the management that no further appeal has been  preferred by the department before the Income tax Appellate Tribunal  as they have no idea of the same so far.  

 The bills booked and payments made were just accommodation entries.  Many of the parties are not traceable and when we requested the  Amrapali Group Management to produce the persons/entities to  ascertain the veracities of the claims, they didn’t co-operate.    It appears Prima-Facie that the bogus invoices were booked and cash  was taken from these parties. We are of the opinion that if we confront  the recipient of the purported charges then last recipient would flatly  deny.    It is pertinent to note that Shri Ajay Kumar Aggarwal of BSBK Group in  a statement recorded under section 132(4) of the Income Tax Act has  admitted that he provided accommodation/bogus bills.

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   Till the date of writing this report the amount so identified for bogus  bills is Rs.837.2 crore. Further, the supplies by Jotindra Steel and  Tubes and Mauria Udyog Ltd, having common directors with Amrapali  Group Companies, are prima-facie bogus by nature and are under  examination amounting to Rs.450 crore. (Refer Annexure No. S 4 Page  no 2827 Supplementary report).     Land Development Charges  A sum of Rs.7.3 crore has been debited to this account on 31st March,  2013 for which the supporting relevant documents are not made  available to us for our verification. This amount needs to be recovered  from the Directors as there is no supporting evidence or voucher and it  is just a book entry.    

Total bogus expenses as on date of report have been ascertained to be  Rs. 842.42 crore.    Double booking of expense  

It has been observed that brokerage amounting to Rs 0.25 crore was  paid twice; once to HDFC Realty and again to Mr. Alok Ranjan c/o SSS  Enterprises on account of same flat bookings in Amrapali Sapphire  Developers Private Limited during the FY 2019-10. Mr. Sanjay Kumar,  proprietor of SSS Enterprises has already conveyed to GM Finance of  Amrapali Group by way of speed post that fake bill for brokerage has  been raised under his name by Mr. Alok Ranjan. This amount of  Rs.0.25 crore should be recovered from Alok Ranjan/ the Management  for booking of double expense. (Volume 1 – Page no 213)    

Unsupported Cash Payments  

The Company has made unusual cash payments by transferring the  cash to the site cash during the financial year 2016-17 by way of  vouchers which are not supported/authenticated by the site cash in  charge. It seems that all these entries have been manipulated to use the  cash to decrease the balance as on 08/11/2016 being the date of  demonetization. Some instances are as under:    

Financial Year Particulars Amount  

30/04/16 Wages Paid 2,754,350  

31/05/16 Wages Paid 2,637,050  

30/06/16 Wages Paid 2,655,900  

31/07/16 Wages Paid 2,645,450  

31/08/16 Wages Paid 2,643,950  

30/09/16 Wages Paid 2,659,450  

31/10/16 Wages Paid 2,683,350  

30/11/16 Wages Paid 1,259,630  

06/06/16 Transferred to site cash  3,000,0000  

12/05/16 Transferred to site cash 4,100,000

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The above are only from one company which is tip of the iceberg and  actual amounts may be much higher.    Further cash payments are being made to number of parties amounting  to Rs.20,000 or less which are not supported by payee’s receipts on  daily basis. Thus, these payments are not genuine. (Volume I- Page 223)    It is observed that the cash balance available on 8th November 2016 was  partly deposited into bank and huge amounts were not deposited into  bank and was used for payments to staff, suppliers, vendors etc. It is  worthwhile to mention that it was not permitted to use Specified Bank  Notes (SBN-500, 1000 denomination Notes) for making payments to  these parties.   

 Further there has been an Income tax Survey on 17/11/2016. We  understand Income Tax Authorities have recorded the statement of  Directors and also taken the Inventory of Cash in hand as on that date.  A copy of the statement recorded and detail of inventory of Cash in  hand is not made available to us.  

Gold bar purchased from Yashika Diamonds  It has been observed that the Group Companies purchased Gold bar,  other forms of gold worth Rs.5.88 crore. The same has been booked as  festival expenses. This does not seem to be a normal business  transaction but in the nature of personal expenses. Thus, this amount  should be recovered from the management of the company.    5. Negligence and non- monitoring by bankers  In view of our detailed report attached, we wish to submit here that the  whole process of transfer of funds from one Company to another  Company to a third Company and so on and so forth on the same dates  would not have been possible without active support by the Bankers.  The Bankers, in our opinion, turned a Blind Eye to the various transfer  of funds from one account to another for reasons best known to them.  They didn’t inquire the huge transfer of funds from various accounts  which were being routed every day. Had they been slightly more vigilant  to monitor and control transfer of funds, the Management would have  not dared to launder the money from one Company to another  according to their whims and fancies and the Bankers are solely  responsible for the negligence on their part.  

Banks did not do any monitoring that whether the funds disbursed  were used for approved purposes or not. The loan sanctioned as term  loan were diverted on the very same day of receipt. The land payment  were not paid etc.  

Bank of Maharashtra – Term Loan has been released by transferring the  amount to the Current account during the financial year 2009-10 to  2012-13. There has been no monitoring by the bank to ensure the end  use of utilization of the funds.    This amount was paid from the Current account for other than  business activities of this Company.  

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   It is observed that there was no monitoring done by the officials of Bank  of Maharashtra, Andhra Bank and other banks by releasing of term  loan to the Company.  Even basic checks as required by the Bank were  forgone and not ensured by the Bank Officials regarding the end  utilization of the term loan funds for the purpose for which they were  granted.  It seems that the Bank officials overlooked all these important  aspects and granted these loans to them without going into any  technical requirements as relating to release of Term Loan facilities to a  borrower.  The banks acted as mute spectator to unapproved  diversion which was almost happening evidently in all banking  transactions.    Optionally Convertible Debentures  ICICI Prudential Asset Management Company Limited had given a sum  

of INR 74 crores approximately on account of debentures issued by  Amrapali Sapphire Developers Private Limited during the financial year  2011-12. These debentures carried interest rate @ 17% Per annum.    There has been a gross non-compliance of Investors cum-shareholders  agreement dated 16th Day of December, 2010 with respect to following:  a. Non appointment of directors  b. Non operation of bank account by joint signatory of investor   c. Non utilization of funds as per clause no. 7.5 of Investment cum       

Shareholders Agreement dated 16th December, 2010.  d. Sale of flats at less than Rs 3,420 per square feet of saleable area  

and many other clauses of this agreement neither followed nor  ensured by the Investor.   

 It is very clear that a Debenture Subscription Agreement and  Investment cum Shareholders Agreement both dated 16th day  December, 2010 were merely sham documents which were never  complied with and both i.e. Amrapali group of Companies and ICICI  Prudential Asset Management Company Limited were in  connivance with each other in diversion of funds for non-specified  purposes.  

Foreign investment  The company has received the sum of Rs. 140 Crores during the  financial year 2012-13 from IPFFI Singapore PTE Limited under Foreign  Direct Investment Scheme. As per FEMA rules this amount was to be  

invested in Real Estate construction projects only.     The amount received in Axis Bank of Rs.85 Crores was transferred to  Amrapali Centurian Park Pvt. Ltd. (ACPPL) as under:      

On 7.8.2012  - Rs.5 Crores   On 8.8.2012  - Rs.50 Crores    On 18.8.2012 - Rs.30 Crores                 -------------------     Total  = Rs. 85 Crores                 ------------------  ACPPL on receiving Rs.85 Crores, allotted Equity Shares worth Rs. 85  lakhs to ASCPL and balance Rs.84.15 Crores were treated as Share  Premium Account.  There is no Valuation Report available as to how

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 this share premium of Rs. 84.15 Crores has been calculated.  This  transfer of fund by ASCPL to ACPPL is absolutely violative of FDI Rules  and Agreement.      The Second amount received in BOB Escrow Account was transferred  from 8.8.2012 to 28.9.2012 on various dates in the Account of BOB,  Sansad Marg Branch, and New Delhi and also used for payment of  Term Loan Instalments of OBC and Bank of Maharashtra for repayment  of their Term Loan instalments.     It will therefore, be observed from the above, that the Company  (ASCPL) did not use money for the project for which it was received  from IPFII Singapore but transferred Rs.85 Crores to Amrapali  Centurian Park Pvt. Ltd. and Rs.55 Crores to repay Bank Loan  Instalments and Repay the outstanding creditors provided for in  

the books and standing in the books. The said payments made by  ASCPL are, therefore, in contravention of FDI norms and rules and  for which the money was brought in India.    Moreover, ASCPL has paid interest of Rs.58.81 Crores @ 17%  (which is a highly abnormal rate) so far to IPFII, Singapore during  the last 3 years.   - Year 31.3.2013    Rs.14.41 Crores Paid  - Year 31.3.2014    Rs.22.20 Crores Paid  - Year 31.3.2015              Rs.22.20 Crores Paid                                                                                    ----------------            Total   =   Rs.58.81 Crores                           ----------------  

a) It is very clear that all such violations are being made with the  knowledge of the IPFII Singapore and they are in Connivance with the  ASCPL.    

b) As per Schedule 4 of the agreement CCD’s (Compulsory Convertible  Debenture) were subject to the following terms and conditions.  

 1) On expiry of 5 years from the date of allotment, the CCD shell  

be fully monetarily and compulsorily converted into class B  shares of the company  

2) The CCD’s shall be converted into such number of class B  shares arrived that by dividing the aggregate face value of  CCD’s by Rs.2,734.30.  

But these CCD’s were not converted into class B shares as per  agreement but entered into another agreement to extend the term  of CCD’s from 5 years to 7 years. By this way , The fund has  continued to be a creditor otherwise after conversion to equity, it  will not be eligible for interest and principal.    Current liabilities not payable  

Security deposits from contractors and intercorporate deposits accepted  from non group companies are in the nature of unsecured loans. There  have been no business transactions with the company except movement  of funds. The list of such liabilities is under preparation which are not  payable.   

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 Inter-corporate deposits accepted by the Group are Non-Interest- bearing unsecured loans. There are no business transactions with these  companies. It is not understood as to why a person will give interest free  loans without any considerations. Thus, we are of the view that these  are accommodation entry only in lieu of consideration given to them  indirectly by the management.    

Hence, we are of the view that all the aforesaid amounts are not  payable.    

In our opinion, this is a case of Money Laundering as the generic term  of Money Laundering is defined to describe the process by which  Criminals disguise the original ownership and control the proceeds of  the criminal conduct by making such proceeds to have derived from a  

legitimate source.     

Money Laundering is the process of concealing the origin of money  obtained illegally by passing it through a complex sequence of Banking  transfers or commercial transactions. The main process is accounting  for the proceeds without raising the suspicion of law enforcement  agencies. In the instant case too, Amrapali Group of Companies have  defied all laws to transfer small and big amounts from one account to  another to a third and so on and so forth on a single day with the  connivance of the Bank officials and financial institution officials and  thereby Committed act of Money Laundering on a large scale.    

6. Lands allotted to consortium and flats sold to homebuyers  

Several companies were formed with consortium partners which were  just dummy companies and were part and parcel of Amrapali group. To  comply with the condition of minimum 3 partners, these companies  were created in the names of office boys and peons. Technically the  allotments at the initial stage itself were void ab-initio.  In most of the  companies, the amount received from homebuyers was sufficiently more  than the amount spent on construction and for payment of land. Had  the promoters paid amount received from homebuyers to the authorities  on time there would not have been any liability of land dues. Further  there was no need to avail any loan from banks, Private equity funds as  well as from investors. The sole objective of taking loan was to divert  the funds to other ventures to create assets in the name of family  

members, make movies, to satisfy the ambitious desires of family  members and to build hospital. Villas were bought at tourist  destinations for fun at the expense of middle class and low income  group peoples abodes. Many parties joined them in the looting of hard  earned money of homebuyers to take their share of the cake in the form  of unbelievable return on investment, profits, land, FSI and flats and  facilities at throwaway prices. Bogus expenses were booked and the  promoters were having no fear of the law of the land. They could  execute many transactions of transfer of properties, booking of  expenses, funds transfer, even when the petition was accepted and was  pending for disposal before the Honourable Supreme Court. Companies  in which land was allotted to consortium partners are as under:  

• Amrapali Leisure Valley Pvt Ltd   

• Amrapali Centurian Park Pvt Ltd

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• Amrapali Homes  

• Amrapali Grand  

• Amrapali Eden Park Developers Pvt Ltd - Iftikar Ahmed and  Rakesh Mahajan jointly hold 49% in the said company  

 (i) There is no substance in the nature of transactions carried  

on by the company. The funds are merely routed from one  entity to another for hidden objective.   

(ii) Banks were financing not the construction activity but loans  and advances to third parties.   

(iii) Mr. Rakesh Mahajan and Mr. Ifthikar Khan were grossly  involved in the wrongdoings in the company’s project and  equally conspired in the delay and diversion of home buyers  funds and they being 49% shareholders and active directors  in the company should be held responsible for the deficit in  

completion of the project amounting to Rs.20 crore.    

Further, Amrapali Infrastructure had given an advance of Rs.1.5 crore  to Nirala Infracity Ajmer Pvt Ltd - a project controlled by Rakesh  Mahajan and Iftikar Ahmed. This amount is recoverable from Nirala  Infracity Ajmer Pvt Ltd.   

7. Companies created solely for the purpose of routing funds  

The intention of Amrapali Group was to divert funds to other  projects/income sources in the name of family members of the promoter  and the trusted employees, friends of the promoters as well of the  executives, auditors and their relatives. For this purpose, several  companies were incorporated for routing funds. These companies did  not have any material transaction as per the main object for which they  were incorporated and did not have business since their incorporation.  These companies did not have any employees also. These companies are  shell companies used only to route interest free funds from one  company to another. List of such companies identified so far is as  under:  

a) Jhamb Finance & Leasing Private Limited - The company didn’t  have any operations/income/expenses except for FY 2014-15 and had  only movement of funds from one related party/interested party to the  other. It means the company was used merely for routing the funds and  not for doing any business.    Since incorporation, loans (liability) and loans & advances (asset)  increased as under, without booking of any expense/income:  

As on Loans (liability)   Amount (RS. )  

Loans & advances  (asset)  

Amount (RS. )  

1st April 2014 83,00,000 1,12,39,917  

1st October 2014 35,33,00,000 34,67,39,917  

31st March 2015 312,93,32,906 313,11,55,392  

31st March 2016 859,77,32,906 863,58,50,776  

31st March 2017 877,57,22,906 883,24,00,776

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It is pertinent to note that starting from the FY 2015-16, the loans given  and taken increased three folds without having any corresponding  increased on the income and assets side on account of interest.  Whereas starting from FY 2015-16, the employees started leaving the  organization and the construction at sites was at standstill. The  directors in the company are having no knowledge or an iota of idea  about the transactions carried out. The company’s operation were  under the controlled and supervision of CFO Chander Wadhwa.    

Further, it received Rs.18.95 crore from Suspense- unidentified  persons/parties and paid Rs.24.41 crore to Suspense- unidentified  persons/parties, leaving balance payable of Rs.5.46 crore to Suspense-  unidentified persons/parties. The said transactions of Rs.18.95 crore  

details were not made available to us.    

b) Gaurisuta Infrastructure Private Limited – It lent and received  funds from several parties without doing any business. Details of Rs.25  crore received from third parties are as under:    

S.no. Name of party Amount Since date  

1 Ams Powertonic Pvt Ltd 50,00,000 07-05-2012  

2 Anuj Buildcon Pvt Ltd 50,00,000 10-05-2012  

3 Asv Garments Pvt Ltd 50,00,000 07-05-2012  

4 Bij Buildcon Pvt Ltd 50,00,000 10-05-2012  

5 Carona Infra Projects Pvt. Ltd. 2,20,00,000 Received on  various dates  From 16-05- 2013 to 16-09- 2014  

6 Charuvilla Apartment Behl 8,31,000 08-07-2011  

7 Financial World Pvt. Ltd 57,00,000 11-07-2012  

8 Function Distributors Pvt. Ltd. 50,00,000 03-08-2012  

9 Green Value Agro Farm  Pvt.  Ltd  

30,00,000 01-08-2012 &  03-08-2012  

10 Infotech India Pvt Ltd 1,00,00,000 03-07-2012  

11 Kabir Enterprises Pvt Ltd 50,00,000 06-06-2012  

12 Ladli Ji Enterprises Pvt Ltd 2,00,00,000 15-05-2012

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The above companies were used for the purpose of money  laundering and required a detailed investigation. Further the  amount as shown above is not payable to the party as indicated  against. None of the parties as above has lodged any claim so far  therefore it strengthens our charge.    

13 Leisure Buildcon Pvt Ltd 50,00,000 25-04-2012  

14 M/S Naksha Properties  Pvt.Ltd  

84,00,000 19-04-2012  

15 M/S Shravni Infrastructre 3,20,00,000 Received on  various dates  From 19-04- 2012 to 11-07- 2013  

16 M/S Soulful Heart Solutions 22,00,000 Received on  various dates  From 19-04- 2012 to 17-07- 2013  

17 Ram Rahim Trading Co.  Limited  

70,00,000 01-08-2012 &  02-08-2012  

18 Randhir It Solutions Pvt Ltd 50,00,000 07-05-2012  

19 Rayan Garments Pvt Ltd 1,40,00,000 26-04-2012 &  07-05-2012  

20 R N Sangahi 24,37,480 11-04-2011 ;  02-07-2011 &  18-12-2012  

21 S A Corrugators Pvt Ltd 20,00,000 01-08-2012  

22 Sadbhavana Properties Pvt Ltd 4,00,00,000 08-06-2012  

23 SpbPropcorn Pvt. Ltd. 50,00,000 25-04-2012  

24 Technicare Biomed India Pvt  Ltd  

40,00,000 25-04-2012  

25 Utkarsh Properties Solution 28,00,000 26-04-2012 ;  16-09-2014 &  17-09-  2014  

26 Vendure Agents Pvt Ltd 50,00,000 01-08-2012  

27 Zarf Infra. Development Pvt  Ltd  

1,45,00,000 Received on  various dates  From 26-04- 2012 to 04-08- 2012  

28 Zoom Building Materials Pvt  Ltd  

1,00,00,000 10-05-2012 &  11-05-2012  

TOTAL 25,08,68,480  

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 As on 31st March 2017, the company is having interest free loans and  advances amounting to Rs.703 crore without any movement with a paid  up share capital of merely Rs.0.01 crore and the directors are  employees and junior employees of statutory auditors. The company is  used as a conduit in diverting home buyer funds to Amrapali  Healthcare (Noida Hospital) and buying shares in different group  companies from the funds of home buyers. The entire shareholding  should be attached and be made up for sale.  

c) Neelkanth Buildcraft Private Limited - It was formed in the year  2013 having a capital of Rs.0.01 crore for the specific purpose of buying  shares from JP Morgan. Mr Chandan Kumar, director of Neelkanth  Buildcraft Private Limited is an office boy in the office of Statutory  Auditor of Amrapali Group, Mr Anil Mittal and the other director Mr  

Vivek Mittal is nephew of Statutory Auditor Mr Anil Mittal & does small  time jobs.    d) Stunning Construction Private Limited – The Company is  holding 19.75 % shareholding in LA Residentia Developers Pvt. Ltd. is a  consortium partner in the project since beginning. LA Residentia project  has 3200 flats LA Residentia should surrender either 19.75% of land or  632 flats.  It was formed only for payment of Statutory dues of Amrapali  Group of Companies, its directors and their relatives including senior  employees of the Amrapali Group of Companies. The company was  under the direct control of CFO Chander Wadhwa and Company  Secretary Pankaj Mehta. The amount of taxes paid by the company on  behalf of promoters, directors, executives and their family members is  Rs.17.43 crore (net) and gross up is Rs.24.9 crore is recoverable from  promoters, directors, executives and their relatives.    e) Kapila Buildhome Private Limited – The company did not  undertake any business. A sum of Rs.392.68 Crores was advanced as  loan or advances to the various group Companies. Further, it accepted  non-interest bearing inter corporate deposits from non group companies  with whom no other transactions were undertaken.  We are of the view  that these are accommodation book entries only in lieu of consideration  given to them indirectly by the management. List is as stated  hereunder:   

Name Amount In  Rs.   

Date of  Acceptance  

Ample Hotels and Resorts 20,000,000 20/04/12  

Justify Vanijya Private Limited 4,000,000 22/06/12  

Ladli ji Enterprises Private  Limited  

5,900,000 25/04/12  

Madhav Fincap Private Limited 15,000,000 24/04/12  

Pan Realtors Private Limited 100,000,00 0  

23/08/10  

Total  144,900,00 0  

The above companies were used for the purpose of money laundering  and required a detailed investigation. Further the amount as shown  above is not payable to the party as indicated against. None of the

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 parties (except PAN Realtors that also when we requested them  otherwise they were silent for last 8 Years) as above has lodged any  claim so far therefore it strengthens our charge.     f) Rudraksh Infracity Private Limited- Shri Chandan Kumar, an  office boy and employee of CA Anil Mittal, Statutory Auditor and Shri  Atul Mittal, relative of CA Anil Mittal were inducted in the board.  The  basic purpose of this Company was only for money laundering and  was incorporated to receive Funds from Mannat Buildcraft Private  Limited.  After receiving money (Rs.25 Cr.) from Mannat Buildcraft  Private Limited, the same was transferred to J.P. Morgan Investments  for purchase of Equity Shares of Amrapali Zodiac Private Limited at an  exorbitant price. There are no transactions before or after these  transfers of money and the same have been camouflaged to make it  look with business transactions on the basis of the Valuation Report.  

 It was also observed that there are no transactions at any date during  the period but the bank account has only been used for diversion of  funds.  

g) Mannat Buildcraft Private Limited - Shri Pankaj Mehta is  Company Secretary of Amrapali group of Companies and now Partner of  Mr. Chander Wadhwa, CFO in Saffron Consultants LLP and Mr. Ashish  Jain who is also Partner of Mr. Chander Wadhwa, CFO in Saffron  Consultants LLP, were inducted in the board. The basic purpose of this  Company was only for money laundering (Rs.120 Cr.) and was  incorporated to receive Funds from Amrapali Zodiac Developers Private  Limited.     

The whole racket of money laundering and receiving money from these  Companies i.e. Mannat Buildcraft  Private Limited, Rudraksh Infracity  Private Limited and Neelkanth Buildcraft private Limited are the brain  child of Mr. Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor  of Amrapali Group of Companies. Both these Companies are controlled  by both of these persons and had been formed only for this Money  Laundering Business.  There are no transactions before or after these  transfers of money and the same have been camouflaged to make it look  with business transactions on the basis of the Valuation Report.  

h) Amrapali Magadh Developers Pvt Ltd - The company has not  

carried out principal business activities. There is no bank account. The  purpose of creating the company is not clear. The shareholders paid the  share application money in cash. The company is a dormant company  & did not have any significant transaction.    

i) Amrapali Mahi Developers Pvt Ltd - The company received share  capital in cash and all the expenses were paid in cash only. Mr.  Mahendra Singh Dhoni, husband of Ms. Sakshi Singh Dhoni (director of  company) was the brand ambassador of Amrapali group and have  carried out a number of transactions with respect to endorsement of  Amrapali group’s projects. He entered in agreements with other group  company.   

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 j) Amrapali Spring Valley Pvt Ltd- the company is created for  diversion of funds and Rs.186 crore was diverted from Amrapali Smart  City Pvt Ltd to buy shares of Ultra Home Construction Pvt Ltd and  shareholders are promoter directors without doing any investments.    

Most of the above companies will qualify to be NBFC, which was  reported neither by the management nor by the statutory auditors  (except Jhamb Finance & Leasing Pvt Ltd). It is recommended that RBI  shall investigate the affairs and compliances of the above companies.    

Amrapali Media Vision Pvt Ltd was also incorporated with a purpose  to route funds for making movies to satisfy the ambitious desires of  directors/family members. Most of the marketing and advertisement  business of the group companies was given to the company with a profit  

margin on the cost. The group could have done this advertisement  directly. But because there was need to make movies, the funds were  diverted to the company directly in the form of loan as well by availing  the services indirectly from these companies. The Company was freely  availing funds of homebuyers from other group Companies in the form  of ICD  and spent it on making movies.    

Hawthrone Intellect Management Solutions Pvt Ltd –Company was  providing Management Consultancy Services (Recruitment Services)  and taking nominal professional fee.  In turn, the Company has  incurred more expenses in the last few years on account of Salary,  Wages and other administrative expenses thereby resulting in net loss  to the Company which has accumulated to INR 2.33 Crores as on  31.03.2015.     

All these entries seem to be in nature of dubious entries and no voucher  are available.  This amount of loss of 2.33 Crores needs to be recovered  from the Directors as they have wiped of the amount of the Home  Buyers funds diverted as Home Buyers Money to the Company.    Apart from the above companies, there were several companies which  were incorporated by employees, auditors of Amrapali group.  Shareholding as well as investment/assets of these companies shall be  attached    8. Companies created for building assets  

 The following companies were created by the Group for building assets  from homebuyer funds without contribution of any rupee by promoters  and their relatives. The shareholding is held by the group companies  and/or by shell companies and/or the trusted partners including  individuals.  

• Ultra Home Construction Pvt Ltd- Shareholders did not bring  capital of their own, but used funds of home buyers in other  entities/projects to pay for allotment of shares in UHCPL. Mr. Anil  Kumar Sharma was allotted shares at premium for an amount of  Rs.22,82,40,810 on 4th Nov 2010 and Rs.25,84,05,470 on 2nd March  2011 by adjusting receipts from Amrapali Infrastructure Ltd which

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 further received from Amrapali Sapphire Developers Pvt Ltd, which  received from homebuyers. Few instances are hereunder:  

Received in Amrapali  Sapphire Developers  Pvt Ltd primarily from  home buyers  

Transferred to  Amrapali  Infrastructure Ltd  

Transferred to  Ultra Home  Construction Pvt  Ltd  

INR 5.47 crore as on 4th  March 2010  

INR 2 crore on 5th  March 2010  

INR 2 crore on 5th  March 2010  

INR 1.90 crore on 5th  and 6th March 2010  

INR 2 crore on 8th  March 2010  

INR 2 crore on 8th  March 2010  

INR 1.13 crore on 8th  March 2010  

INR 2 crore on 9th  March 2010  

INR 2 crore on 9th  March 2010  

• Amrapali Homes Projects Private Limited –It has been observed  that Mr. Prem Mishra was given INR 12.40 crore (under several ledgers)  for purchase of land since 1st April 2008, out of which INR 10 crore are  still receivable from him. The project was sold by Prem Mishra to  various parties and received amount in his name. We are yet to  complete the audit of Prem Mishra in Indore project. The company  transferred funds to and fro with several parties which do not have any  substance. It has several small and big debit balances as on date.  

• Amrapali Biotech India Pvt Ltd – Land & Building, Plant &  machinery, a factory at Rajgir (Bihar)  

• Amrapali Healthcare Pvt Ltd – Hospital at Noida  

• Noida Texfab Pvt Ltd – Amrapali International Institute of Hotel  management, Noida  

• Neelkanth Buildcraft Pvt Ltd – bought shareholding from JP  Morgan in Amrapali Zodiac developers Pvt Ltd.  

• MVG Techno Consultants Pvt Ltd – Tower at Noida  

• Amrapali Infrastructure Pvt Ltd – recast factory at Greater Noida  

• Sangam Colonisers Pvt Ltd- The Company has received an amount  of Rs.10.51 crore as advance against plots. However, despite repeated  requests we have not been provided with the complete data base  reflecting Number of Plots, Name of the buyers, Amount of Sale  Consideration, Amount Received, Amount Outstanding, Unsold plots  etc. Hence, we are not in the position to comment upon the same. As  informed to us during the course of audit, the remaining portion of the  land available with the Company has been attached by Hon’ble  Supreme Court of India and put to auction by DRT.  

• Navodaya Properties Pvt Ltd – Building corporate tower 2, Noida  

• Amrapali Power & Cement Pvt Ltd – Land from Charu Rai yet to be  identified, Land from UPSIDC yet to be identified.  

• Amrapali Buddha Developers Private Limited – Shopping complex  cum Mall at Gaya  

• MSB Software Technology Private Limited – Tower 1, Noida  

• Gaurisuta Infrasolution Private Limited –Flats in Amrapali Silicon  City Private Limited, booking of bogus expenditure of Rs.1.07 crore.  

• Amrapali Hospitality Services Private Limited- Hotel at Deogarh,  Jharkhand  

• Mums Mega Food Park Private Limited- FMCG Factory at Buxar,  Bihar, Land Building and Plant & machinery      RudrakshInfracity Private Limited - bought shareholding from JP  Morgan in Amrapali Zodiac developers Pvt Ltd.

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• MannatBuildcraft Private Limited - bought shareholding from JP  Morgan in Amrapali Zodiac developers Pvt Ltd.  

Serious Observation  Our investigation reveals that this company has been used to  perpetuate a fraud enabling JP Morgan Investments to sell its shares of  Amrapali Zodiac Pvt. Ltd. to other Group Companies of Amrapali group  namely, RudrakshInfracity Pvt. Ltd. and Neelkanth Buildcraft Pvt. Ltd.  at a valuation amounting to INR 140 crores which is not justified. This  company has been used as a tool to transfer the money to other  Amrapali Group companies. The following persons seems to be involved  in this organized fraud:  

i. Amrapali Zodiac Developers Pvt. Ltd.  ii. RudrakshInfracity Pvt. Ltd.  iii. Neelkanth Pvt. Ltd.  iv. JP Morgan Investments  v. MannatBuildcraft Private Limited  vi. HDFC Bank  

Chander Wadhwa, Adhikari dash and Anil Mittal incorporated 27  Additional companies identified so far, which may be many more, and  became consortium partners from the funds of the home buyers. In the  process, they appointed peons and junior employees of auditors office  as directors who were totally unaware of the transactions. These  companies were used for depositing cash during demonetisation. The  companies were formed/acquired for routing funds and were not in any  business. These were sham companies whose share capital was mostly  subscribed in cash and the transfer of shares was also in cash leaving  no audit trail.   

9. Misuse of funds by directors involved in scam  The directors and executives colluded with each other and diverted  homebuyers funds. Directors received huge amount of money in the  form of salary as well as professional fee, both together. A person could  have been either in whole time employment of the company or render  services as consultant. However, a person cannot enjoy salary income  and earn professional income at the same time and also both cannot be  earned at the same time from same company. But directors of Amrapali  group withdrew sums using all possible ways, be it salary, professional  fee, reimbursement of expenses, use of luxury cars or loans and  

advances to self/relatives/self controlled entities/trusted partners or  booking of bills of self controlled entities/trusted partners.     Further professional fee was booked without any agreement or proof of  service. It had no correlation with the amount of work done by  the directors. Professional fee was booked as per wish and desire of  directors and did not have any fair basis. There were standing  instructions to transfer company funds to the individual directors bank  accounts when the balance was reaching to the specified set minimum  balance limit.     The Professional fee paid to the directors, relatives of directors, and  senior managers was a unique way of diverting money. Huge amounts  were paid without any agreements at the whims and fancies of the

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 directors and managers. Moreover it was tax free and the tax liability  was discharged by another group company. The whole of professional  fee received by the directors (as stated hereunder) is recoverable from  them. (Volume –II,  Page no 416-417).  

Professional fee was under disclosed to the tune of is Rs.33.4 crore  (Anil Kumar Sharma 8.75 cr + Shiv Priya 24.65 cr) in affidavits filed on  3rd Dec 2018 (Volume –II,  Page no 414-415). The Difference was found  of from the affidavit file and the tax returns.    It shall be noted that directors did not share company wise receipts in  the affidavit and also books of accounts of directors were not provided.    Directors along with their trusted partners and relatives cheated and  did criminal breach of trust with the home buyers. They transferred the  funds from the projects to the companies which were closely held by  the directors, their family members and/or by their trusted associates.  The objective was to create assets in the closely held companies and  leave the home buyers on the road. For example, Eklavya Building  Solutions Pvt Ltd acquired property in Goa amounting to is Rs.2 crore  through funds received from Amrapali group, 27 other companies  further invested Amrapali funds in Amrapali projects (For example  Many Flats in IT Park at Greater Noida);     The directors spent homebuyers funds on wedding of daughter of  

director, foreign travels, expensive watches, jewellery, purchasing  luxury cars for use by directors. The homebuyers funds were also used  for investment in mutual funds, creating personal properties , payment  of housing loans, investment in shares & securities. The directors  created discreet projects for personal income for example In the name of  Amrapali Hospitality a hotel at Deogarh was constructed out of funds  received from homebuyers without their knowledge of it. They used  homebuyers funds in the form of construction of assets for other  projects, examples constructed mall at Muzzafarpur, Bareilly etc, Hotel  at Deogarh, Bareilly, Hospital at Noida etc.    Few particulars of diversion of funds received from Amrapali group  are as under:    

Name of director Professional fee  received  

(as per affidavit)  

Anil Kumar Sharma 29,13,23,580  

Shiv Priya 26,43,64,571  

Ajay Kumar 5,76,90,240  

Suvash Chandra Kumar 5,11,21,752  

Amresh Kumar 68,11,110  

Total 67,13,11,253

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 By Anil Kumar Sharma  

Particulars  Amount   

Amount Paid for Housing Loan of Plot no 88,  2057/7 resi Magos Village, Goa  

     3,137,000   

Amount Paid for Housing Loan of Jaypee  Green E-11 Plot, Sector 128, Noida  

        3,796,452   

Amount paid for purchasing shares        59,600,000   

Purchased Jewellery      33,921,575   

Purchased Car           5,613,572   

Investment in LIC and Star Union Daichi –  Insurance Policies  

       18,238,326   

Expense done during wedding of Daughter  

Swapnil Shikha  

       13,500,000   

Transfer to Surabhee Advertising Maharani  Bagh Property   

      38,500,000   

Transfer to Quality Synthetic Industries  Limited Surekha Group  

     30,000,000   

Transfer to others (Chander Wadhwa,  Shashank Manohar, etc)  

       18,600,000   

transfers to family members    107,310,878   

Payment by Stunning Construction Pvt Ltd of  direct tax  

     44,510,320   

Total 376,728,123   

By Shiv Priya  

Advance against property to Gaursons India  Ltd           51,00,000   

Bathroom products and Marble for home          38,92,668   

Furniture          74,76,644   

Helicopter services             6,20,000   

Watches          19,45,500   

Lights, art designing, Bed linen          38,26,290   

Jewellery           33,44,475   

Quality Synthetic Industries Ltd        1,50,00,000   

Cozy Habitat Builders Pvt Ltd          15,00,000   

SN Dubey           10,00,000   

Stamp duty for registry of Jaypee Green Villa          32,50,000   

Payment for LIC        3,49,96,654   

Investment in mutual funds       8,86,50,409   

Payment of loan for Pearl Gateway Towers    30,84,952   

Payment of loan for Jaguar    23,13,800   

Payment of loan from bank of Maharashtra      46,65,200   

Total 18,06,66,592   

By Ajay Kumar  

Yogesh Chand          25,00,000  

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Transferred to Sweep Account        1,33,00,000   

Ozone GSP Infratech           50,00,000   

Quality Synthetic Industries Ltd          40,00,000   

Investment in mutual funds        2,25,00,000   

Payment of housing loan for IRS Colony,  Abhay Khand, Indirapuram 56,31,000   

Payment of housing loan for Pelican Villa  Jaypee Green          37,55,784   

Payment for LIC 2,56,53,384   

Total    8,23,40,168   

Funds transferred from Amrapali group of companies was withdrawn in  cash from personal accounts of directors and diverted to undisclosed  people. In case of Anil Kumar Sharma, it is seen that an amount of is  Rs.10.38 crore was withdrawn from June 2008 to May 2012 within a  few days of transfer to bank account of Anil Kumar Sharma in Bank of  Maharashtra. Several times, description of source of receipt or person to  whom payment was made were not clear and such sources or  application could not be identified.     Several companies were incorporated to create assets or to hold  investment in the group companies or outside the group companies  having assets. The promoter directors or their family members became  the shareholders in these companies without investing any paisa.  Homebuyer funds were diverted to these companies and then these  companies bought shares from the funds so diverted in the companies  having assets for example Noida hospital in Amrapali Healthcare Pvt  Ltd, 5 star hotel in Ultra Home Construction Pvt Ltd, Institute of hotel  management in Noida Texfab Pvt Ltd etc.    Investment from JP Morgan and other funds availed for the purpose of  construction which were not required at all because the funds paid by  homebuyer were in most of the cases were higher than the cost of  construction and land payments, were diverted on the day of receipt  itself to the closely held companies and to the companies created for the  sole purpose for using them as a conduit for diversion and to the  suppliers of bogus supplies. It is very surprising that when funds were  borrowed a high rate of interest was paid ranging from 14 -18% to so  called investors and the same investors were given loans to their group  companies without charging any interest. In such a scenario, the  

possibility of taking cash in the form of interest cannot be ruled out.    Directors sold number of flats at low prices as compared to the prices  existing on or near to those dates and on which rates sales were made  to other home buyers. It is further submitted that some of the flats have  been sold even at rates as low as is Rs.1,000 - is Rs.1,400 per square  feet which is even lower than the cost of construction. Possibility of  taking cash outside the books of accounts cannot be ruled out.     Instances of misuse of funds are hereunder:    Anil Kumar Sharma  Mr. Anil Kumar Sharma received funds from Amrapali group of  Companies which was used for acquiring personal properties, as stated

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 hereunder:  

a. Property located at Plot no 88, 2057/7 Resi magos village Goa- (Housing loan was paid for this property out of amount received  from Group companies)  

b. Property  located at Jaypee Green E-11 Plot, Sector 128, Noida - (Housing loan was paid for this property out of amount received  from Group companies)  

1. Mr. Anil Kumar Sharma purchased shares and securities  amounting to is Rs.5.96 crore out of moneys received from Amrapali  group Companies.  

2. Mr. Anil Kumar Sharma purchased following assets out of amount  received from Amrapali group Companies:  

a. Jewelries worth is Rs.3.39 crore  b. Car through AMP Motors: is Rs.0.56 crore  c. Life Insurance Policies: is Rs.1.82 crore (based on bank  

statements available, although in total amount invested in  insurance policies amounted to is Rs.4 crore)  

3. Mr. Anil Kumar Sharma made following personal expenses of is  Rs.1.35 crore for wedding of his daughter out of amounts received  from Amrapali Group of Companies:  a. Payment made to Event Management Companies: is Rs.0.90  

crore  b. Payment made to hotels: is Rs.0.45 crore  

4. Mr. Anil Kumar Sharma made payment of is Rs.8.71 crore to  following third parties out of amounts received from Amrapali  Group of Companies:  a. Chandan Homes Pvt Ltd: is Rs.10,00,000  b. Kalpana Kumari: is Rs.10,00,000  c. Sapphire Digital Printers:  is Rs.25,00,000  d. Shashank Manohar: is Rs.36,00,000  e. Rajesh Malhotra : is Rs.20,00,000  f. Manas Nursing Home: is Rs.25,00,000  g. Amresh Kumar Anand: is Rs.27,00,000  h. Surbhaee Advertising Pvt Ltd: is Rs.3,85,00,000  i. Quality Synthetic Industries Limited: is Rs.3,00,00,000  j. Chander wadhwa: is Rs.25,00,000  k. Mrityunjay Kumar: is Rs.8,00,000  

5. Mr. Anil Kumar Sharma made payments of is Rs.10.73 crore to his  family members out of amounts received from Amrapali group of  Companies:  a. Deepshikha (Daughter): is Rs.93,50,000  b. Ritik Kumar Sinha (Son in Law): is Rs.1,40,00,000  

c. Swapnil Sikha (Daughter): is Rs.8,39,60,878  6. Mr. Anil Kumar Sharma received RS.  6.55 crore in his bank  account from Amrapali Hospitality during the month of June and July,  2018 for sale of Bareilley mall to Vaishnavi Vahini Mount Life  Hospitality Pvt Ltd. The said amount was immediately disbursed to  family members:  

a. Self: Rs.4,77,00,000  b. Pallavi Mishra (Wife) Rs.60,00,000  c. Swapnil Shikha (Daughter) Rs.48,00,000  d. Raj Dulari devi (Mother) Rs.52,00,000  e. Ranjit Kumar Rs.9,90,000  

7. Unexplained cash deposits of Rs.5.73 crore were received by Mr.  Anil Kumar Sharma in his bank accounts from November to  December, 2016 i.e during demonetization period.

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 8. Mr. Madan Mohan Sharma (Father of Anil Kumar Sharma)  received Rs.2 crore from Amrapali Grand during month November and  December, 2007.  9. Unexplained cash deposits of Rs.0.13 crore were received by Mrs.  Raj Dulari Devi (Mother of Anil Kumar Sharma) during from April to  July, 2018.  10.  Following are the details of lockers held by family members of Anil  Kumar Sharma:  

• Pallavi Mishra –   a) in UCO bank account no 1557010000618  b) in HDFC Bank account no 50100162844761 locker no  9250500004564240  

• Raj Dulari Devi in Yes Bank account no 8599300000716,  Locker no 11606082018  

11. There are substantial transactions with Amrapali Aadya Trading in  his bank account of IndusInd Bank Account no.100028567700 as  per details given below:    

Date Particulars Receipts Payments  

16/07/2014 Neft-Amapali Aadya Trading 2,500,000 -  

14/08/2014 Neft-Amapali Aadya Trading 1,000,000 -  

14/11/2014 Neft-Amapali Aadya Trading 2,500,000 -  

21/01/2015 Neft-Amapali Aadya Trading 500,000 -  

15/04/2015 RTGS- Amapali Aadya Trading - 1,000,000  

15/04/2015 Neft- Amapali Aadya Trading - 1,000,000  

24/04/2015 RTGS- Amapali Aadya Trading - 2,000,000  

29/04/2015 RTGS- Amapali Aadya Trading - 1,000,000  

06/05/2015 RTGS- Amapali Aadya Trading - 2,000,000  

08/05/2015 RTGS- Amapali Aadya Trading - 2,000,000  

13/05/2015 RTGS- Amapali Aadya Trading - 2,000,000  

27/05/2015 RTGS- Amapali Aadya Trading - 2,000,000  

19/05/2015 RTGS- Amapali Aadya Trading 18,500,000 -  

23/06/2015 RTGS- Amapali Aadya Trading - 1,000,000  

30/07/2015 RTGS- Amapali Aadya Trading - 1,500,000  

21/08/2015 RTGS- Amapali Aadya Trading - 2,000,000  

25/08/2015 RTGS- Amapali Aadya Trading - 2,500,000  

27/08/2015 RTGS- Amapali Aadya Trading - 400,000  

27/08/2015 RTGS- Amapali Aadya Trading - 3,600,000  

09/09/2015 RTGS- Amapali Aadya Trading - 1,500,000  

20/08/2016 RTGS- Amapali Aadya Trading 1,500,000 -  

Total 26,500,000 25,500,000  

• Note: He has not disclosed his association With Amrapali Aadya Trading in

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 his various affidavits furnished to the Hon’ble Supreme Court of India.    

Shiv Priya  1. Mr. Shiv Priya received funds from Amrapali group of Companies  which was used for acquiring personal properties, as stated hereunder:  

a. Property located at L 801, Pearl Gateway Towers, Sector 44, Noida  -(Housing loan was paid for this property out of amount received  from Group companies)  b. Vehicle- Jaguar XJ having registration number UP16BA2001- (Loan was paid out of amount received from Group companies)  

2. Mrs. Sonali Suman (Wife of Shiv Priya) made investments in  different mutual funds amounting to Rs.8.86 crore out of amounts  received from Amrapali group of Companies.  3. Mr. Shiv Priya purchased following assets out of amounts received  

from Amrapali group of companies:  a. Jewelleries: Rs.33,44,475  b. Life Insurance Policies   Rs.3,49,96,654  c. Watches Rs.19,45,500  

4. Mr. Shiv Priya made following personal expenses of Rs.2.74 crore  out of amounts received from Amrapali group of companies:  

a. Expenditure made for Residential property (Marbles, bathroom  products, lights etc) Rs.56,53,268  b. Helicopter services Rs.6,20,000  c. Art designing Rs.10,00,000  d. Bed Linen, Table linen and art designing Rs.20,36,290  e. Wooden doors and Furnitures: Rs.74,76,644  f. Payment made for clearing dues of American Express Credit     Card: Rs.1,06,78,273  

5. Mr. Shiv Priya made payment of Rs.1.75 crore to following third  parties out of amounts received from Amrapali Group of companies:  

a. Quality Synthetic Industries Limited Rs.1,50,00,000  b. Cozy Habitat Builders Pvt Ltd Rs.15,00,000  c. S N Dubey Rs.10,00,000  

6. Unexplained cash deposits of Rs.6 crore were received by Mr. Shiv  Priya in his bank accounts during December, 2016 i.e during  demonetization period.  7. Mrs. Sonali Suman (Wife of Shiv Priya) re-paid loan from bank  amounting to Rs.0.45 crore out of amount received from Amrapali  group of Companies. It is to be seen what the purpose was for which the  bank granted loan for 6 months for the said amount.  8. Shiv Priya is holding demat account no 1206420001934748 and  

Sonali Suman is holding demat account no 1206420001936308 with  HDFC bank, of which details have not been provided to us.  9. Mrs Sonali Suman holds mutual funds with HDFC mutual funds  Folio no 11707520/73, which have market value amounting to Rs.0.65  crore as on 28th February 2019.  10. A sum of Rs.0.45 crore was paid by M/s Royal Golf Link City  Projects Private Limited to Mr. Shiv Priya during the financial Year  2016-17 which was not declared by him in the various Affidavits filed in  the Hon’ble Supreme Court.  11. There was an income tax search in the premises of Amrapali  Group of Companies and the residence of the directors in the month of  7th and 8th August, 2013. During this search operation unaccounted  cash was seized from the residence of directors namely Shri Shiv Priya  amounting to Rs 1 Crores. Unexplained jewellery was also seized from

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 the residence of Mr. Shiv Priya amounting to Rs 0.58 Crores. Thus, it  apparently shows that he has unaccounted cash.    Ajay Kumar  

 1. Mr. Ajay Kumar received funds from Amrapali group of Companies  which was used for acquiring personal properties, as stated hereunder:  

a. Property located at Plot no: A-014 Savanna Villas, Jaypee  Greens Sector-128, Noida; the property was not disclosed in  affidavit submitted on 3rd December, 2018 -(Housing loans was  paid for this property out of amount received from Group  companies)  b. Property located at IRS colony, Abhay Khand, Indirapuram,  Ghaziabad- Rs.1.38 crore.  c. Property located at Plot No: A-014, Pelican Villa Jaypee  

Green Noida 201301- Rs.1.11 crore.  2. Mrs. Seema Kumari (Wife of Ajay Kumar) made investments in  different mutual funds amounting to Rs.2.25 crore out of amounts  received from Amrapali group of companies during August to  September, 2018.  3. Mr. Ajay Kumar made investments in Life insurance Policies of  Rs.2.59 crore out of amounts received from Amrapali group of  companies.  4. Mr. Ajay Kumar made payment of Rs.1.25 crore to following third  parties out of amounts received from Amrapali Group of Companies:  

a. Yogesh Chand Rs.25,00,000  b. Ozone GSP Infratech Rs.50,00,000  c. Quality Synthetic Industries Ltd Rs.50,00,000  

5. Mr. Ajay Kumar made investment of Rs.1.12 crore in Ultra Home  Construction as Share Capital out of amounts received from Amrapali  group of companies.  6. Mr. Ajay Kumar made payment of direct tax of Rs.0.11 crore out of  amounts received from Amrapali group of companies.  7. Mrs Seema Kumari holds mutual funds with HDFC mutual funds  Folio no 14756739/01, which have market value amounting to Rs.0.48  crore as on 28th February 2019.  8. Bank Statement of Anandi Singh of IndusInd Bank Account  no.150019032006    A sum of Rs.1.73 crore has been transferred from Seema Kumari on  09/08/2018.     

Further a sum Rs.2.25 crore has been invested in Mutual Funds as per  details given below:  

Date  Particulars Amount   

16/08/2018 Mirae Asset MF 5,000,000  

16/08/2018 Aditya Birla Mutual  Fund  

5,000,000  

18/08/2018 Kotak Mutual Fund 5,000,000  

11/09/2018 HDFC Mutual Fund 5,000,000  

12/09/2018 Tata Mutual Fund 2,500,000  

Total 22,500,000  

 Note: This amount can be attached and recovered by encashment of  these investments.

96  

   Sunil Kumar and Sunita Kumari (wife of Sunil Kumar)  1. While scrutinizing the Accounts of Gaurisuta Infrasolution Private  Limited in which Mr. Sunil Kumar was the Director, it was observed by  us that bogus commission of Rs.1.07 crore was booked. This amount  of Rs.1.07 crore should be recovered from Mr. Sunil Kumar.    2. A sum of Rs.0.50 crore has also been paid as Salary to Mrs.  Sunita Kumari in M/s Gaurisuta Infrasolution Private Limited which is  not genuine as per detailed report given in the case of M/s Gaurisuta  Infrasolution Private Limited. This Amount of Rs.0.50 crore should also  be recovered from Mrs. Sunita Kumari.    Mr. Sudhir Kumar Choudhary  He is director in Amrapali Biotech India Private Limited & Gaurisuta  

Infrasolution Private Limited. As per his statement recorded, he was  forced to become the director in first week of august 2018 with effect  from 06th July 2018.    We are of the view that this planning has been done by the Amrapali  Management after the order of the Hon’ble Supreme Court to accept the  resignation of Mrs. Seema Kumari Wife of Sunil Kumar from the  Directorship and to appoint Mr. Sudhir Kumar Choudhary as the  director of the company.     It was further explained by him that he was a mere employee only and  by virtue of threat by the Amrapali Group of Companies, he was forced  to become the Director of Amrapali Infrasolution Private Limited.    Apart from above specific points, it shall be noted that we had got  access to the email of the Accounts department of Amrapali Group of  Companies with Id accounts@amrapali.in for a short period after  interrogation from an Ex-employee. We could download few instances of  Cash transactions which are enclosed as a sample in Annexure 26-B.  The access to this mail was stopped immediately. We requested the  management to give the access to this mail to enquire into the further  such mails related to the cash and other accounting adjustments  contained in this Email Account. But this access was not made  available to us.    However, the access had been made available after the orders of the  Honorable Supreme Court dated 28th February, 2019. Now, all the  

mails relating to receipt of cash from the various home buyers have  been deleted. Thus, the management of the company has tempered with  the evidence which were available earlier. (Page No. 205 Volume-I)    Further an amount of Rs.113.5 crore paid by Amrapali Infrastructure  Pvt Ltd to directors is recoverable as on 31st March 2018 and this  amount is on account of shares allotted of Ultra Home Construction  Private Limited to the directors without receiving any money from the  directors during the Financial Year 2010-11. This seems to be a  dubious transaction by the directors of the company in manipulating  the accounts in this manner by allotting the shares without actual  consideration. These amounts are not disclosed by the Directors in their  Affidavits. Hence, the Affidavits filed by the directors are incorrect to  this extent.

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   10. Executives who colluded with directors  

The executives of the Group colluded with the management to avoid  proper recording of transactions in books of accounts. To avoid the  traceability of the transactions, the executives recorded the financial  transactions up to March 2015 in Accounting Package tally, then  shifted to FARVISION from April 2015 and continued till March 2016,  and thereafter  partially recorded transaction in tally and a for a few  companied in FARVISION. At the time of switchover, even the opening  balances were not properly entered, thereby leading to a huge difference  in the data provided to us. In November 2016, the Group left Farvision  half way and started recording transactions for partial period in tally.    The executives intentionally recorded transactions by switchover of  

accounting package improperly so that complete trail could not be  established. Subsequently, the companies of the group even stopped  getting the annual accounts prepared and filing returns to ROC and  Income tax     The Sales and Marketing head Mohit Gupta, CFO Chandar Wadhwa,  Accounts head Adhikari Das, Company Secretary Pankaj Mehta and the  Architect Vaibhav Jain along with their immediate coterie extended  helping hand to the management in planning and execution of the  scam.     Mr. Mohit Gupta – Marketing Director   He was responsible for the whole marketing department, Customer  Relationship Management of the Amrapali Group and he did not  cooperate during the entire process of forensic audit.    It is pertinent to note that till now a list of flat wise possession has not  been provided to us.    At first he did not submit us the customer data inspite of number of  reminders. Subsequently, the customer data submitted was not correct.  We found the following–   

(i)  The inventory of vacant flat submitted by him was incorrect.  (ii)  We found 401 flats (Refer Annexure S-5 page 2828-2836  

Supplementary report) which were either lying vacant and   were available in inventory because the flat buyers were  shifted out of Amrapali Group to the other project of other  

builders. Mr. Mohit Gupta also did not disclose the details of  flats booked in the name of various parties without receipt of  any amount from them just by passing journal entry.  

(iii)  From the above it is clear that it defies the order of Honorable  Supreme Court and has violated the order and is responsible  for the gross contempt of the Honorable Court.  

Mr. Adhikari Debi Prasad Dash- GM/DGM Accounts   It is found that Mr. Adhikari authorized (Refer Annexure S-6  page  2837-2841 Supplementary report) most of the payments regarding  payment of professional charges, raw materials, contractor dues and  other direct/indirect expenses. It is pertinent to note that he was also  involved in diversion of funds from Amrapali group and equally  responsible in the conspiracy of cheating with home buyers and

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 diversion of funds.    

He was responsible for the whole accounts department and he did not  cooperate during the entire process of forensic audit. He was authorized  to receive payments in cash and was submitting on day to day basis  cash receipt status to Mr. Shiv Priya. After a clearance from him, a  possession slip or no due certificate is issued.     He continuously replied that he is not aware of anything and for  everything there were Chartered Accountants for respective companies.  This is not a correct statement and he contradicted his own statement  many times. He was in possession of final accounts of group companies  and did not share with us.     

Adhikari Dash also did not disclose the details of flats booked in the  name of various parties without receipt of any amount from them just  by passing journal entry.    From the above it is clear that it defies the order of Honorable Supreme  Court and has violated the order and is responsible for the gross  contempt of the Honorable Court.    

He along with his brother exercised direct control over below  companies:  

(i) Teks Tech Inspection India Private Limited  (ii) Teks Tech IT Services India Private Limited  (iii) Vinayaka Square Private Limited  (iv) Shri Vinayaka Buildspace Private Limited  (v) Milestone Highrise Private Limited  

Vinayaka Square Private Limited  

• The company has a commercial project named “Beta Plaza” at  Greater Noida which received funds from Teks Tech Inspection India  Private Limited (controlled by Mr. Adhikari), APJ Finmart Private  Limited, Opulent Inn Private Limited, Tasty Feast Private Limited,  Opulent Holidays and Travels (P) Limited. The chairman of four  companies CA Pankaj Mittal appeared before us and could not  explained the reasons for giving loans @ 6% p.a. to a real estate  project whereas the bank rate on FDR is 7% and more.  

• The company has purchased this land for the project at Greater  Noida in FY 2015-16 amounting to Rs.17.09 crore   

• Vinayaka Square received Rs 1 crore from Amrapali funds routed  through Teks Tech Inspection India Private Limited and received  Rs.2.56 crore from Shri Vinayaka Buildspace Private Limited.   This is a project funded by Amrapali’s Funds and shall be attached.  

 Mr. Chander Wadhwa CFO Amrapali Group of Companies  It has also been observed that a sum of Rs.5 crores was transferred by  M/s Amrapali Homes Project Private Limited to Mr. Amit Wadhwa,  nephew of Mr. Chander Prakash Wadhwa. As per the affidavit filled by  Mr. Chander Prakash Wadhwa the said sum was invested by him in  M/s Three Platinum Softech Private Limited. The Heartbeat city projects  is partly owned by three Platinum and Amrapali group has invested in  the projects in the name of Chander Wadhwa.  

99  

   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 Heart beat city projects. Funds  

were invested in Patel Advance JV (Neo Town project Noida) and  Euphoria Sports City.    Furthermore, it is observed that the Company Management as well as  Statutory Auditors and CFO have failed in their duty to follow the  Accounting Standards relating to recording the valuation of Work in  Progress as per ICAI guidelines applicable to Real Estate Companies.  It  is also pointed out that the CFO has not signed any Audited Financial  Statements for reasons best known to them. But according to the  statement recorded by us of various employees and suppliers as well as  home buyers, we are informed that he was the main person handling  Finance and every meeting was held with him only.  (page no 209  Volume 1)    Mr. Pankaj Mehta –Company Secretary  He was responsible for the secretarial compliances of the companies.  He incorporated more than 50 additional companies to create a cobweb.  He was a director in many of these companies and was an important  link in the transfer of funds through various group companies.    He was also signatory to the bank account of Stunning Construction  Private Limited. He resigned from the services of the Company in  December, 2016. However even after his resignation, on the  instructions of Mr. Chander Wadhwa, CFO, he continued to operate the  Bank Accounts of Stunning Construction Private Limited.    After his resignation in the Amrapali Group, he started working as a  

partner of Saffron Consultants LLP with Mr. Chander Wadhwa.  Also  Mr. Anil Kumar is still working as an employee with Mr. Chander  Wadhwa.    On the instructions of Mr. Chander Wadhwa CFO manipulative entries  were recorded for adjustment of payment dues of Mr. Pankaj Mehta  against his Flat No. E-1502, Silicon City, Sector - 76, Noida.   

11. Non compliance of statutory obligations  

(i) The group companies have not filed annual returns and Audited  Financial Statements after 31st March, 2015. The Registrar of  Companies has already disqualified the Directors namely Mr. Anil  Kumar Sharma, Mr. Amresh Kumar, Mr. Shiv Priya, Mr.Ajay Kumar

100  

 and Mr. Suvash Chandra Kumar for a period of 5 years from  1/11/2017 to 31/10/2022 u/s 164(2) of The Companies Act, 2013.    (ii) The company has not been regular in payment of TDS and Service  tax and has also not filled relevant returns of TDS/Service tax after 31st  March, 2015. There is also no follow up available from the Concerned  departments.   

Latest information regarding status of default in respect of TDS/ Service  tax is not made available to us. There may be huge demands  outstanding against the company due to non-payment and non-filing of  TDS/Service tax returns.  

(iii) No Statutory records have been maintained by the Amrapali group  

companies and produced before us relating to the following:  i. Register of Directors and shareholders  ii. Register of related party contracts   iii. Minute book of Director and Shareholders  iv. Fixed Assets Register  v. Charges register in respect of loans taken from Banks and others  

(iv) Transfer entries are recorded in Inter Corporate Deposit accounts  by transferring the amount from one Amrapali group company to  another Amrapali group company in contravention of section  269SS/269T of The Income Tax Act, 1961.    (v) Depreciation has not been provided on the building in  contravention of the provisions of the Companies Act, 1956, now  Companies Act, 2013 in Navodaya Properties Private Limited.    It is highly surprising that in spite of such glaring discrepancies  regarding non-Compliance of statutory compliances, the Statutory  Auditors have not pointed out any such discrepancies in their Statutory  Audit Reports.    There are many other glaring short comings in the Audited Balance  Sheet & Financial Statements   a) I – Page 214)  

12. Anil Mittal - Statutory Auditor  

While scrutinizing the affidavit submitted by Shri Anil Mittal Date  12/11/2018 before the Hon’ble court we have noted the following:  

a) CA Anil Mittal was paid Rs.0.56 crore (Rs.0.66 crore less Rs.0.10  crore recovered) during the period 2011 to 2018. These payments  have been shown in the nature of cheques given /credit card  payments which have been never been recovered.  

b) Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFO  were in connivance with each other and these payments have been  made by Shri Anil Mittal to Chander Wadhwa CFO for sharing fees  received from Amrapali group for the work awarded to CA Anil  Mittal. CA Anil Mittal blindly signed all the accounts and is grossly  involved along with Mr. Chander Wadhwa in making various  manipulation in the accounts.   

c) Audit files handed over by Shri Anil Mittal Statutory Auditor are

101  

 grossly deficient and they do not contain the documents which are  normally required in the statutory audit files as per guidelines and  directions issued by The Institute of Chartered Accountants of  India.  

d) Statutory Auditor CA Anil Mittal has received the payment on  account of professional charges in the name of the companies in  which his relatives are directors. This fact has not been disclosed  in audited financial statements.  

e) A sum of Rs.52.07 crore was adjusted against the payment due on  account of Flat number P-1203 in Amrapali Princely Estate on  account of professional fees due and to be paid on account of  Audit fees.   

f) Further a sum of Rs.16.36 crore was also adjusted against the flat  number P-1104 in Amrapali Princely Estate on account of  Professional fees due and to be paid on account of Audit fees.  

 13. Diversion of homebuyers funds   Amrapali Group was engaged in diversion of home buyer funds from  one project to another project, other group companies, directors and  senior executives of the group. There is also a diversion of funds to  various suppliers where advances were made without any further  adjustment/ transactions.     There is not only diversion of funds, there is siphoning of funds also by  way of booking undervalued transactions in respect of sale of flats, by  way of booking of expenses, and making purchases from the bogus  suppliers/service providers.    In addition to this they adopted fraudulent practices also by way of  double booking of flats. There are also instances of adjustment of  amounts payable to suppliers/brokers with the amount due from the  home buyers such trade creditors have denied having any knowledge of  such transactions.    We have traces of receiving of Cash from the home buyers/ others as  shown by the email of the accounts department of the Amrapali Group  of Companies which is not accounted for in the books of accounts.     There is also allotment of shares without inward movement of funds by  making manipulative entries in the books of accounts.    The homebuyers funds were diverted Rs. 5,619.47 crore to other  

companies/directors:  (i) through payment of professional fee to directors Rs.100.53  

crore;  (ii) by way of booking of bogus bills including commission  

Rs.842.42 crore;  (iii) by selling flats at undervalued prices in books and received  

differential market value in cash Rs.321.21 crore; (it is a tip  of iceberg)  

(iv) by way of granting inter corporate deposits to related entities  and unrelated entities / trusted partners for ultimately  diverting funds to unapproved uses.  

Summary of diversion of funds is as under:

102  

 Name of Company Details of amount diverted (Amount in crores)  

First  Diversion  

Bogus Expense  page no 2827 of  supplementary  

report  

Advances  recoverable  from third  

parties  (Rs.234.21  crore plus  

Rs.326 crore  Volume IV,  

page no 1015- 1019)  

Undervalued  flats  

page no 2811  of  

supplementar y report  

Cash   

ULTRA HOME  CONSTRUCTION  PRIVATE LIMITED -   

                 333.00   

                                                         87.68   

                          30.87  0.22  

AMRAPALI HOMES  PROJECTS  PRIVATE LIMITED -   

                      4.41   

                                                         55.01  -  0.23  

AMRAPALI  PRINCELY  ESTATE PRIVATE  LIMITED  

                186.99   

                    56.78   

                                                                -     

                            6.70  5.02  

AMRAPALI  SAPPHIRE  DEVELOPERS  PRIVATELIMITED  

                113.98   

                    85.45   

                                                                73.06   

                          76.02   

          0.11   

AMRAPALI  SILICON CITY  PRIVATE LIMITED  

                391.57   

                    97.87   

                                                                50.41    

                          73.05   

          3.58   

AMRAPALI EDEN  PARK  DEVELOPERS  PRIVATELIMITED -   

                    12.67   

                                                            3.02  -  2  

AMRAPALI  ZODIAC  DEVELOPERS  PRIVATELIMITED  

                286.00   

                    70.60   

                                                         28.07   

                            6.75  3.84  

AMRAPALI  CENTURIAN PARK  PRIVATE LIMITED  

                518.78   

                      5.20   

                                                                -     

                          43.12  7.45  

AMRAPALI DREAM  VALLEY PRIVATE  LIMITED  

                445.33   

                      5.63   

                                                                3.23    

                          24.11   

          8.02   

AMRAPALI  LEISURE VALLEY  DEVELOPERS  PRIVATE LIMITED  

                237.53   

                    26.45   

                                                                19.67    

                            5.88   

          0.23   

AMRAPALI  LEISURE VALLEY  PRIVATE LIMITED  

                431.11   

                    16.20   

                                                         51.62   

                            8.53  9.79  

AMRAPALI SMART  CITY  DEVELOPERS  PRIVATELIMITED  

                538.59   

                    39.27   

                                                                17.20     

                          18.97   

       10.79   

SANGAM  COLONIZERS  PRIVATE LIMITED -  -   

                                                                0.36   -   

          0.15  

103  

 SHALIMAR  COLONISERS  PRIVATE LIMITED  -  -   

                                                                -    -  -   

HI-TECH CITY  DEVELOPERS  PRIVATE LIMITED  

                     2.42   

                      1.96   

                                                                8.91   -   

          0.46   

AMRAPALI  HEALTHCARE  PRIVATE LIMITED -  -   

                                                            0.22  -  -   

AMRAPALI  HOSPITALITY  SERVICES  PRIVATE LIMITED -   

                      0.02   

                                                                13.55   -   

          0.01   

AMRAPALI  INFRASTRUCTUR E PRIVATE  LIMITED -   

                    65.61   

                                                                40.24   -   

          3.16   

MSB SOFTWARE  TECHNOLOGY  PRIVATE  LIMITED. -  -   

                                                                -    -   

          0.70   

MUMS MEGA  FOOD PARK  PRIVATE LIMITED -  --   

                                                                1.29   -     

MVG TECHNO  CONSULTANTS  PRIVATE LIMITED -  -   

                                                                -    -  0.13  

NAVODAYA  PROPERTIES  PRIVATE LIMITED -  -   

                                                                -    -   

          0.24   

NOIDA TEXFAB  PRIVATE LIMITED -  -   

                                                                -    -  0.13  

AMRAPALI  AEROCITY  PRIVATE LIMITED -  -   

                                                                0.01    -     

AMRAPALI  BIOTECH INDIA  PRIVATE  LIMITED. -  -   

                                                                -    -  1.5  

AMRAPALI  BUDDHA  DEVELOPERS  PRIVATELIMITED -   

                      0.65   

                                                                0.47   -  -   

AMRAPALI  MAGADH  DEVELOPERS  PRIVATELIMITED -  -   

                                                                -    -  -   

AMRAPALI MAHI  DEVELOPERS  PRIVATE LIMITED -  -   

                                                                -    -     

AMRAPALI MEDIA  VISION PRIVATE  LIMITED -  -   

                                                            4.96  -  9.67  

AMRAPALI POWER  AND CEMENTS  PRIVATELIMITED -  -   

                                                                0.91  -   

          -   

AMRAPALI SMART  CITY PRIVATE -   

                      8.02   

                                                            0.95  -  0.5

104  

 LIMITED  

AMRAPALI  SPRING VALLEY  PRIVATE LIMITED -  -   

                                                                -    -  -   

HAWTHORNE  INTELLECT  MANAGEMENT  SOLUTIONS  PRIVATE LIMITED -  -   

                                                                0.17  -   

          0.01   

NEELKANTH  BUILDCRAFT  PRIVATE LIMITED -  -   

                                                                -    -  -   

GAURISUTA  INFRASTRUCTUR E PRIVATE  LIMITED -  -   

                                                            0.46  -  0.02  

KAPILA  BUILDHOME  PRIVATE LIMITED -  -   

                                                                0.41  -   

          0.03   

STUNNING  CONSTRUCTIONS  PRIVATE LIMITED -  -   

                                                         15.04  -   

          0.17   

JHAMB FINANCE  AND LEASING  PRIVATELIMITED -  -   

                                                            5.93  -  -   

MANNAT  BUILDCRAFT  PRIVATE LIMITED -  -   

                                                                0.99  -   

          0.20   

RUDRAKSH  INFRACITY  PRIVATE LIMITED -  -   

                                                                -    -  -   

GAURISUTA  INFRASOLUTION  PRIVATE LIMITED -  -   

                                                                1.24 -   

          0.01   

LA RESIDENTIA  DEVELOPERS  PRIVATE LIMITED -  -   

                                                         23.35  -  0.3  

Amrapali Grand -                          

3.98                                                             

29.17  -  0.5  

AHS Joint Venture -                          

0.08                                                                    

15.81   -     

Amrapali Homes   -                          

2.86                                                             

21.41  -  0.19  

Amrapali Patel  Platinum -  -   

                                                                7.85     

                          27.31  -   

Hi Tech City  Developer Pvt Ltd  7.30     

Total                

3,152.30                     

842.42                                                           

582.68                            

321.31           

69.36   

Particulars Amount in  

crores  

Grand Total 4,968.07  

Further Gaurisuta Infrastructure Private Limited gave 25.00

105  

 Rs 25 crore advances to various parties as listed on page  

no 92-93 Volume I  

Further in Gaurisuta Infrastructure Private Limited,  

inventory of Rs 89 crore unidentifiable page no 96  

Volume I  

89.00  

FDR as on 31st March 2015 page no 175 Volume I 61.97  

Professional Fees Paid to Directors 100.53  

Taxes paid by Stunning Construction  on behalf of  

promoters and family  

24.90  

More than 700 flats given to so called suppliers 350.00  

Total diversion identified 5,619.47  

14. J P Morgan  Amrapali Zodiac Developers Private Limited has financed this  transaction by its own shares through Group Companies by  incorporating new Companies. These transactions enable Amrapali  Zodiac Developers Private Limited to avoid the provisions of The  Companies Act, 1956 applicable for buying its own shares.     It is also relevant to point out that Shri Anil Mittal at any stage of time  has not reported his interest or disclosed about his relatives of Director  and Junior Employee. Both the directors and shareholders of the  company i.e Mr. Atul Mittal (Relative) and Mr. Chandan Kumar (Junior  Employee), are relatives/employee of Anil Mittal, the Statutory Auditor  of the company.    

a) Rudraksh Infracity Private Limited- Shri Chandan Kumar, an  employee of CA Anil Mittal, Statutory Auditor and Shri Atul Mittal,  relative of CA Anil Mittal were inducted in the board.  The basic purpose  of this Company was only for money laundering and was incorporated  to receive Funds from Mannat Buildcraft Private Limited which  Company was incorporated by CFO Chander Wadhwa through his close  associates.  After receiving money from Mannat Buildcraft Private  Limited, the same was transferred to J.P. Morgan Investments for  purchase of Equity Shares of Amrapali Zodiac Private Limited at an  exorbitant price.  As per details furnished hereunder, the Valuation  Report was also made to suit to the requirement of J.P. Morgan  Investments as the M/s Sudit K. Parikh & Company, Chartered  Accountants were appointed by J.P. Morgan officials for the said  valuation. They have admitted that valuation work was done on the  basis of information provided by J.P. Morgan Investments after applying  some basic checks.    The whole racket of money laundering and receiving money from these  Companies i.e. Mannat Buildcraft Private Limited and Rudraksh  Infracity Private Limited are the brain child of Mr. Chander Wadhwa,  CFO and Anil Mittal, Statutory Auditor of Amrapali Group of  Companies. Both these Companies are controlled by both of these  persons and had been formed only for this Money Laundering Business.   There are no transactions before or after these transfers of money and

106  

 the same have been camouflaged to make it look with business  transactions on the basis of the Valuation Report.    JP Morgan invested Rs.85 crore in the year 2010 with an understanding  to have a preferential claim on profits called distributable surplus in the  ratio of 75% to JP Morgan and 25% to promoters namely Amrapali  Homes Project Private Limited and Ultra Home Construction Private  Limited with the following main condition in Shares Subscription  Agreement dated 9th September, 2010 amongst Ultra Home  Construction Private Limited, Amrapali Homes Project Private Limited,  JP Morgan & Amrapali Zodiac Developers Private Limited    The Company shall provide evidence of the aforesaid investment in  the Investee Company to the Investor. (Rs. 60 Cr. in Leisure Valley  Developers)    

(A)   There was a prescribed methodology and procedures defined of  computation of Fair Market Value at the time of the exit to be worked  out in the agreement on Page No 51, schedule 6 of Shareholder’s  Agreement, which was not followed at the time of any of the exits.     Clause 4.2 (iii) – The Company shall grant an interest free loan of Rs  85,000,000 (Rupees Eighty Five Million Only) to UHCPL.    Clause 4.2(iv) – The Company shall remit Rs 600,000,000 (Rupees  Six Hundred Million Only) to the Investee Company for subscribing  to 0.01% compulsorily convertible Preference shares of the  Investee Company (“Investee Company Shares”)  

 (B)  Distribution of profit was agreed between the Investor i.e., JP  Morgan & the Investee i.e., Amrapali Group to share the profits from the  project in the agreed ratio as per clause 7.3 & Clause 7.5.1 Page No 19  of Shareholder’s Agreement.    (C) Clause 7.1 - The Company agrees and undertakes that it shall,  and the Investor and Developers agree that they shall cause the  Company to first utilize the revenues (less the cost of construction  of the project, provision for future consideration cost of the  Project, payment of Project Land cost and interest thereon, annual  lease rent payment to New Okhla Industrial Development Authority  and one time land lease cost) towards payment of applicable taxes  and payment of interest to the lenders, if any, in accordance with the  provisions of Law.    Clause 7.2 – Post the payment of taxes and interest to the lenders, as  aforesaid, the Company shall make payments of all principal amounts  accrued and payable to the lenders, if any, at applicable seniority.    (D) In clause 2.12 of Page No 12 of Shareholder’s agreement it was  agreed that the aggregate advances outstanding from the Amrapali  Zodiac developers Private Limited to its affiliates will not exceed Rs  25 crores excluding Amrapali Infrastructure Private Limited. It was  also in the knowledge of JP Morgan vide clause 2.14 of Page No 12 of  Shareholder’s Agreement that advances to Amrapali Infrastructure  Private Limited which was Rs 51 crore on 31st July, 2010 will be  restricted to Rs 15 crore.   

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 (E)   Clause No 10.4.3 in page No 21 of Shareholder’s Agreement  mentions that no action can be taken without investor’s approval in  relation to 10.4.3(xi) any payments made to related parties.  

 (F)   It was also mentioned in the agreement that statutory auditor  and internal auditor cannot be appointed and removed without the  approval of JPMorgan.  

 (G) The following points indicate very clearly that JP Morgan was  having full control on Amrapali Zodiac Developers Private Limited  project and no material decision could have been taken without JP  Morgan approval.    On Page No 60 of Shareholder’s Agreement in Note 1 it was agreed  & accepted that any surplus cash flow from the project will be first  utilized for payment of land cost to Noida Authority.    Documents to be submitted by Amrapali Zodiac Developers Private  Limited to JP Morgan:  

(i) Monthly progress report signed by director & CFO.  (ii) No delay report in specified format.  

 JP Morgan insisted that the cost shall be restricted to Rs 425 crore and  any additional cost over and above Rs 425 crore shall be brought in by  Amrapali Group promoter. The additional cost considered was Rs  125 crore to be brought in by promoters.    

(H) Zodiac has followed recognition of revenue on the basis of  Project Completion Method – Accounting Standard - 7  (Construction Contracts). As per Project Completion Method as given  in Accounting Standard – 7, the profit cannot be recognized until the  project is completed and as per Clause No 7.3 of Shareholder’s  Agreement the distributable amount is the balance amount  representing the aggregate of all profits, after considering the payments  referred to in clause 7.1 and 7.2 , including any amounts transferred to  the reserves accounts of the Company shall for the purpose of this  clause 7 are referred to as the “Distributable Amount”.    (I) From the above it is clear that in absence of recognition of profit in  the agreement there cannot be any distributable amount for  

distribution.    (J) It was accepted by Mr Suraj Chhabria of JP Morgan (Apollo)  that the money invested by them in Amrapali Zodiac Developers  Private Limited was not utilized in the project. He also accepted  that it was in their knowledge that money invested by them was  not going to be utilized in Amrapali Zodiac Developers Private  Limited project and it is contracted that Rs 60 crores to Amrapali  Leisure Valley Developers Private Limited, Rs 8.5 crores to Ultra  Home Construction Private Limited be transferred.    

(K) JP Morgan was in knowledge of that the Company Amrapali  Zodiac Developers Private Limited has paid the money received  from the Home buyers to tthe other Companies of Amrapali Group.  

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 (L) JP Morgan permitted a transfer of Rs 140 crore to Mannat  Buildcraft Private Limited and from Mannat Buildcraft Private Limited  to Neelkanth Buildcraft Private Limited and Rudraksh Infracity Private  Limited for buying shares from JP Morgan of Amrapali Zodiac  Developers Private Limited. There were always advances exceeded  than the limits specified in Shareholder’s Agreement but JP  Morgan did not ensure bringing back the money from the affiliates  though it was having its board representation in the ratio3:2.    JP Morgan did not ensure that the funds for additional cost were  brought in and in valuation it was assumed that additional cost of Rs  125 crores will be brought in by the promoter for the last lag of the  construction for its IRR (Internal Rate of Return) working.    (M) JP Morgan was getting return at the rate of more than 20 %  

on its investment of Rs 85 crore & was agreeing with Amrapali  Zodiac Developers Private Limited to invest in Amrapali Leisure  Valley Developers Private Limited a substantial part of its  investment i.e., 60 crore out of Rs 85 crore at the rate 0.01%. It  categorically demonstrates that JP Morgan invested Rs 60 crore in  Amrapali Leisure Valley Developers Private Limited without  complying FEMA (Foreign Exchange Management Act) for its  investment of Rs 60 crore in Amrapali Leisure Valley Developers  Private Limited. It is not out of place to mention that Amrapali  Zodiac Developers Private Limited was a project where home  buyers were required to pay on the basis of progress of the  construction of the project. Meaning it was construction linked  payment project.    (N) We found that most of the time customers have paid more  than what was spent in the project. The Amrapali Zodiac Developers  Private Limited diverted home buyer’s money & there was no need  of any investment from JP Morgan. It was accepted by Mr Suraj  Chhabria that there was no restriction on the Company to invest  the money in the project & it was in his knowledge & the  knowledge of JP Morgan that the money has been diverted,  Transferred  

Valuation  

(A) The valuation did not follow the correct methodology of DCF  (Discounted Cash Flow). The valuation is without any sanctity &  

validity. The valuation was carried out to cause wrongful loss to the  homebuyers of Amrapali Zodiac Developers Private Limited and to give  advantage to JPMorgan.  

(B) Name of the firm – Sudit K. Parekh & Co.   

                                        Chartered Accountants   

         Name of the Partners–  

I. Mr. Durgaprasad Khatri  II. Mr. Tanwir Shirolka  III. Mr. Srikant V Jilla  IV. Ms. Deepti K.Ahuja  

Ms Ahuja, then partner in SKP&Co.Chartered Accountants informed

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 that JP Morgan, Mumbai office in Andheri/ Santacruise did not allow to  take any of the details/ abstract from the share purchase agreement. It  is to note that at the time of exit, it was predetermined that Zodiac  Developers would not pay the lease rent as well as the installment due  to Noida Authorities as clearly explained in the cash flow statement  provided by the SKP&Co in 4 no. of valuation certificates from2010- 2015.  

(C)   

Source: Data from Form FC-TRS  From the table above it is clear that valuation exercise was done  backwardly. For instances first we paid Rs 100 crores, then Rs 25  crores, then Rs 10 crores and finally Rs. 5Cr..  EXTRACT from FEMA RULES;  

FEM (Transfer or Issue of Security by a Person Resident Outside India)  Regulations, 2000  “4. Restriction on an Indian entity to issue security to a person resident  

outside India or to record a transfer of security from or to such a person  in its books.    Save as otherwise provided in the Act or Rules or Regulations made  thereunder, an Indian entity shall not issue any security to a person  resident outside India or shall not record in its books any transfer of  security from or to such person: Provided that the Reserve Bank may,  on an application made to it and for sufficient reasons, permit an entity  to issue any security to a person resident outside India or to record in  its books transfer of security from or to such person, subject to such  conditions as may be considered necessary.  

Transfer of shares or convertible debentures or warrants of an Indian  company or units of an Investment Vehicle] by a person resident  

Valuation  Report date  

No of  shares  

Face  Value  

Value per  share *  

Total amount Date of FC-  TRS  

Sold to  

9/09/2010 785715 10 1081.8172 85,00,00,00 20/10/2010 JP  Morgan  

23/10/201 3  

436508 10 2290.9 99,99,99,26 30/12/2013 Neelkanth  Buildcraft  Private  Limited  

9/09/2014 97000 10 2577.25 24,99,93,20 30/09/2014 Rudraksh Infracity  Private  Limited  

10/04/201 5  

34365 10 2910 10,00,02,10 29/07/2015 Rudraksh Infracity  Private  Limited  

10/04/201 5  

17180 10 2910 4,99,93,800 6/10/2015 Rudraksh Infracity  Private  Limited

110  

 outside India    

(1) Subject to the provisions of sub-regulation (2), a person resident  outside India holding the 2[shares or convertible debentures or  warrants of an Indian company or units of an Investment Vehicle] in  accordance with these Regulations, may transfer  the 3[shares or  convertible debentures or warrants of an Indian company or units of an  Investment Vehicle] so held by him, in compliance with the conditions  specified in the relevant Schedule of these regulations.    Further, subject to minimum lock-in period of one year or minimum  lock-in period as prescribed under Annex-B of Schedule 1 whichever is  higher, a person resident outside India holding the shares or convertible  debentures or warrants] of an Indian company containing an optionality  clause in accordance with these Regulations and exercising the  

option/right, may exit without any assured return, subject to the  following conditions:  

(i) In case of listed company, at the 6[market price prevailing on  the floor of the recognized stock exchanges]  

(ii) In case of equity shares, preference shares or debentures of  unlisted company, at a price not exceeding that arrived at as per any  internationally accepted pricing methodology for valuation of shares on  arm's length basis, duly certified by a Chartered Accountant or a SEBI  registered Merchant Banker. The guiding principle would be that the  non-resident investor is not guaranteed any assured exit price at  the time of making such investment/agreements and shall exit at  the price prevailing at the time of exit, subject to lock-in-period  requirement.  

(2) (i) A person resident outside India, not being a non-resident Indian  or an overseas corporate body, may transfer by way of sale or gift the  shares or convertible debentures or warrants of an Indian company or  units of an Investment Vehicle] held by him or it to any person resident  outside India;  

(ii) A non-resident Indian may transfer by way of sale or gift, the shares  or convertible debentures or warrants of an Indian company or units of  an Investment Vehicle] held by him or it to another non-resident Indian  only;  

(iii) A person resident outside India holding the 6[shares or convertible  debentures or warrants of an Indian company or units of an Investment  

Vehicle] in accordance with these Regulations,  

(a) may transfer the same to a person resident in India by way of gift;  (b) may sell the same on a recognized Stock Exchange in India through  a register broker.”  

 In the valuation working, it is shown that all project cost was incurred  by June, 2013. It is only additional cost of Rs 125 crore &  marketing cost of Rs 6.85 crore shown as to be incurred after that.  

(A) JP Morgan personnel have never met the buyer. Both the  Companies Neelkanth Buildcraft Private Limited & Rudraksh Infracity  Private Limited were formed in the year 2013 having a capital of Rs 0.01  crore  each for the specific purpose of buying shares from JP Morgan.  

(B) No person from Mauritius travelled to India and no person from

111  

 India travelled to Mauritius. Indian people signed the contract in India  and Mauritius people signed the contract in Mauritius. Buyer did not  carried out any due diligence nor it appointed any valuer.  

(C) The Sales agreement was drafted by JP Morgan team, buyers are  not aware of it.  

(D) We spoke to the director of Neelkanth Buildcraft Private Limited &  Rudraksh Infracity Private Limited namely Vivek Mittal & Chandan  Kumar. Both of them refused meeting with any person/entity from JP  Morgan. They are not aware of that any time they have bought these  shares.  

 No substantial fundswere used in the construction of the project. The  address of the Company who purchased share from JP Morgan is the  address of Group Statutory Auditor Mr. Anil Mittal.  

(A) Mr Chandan Kumar, director in Neelkanth Buildcraft Private  Limited & Rudraksh Infracity Private Limited is an office boy in the  office of Statutory Auditor Mr Anil Mittal.  

(B) Mr Vivek Mittal, another director in Neelkanth Buildcraft Private  Limited is nephew of Statutory Auditor Mr Anil Mittal & does small  timejobs  

 Facts  Amrapali Zodiac Developers Pvt Ltd incorporated on 18th December  2009. As per the Share Subscription Agreement dated 9th September,  2010, JP Morgan invested 85 crore on 20th October 2010 with an  understanding to have a preferential claim on profits called  distributable surplus in the ratio of 75% to JP Morgan and 25% to  promoters namely Amrapali Homes Project Private Limited and Ultra  Home Construction Private Limited. The said investment was  repatriated to JP Morgan as under:  

• RS.  100 crore on 30th December 2013;  

• RS.  25 crore on 30th September 2014;  

• RS.  10 crore on 29th July 2015; and   

• RS.  5 crore on 6th October 2015.  FEMA  

Extracts of Master Circular no.8/2010-11 dated July 01, 2010 on  External Commercial Borrowings and Trade Credits    External Commercial Borrowings (‘ECBs’) refer to commercial loans in  the form of bank loans, buyers credit, suppliers credit, securitized  instruments (eg floating rate notes and fixed rate bonds, non  convertible, optionally convertible or partially convertible preference  shares) availed of from non-resident lenders with a minimum average  maturity of 3 years.     ECB can be accessed under 2 routes   a) Automatic route and   b) Approval route.    A) Under Automatic route   

112  

• Eligible borrowers can be corporates, including those in the  hotel, hospital, software sectors (registered under the  Companies Act 1956) and Infrastructure Finance companies,  Housing Finance companies and Non Banking Finance  Companies.  

• Recognised lenders can be international banks, suppliers of  equipments, foreign collaborators and foreign equity holders  

• All in cost ceilings for ECBs under automatic route are:  

• Average maturity period  3 to 5 years- 300 basis points over 6  months London Interbank Offered Rate (‘LIBOR’)  

• Average maturity period more than 5 years – 500 basis points  over 6 months LIBOR  

• ECBs are eligible for end use for investment for import of capital  goods, industrial sector, infrastructure sector and specified  service sectors. However, proceeds of ECBs should not be used  

for acquisition of land in any of these permitted uses.   

• ECBs are not permitted to be utilized for real estate sector.    

B) Under Approval route    

• Certain ECBs which are not under automatic route are under  approval route.     ECBs are not permitted to be utilized for real estate. However, the  term real estate excludes development of integrated township as  defined by the Ministry of Commerce and Industry, DIPP, SIA (FC  Division), Press Note 3 (2002 Series) dated January 4, 2002. As per the  said press note, development of integrated township includes housing,  commercial premises, hotels, resorts, city and regional level urban  infrastructure facilities such as roads and bridges, mass rapid transit  systems and manufacture of building materials. Development of land  and providing allied infrastructure will form an integrated part of  township’s development.  

Hedging required:  Minimum mandatory hedging is required @70% of principal plus  interest (both) of ECB where Minimum Average Maturity Period is less  than 5 years. Minimum tenor should be one (1) year thereafter to be  rollover till expiry of ECB  Compliance under FEMA  

 ECB Compliance  Borrowers are required to submit a report about signing of loan  agreement with the lender for obtaining Loan Registration Number  (LRN) within 7 days of the signing it to RBI in form ECB.  Borrowers are required to report monthly about actual ECB  transactions through form ECB-2 to AD Category I bank within 7 days  from close of the month.  

Companies Act 1956  Amrapali Zodiac Developers Pvt Ltd could not have bought back its own  shares from JP Morgan as a company cannot buy back its own shares  as per the provisions of section 77 of the Companies Act 1956.  Section 77 states “(1) No company limited by shares, and no company

113  

 limited by guarantee and having a share capital, shall have power to buy  its own shares, unless the consequent reduction of capital is effected and  sanctioned in pursuance of sections 100 to 104 or of section 402.”  

Even otherwise, as per Section 77A, a company can purchase its own  shares from   (i) free reserves; Where a company purchases its own shares out of  free reserves, then a sum equal to the nominal value of the share so  purchased shall be transferred to the capital redemption reserve and  details of such transfer shall be disclosed in the balance-sheet or   (ii) securities premium account; or   (iii) proceeds of any shares or other specified securities. A Company  cannot buyback its shares or other specified securities out of the  proceeds of an earlier issue of the same kind of shares or specified  

securities.    

Conditions of Buy Back   (a) The buy-back is authorised by the Articles of association of the  

Company;  (b) A special resolution has been passed in the general meeting of the  

company authorising the buy-back. In the case of a listed company,  this approval is required by means of a postal ballot. Also, the  shares for buy back should be free from lock in period/non  transferability. The buy back can be made by a Board resolution If  the quantity of buyback is or less than ten percent of the paid up  capital and free reserves;  

(c) The buy-back is of less than twenty-five per cent of the total paid- up capital and free reserves of the company and that the buy-back  of equity shares in any financial year shall not exceed twenty-five  per cent of its total paid-up equity capital in that financial year;  

(d) The ratio of the debt owed by the company is not more than twice  the capital and its free reserves after such buy-back;   

(e) There has been no default in any of the following    i. in repayment of deposit or interest payable thereon,  ii. redemption of debentures, or preference shares or  iii. payment of dividend, if declared, to all shareholders within the  stipulated time of 30 days from the date of declaration of dividend  or  iv. repayment of any term loan or interest payable thereon to any  financial institution or bank;  

(f) There has been no default in complying with the provisions of  filing of Annual Return, Payment of Dividend, and form and contents of  Annual Accounts;  (g) All the shares or other specified securities for buy-back are fully  paid-up;   (h) The buy-back of the shares or other specified securities listed on  any recognised stock exchange shall be in accordance with the  regulations made by the Securities and Exchange Board of India in this  behalf; and  (i) The buy-back in respect of shares or other specified securities of  private and closely held companies is in accordance with the guidelines  as may be prescribed.  

115  

 1) Amount Realisable from the sale of the unsold inventory and from  home buyers (Residential and commercial) in various projects and its  extent.   

Net surplus/deficit       

S.No Name of company  Total  

Receivable  from Buyers  

Estimated  Cost still to  be incurred  

Refund/  Shifitng  

Cost to  Complete  by NBCC  

Net  Surplus/  (Deficit)  

1  Amrapali Princely  Estate Pvt.Ltd.  

              38                     -               -                       

44               

(6)  

2  Amrapali Eden Park  Developers Pvt.Ltd.  

              12                     -               -                        5   

           7   

3  Amrapali Zodiac  Developers Pvt.Ltd.  

              70                     -               -                       

61              10   

4  Amrapali Leisure  Valley Pvt.Ltd.  

          1,887                  267             -                  

1,586               

35   

5  Amrapali Centuiran  Park Pvt.Ltd.  

             575                     -                2                   

769          (196)  

6 Amrapali Grand                 16                     -               -     

                 -     

           16   

7  

Ultra Homes  Construction  Pvt.Ltd.  

             580                    40              3                     

26            511   

8  Amrapali Homes  Project Pvt Ltd  

                7                     -               -                       -     

           7   

9  Amrapali Dream  Valley Pvt Ltd  

          1,435                     -               -                  

1,657           

(222)  

10  Amrapali Silicon  City Pvt Ltd  

             558                     -               -                     

477               

81   

11  

Amrapali Smart  City Developers  Pvt  Ltd  

             489                     -               -                     

846          (357)  

12  

Amrapali Leisure  Valley Developers  Pvt.Ltd.  

             309                     -               -                     

322            (13)

116  

13  Amrapali Sapphire  Developers Pvt Ltd  

              69                     -               -                       

90             

(20)  

 Group Total             6,046   

                307   

           5               

5,882           

(148)  

Refer ANNEXURE XXIII  The unsold Inventory in the various schemes where forensic audit was  carried out is to the tune of Rs 1,958.82crores spread-over in  5,229Flats.      *Unsold inventory of Amrapali Centurian Park Private Limited  comprises of three projects namely- Amrapali Tropical Garden,  Amrapali Terrace Homes, O2 Valley.    We have not been provided the inventory details of O2 Valley, the data  mentioned here and included in calculation of surplus/deficit is agreed  in discussion with CMD, Amrapali Group.    Unsold units of O2 Valley is 223.    The unsold Inventory in respect of the commercial shop space amounts  to Rs.162 crores spread-over in 5schemes.      *487 units are available in commercial project Tech Park which are yet  to be examine. The detailed list of inventory is attached in ANNEXURE  XXII.2.     15. Sale of Flats at lower prices (Under-Valued Transactions)  While scrutinizing the record for sale of flats, we have observed that  number of the flats were sold at low prices as compared to the prices  existing on or near to those dates and on which rates sales were made  to other home buyers. It is further submitted that some of the flats have  been sold even at rates as low as RS.  1,000 - RS.  1,400 per square feet  which is even lower than the cost of construction. No satisfactory  explanation has been given to us for the same. Possibility of taking cash  outside the books of accounts cannot be ruled out. Total Amount  

involved in under-valued transaction is enclosed Annexure 26-A  (Volume III Page no 584-586 ) & at Annexure S-7 (Supplementary  Report page no 2842-2893). The amount shown below is the minimum  and it may be in the range of 1,000 crore. Since the sample size is 5856  against the total number of more than 42,000 flats.  

S.no. Name of the company Number of  

Units  

Amount (In  

Crores)  

Refer Page  

Number  

1 *Amrapali Sapphire  

Developers Private  

Limited  

315 76.02 205 - Point No. 1

117  

 2 *Amrapali Leisure  

Valley Developers  

Private Limited  

70  

5.88  

222 - Point No. 1  

3 *Amrapali Smart City  

Developers Private  

Limited  

261 18.97 232 - Point No. 1  

4 *Amrapali Silicon City  

Private Limited  

468 73.05   257 - Point No. 1  

5 *Amrapali Dream  

Valley Private Limited  

1,752 24.11 248 - Point No. 1  

6 #Amrapali Leisure  

Valley Private Limited  

122 8.53 2811  

(Supplementary  

Audit Report)  

7 #Ultra Home  

Construction Private  

Limited  

524 30.87 2811  

(Supplementary  

Audit Report)  

8 #Amrapali Centurian  

Park Private  

Limited  

1,912 43.12 2811  

(Supplementary  

Audit Report)  

9 #Amrapali Princely  

Estate Private Limited  

146 6.70 2811  

(Supplementary  

Audit Report)  

10 #Amrapali Zodiac  

Developers Private  

Limited  

107 6.75 2811  

(Supplementary  

Audit Report)  

11 #Amrapali Patel  

Platinum  

179 27.31 2811  

(Supplementary  

Audit Report)  

Total 5,856 321.31   

Note: *These calculations are based upon the rates, where the sale  consideration of the flat is less by more than 25% of the average sale  price of the project.     # These calculations are based upon the rate of Rs.2000/- per sq. ft.  and where flats were sold lesser than the rate of Rs.2000/- per sq. ft.  

16. Group investment in other projects  

The group started demerging and delinking the good projects from the

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 brand name “Amrapali” though these projects were initially launched as  Amrapali projects. The said projects identified till the date of writing of  the report are La Residentia, Vinayaka square, Heartbeat City, O2  Habitat.    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.    

• 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 Propmart 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 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.  

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• The company is also using the Brand name/trademark of  Amrapali group on its letterheads.  

• The website of the company is following www.amrapali- laresidentia.com.  

• When we open the website of the company, advertisement page  was hiding details and it is a project of Amrapali group.  

17. Summary of amounts recoverable standing as debit balances  in books of accounts  Amrapali group of companies had several amounts lying in debit  balances in the form of advances recoverable on account of long term  loans to third parties, short term loans given to third parties, advances  given for purchase of plots, advances given to creditors for  materials/others etc.    Amrapali group of companies were mostly diverting loan funds as well  as home buyers funds to directors, key managerial personnel, relatives,  group companies and third parties. They did construction activity only  in part and created a circle for movements of funds vide bogus expenses  or hollow transactions. Funds were given to several parties in the garb  of advances against purchase of land or for purchasing material for  construction and booked as sundry creditors with debit balances.  However, in effect such amounts were neither returned nor any expense  was booked against them. Such amounts are as old as 2006-07, which  have not been returned or no expense has been booked till date. Total of  such recoverable amounts to Rs.582 crore.     Top 20 of such parties with their balances are stated hereunder:  

Name of the Company/Entity Total  

Jaura Infratech Private Limited       34,55,00,000   

Mauria Udyog Limited       22,24,34,199   

Anil Kumar Sharma       16,34,69,224   

Shiv Priya       11,53,30,097   

Prem Mishra       10,26,03,947   

Vansh Consultants Private Limited         9,75,00,000   

Apex Infraventure Private Limited         7,95,05,000   

Rinku Computech Private Limited         6,69,59,467   

Sapphire Digital Printers         4,46,83,088   

Heart Beat City Developers Pvt Ltd         4,29,32,000   

Rubi Creations Private Limited         4,26,27,790   

Ajay Kumar         4,05,40,931   

Star Land Craft Private Limited         4,01,85,888   

Heartland City Developers Private Limited         4,01,22,762   

Vidhya Shree Buildcon Private Limited         4,00,00,000   

Sky Tech Buildcon Private Limited         3,88,53,775   

Skyline Tele Media Services Limited         3,48,02,771   

Shantinath Enterprises         3,24,71,100  

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 Red Star Tradex P Ltd.         3,00,00,000   

Mohabbat S/o Abbas         2,66,99,000  

Total of top 20 companies/parties     1,64,72,21,039  

It can be seen from records that the recoverable are due since long and  there are mostly no movements subsequently either in the form of  booking of expenses or receipts. Out of the amounts recoverable from  parties in case of Ultra Home Construction Pvt Ltd, 20 parties having  huge balances recoverable were called for personal interviews. 7 parties  appeared  and no satisfactory explanation was provided  (Refer  Annexure X.1, Volume IV page no 1015-1019)  

18. Assets created out of diverted funds    

Refer Page no 550 to 557 of Volume II     19. Cars    The Company has bought many luxury cars and other cars out of the  funds of the homebuyers.  Many of the cars were transferred in the name of the relatives /  employees without passing any entries in the books of accounts and  receiving any money from the transferees.  Moreover, the cars were transferred in the name of the persons who was  not associated with the company which originally bought the cars. We  have already reported the matter in the court hearings and the  honourable court has ordered for the sale of the said luxury cars.     Out of the above 15 cars only 9 were made available for physical  verification.  

20. HOMEBUYERS    The group constructed and booked/sold residential and commercial  units:  

a) before launch of the projects;  b) at the launch of the projects; and  c) Continued to book till any inventory was left over in the projects.  

 The customers booked the flat for:  

a) Abode;  b) Investment;  c) barter in advance;  d) adjusting their amounts in respect of work done in same project  

(creditors of same projects)  e) adjusting their amounts in respect of work done in other projects  

(creditors of other projects)  f) booked in the name of unidentifiable/untraceable  

persons/entities.    During this procedure, we were informed that the data related to  customers was maintained in the software FAR VISION as well as  manually of some of the projects. The Data in such fashion is  intentionally maintained to avoid findings in future the gaps.  

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   1) It is found that the promoters/directors/senior management of the  company were treating the inventory of the projects as personal asset  and started allotting the unsold inventory to various persons/entities by  passing an accounting entry in the Accounting software tally.  2) We found that 14 flats were booked in the name of Mr. Rajesh Viz  in the project Amrapali Centurion Park, Terrace Homes. The customer  data in FAR Vision provided, shows only Rs 10,000/- received for each  flat from him as a booking amount. We did not find his name in the  tally data of books of accounts of Amrapali Centurion Park Pvt. Ltd. We  sent Emails to him to confirm the same but did not get any satisfactory  response from him. He did not come and avoided meeting us for last 5  months.  3) We found differences in amount shown as per the records i.e.  amount received as per Customer data base sheet extracted from  

software FAR VISION and the amount actually paid by the customer.  We came to know about the differences in receivable after sending e  mails/ speaking over the phone to the customers. A list of such  differences is given on sample basis (Page No. 483)  4) We found the following 2 customers who had been handed over the  possession but still appearing in the Customer database as undelivered.  Both have paid less than 50% as per company records.  

5) For amount received there is a mismatch in the tally records/ FV  accounts and customer data in software Far Vision. Amount received  from a customer with flat no. though shown in customer database but  didn’t account for in the tally. List on sample basis is given (Page No.  486)  6) We found a mismatch that the name of customer is different in  accounting package (tally& ERP FAR Vision) and customer data record  in FAR VISION. We were not explained satisfactorily the reason for the  same. (Page No. 489)  

7) We found a no. of customers/buyers whose know your customer  (KYC) is not available (N/A).For example PAN, e-mail, phone and  address (Page No. 490)   8) The supplier of material and provider of services were  unsecured creditors for the amount claimed by them. There are a  number of flats booked against the amount claimed as due. All this  was done in 2015-17. There are flats allotted to parties (unsecured  creditors) in different projects irrespective of whether any service  was provided/ material supplied to the same project or not.    We propose the following order for allotment of flats to the persons/  entity who have        booked the flats subject to the verification of their  claim:  

(a) For abode;  

S.  No.  

PROJECT NAME CUSTOMER   NAME  

FLAT NO. POSSESSION  (as per customer)  

POSSESSION  (as per details   provided to us)  

1 Amrapali Zodiac MR. SAMEER   KR. SUNEJA  

JP-03 Handed over Not handed over  

2 Amrapali Princely  Estate  

MRS.   MRIGANKA  PRABHAT  

FP-01 Handed over Not handed over

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 (b) For investment without interest and payments made by bank;  (c) For investment against barter in advance if services  rendered/supplies made to the same project;  (d)  To the creditor if services rendered/supplies made to the same  project; and   (e)  The last should be the person/ entities who have supplied and  services rendered to the group companies  

 9) We checked the customer data on the basis of a selected criteria  (customers having two or more than two units& customers not having  KYC details) and found that no money is received against the sale of  those units. The units are booked by just passing a JV. A few examples  are shown below. The detailed list of units (project wise) which we  checked is also attached. (ANNEXURE-XV.28 page 2646-2658 vol. VIII)     

S. No.  Project Name  Customer Name Unit No Unit Cost  

(ex ST)  

1 Amrapali Grand MORPHEUS SECURITY   

PVT. LTD  

T-7-G2 74,16,700  

2 Amrapali Grand SANJEEV KUMAR T-6-G4 94,76,511  

3 Amrapali Grand MAHESH KUMAR T-6-G2 84,99,961  

4 Amrapali Eden   

Park  

IshwarKhandelwal D-2102 84,28,450  

5 Amrapali Eden   

Park  

AMRENDER KR JHA/   

SUNITA JHA  

C-G01 1,40,00,000  

6 Amrapali Eden   

Park  

MAHESH KUMAR C-G02 70,75,000  

7 Amrapali Eden   

Park  

SUSHMA RANI/ VIJAY NARAYAN  

RAI  

C-G03 96,75,859  

8 IMT Manesar SAI Glazing 323 82,09,095  

9 IMT Manesar NOPS Infrastructure 227 87,76,128  

10 IMT Manesar NOPS Infrastructure 234 1,32,02,500  

11 Amrapali village Mrs Pooja KM-1205 31,35,000  

 There have been instances of duplicate allotment of flats i.e. one flat is  allotted to more than one person and money is received from both the  home buyers. Sample details are given here under. The work relating to  duplicate flats allotment is still in the process of being checked.     

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Flat No.

Date of  

Booking &  

Allotment Name of Buyer Amount in Rs.Flat No.

Date of Booking  

& Allotment Name of Buyer Amount in Rs.

1 Crystal Homes T3-2301 09-11-15 Sulochana Karwa 2,500,000       T3-2301 26-05-16 Aayush Soni 2,013,750          

2 Amrapali Princely Estate M-P01 07-11-15 Nilesh Karwa (HUF) 5,000,000       M-P01 15-10-16 Sanjeev Kumar Goel 6,344,460          

3 Amrapali Princely Estate C-P03 07-11-15 Pramod Karwa (HUF) 5,000,000       C-P03 15-10-16 Shalabh Mittal 3,105,635          

4 Amrapali Patel Platenium A-2303 26-03-10 Pramod Karwa (HUF) 2,000,000       A-2303 20-04-12 Manjul Kumar Tyagi 4,826,991          

5 Amrapali Patel Platenium J-2401 26-03-10 Rajeswari Karwa 1,500,000       J-2401 N/A Nissa Hussaini -                       

6 Crystal Homes T1-2401 09-11-15 Nilesh Karwa (HUF) 2,500,000       T1-2401 13-06-16 Manish Jain 2,030,400          

7 Crystal Homes T2-2403 09-11-15 Nilesh Karwa (HUF) 2,500,000       T2-2403 28-07-16 Ajit Pal Singh 312,500              

Silicon City G1-104 24-03-11 Nilesh Karwa & Seema Karwa 1,250,000        

Silicon City G1-204 24-03-11 Nilesh Karwa & Seema Karwa 1,250,000        

23,500,000     18,633,736       Total Amount Received

Tower has not been constructed and Fake allotment is been  

made to   Nilesh Karwa & Seema Karwa

First Buyer Second Buyer

S.no. Name oF Project

8

 Ultra Home Construction Pvt Ltd allotted flats to buyers on false  promises and forged documents. An instance being in the case of Mr.  Mohammad Kaif where he was allotted 3 flats i.e G-2502, G 2501 and  LG-1 vide agreements dated 22nd August 2012, 19th September 2012  and 9th January 2013, through their consortium- Amrapali Patel  Platinum and UHCPL received INR 2 crore on assured return basis.  However, subsequently, it came to the knowledge that flats mentioned  in the buyer agreement never existed as 25th floor did not exist in the  approved building plan. Further, as per details provided by Mr. Kaif, as  on 31st March 2017, an amount of INR 1,40,00,000 was payable to him,  however, as per books of accounts (in tally data), an amount of INR  1,70,00,000 was payable to him by UHCPL.    

Hi Tech City Developers Pvt Ltd has huge amount of Trade Receivables  of INR 1.64 crores    Whereas , the project under this Company i.e. Amrapali Empire has  been completed. Most of the flats have been handed over and registry  has been done. We fail to understand as to why the aforesaid amount is  still appearing as recoverable from various home buyers.    This implies it was received in cash and not accounted for. The  complete list of all such flat owners along with their sale amount and  amount received is enclosed below:   

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Sr No UNIT  

NO. BUYER NAME Total Cost Total Received

Balance  

Amount

1 A-1603 Son Pal Sharma/Shashi Sharma 3,135,000        2,380,028        754,972         

2 A-1604 Sunil Kumar Jha 2,527,000        1,984,673        542,327         

3 A-1803 Sahji Nambiar 3,160,000        3,027,520        132,480         

4 A-1904 Himanshu Khurana 2,527,000        2,459,629        67,371           

5 B-301 Suresh Chand Sharma 3,135,000        3,055,584        79,416           

6 B-1604 Mrs. Niki Rani 2,460,500        1,974,973        485,527         

7 B-1703 Rahul Ranjan 2,640,000        485,984            2,154,016     

8 B-1803 Ravi Kant Tyagi (STAFF) 3,193,000        2,992,196        200,804         

9 B-1903 Monika Thakur 3,696,000        2,000,000        1,696,000     

10 B-1904 Neeraj Soni 2,527,000        1,903,967        623,033         

11 C-604 Nirmala Devi 1,750,000        1,261,035        488,965         

12 C-702 Manish Raj Sharma 1,913,625        1,302,510        611,115         

13 C-905 M. A. Khan 2,004,750        1,603,951        400,799         

14 C-1604 Bharat Lal Agrahari 1,900,000        1,624,794        275,206         

15 C-1701 Sanjay Kumar 2,023,675        1,375,525        648,150         

16 C-1705 Syed Sharique Ali 2,308,500        2,035,125        273,375         

17 C-1901 Uday Shankar Rai 2,004,750        1,000,185        1,004,565     

18 C-1902 Suresh Chandra Mandal 2,004,750        1,414,459        590,291         

19 C-1904 Mrs. Annu (Gulshan Driver) 1,645,000        921,525            723,475         

20 C-2001 Shailendra Kumar 2,357,800        2,308,500        49,300           

21 C-2002 Mrs.Nivedita Singh 2,333,500        871,103            1,462,397     

22 C-2003 Dheerendra Kumar/Shailendra kumar 1,111,500        663,834            447,666         

23 C-2004 Manjari Smrita 1,148,200        1,111,500        36,700           

24 D-102 Prasanna Kumar Das 1,900,000        1,861,637        38,363           

25 D-1703 Sri Dhaneswar Dash 2,308,500        2,172,696        135,804         

26 D-1903 Virendra Kumar 2,308,500        2,209,508        98,992           

27 D-1904 Randhir Kumar 1,900,000        1,805,148        94,852           

28 A-303 Manish Kumar 3,382,500        3,302,347        80,153           

29 B-403 Anupama Tiwari 3,176,250        2,182,659        993,591         

30 B-1902 Md. Merajul Hasan 2,527,000        2,191,025        335,975         

31 B-1501 Rajesh Kumar 3,093,750        2,943,106        150,644         

32 C-1806 Anand Shankar 1,900,000        1,504,737        395,263         

33 C-1704 Sourabh Shandilya 2,100,000        1,702,175        397,825         

78,103,050     61,633,638     16,469,412  Total     

It is worth mentioning here that of the above 33 home buyers most of  them are employees/ ex-employees of the Company. The management  has done under-valued registry for all these cases. We are of the view  that the management has under-valued these registries to evade the  stamp duty to be paid to the government and has taken the money  outside the books from these employees and these amounts  outstanding in the books are only book entries and should be recovered  from the management.    21. Misrepresentation of Facts  As per the information provided and the records made available to us,  Flat No C-704 in Amrapali Castle and Flat No D-702 in Amrapali Eden  Park were shown as vacant flats and were provided to NBCC for the  purpose of sale. However, we have received letters from Mr Manoj  Kumar and Mr Maneesh Gaur in Amrapali Castle and Amrapali Eden  Park respectively along with many Annexures. (Payment receipts, NOC,  possession letter).that the flats have been booked by them    9)  While scrutinizing the customer data, we found a case where the  flat is sold at discount. The total value of the flat is booked as a  discount. There may be many more such cases.  

Project Customer Name Unit No Area Unit Cost  Discount   

Amrapali  Leisure   

M/S. AMCON  BUILDCON PVT.  

A-002 2525 80,38,484 80,38,484

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 Valley LTD.  

We are informed that Mr.Adhikari Debi Prasad Das (GM/DGM  Accounts) and Mr. Mohit Gupta (Director Marketing) were directly  responsible for accounting and collection of receivables and marketing  of flats.    We interviewed both the persons several times. Both kept on changing  their stand/answers and did not cooperate in answering our queries.  Their answer to every question was that they are not aware. They did  not provide many documents and the laptops which are in their  possession. In spite of repeated reminders, Mr. Mohit Gupta has not  made available the complete data with respect to home buyers/flat  owners.    We found Mr Mohit Gupta and Mr Adhikari Devi Prasad Das directly  responsible for all the wrongdoings in booking of receivables, marketing  of the flats and in handing over the possession of the flats.    Utilities like Milk booth, Nursery schools, Senior secondary  schools, Nursing homes allotted to various parties should be  cancelled.    LIST OF FLATS (Residential & Commercial) ALLOTED TO BROKERS  AND SUPPLIERS    833 Flats booked (identified till now)  in the name of various vendors  should be attached and be released at last till the last home buyers gets  his/her flat.If there is  a shortfall , then the flats should be treated as  inventory  and be sold .    The following flats should be cancelled.   These are the 353 flats booked in the name of various vendors parties  without receipt of any sum. The flats has not been included in inventory  and will be available for sale after giving a chance to the Flat buyer if  he/she/it introduce any documents to substantiate the claim. Refer list  below:    It has further been observed that, 75 flats adjustments were made  between M/s LA Residentia and Amrapali Group of Companies against  the aforesaid Branding Income. These home buyers have already been  allotted flats in M/s LA Residentia. Hence, the 75 Flats booked by  Amrapali Group in various schemes should be treated as vacant.  (Volume-I Page No. 200). The Complete List of all such flat has been  enclosed as Annexure 25-A. (Volume III Page no 582-583)  

22. Sureka group  Amrapali and Sureka’s have a very long and intricate association  starting officially with the partnership venture ‘Amrapali Homes’ in  2006 wherein Ultra Home Construction Private Limited and Mauria  Udyog Limited is partner and developed project in name of Amrapali  Homes in Indirapuram then Amrapali Grand wherein Ultra Home  Construction Private Limited and Bihariji Ispat Udyog Limited were  partners, though the land was allotted to Bihariji Ispat Udyog Limited.  Initially Amrapali Group ventured like these types of association as he

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 was independently not able to meet the net worth, turnover and other  eligibility criteria for land allotment by Noida authorities. They then  next associated in Sapphire Project wherein Sureka’s family  participated as shareholders and directors in the Company. Every Joint  Venture used to have an unexecuted profit sharing and investment  arrangement. Since the company didn’t declared dividend ever, the  profits were drawn by Sureka family in the nature of advances which  has majorly been squared off against billing from Mauria Udyog  Limited, Jotindra Steel and their other related companies. Some of the  amount is still lying as advance in the books of accounts of Amrapali  Group. In 2012 Amrapali Group invested in 25% stake in Sureka  family’s three projects Heart Beat City, Pebbles Prolease, Three  Platinum Softech. Apart from subscribing to share capital, the further  investment was made directly as advance or billing from Amrapali  Group to these companies and some through shell companies as well.  

 Further they did a project in Ultra Home Construction Private Limited  with Mozambique. This project was planned, coordinated and managed  by Mr Navneet Sureka in the name of Ultra Home Construction Private  Limited and whatever advance was sanctioned and disbursed by the  Government of Mozambique through EXIM bank to Ultra Home  Construction Private Limited was eventually diverted to Sureka family  through billing from Jotindra Steel and Tubes Limited, Mauria Udyog  Limited, etc. A separate bank account of Ultra Home Construction  Private Limited was opened in State Bank of Patiala, Faridabad branch  where signatory was Mr Akhil Sureka who used to operate the account  from there. The entire transactions of  LC and EXIM bank was routed  from that account. Navneet Sureka visited more in the period of  contract finalization to Mozambique    Partner in the following projects:   

• Amrapali Sapphire Developers Pvt. Ltd. – 10.52% of shareholding  BihariJi Ispat Udyog Limited  

• Amrapali Smart City Pvt Ltd – 10% shareholding held by Mauria  Udyog Ltd  

• Amrapali Homes – 5% - Mauria Udyog Ltd (Rs.20 crore given as an  advance before 2008 and is recoverable)  

• Amrapali grand – 10% BihariJi Ispat Udyog Limited –We were  informed that the land was allotted in the name of Bihariji Ispat  Udyog Ltd and construction and development work was done by  Amrapali group.  

Directors in the following companies   

• Amrapali Leisure Valley Pvt Ltd – Akhil Sureka    Cheque signatories in the following companies  

• Amrapali Leisure Valley Pvt Ltd  

• Amrapali Dream Valley Pvt Ltd  

• Amrapali Leisure Valley Developers pvt Ltd  

• Amrapali centurian Park Pvt Ltd    From the above, it is clear that Sureka group directors namely Vishnu  Sureka, Navneet Sureka and Akhil sureka were promoters in amrapali  group. They were in equal control of affairs with other promoters (Anil  Sharma Shiv Priya, etc.). They not only invested as a promoter heavy

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 amount but also provided the land allotted to Bihariji Ispat a sureka  group company. But the amount invested was withdrawn in a  very  short period by other associate companies in the form of interest,  supplies, provision of services etc. it was found out that there were  many other suppliers who never interacted with any of the  directors/staff but supplied material to Amrapali through Akhil and  Navneet Sureka. In our opinion, this was nothing but accommodation  bills and a form of withdrawing funds from the group. None of the  employess/ directors of the sureka companies knew that Sureka group  has supplied ,material to Amrapali group. Though sureka group has a  policy and procedure wthat for any item above Rs,. 5,000/- a purchase  order would be issued but it was not followed in the case of supplies to  Amrapali. Surprising all the transactions  worth more than 500 crore  has been handled single handedly by Navneet and akhil sureka without  involving any of the directors and employees. All the cheques were also  

signed by Usreka family and not by any other directors.     It is pertinent to note that the amount paid for FSI purchased by  Suraka group companies was taken back on the same day by routing  through a number of companies.All such cheques for money laundering  were signed by Akhil Sureka Furthermore, it is found that the amount  so paid ie Rs. 80 crore was also received from suppliers of the Amrapali  group. Therefore in our opinion,not only FSi should be canceled but   the amount os Rs. 80 crore is recovereable from them.    They adopted the same methodoly. Formed various business entities,  appointed small time employees the directors in these companies and  routed fundsof 100s of crores and it may be in the range of 1000s  crores.. None of the directors were knowing about any of the business  transactions. Further more most of the directors never attended any  board meetings,knew about nature of business the company does,  name of other directors in the company and so on. We are not sure who  was teacing the fraudlent practices to whom, whether Sureka to  Amrapali or vice versa.    It was observed Rs.13.44 crore paid to Sureka Public Charitable Trust  were transferred to donation account subsequently. It is submitted that  Sureka Public Charitable Trust is a group institution of Jotindra Steels  & Tubes Limited, which is also under the forensic audit. This should be  recovered from the Jotindra Steels & Tubes Limited.    Sureka group used several companies to route funds from Amrapali  

group to Sureka group, an example being in the case of Amrapali  Infrastructure Pvt Ltd, where the company received Rs.3.23 crore  from  “Synergy Freightways Private Limited” from 26th March 2015 to 30th  March 2015. On 31st March 2015 an amount to Rs.4.18 crore was paid  to the said party through 16 separate transactions and thereby leading  to a debit balance recoverable from the party amounting to Rs.0.9,5  crore as on 31st March 2015. This amount should be recovered from  the Sureka Group.    It is worthwhile to mention here that M/s Synergy Freightways Private  Limited is an associate Company of M/s Jotindra Steel and Tubes  Limited. Further, there are no business transactions with the said party  except routing of funds.     

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 Another example being in the case of Shriv Buildmat Private Limited  where one of the directors is common with MauriaUdyog Limited. On  scrutiny of ledger accounts of Shriv Buildmat, it was observed that  during FY 2014-15 and 2015-16, the said company had almost 100%  sales to Amrapali group of companies. It was also observed that one flat  was allotted to Mr. Atul Kumar, Director of ShrivBuildmat Private  Limited in Verona Heights, against the amount due to the said  company. This adjustment is not genuine and the relevant amount  should be recovered from Mr. Atul Kumar or his flat may be attached.  As per ledger account advance to Amrapali for flat, a sum of INR 34.05  lakhs has been shown as recoverable as on 31st March, 2015. There is  no name of the Company to which such advance has been given in the  books of the Amrapali Group of Companies. Thus, this amount of INR  34.05 Lakhs is shown as recoverable is not genuine.    

A sum of INR 53.21 Lakhs has been debited to Labour Charges  Contractors on account of bill no. SBPL/Noida/010 dated 13/3/2013  has been recorded in the books of Amrapali Infrastructure Private  Limited on 16/03/2015.    RN Traders  During the financial year 2016-17 and 2017-18, a sum of INR 17.63  crores has been debited to this party and standing recoverable as per  Raw Tally Data, till date as per details given below:  

Date Particulars Amount in  lakhs  

Remarks  

30-11-2016 Bank Payment 0.02 Payment made without any  narration on the voucher  

13-12-2016 Bank Payment 750 Payment made without any  narration on the voucher  

19-04-2017 Transfer entry through  MauriaUdhyog Limited  

1,004 Being Amount transfer as  per letter signed by Mr. Anil  Sharma  

19-04-2017 Transfer entry through  Sarvomme  Infrastructure Private  Limited  

960 Being Amount transfer as  per letter signed by Mr. Anil  Sharma  

Total 2,714.02   

Further, there is no Name, Pan or Address available in the records of  M/s RN Traders. It was further observed that there are no business  transactions with M/s RN Traders. It is possible that this amount of  INR 2,714.02 Lakhs has been withdrawn by the management for their  own personal use and should be recovered from the management.    BiharijiIspat Udyog Limited being one of the partners of Amrapali Grand  always had negative capital. They withdrew much more than what they  brought into the business. There is no substance in them being called  as capital contributors to the business of Amrapali Grand. As on 1st  April 2008 they had withdrawn INR 12 crore and invested a capital

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 contribution of INR 1.5 crore. As on 31st July 2018, they have debit  balance of INR 1.67 crore and negative capital of INR 30,380. They  always withdrew homebuyers funds for misusing for their own agendas  apart from the business.     Out of INR 12 crore given to BihariJiIspat Udyog Limited, they returned  INR 6.45 crore through bank and the balance amount was adjusted  against receivables from Ultra Home Construction Pvt Ltd and against  capital contribution by BiharijiIspat Udyog Ltd.    Amrapali Grand gave loans and advances to below parties, which are  recoverable as on 31st July 2018 amounting to INR 25.73 crore as per  Tally data.   

It has been observed that amounts paid to parties above were mostly  routed to Quality Synthetics Pvt Ltd which primarily belongs Sureka  family. For example:     

S. No. Name of the  Company/Person  

Amount Date of transaction  

1 Anil Kumar Sharma 10,03,55,900 20.11.2007 to  25.07.2018  

2 Shiv Priya 7,10,50,000 20.04.2007 to  22.09.2010  

3 Madan Mohan Sharma 2,01,00,000 20.11.2007 to  5.12.2007  

4 Ajay Kumar 2,74,68,000 23.06.2007 to  31.03.2011  

5 BiharijiIspat Udyog Limited 1,67,00,000 5.04.2006 to  31.07.2018  

6 Amrapali Homes 54,01,519 15.09.2006 to  07.12.2013  

7 SuvashChander Kumar 47,11,000 3.01.2008 to  01.12.2009  

8 Shiv Priya –Imprest 35,70,480 1.04.2008 to  24.12.2009  

9 Amrapali Zodiac Developers  Private Limited  

19,20,000 27.06.2017 to  13.07.2017  

10 Jhamb Finance and  Leasing Private Limited  

19,00,000 5.11.2015  

11 Amresh Kumar 16,86,000 1.04.2007 to  15.09.2008  

12 GK International 10,00,000 21.01.2007  

13 Pallavi Mishra 6,07,080 12.07.2018  

14 Mohit Gupta 5,80,000 25.06.2007 to  11.04.2008  

15 P K Choubey 1,50,000 2.08.2007  

16 Amrapali Foundation 1,00,000 24.11.2015  

17 Suraj pur Sales & Service 1,00,000 1.11.2010    

Total 25,73,99,979   

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 a) Payment of Rs 2,74,68,000/- has been made to Mr Ajay Kumar  

from 2007-08 to 2010-11 as  advance recoverable. Out of this, Rs  77,00,000 was paid by him for purchase of property located at  Jaypee Greens, Noida & Rs 50,00,000 was paid by him to Quality  Synthetics Industries Limited.  

b) Payment of Rs 10,03,55,900 has been made to Mr Anil Kumar  Sharma from 2007-08 to July, 2018. Out of this, Rs 3,00,00,000  was paid to Quality Synthetics Industries Limited.  

c) Payment of Rs 7,10,50,000 has been made to Mr Shiv Priya from  2007-08 to September 2010. Out of this, Rs 1,00,00,000 was  paid to Quality Synthetics Industries Limited.  

 While reviewing the books of accounts of Amrapali Infrastructure  Private Limited and M/s Jotindra Steel and Tubes Limited, it has been  observed that Amrapali Infrastructure has made purchases from M/s  

Jotindra Steel against Letter of Credit. The letter of credit has been  discounted by M/s Jotindra Steel with the banks. The discounting  charges of INR 1.30 Crores have been debited by M/s Jotindra Steel to  M/s Amrapali Infrastructure. We fail to understand the reason for this  treatment. In normal course of business, the supplier is the person who  bears the discounting charges in respect of the transactions as the  margin when sold on Letter of Credit are generally higher. This amount  of INR 1.30 Crores on account of discounting charges of Letter of  Credit Should be recovered from M/s Jotindra Steel and Tubes Limited.  

i. It has also been observed that M/s Jotindra Steel and Tubes  Limited has issued service invoices for erection, shifting and  transportation charges amounting to INR 96 lakhs approximately  during the financial year 2014-15 as per details given below:  

Date  Bill number  Name of  the Party  

Gross  Amount  Tax Total  

Nature of the  Service  

6/6/2014  JST/FBD/SG/000 1  

Jotindra  Steels &  Tubes  

           5,000,00

0   

         618,00

0           

5,618,000   Erection  Charges  

6/6/2014  JST/FBD/SG/000 2  

Jotindra  Steels &  Tubes  

           2,532,00

0               

78,239           

2,610,239   Transportatio n Charges  

12/1/201 4 Bill not available  

Jotindra  Steels &  Tubes  

               247,500   

             7,648   

           255,148   

Transportatio n Charges  

12/1/201 4 Bill not available  

Jotindra  

Steels &  Tubes  

               365,000   

           11,279   

           376,279   

Transportatio n Charges  

2/1/2015 Bill not available  

Jotindra  Steels &  Tubes  

               221,400   

             6,841   

           228,241   

Transportatio n Charges  

2/1/2015 Bill not available  

Jotindra  Steels &  Tubes  

               182,700   

             5,646   

           188,346   

Transportatio n Charges  

3/31/201 5 Bill not available  

Jotindra  Steels &  Tubes  

               164,700   

             5,089   

           169,789   

Transportatio n Charges  

3/31/201 5 Bill not available  

Jotindra  Steels &  Tubes  

               216,000   

             6,675   

           222,675   

Transportatio n Charges

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Total  9,668,71

7   

Further, on scrutiny of the invoices issued by the JSTB it appears that  the invoices raised for the above services are completely different from  the invoices issued regularly and are prima facie non-genuine. Hence,  the same should be recovered from JSTB or the Company Management  as both the parties have been partnering in various projects.    ii. It is further observed that purchases amounting to INR 7.09 Crores,  

INR 59.53 Crores and INR 47.04 Crores has been made from this  party in M/s Amrapali Infrastructure Private Limited during the  financial year 2013-14, 2014-15 and 2015-16 respectively. While  sample checking of the purchase bills, it was noted that the goods  consignment notes enclosed with the purchase bill are issued by  M/s Synergy Freightways Private Limited which is also a group  Company of Jotindra Steel and Tubes Limited. Goods consignment  note enclosed with the purchase bills don’t seem to be genuine in  view of the undermentioned observations:    1. We sent a letter to M/s Synergy Freightways Private Limited as  

per address on record which has been received back as  undelivered.   

2. Statement of Mr. Akhil Sureka, Managing Director of M/s  Jotindra Steel and Tubes Limited was recorded and it was  confirmed by him that most of the purchase/ sales transactions  are back to back i.e. all such consignments are sent directly  from their supplier to Amrapali Group of Companies. In these  circumstances it is not understood by us that how the  consignment notes of M/s Synergy Freightways Private Limited  have been enclosed with most of the purchase bills, if the  transactions were back to back for their supplies.  

3. On scrutiny of the tally data/documents of Amrapali  Infrastructure Private Limited and JST, it has been  observed that no freight has been paid to M/s Synergy  Freightways Private Limited either by Amrapali  Infrastructure Private Limited or by JST.  

This clearly establishes that all the GRs issued by M/s Synergy  Freightways Private Limited are not genuine. Further, most of the  purchase invoices of JST have been shown as sale on the same date  with similar particulars/ quantity by raising the invoice on Amrapali  Infrastructure Private Limited.    We are of the view that these sales invoices raised by JST are also not  genuine and are mere accommodation entries only.    Sample details of such transactions for 2 days are enclosed below:   

Sr.  

No.  

Date of  

the bill  

Bill  

No.  

Amt. of  

Bill (In  

Rs.)  

Date of  

the GR GR No.  

Time  

In  

Time  

Out  

1 07.02.2015 698 1,652,641  07.02.2015 698 15:48 18:12

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 2 07.02.2015 699 1,462,037  07.02.2015 699 16:22 17:31  

3 07.02.2015 701 1,136,176  07.02.2015 701 15:52 17:49  

4 07.02.2015 703 1,143,610  08.02.2015 703 16:02 12:19  

5 07.02.2015 704 1,138,241  08.02.2015 704 10:09 11:57  

6 07.02.2015 705 1,138,241  08.02.2015 705 10:54 14:58  

7 07.02.2015 706 1,382,740  08.02.2015 706 14:43 18:04  

8 08.02.2015 713 892,503  09.02.2015 713 9:20 14:29  

9 08.02.2015 715 952,167  09.02.2015 715 14:28 17:23  

1 08.02.2015 716 948,647  09.02.2015 716 14:23 17:22  

11 08.02.2015 717 890,025  09.02.2015 717 9:45 14:40  

12 08.02.2015 718 1,032,512  09.02.2015 718 9:52 14:43  

13 08.02.2015 719 368,446  09.02.2015 718 9:52 14:43  

14 08.02.2015 720 1,383,566  09.02.2015 720 10:27 16:08  

15 08.02.2015 722 1,136,176  09.02.2015 722 10:09 17:11  

16 08.02.2015 726 1,087,502  09.02.2015 - - -  

17 08.02.2015 727 223,673  09.02.2015 726,727 11:47 17:13  

18 08.02.2015 728 1,135,763  09.02.2015 728 14:15 18:50  

4. It has been further observed that there have been unaccounted  cash transactions between the Amrapali Group of Companies  and JSTB group of Companies as per documents seized during  Income Tax Search in the premises of JSTB Group of  Companies which are not accounted for in the Amrapali Group  of Companies. Complete Copy of the Order of CIT (Appeals)  where the observations regarding unaccounted cash were  discussed is enclosed herewith as Annexure 34-C.  

 II. M/s Mauria Udyog Limited Ghaziabad  While scrutinizing the ledger of this party it was observed as follows:  

a) During the month of December 2015 there were 7 purchase  invoices from this party amounting to INR 0.65 Crores all dated  18/12/15.   

b) While scrutinizing the data called from M/s Mauria Udyog  Limited it was noted that they have purchased these goods vide 7  purchase invoices dated 17/12/15 for INR 0.63 Crores.  

c) There is no other purchase/Sale by M/s Mauria Udyog Limited.  d) Similarly, in other months also 100% of the sale is made to  

Amrapali Group of Companies. Since M/s Mauria Udyog Limited  is a group company of Jotindra Steels & Tubes Limited, there is  very high possibility of accommodation bills being issued and all  their purchases being Non-Genuine amounting to INR 5.28  Crores for financial year 2015-16.  

e) It is further observed that all the payments against these  purchases’ bills have been made by issuing letter of credit. It  seems that the Company is getting the LC’s discounted from the  bank against these non-genuine bills.

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   When we questioned Mr. Navneet Sureka who approached Amrapali  group from trust side and who was approached in Amrapali group. He  answered “he is not able to recollect”.    He didn’t cooperate otherwise how it is possible that such a huge  amount donated by Amrapali group companies and he is not able to  remember the basic question. We recommend the amount donated  should be recovered from the Sureka group.    We are of the opinion that the supplies and services provided by  Jotindra Steel & Tubes Limited (Rs 321 crore) and Mauria Udyog  Limited (Rs 128 crore) are prima facie bogus in nature.    1. The 2 directors namely Mr. Akhil Sureka and Mr. Navneet Sureka are  

equally responsible for companies having  shareholding/capital/profitsharing and should be held responsible for  shortfall in cost of construction and land dues to Noida authorities.  (Refer annexure S-11 page 2960 Supplementary report)    2. Mr.  Akhil Sureka opened bank account in SBI, Patiala, Faridabad in  the name of Amrapali group companies and became a signatory.  Amrapali did not have any base at Faridabad but Akhil sureka operates  from Faridabad.    3. Jotindra Steel and Tubes Limited agreed to buy used construction  equipments from Amrapali Infrastructure Private Limited and paid Rs 8  crore on 13th December, 2016 and immediately transferred that funds  to group companies of Sureka group namely Jotindra Steel and Tubes  Limited and others by routing the funds from Amrapali Infrastructure  Private Limited to Ultra Home Construction Private Limited.    4. The FSI’s bought by Sureka group (details given in Chart D) without  making any payment. The modus operandi was funds were paid from  one company and on the same day were transferred to other Sureka  group company by routing in 2-3 Amrapali Group companies. This  would not have been possible without active involvement of  Mr. Akhil  Sureka, who is bank signatory. We found on sample basis that the  amount of Rs. 80 crore so routed was originally started from Amrapali.  The amount so claimed of Rs 80 crore has been routed through various  companies. this amount has been paid out of Amrapali group against  purchases and payment made to various vendors namely Bhagirathi  

Tubes (Prop Mr. SHiv Kumar)etc. It was confirmed by supplier that he  did not have any knowledge of any of the transactions and stated that  all transactions were carried out in good faith under the advice &  instruction of Mr. Akhil Sureka. He further submitted that he never  visited any of the Amrapali group office, he or his staff including  employees has never visited any of the offices or site of Amrapali group.  When questioned on supplies of scaffolding material and steel to and  purchase sales reconciliation of supplies along with purchase orders  and sales orders, he confirmed that it is not available.  The amount so  paid should be recovered from the SUREKA group companies. It was  further confirmed that funds movement were also on behalf of Akhil  Sureka carried out under good faith.      5. An amount of Rs 55 crore was received from EXIM bank under line of

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 credit for a project was to be done in Mozambique. The group submitted  a bogus bank guarantee for the said advance to Mozambique client  from a bank namely International Trade Bank Limited. Out of the  funds of RS 55crore, major amount was transferred to Companies of  Sureka group.    On enquiry from the Amrapali Group we came to know that the bank  guarantee was made available by Mr. Navneet Sureka, Managing  Director of Mauria Udyog Limited and that no bank exist/existed by  the name International Trade Bank Limited. It was also informed  that the project was under direct control and supervision of Mr. Navneet  Sureka. It shows active involvement of Mr. Navneet Sureka in the  project. Mr. Prashant Kumar and Mr. Ram Kumar are the persons who  were travelling to Mozambique and know about the project but we could  not get the contact details of these 2 persons  

 6. Quality Synthetics (Sureka Group) had given a loan to Amrapali  Sapphire of RS 3 crore in March, 2009 at the rate of interest of 14% p.a.  The company kept on paying to Quality Synthetics when it was having  no funds for construction. The Amrapali Group was giving advances to  various vendors/parties interest free and taking loan from Quality  Synthetics, at the rate of 14% p.a. It is pertinent to note that the  said amount of RS 3 crore along with all interest due totaling to RS  3,86 crore was repaid in March, 2018 when there were no funds  available for construction of flat and the case was pending before  Honorable Supreme Court. The amount should be recovered  immediately. It is pertinent to note that the company is not doing any  business and are used just for the purpose of money laundering.  7. Sureka group was a promoter and was providing the net worth  certificate at the time of allotment of land to Noida/ Greater Noida  authorities. At the time of making payment to the authorities for  land funds were arranged by them.     8. The directors other than the family have come and informed that they  were not knowing about the operations of the company and not  attended any board meeting and papers were send to their residence for  signatures.    9. There are many other high value transactions which we are in  process of examination.    10. Further to our supplementary report dated 30th April 2019. The  

directors of four companies of Sureka Group appeared before us from  9th May 2019 to 18th May 2019, the directors gave their statement On  the basis of interaction in the statement given by them. We found as  follows.    The four companies which bought FSI for the sham companies created  for the purpose of money laundering. Neither the shareholders nor the  directors of the companies were aware of any transactions carried out  by these companies. It is worthwhile to note that Mr. Vishnu Sureka,  Mr. Navneet Sureka and Mr. Akhil Sureka were neither the  shareholders nor the directors as well didn’t attend any board meeting  including AGM/EGM. However, out of three who were signatory to the  bank in all the companies. Directors were not aware of who have been  the signatories. When questioned . Vishnu, navneet and akhil Sureka

135  

 could not reply why they were the signatories when they were neither  shareholders, directors, employees.    Mauria Udyog Limited  It was submitted in affidavit of Mauria Udyog Limited that Mauria  Udyog Limited is a manufacturer and traders. It is stated that in  addition, to manufacturing of LPG Cylinders, MUL also manufactures  world class “Terry Towel” and “Apparels”. Further MUL also trades  internationally & domestically in Steel Products in addition to Ferrous &  Non Ferrous metals. MUL also deals in agro commodities such as soya  bean, refined oil & deoiled cake used as fodder for the cattle feed/poultry  industry.(from affidavit of MUL para 5 page 2) We scrutinized the  annual accounts of Mauria Udyog Limited and found that the  product that is TMT bars are supplied only to Amrapali Group  companies and a very minuscule quantity to other companies.  

 In the 2010-11, TMT bar supplied for Rs. 52.97 crore and the payment  received Rs 29 crore and that is also a major part of the payment of Rs  16.5 crore was received in March.     Similarly, in the year 2012-13, supplies were made of TMT bar and the  payment was received in the month of March 2012 just before closing of  the year.    Suddenly in the year 2012-13, trend is changed and Ultra Home  Construction Pvt Ltd gave an advance of Rs 33 crore on various dates  which was returned subsequently in the month of February and March.    The above transactions are dubious in nature because we scrutinized  the supply bills of Mauria Udyog Limited and found that Mauria Udyog  Limited has supplied TMT bars only to Amrapali group of companies. It  is not an item in which Mauria Udyog Limited has dealt with any other  party except a miniscule quantity of 2-3 customers who in turn has also  supplied to Amrapali group. There was no purchase order from  Amrapali group to Mauria Udyog Limited even the size of TMT bar  was not mentioned on the invoice of Mauria Udyog Limited. The  rate charged by Mauria Udyog Limited are higher in the range of  15-20% then the market rate for which no satisfactory explanation  was provided to us. In year 2013-14, Ultra Home Construction Pvt Ltd  gave Rs 2.45 crore to Mauria Udyog Ltd which was returned on 29th  March. It is surprising to find out that in the year 2014-15 in the  month of May and June, Ultra Home Construction Pvt Ltd has  

accepted LCs from banks without booking of any purchase of  material. The company’s bank account is used for accommodation bills  and Mauria Udyog Ltd was paid an excess of Rs 1.16 crore over and  above an accommodation bill. In the year 2015-16, in the month of  May Amrapali group started supplying TMT bars to Mauria Udyog  Ltd, the purpose of supplies of TMT bars by Ultra Home  Construction Pvt Ltd was not explained to us. In the year 2015-16,  total supplies are to the extent of Rs 15.79 crore and in the year 2016- 17 amounting to Rs 5.36 crore. In the year 2015-16, payments were  made to Mauria Udyog Ltd on behalf of Shri Satguru Metalloys Pvt Ltd  and Bhagirathi Tubes of Rs 8 crore and Rs 6.50 crore respectively. We  were not explained any reasons for making such payments.    It is pertinent to note that the company is not doing any business and

136  

 are used just for the purpose of money laundering.    Shri Narayan Rajkumar Merchants Ltd  A group company of Sureka group paid Rs 1 crore to Amrapali Sapphire  Developers Pvt Ltd. The entire amount along with interest payment of  Rs 1.11 crore was paid to Shri Narayan Rajkumar Merchants Ltd,  surprisingly Amrapali group didn’t charge any interest on payments  made to Sureka group of companies but it had paid without fail interest  @ 13.45% to Shri Narayan Rajkumar Merchants Ltd. Further an  amount of Rs 2 crore was paid to Shri Narayan Rajkumar  Merchants Ltd on 31st  March 2018, when the matter was pending  before the Honourable Supreme Court. The amount of Rs 2 crore  should immediately be recovered from Shri Narayan Rajkumar  Merchants Ltd and Sureka family.    

It is pertinent to note that the company is not doing any business and  are used just for the purpose of money laundering.    Conclusion  We are of the opinion that this company floated/formed for the purpose  of money laundering and FSI sold to these companies were merely  accounting and adjustment entries done by them transferring funds  from one account to another as reported earlier in our supplementary  report. The modus operandi adopted by Sureka family was the same as  adopted by Amrapali Group i.e. they formed the companies, their  employees who were paid salaries in the range of Rs 20,000-Rs 60,000  the shareholders and directors in these companies. It is pertinent to  note that their signatory to the bank are family members.    Mr. Navneet Sureka and Mr. Akhil Sureka used these companies for the  purpose of money laundering of funds of Amrapali Group.    The bank guarantee was bogus and we couldn’t find the bank name  which issued the bank guarantee, it appears that there was a criminal  conspiracy and the bank was not in existence.    Mr. Navneet Sureka was in full control of Amrapali group companies  which is very clear and can be understood from the transactions of  donation. On the instructions of Mr. Navneet Sureka, GM/DGM  accounts Mr. Adhikari was transferring funds to the trust from various  group companies of Amrapali as and when desired by him and  instructed by him.  

 None of the directors ever attended a board meeting it was informed  that the directors signed the paper under the instructions and  directions of Mr. Akhil Sureka. The fact was accepted by Mr. Akhil  Sureka. This proves that there was non compliances of holding board  meetings and AGM as required u/s 174 of Companies Act, 2013.  Further, the bank signatories to the bank are Mr. Vishnu Sureka and  Mr. Navneet Sureka as an authorized signatory. In what capacity they  were the signatory, they could not explain and it was told by Mr. Akhil  Sureka and Mr. Vishnu Sureka that the directors were having full faith  upon them therefore authorized them as bank signatory surprisingly,  directors were not the signatory this is an unique case which is difficult  to found in the corporate history.   

137  

 When there was a transfer of shares from one shareholder to other in  full or part of his/her shareholding there was no transactions for  consideration through banking channels.    23. 27 Additional companies  (i) Funds invested to become the consortium partners by these 27  companies were from the Amrapali group of companies and these 27  companies were just the face created to comply the conditions of  partners and also keeping in mind to demerge a part of the plot in  furtue to the consortium partners. The funds contributed by these 27  companies were originated and routed from the Amrapali group  companies.    (ii) These companies were managed by CFO Mr. Chander Wadhwa,  Company Secretary Mr. Pankaj Mehta and CA Mr. Anil Mittal.  

General:  1. The companies were  formed for  the purpose  of acquiring the  shares in the 47 group companies to  gain  the position of consortium  partner, for villa in Goa, immovable property E/17 Surajkund Noida,  D- 151 ,  Preet Vihar, NewDelhi, First Floor-E-57, Preet Vihar, New  Delhi. for routing the cash during demonetization  and  booking flats   in  IT Park Greater Noida of Ultra Home Construction Private Limited.  The cash on Hand of Rs. 1.98 crore.  From these companies is not  traceable and is misappropriated and be recovered from CA Anil Mittal     The Directors in these companies are Junior employees of Anil Mittal  Statutory Auditors namely  

1. Pankaj Mehta Company Secretary of Amrapali group of Companies   2. Vivek Mittal Nephew of Anil Mittal  3. Chandan Kumar Office boy of Anil Mittal  4. Seema Mittal wife of Anil Mittal  5. Chandar Wadhwa CFO  6. Bushan Sharma  7. Ashish Jain employee of Anil Mittal   8. Amit Wadhwa Nephew of Chandar Wadhwa  

List of companies are as under:  

S.no Name of company Page no  

1. Aptara Infrastructure Pvt Ltd   

2. Bhavya Housing Projects Private Limited   

3. Bushells Developers Private Limited   

4. Chintapurni Estates Private Limited   

5 DH Education Services Pvt Ltd   

6. Earthwell Developers Pvt Ltd   

7. Eklavya Building Solutions Pvt Ltd   

8. Bushells Reality Solution Private Limited   

9. Saffron Propmart Consultancy Private  Limited  

10. GaurisutaBuildhome Private Limited   

11. Gaurisuta Real Estate and Developers  Private Limited  

12. Kamyani Realtors Private lImited   

13. Kapila Building Solution Private Limited   

14. MahamayaBuildcon Private Limited  

138  

 15. Rinku Clothing Creation Private Limited   

16. RRS Properties Private Limited   

17. Spacewell Developers Private Limited   

18. StatelinesBuildwell Private Limited   

19. Mansarovar Textiles Private Limited   

20. Rainbow Cotton Private Limited   

21. Kamakshi Buildwell Private Limited   

22. Golden Portfolio Consultant Private  Limited  

23. Double Esh Infrastructure Private  Limited  

24. Aashirwad Linens Private Limited   

25. Aksh Real Estates Private Limited   

26. AdhunikBuildtech Private Limited   

27. Rinku Computech Private Limited   

We recommend the forfeiture of the following investment in the group  companies by these 27 companies because the funds invested to  become the consortium partners were from the group companies and  these companies were just the front created to comply the conditions of  partners and also keeping in mind to demerge a part of the plot in  future to the consortium partners. The funds contributed by these 27  companies were originated and routed from the Amrapali group  companies.             

139  

Rs. 100 of Crores of home buyers funds in active connivance of CFO  Chandar Wadhwa and Statutory Auditors Anill Mittal were routed  through  

1. Rinku Computech Private Limited  

       Paid-Up Capital    

S.  

No.  

Name of the  

Company  

No. of  

Shares  

Investment in  

which Amrapali  Group Co.  

Number of  

Equity  shares of  respective  co.  

Number of  

Preference  Shares of  respective  co.  

% of  

Equity  Shares  

1 Aksh Real Estate Pvt  Ltd  

     8,20,000   

Amrapali Centurian  Park Pvt Ltd 36,50,000 8,50,000 22.47%  

2 DH Education  Services Pvt Ltd  

     5,01,500   

Amrapali Centurian  Park Pvt Ltd 36,50,000 8,50,000 13.74%  

3 Mansarovar Textiles  Pvt Ltd  

     3,71,000   

Amrapali Centurian  Park Pvt Ltd 36,50,000 8,50,000 10.16%  

4 Bhavya Housing  Projects Pvt Ltd  

          1,000   

Amrapali Leisure  Valley Pvt Ltd 10,000 4,57,334 10.00%  

5 Kamayani Realtors  Pvt Ltd  

          1,000   

Amrapali Leisure  Valley Pvt Ltd 10,000 4,57,334 10.00%  

6 Chintapurni Estates  pvt Ltd  

          1,000   

Amrapali Leisure  Valley Developers  Pvt Ltd 10,000 6,00,000 10.00%  

7 Aashirwad Linens  Pvt Ltd  

          1,500   

Amrapali Dream  Valley Pvt Ltd 10,10,000             -    0.15%  

8 Rainbow Cotton Pvt  Ltd  

          1,000   

Amrapali Dream  Valley Pvt Ltd 10,10,000             -    0.10%  

9 Rinku Clothing  Creation Pvt Ltd  

          1,429   

Amrapali Silicon  City Pvt Ltd 10,36,982             -    0.14%  

10  Double Esh  Infrastructure Pvt  ltd  

          1,000   

Amrapali Smart  City Dev. Pvt Ltd 6,91,42,401             -    0.00%  

11 Earthwell  Developers Pvt Ltd  

          1,000   

Amrapali Smart  City Pvt Ltd 10,000             -    10.00%  

          1,000   

Amrapali Smart  City Dev. Pvt Ltd 6,91,42,401             -    0.00%  

12 Sapcewell  Developers Pvt ltd  

          1,000   

Amrapali Smart  City Pvt Ltd 10,000             -    10.00%  

          1,000   

Amrapali Smart  City Dev. Pvt Ltd 6,91,42,401             -    0.00%  

13 GaurisutaBuildhome  Pvt Ltd  

             200   

Mums Megha Food  Park Ltd 10000   2.00%  

14 Rinku computech  Pvt Ltd  

   23,94,000   

Amrapali Biotech  India Pvt Ltd 1,20,00,000   19.95%  

15 Kamakshi Buildwell  Private Limited  

             500   

Mums Megha Food  Park Ltd 10000   5.00%

140  

Patel Advance JV 8,25,00,000  

Case Enterprises Ltd 10,00,000  

Manjeet Singh 16,00,000  

MSB Software Technologies 2,40,000  

Anil Kumar Sharma 9,85,000  

Bhushan Sharma 34,00,000  

Digital India 19,59,110  

KK Shukla 9,00,000  

RV Consultant Service 95,00,000  

Sundry Advances 26,99,000  

Sunita Bhagwani 20,00,000  

Saffron Propmart Consultancy Pvt Ltd 7,10,00,000  

TOTAL 17,77,83,110  

Date  Particulars Transaction Balance  

 28-03-2018  

  Balance as on 28/03/2018  

  4,06,50,815  

 29-05-2018  

 Less:  

Payment to Saffron Propmart  Consultancy Private Limited  

 3,90,00,000  

  Less:  

 Payment to Preeti Jaiswal  

 1,50,000  

  Less:  

 Other Payments  

 5,90,771  

   Balance before proceeds  from FDR  

  9,10,044  

 Receipts From FDR    

 31-07-2018  

 Add:  

 Proceeds from FDR  

 9,86,19,983  

   Balance after proceeds from  FDR  

  9,95,30,027  

 Payments made out of  receipts from  FDR  

 31-07-2018  

 Less:  

Net Payment to Saffron  Propmart Consultancy  Private Limited  

 3,20,00,000  

 01-08-2018  

 Less:  

 Payment to Vandana  Wadhwa  

 2,00,00,000  

 23-10-2018  

 Less:  

 Payment to Ample Hotels &  Resorts  

 1,00,00,000  

141  

24. Misuse of Bank Loan funds (Volume II Page No. 426-457)  Diversion of loan funds for unapproved purposes  Amrapali group of companies obtained funds primarily from following  sources:  a) Home buyers funds against construction linked progress;  b) In the form of loans (term loan, working capital/cash credit limits)  from banks against construction linked progress; and   c) Homebuyers also availed housing loans from banks for purchasing  flats in Amrapali projects    Banks granted loans to Amrapali group under certain terms and  conditions which included utilisation of loan funds for:  a) Payment of cost of land and lease rental to Noida authorities;  b) Payment of construction cost of projects.  

Observation  1. The amounts disbursed were not utilised for payment of cost of  land or for payment of lease rentals or for payment of construction cost.  The banks did not monitor utilisation of funds granted by them. In  fact, these funds were diverted as loans to related and/or unrelated  entities which was ultimately utilised in building assets/purposes  which were unapproved by the banks. The banks acted as mute  spectator to unapproved diversion which was almost happening  

evidently in all banking transactions.    2. While obtaining loan funds, Amrapali group hypothecated land on  which project was being undertaken as well as building under  construction as well as material lying at project, leaving nothing with  home buyers for recovery of their payments.     3. It is also observed that the loan funds were routed through several  bank accounts of the same company and thereafter routed to third  parties whereby trying to misguide the flow of funds. It clearly means  these transactions had no substance and were made only to mislead.   

1. In the case of Amrapali Zodiac Developers Pvt Ltd:  Bank of Baroda (Rs.75 crore), Union Bank of India (Rs.50 crore) and  

 23-10-2018  

 Less:  

 Payment to Moral Sales  

 1,00,00,000  

 23-10-2018  

 Less:  

 Payment to Mahalaxmi  Enterprises  

 1,00,00,000  

 23-10-2018  

 Less:  

 Payment to Annex IT  Distributors  

 70,00,000  

 23-10-2018  

 Less:  

 Payment to Anjali Buildcon  

 1,00,00,000  

   Other Payments  

 1,61,904  

   TOTAL  

 9,91,61,904  

Balance as on 28-10-2018  

3,68,123

142  

 Corporation Bank (Rs.25 crore) together approved term loan amounting  to Rs.150 crore to develop a group housing project at Sector-126, Noida.  These funds were granted against the aforesaid term loan, the banks  secured first charge by way of assignment or creation of security  interest of-  

(i) All the rights, title, interest benefits, claims & demands whatsoever  of the borrower in –   (a) permits, approval, clearances, etc. in respect of project being  financed.   (b) any letter of credit, guarantee, performance bond, corporate  guarantee, bank guarantee, provided by any party under the  project.  

(ii) All the receivables, reserves, book debts, bank accounts, including  the Escrow account & all other incomes, present & future  pertaining to the projects being financed.  

(iii) All insurance contracts, insurance proceeds.  (iv) Charge on the specific reserve to be created by Ultra Home  

Construction Private Limited, the holding company by contributing  10% of their profits to address the contingent liabilities of their  subsidiaries.  

The banks also secured second charge over the land & buildings (First  charge is with Noida Authority). Also hypothecated raw Material, work  in progress (pari passu charge over the project assets).    Immediately on receipt, these funds were diverted to several third  parties as stated     

S.No. Particulars  Amount   

1 U Tek Sales Corporation           

6,97,39,500   

2 Taneja Building material Suppliers              

4,24,01,000   

3 Devki Nandan Trading Co              

3,00,00,000   

4 Guru Kripa Traders-2              

3,00,00,000   

5 Shri Balaji Cement & Hardware              

2,89,61,000   

6 Investor Clinic Infratech Private Limited              

2,00,00,000   

7 Mauria Udyog Limited              

3,00,00,000   

8 Shiva Trders              

2,00,00,000   

9 Shiv Traders              

1,75,00,000   

10 Om Traders              

1,35,00,000   

11 Lakshmi Steel              

1,20,81,351   

12 Mahaveer Enterprises              

1,00,00,000   

13 Sidhivinayak Trading Company              

1,00,00,000   

14 Rama Trading Company               

143  

 75,00,000   

15 Uday Enterprises                 

69,50,500   

16 Orient Trading Company                 

68,96,800   

17 Kartikey Enterprises                 

68,72,600   

18 Dayal Traders                 

68,42,300   

19    R.K. Enterprises  67,50,500   

20 MahaLuxmi Traders                 

67,32,500   

21 Purnima Steel Syndicate  

65,71,972   

22 New Payal Traders                 

64,50,500   

23 Shyam Sales Corporation                 

64,38,700   

24 Kishan Steel Corporation                 

62,53,700   

25 Shri Ganesh Trading Company                 

62,50,500   

26 Arhaan Enterprises                 

62,17,570   

27 Gayatri Traders                 

59,42,500   

28 Lakshmi Steels                 

53,42,600   

29 Guru Kripa Traders                 

50,00,000   

30 Guru Nanak Trading Company                 

50,00,000   

31 R R Enterprises                 

50,00,000   

32 Rohit Steel                 

50,00,000   

33 Shree Ji Trading Company                 

50,00,000   

34 Shri Hari Trading Company                 

50,00,000   

35 G.S. Enterprises                 

49,50,500   

36 A.B Enterprises                 

48,16,654   

37 Amit Steel                 

40,00,000   

38 Barnala Steel Industries Ltd                 

36,72,008   

39 S.R Steel                 

34,92,054   

40 Kumar Trading Company                 

32,45,859   

41 Quality Synthetics Private Limited                 

25,00,000  

144  

42 Shri Bankey Bihari Trading Company                 

25,00,000   

43 Jayem Manufacturing Co Pvt Ltd                 

23,15,400   

44 SBL Construction Private Limited                 

22,10,040   

45 ANALCO ( INDIA ) PVT LTD                 

21,86,728   

46 Kumar Trading CO                 

19,53,325   

47 BUILD TECH INDUSTRIES                 

19,06,800   

48 M. K TRADERS                 

16,20,370   

49 Shree Ram Plywood  

14,79,510   

50 ARUNACHAL TIMBER TRADERS PVT LTD                 

13,98,400   

51 Naveen Associates                 

13,60,217   

52 Deepak Mehta & Associates                 

13,50,000   

53 Raj Shree Ispat                 

10,92,584   

54  DREAM INTERIORS & DEVELOPERS (P)  LTD 10,00,790   

55 Aryan Corporate Soloutions Pvt Ltd                 

10,00,000   

56 Astech Marketing Private Limited                   

6,81,321   

57 Jotindra Steel & Tubes Ltd                   

5,00,250   

58 Amrapali Infrastructure Private Limited                   

2,94,829   

TOTAL            

51,37,23,732   

Few examples of diversion of funds are as under:    1. Guru Kripa Traders-2  RS.  3 crore was paid as advance to them in October 2010 which  remained as it is till January 2011, when expenses for purchase of steel  were booked against the aforementioned advance. Below is the extract  of relevant portion of ledger.    

Date Particulars Vch Type Debit Credit Balance  

05/10/2010 Bank of Baroda  A/C No - 21580200000079  

Payment 15000000.00   15000000.00  Dr

145  

 06/10/2010 Bank of Baroda  

A/C No - 21580200000079  

Payment 5000000.00   20000000.00  Dr  

15/10/2010  Bank of Baroda  A/C No - 21580200000079  

Payment 5000000.00   25000000.00  Dr  

16/10/2010 Bank of Baroda  A/C No - 21580200000079  

Payment 5000000.00   30000000.00  Dr  

29/12/2010 STEEL Purchase  U.P  

 1105440.00 28894560.00  Dr  

01/01/2011 STEEL Purchase  U.P  

 1137012.00 27757548.00  Dr  

01/01/2011 STEEL Purchase  U.P  

 1127296.00 26630252.00  Dr  

01/01/2011 STEEL Purchase  U.P  

 1081575.00 25548677.00  Dr  

01/01/2011 STEEL Purchase  U.P  

 1114169.00 24434508.00  Dr  

02/01/2011 STEEL Purchase  U.P  

 1096914.00 23337594.00  Dr  

02/01/2011 STEEL Purchase  U.P  

 1078802.00 22258792.00  Dr  

03/01/2011 STEEL Purchase  U.P  

 1091563.00 21167229.00  Dr  

03/01/2011 STEEL Purchase  U.P  

 858603.00 20308626.00  Dr  

04/01/2011 STEEL Purchase  U.P  

 1107007.00 19201619.00  Dr  

04/01/2011 STEEL Purchase  U.P  

 1084429.00 18117190.00  Dr  

05/01/2011 STEEL Purchase  U.P  

 1077003.00 17040187.00  Dr  

05/01/2011 STEEL Purchase  U.P  

 1062433.00 15977754.00  Dr  

05/01/2011 STEEL Purchase  U.P  

 1054560.00 14923194.00  Dr  

06/01/2011 STEEL Purchase  U.P  

 1112498.00 13810696.00  Dr  

06/01/2011 STEEL Purchase  U.P  

 1118674.00 12692022.00  Dr  

07/01/2011 STEEL Purchase  U.P  

 1034488.00 11657534.00  Dr  

07/01/2011 STEEL Purchase  U.P  

 1087996.00 10569538.00  Dr  

08/01/2011 STEEL Purchase   1082110.00 9487428.00

146  

 U.P Dr  

08/01/2011 STEEL Purchase  U.P  

 1054092.00 8433336.00  Dr  

09/01/2011 STEEL Purchase  U.P  

 1116534.00 7316802.00  Dr  

10/01/2011 STEEL Purchase  U.P  

 1109399.00 6207403.00  Dr  

10/01/2011 STEEL Purchase  U.P  

 1073727.00 5133676.00  Dr  

10/01/2011 STEEL Purchase  U.P  

 1087996.00 4045680.00  Dr  

11/01/2011 STEEL Purchase  U.P  

 1062669.00 2983011.00  Dr  

11/01/2011 STEEL Purchase  

U.P  

 889730.00 2093281.00  

Dr  

12/01/2011 STEEL Purchase  U.P  

 1023600.00 1069681.00  Dr  

13/01/2011 STEEL Purchase  U.P  

 1097561.00 27880.00 Cr  

31/03/2012 REBETE &  DISCOUNT  

Journal 27880.00      

30027880.00 30027880.00        

2. Shri Balaji Cement & Hardware  

RS.  2.08 crore was paid as advance to them towards the end of March  2011 against which expense was booked on 31st March 2011 and  continued till 1st week of April 2011. It was noticed that the same  person was selling steel, bricks, cement, rodi sand, badarpur, which  itself is in unorganised sector and is questionable.  

Date Particulars Vch Type Debit Credit Balance  

19/03/2011 Bank of Baroda  A/C No - 21580200000079  

Payment 3949500.00   3949500.00  Dr  

21/03/2011 Bank of Baroda  A/C No - 21580200000079  

Payment 3851500.00   7801000.00  Dr  

26/03/2011 Bank of Baroda  A/C No - 21580200000079  

Payment 6450500.00   14251500.00  Dr  

28/03/2011 Bank of Baroda  A/C No - 21580200000079  

Payment 6550800.00   20802300.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 456225.00 20346075.00  Dr  

31/03/2011 Cement Purchase  U.P  

 490875.00 19855200.00  Dr  

31/03/2011 STEEL Purchase  U.P  

 495666.00 19359534.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 471345.00 18888189.00  Dr  

31/03/2011 Cement Purchase  U.P  

 496650.00 18391539.00  Dr

147  

 31/03/2011 STEEL Purchase  

U.P    483946.00 17907593.00  

Dr  

31/03/2011 Cement Purchase  U.P  

 505313.00 17402280.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 525945.00 16876335.00  Dr  

31/03/2011 STEEL Purchase  U.P  

 27300.00 16849035.00  Dr  

31/03/2011 Cement Purchase  U.P  

 493763.00 16355272.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 476280.00 15878992.00  Dr  

31/03/2011 STEEL Purchase  U.P  

 470905.00 15408087.00  Dr  

31/03/2011 Cement Purchase  U.P  

 502425.00 14905662.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 510678.00 14394984.00  Dr  

31/03/2011 STEEL Purchase  U.P  

 469124.00 13925860.00  Dr  

31/03/2011 Cement Purchase  U.P  

 501843.00 13424017.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 438375.00 12985642.00  Dr  

31/03/2011 Cement Purchase  U.P  

 750750.00 12234892.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 754950.00 11479942.00  Dr  

31/03/2011 STEEL Purchase  U.P  

 766725.00 10713217.00  Dr  

31/03/2011 Cement Purchase  U.P  

 782513.00 9930704.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 754320.00 9176384.00  Dr  

31/03/2011 STEEL Purchase  U.P  

 767644.00 8408740.00  Dr  

31/03/2011 Cement Purchase  U.P  

 779625.00 7629115.00  Dr  

31/03/2011 BADARPUR Purchase  U.P  

 778260.00 6850855.00  Dr  

31/03/2011 Cement Purchase  U.P  

 788288.00 6062567.00  Dr  

01/04/2011 Rodi Purchase  U.P  

 884331.00 5178236.00  Dr  

01/04/2011 Cement Purchase  U.P  

 931392.00 4246844.00  Dr  

01/04/2011 Rodi Purchase  U.P  

 882872.00 3363972.00  Dr  

01/04/2011 Bricks Purchase  U.P  

 853965.00 2510007.00  Dr  

01/04/2011 STEEL Purchase  U.P  

 844356.00 1665651.00  Dr  

02/04/2011 Bank of Baroda  A/C No - 21580200000079  

Payment 2310500.00   3976151.00  Dr  

02/04/2011 Bank of Baroda  A/C No -

Payment 5848200.00   9824351.00  Dr

148  

 21580200000079  

02/04/2011 Cement Purchase  U.P  

 935550.00 8888801.00  Dr  

02/04/2011 Sand Purchase  U.P  

 839969.00 8048832.00  Dr  

04/04/2011 Bricks Purchase  U.P  

 876120.00 7172712.00  Dr  

04/04/2011 Sand Purchase  U.P  

 831527.00 6341185.00  Dr  

05/04/2011 STEEL Purchase  U.P  

 841333.00 5499852.00  Dr  

05/04/2011 STEEL Purchase  U.P  

 849350.00 4650502.00  Dr  

06/04/2011 Bricks Purchase  U.P  

 884147.00 3766355.00  Dr  

06/04/2011 Cement Purchase  U.P  

 284130.00 3482225.00  Dr  

07/04/2011 Rodi Purchase  U.P  

 884321.00 2597904.00  Dr  

07/04/2011 Cement Purchase  U.P  

 931392.00 1666512.00  Dr  

12/04/2011 Bricks Purchase  U.P  

 872193.00 794319.00  Dr  

12/04/2011 STEEL Purchase  U.P  

 853780.00 59461.00 Cr  

28961000.00 29020461.00    

 Closing Balance 59461.00      

29020461.00 29020461.00    

3. Investor Clinic Infratech Private Limited  

It is evident from the books of accounts that loan funds were utilized for  payment of RS.  2 crore who had invoiced the company for brokerage  expense which is not construction linked payment. Brokerage is an  indirect expense, incurred for the sale of flat. The banks had granted  funds for construction activity and not for sale activity. This is clearly  diversion of loan funds to unapproved means.  

4. Shiva Traders  

RS.  2 crore was paid as advance on 9th October 2010 against which  

subsequently invoices for purchase of steel were booked in December  2010 only to adjust the balance.      

Date Particulars Vch Type  Debit   Credit   Balance   

09/10/2010 Bank of Baroda  A/C No - 21580200000079  

Payment     2,00,00,000   

             2,00,00,000   

11/12/2010 STEEL Purchase  U.P  

        10,39,959   

           1,89,60,041   

13/12/2010 STEEL Purchase  U.P  

        10,39,964   

           1,79,20,077   

14/12/2010 STEEL Purchase  U.P  

          8,31,947   

           1,70,88,130  

149  

 15/12/2010 STEEL Purchase  

U.P           

12,47,950               1,58,40,180   

16/12/2010 STEEL Purchase  U.P  

 12,47,945  1,45,92,235   

17/12/2010 STEEL Purchase  U.P  

        14,55,941   

           1,31,36,294   

18/12/2010 STEEL Purchase  U.P  

        12,47,958   

           1,18,88,336   

20/12/2010 STEEL Purchase  U.P  

        10,39,965   

           1,08,48,371   

01/01/2011 STEEL Purchase  U.P  

          8,47,103   

           1,00,01,268   

03/01/2011 STEEL Purchase  U.P  

        10,55,136   

              89,46,132   

04/01/2011 STEEL Purchase  

U.P  

10,51,612   

78,94,520   

05/01/2011 STEEL Purchase  U.P  

        10,63,874   

              68,30,646   

06/01/2011 STEEL Purchase  U.P  

        10,85,323   

              57,45,323   

07/01/2011 STEEL Purchase  U.P  

        10,48,579   

              46,96,744   

08/01/2011 STEEL Purchase  U.P  

        10,77,182   

              36,19,562   

10/01/2011 STEEL Purchase  U.P  

        10,73,193   

              25,46,369   

11/01/2011 STEEL Purchase  U.P  

        10,79,473   

              14,66,896   

12/01/2011 STEEL Purchase  U.P  

          8,08,790   

                6,58,106   

13/01/2011 STEEL Purchase  U.P  

          6,56,927   

                     1,179   

31/03/2011 Short & Excess  A/c  

Journal                 1,179   

20000000.00     2,00,00,000   

5. Om Traders  RS.  1.35 crore was paid in September 2010 against which subsequently  

invoices for purchase of steel were booked in December 2010 only to  adjust the balance.    

Date Particulars Vch Type  Debit   Credit   Balance   

02/06/2010 BOM-SEC51 A/C  No - 60036386553  

Payment     50,00,000             50,00,000   

03/06/2010 Hardware Item Purchase  U.P  

       8,76,488           41,23,512   

24/06/2010 Hardware Item Purchase  U.P  

       9,20,241           32,03,271   

03/07/2010 Hardware Item Purchase  U.P  

       7,57,796           24,45,475   

04/07/2010 Hardware Item Purchase  U.P  

       7,56,000           16,89,475  

150  

 05/07/2010 Hardware Item Purchase  

U.P          7,20,421             9,69,054   

10/08/2010 Steel Purchase Purchase  U.P  

       9,77,734                  8,680   

14/09/2010 HDFC BANK(L.N) Payment     50,00,000             49,91,320   

22/09/2010 BOM-SEC51 A/C  No - 60036386553  

Payment     60,00,000          1,09,91,320   

27/09/2010 Bank of Baroda  A/C No - 21580200000079  

Payment     85,00,000          1,94,91,320   

01/10/2010 Bank of Baroda  A/C No - 21580200000079  

Payment     50,00,000          2,44,91,320   

22/10/2010 BOM-SEC51 A/C  No - 60036386553  

Payment  1,50,00,000          3,94,91,320   

25/10/2010 HDFC BANK(C.P)- 14018640000045  

Payment  1,00,00,000          4,94,91,320   

01/02/2011 Hardware Item Purchase  U.P  

       9,90,150        4,85,01,170   

01/02/2011 Hardware Item Purchase  U.P  

       9,49,200        4,75,51,970   

01/02/2011 Hardware Item Purchase  U.P  

       9,98,025        4,65,53,945   

01/02/2011 Hardware Item Purchase  U.P  

       9,48,518        4,56,05,427   

01/02/2011 Hardware Item Purchase  U.P  

       9,18,750        4,46,86,677   

01/02/2011 Hardware Item Purchase  U.P  

       9,06,203        4,37,80,474   

01/02/2011 Hardware Item Purchase  U.P  

       7,80,780        4,29,99,694   

01/02/2011 Hardware Item Purchase  U.P  

       9,45,000        4,20,54,694   

01/02/2011 Hardware Item Purchase  U.P  

     11,08,275        4,09,46,419   

01/02/2011 Hardware Item Purchase  U.P  

       9,41,850        4,00,04,569   

01/02/2011 Hardware Item Purchase  U.P  

     12,81,000        3,87,23,569   

01/02/2011 Hardware Item Purchase  U.P  

       9,06,780        3,78,16,789   

01/02/2011 Hardware Item Purchase  U.P  

       9,08,523        3,69,08,266   

01/02/2011 Hardware Item Purchase  U.P  

       7,38,203        3,61,70,063   

01/02/2011 Hardware Item Purchase  U.P  

     11,24,928        3,50,45,135   

01/02/2011 Hardware Item Purchase  U.P  

       9,70,305        3,40,74,830   

01/02/2011 Hardware Item Purchase  U.P  

       8,93,550        3,31,81,280   

01/02/2011 Hardware Item Purchase  U.P  

       8,91,030        3,22,90,250   

01/02/2011 Hardware Item Purchase  U.P  

       8,94,548        3,13,95,702  

151  

 01/02/2011 Hardware Item Purchase  

U.P          8,49,450        3,05,46,252   

01/02/2011 Hardware Item Purchase  U.P  

 9,31,718  2,96,14,534   

01/02/2011 Hardware Item Purchase  U.P  

       9,31,718        2,86,82,816   

01/02/2011 Hardware Item Purchase  U.P  

       8,80,530        2,78,02,286   

01/02/2011 Hardware Item Purchase  U.P  

       9,63,375        2,68,38,911   

01/02/2011 Hardware Item Purchase  U.P  

     10,62,810        2,57,76,101   

01/02/2011 Hardware &  Sanitary Items  

Purchase  U.P  

       9,29,198        2,48,46,903   

01/02/2011 Hardware Item Purchase  U.P  

       8,13,750        2,40,33,153   

02/02/2011 Hardware Item Purchase  U.P  

       8,56,800        2,31,76,353   

03/02/2011 Hardware &  Sanitary Items  

Purchase  U.P  

     11,98,050        2,19,78,303   

04/02/2011 Hardware &  Sanitary Items  

Purchase  U.P  

       9,85,950        2,09,92,353   

05/02/2011 Hardware &  Sanitary Items  

Purchase  U.P  

     10,58,925        1,99,33,428   

06/02/2011 Hardware Item Purchase  U.P  

       9,39,750        1,89,93,678   

07/02/2011 Hardware Item Purchase  U.P  

       8,04,825        1,81,88,853   

08/02/2011 Hardware Item Purchase  U.P  

       9,50,250        1,72,38,603   

09/02/2011 Hardware Item Purchase  U.P  

       8,80,824        1,63,57,779   

09/02/2011 Hardware &  Sanitary Items  

Purchase  U.P  

       8,30,771        1,55,27,008   

10/02/2011 Hardware &  Sanitary Items  

Purchase  U.P  

       7,70,921        1,47,56,087   

11/02/2011 Hardware &  Sanitary Items  

Purchase  U.P  

       7,88,130        1,39,67,957   

12/02/2011 Hardware Item Purchase  U.P  

       9,03,693        1,30,64,264   

13/02/2011 Hardware Item Purchase  U.P  

       8,31,180        1,22,33,084   

14/02/2011 Hardware Item Purchase  U.P  

       6,44,532        1,15,88,552   

14/02/2011 Hardware Item Purchase  U.P  

       9,58,073        1,06,30,479   

15/02/2011 Hardware Item Purchase  U.P  

       9,56,802           96,73,677   

16/02/2011 Hardware Item Purchase  U.P  

       9,25,344           87,48,333   

17/02/2011 Hardware Item Purchase  U.P  

       9,03,231           78,45,102   

18/02/2011 Hardware Item Purchase  U.P  

       6,48,732           71,96,370  

152  

 18/02/2011 Hardware Item Purchase  

U.P          8,02,578           63,93,792   

19/02/2011 Hardware Item Purchase  U.P  

       8,49,912           55,43,880   

20/02/2011 Hardware Item Purchase  U.P  

       9,77,550           45,66,330   

21/02/2011 Hardware Item Purchase  U.P  

       8,68,004           36,98,326   

22/02/2011 Hardware Item Purchase  U.P  

     10,56,930           26,41,396   

23/02/2011 Hardware Item Purchase  U.P  

       8,29,500           18,11,896   

24/02/2011 Hardware Item Purchase  U.P  

       9,21,413             8,90,483   

25/02/2011 Hardware Item Purchase  U.P  

       8,79,564                10,919   

31/03/2012 REBETE &  DISCOUNT  

Journal            10,919     

54500000.00 5,45,00,000     

 6. Mauria Udyog Limited  RS.  3 crore was diverted to the company on 29th September 2010 and  30th March 2011 for RS.  1 crore & 2 crore respectively as advance and  the same was subsequently booked against purchase of steel in  January 2011 and May 2011 only to adjust the balance.  

Date Particulars Vch Type  Debit   Credit   Balance   

29/09/2010 Bank of Baroda  A/C No - 21580200000079  

Payment          1,00,00,000   

              1,00,00,000   

14/01/2011 STEEL Purchase  U.P  

               17,43,440   

               82,56,560   

14/01/2011 STEEL Purchase  U.P  

               17,87,807   

               64,68,753   

14/01/2011 STEEL Purchase  U.P  

               17,77,211   

               46,91,542   

14/01/2011 STEEL Purchase  U.P  

               17,81,419   

               29,10,123   

16/01/2011 STEEL Purchase  U.P  

               22,16,525   

                 6,93,598   

20/01/2011 STEEL Purchase  U.P  

                 2,96,570   

                 3,97,028   

20/01/2011 STEEL Purchase  U.P  

                 2,97,012   

                 1,00,016   

30/03/2011 Bank of Baroda  A/C No - 21580200000079  

Payment          2,00,00,000   

              2,01,00,016   

13/05/2011 STEEL Purchase  U.P  

               22,15,039   

            1,78,84,977  

153  

 16/05/2011 STEEL Purchase  

U.P                  

20,97,410                1,57,87,567   

17/05/2011 STEEL Purchase  U.P  

               22,02,653   

            1,35,84,914   

17/05/2011 STEEL Purchase  U.P  

               21,12,682   

            1,14,72,232   

30/05/2011 STEEL Purchase  U.P  

 21,09,193  93,63,039   

30/05/2011 STEEL Purchase  U.P  

               21,72,250   

               71,90,789   

30/05/2011 STEEL Purchase  U.P  

               22,02,076   

               49,88,713   

30/05/2011 STEEL Purchase  U.P  

               20,00,371   

               29,88,342   

31/05/2011 STEEL Purchase  U.P  

               22,91,842   

                 6,96,500   

31/05/2011 STEEL Purchase  U.P  

               21,58,699   

               14,62,199   

31/05/2011 STEEL Purchase  U.P  

               23,54,459   

               38,16,658   

22/08/2011 STEEL Purchase  U.P  

               20,90,696   

               59,07,354   

22/08/2011 STEEL Purchase  U.P  

               12,11,312   

               71,18,666   

22/08/2011 STEEL Purchase  U.P  

               19,90,348   

               91,09,014   

22/08/2011 STEEL Purchase  U.P  

               20,68,279   

            1,11,77,293   

22/08/2011 STEEL Purchase  U.P  

               15,67,565   

            1,27,44,858   

22/08/2011 STEEL Purchase  U.P  

               23,08,793   

            1,50,53,651   

22/08/2011 STEEL Purchase  U.P  

               22,68,774   

            1,73,22,425   

22/08/2011 STEEL Purchase  U.P  

               22,56,451   

            1,95,78,876   

01/01/2012 STEEL Purchase  U.P  

               22,46,743   

            2,18,25,619   

01/01/2012 STEEL Purchase  U.P  

               23,01,728   

            2,41,27,347   

01/01/2012 STEEL Purchase  U.P  

               23,25,626   

            2,64,52,973   

01/01/2012 STEEL Purchase  U.P  

               23,49,055   

            2,88,02,028   

                                                                                               3,00,00,000   

          5,88,02,028   

 Closing Balance                                  2,88,02,028   

                                                                                               5,88,02,028   

          5,88,02,028   

1. In the case of Amrapali Princely Estate Pvt Ltd:  Syndicate bank and Bank of India together approved term loan  amounting to Rs.100 crore to develop a housing project at Plot no Gh- 02/A, Sector-76, Noida over an area of 15.15 acres consisting of 19  towers. These funds were granted on 13th April 2013 and 15th May  2013, 6th March 2014 and 28th March 2014 for Rs. 25 crore each time.  

154  

   Against the aforesaid term loan, the banks secured first pari passu  charge over the entire project assets of Amrapali Princely Estate Pvt Ltd  (including building under construction & construction material kept at  site) & receivable excluding advance booking money. The banks also  secured second pari passu charge (with first charge on land with  Greater Noida Authorities) by way of equitable mortgage on 61300  square metres of the project land at plot no.Gh-02,Sector-76, Noida    Immediately on receipt, these funds were diverted to several third  parties as stated hereunder:  

S.No. Particulars Payments  

1 FIXED DEPOSIT BOI  

8,25,00,000   

2 Bhagirathi Tubes B/p         6,51,80,135   

3 Raj Shree Ispat         4,20,00,000   

4 Vrindavan Buildcon Pvt Ltd         4,00,00,000   

5 Kapila Buildhome Pvt Ltd.         3,70,00,000   

6 Sameer Builtaid Pvt Ltd.         3,32,07,919   

7 Gaurisuta Infrastructure Pvt Ltd.         3,00,00,000   

8 Radius Synergies Pvt Ltd         2,90,00,000   

9 Lakshmi Steels         2,87,00,000   

10 Arhaan Enterprises         2,25,00,000   

11  Bank of India Loan A/c No- 605965410000120  

      1,70,25,946   

12 GaurisutaBuildhome Pvt Ltd.         1,40,00,000   

13 SBL Construction P Ltd (Tower C& D)         1,30,77,888   

14 Shri Balaji International  

1,19,58,509   

15 Jaypeeco India         1,11,79,965   

16 Lakshmi  SteelB/p         1,00,00,000   

17 Amrapali Sapphire  Developers Pvt Ltd           84,22,323   

18 SPS Buildtech Pvt Ltd (Tower-B & K)           84,06,223   

19 Syndicate Bank A/c No-87801010004689           32,00,000   

20 Shriv Build Mat Pvt Ltd.           20,00,000   

21 Ashtech Marketing Pvt Ltd.         

155  

 16,62,747   

22 GAURISUTA INFRASOLUTION PVT.LTD           10,00,000   

23 AAUSH RAJ             7,95,339   

24 Pradhan Projects             1,02,271   

 TOTAL     51,29,19,265   

(i) Fixed deposit – The Company made a fixed deposit of Rs. 8.25  Crore and out of which Rs. 3.75cr was outstanding as on 31st March  2015 which we could find if utilized for business purpose. Rs. 4.50 cr.  was used for repayment of Loan    (ii) Radius Synergies Pvt Ltd – It is seen that RS.  1.55 crore was  given as advances since 2013 and continued giving advances till 2015  to this party. Out of these funds an amount of Rs.1 crore is outstanding  till 31st March 2015. Out of advances for Rs.1.55 crore, expenses were  booked only for Rs.52 lakh for labour charges in 2014. The veracity of  the expenses booked is to be examined    (iii) Shriv Build Mat India Pvt – It is seen that Rs.20 Lakh was given  as advance in 2014 which has not returned subsequently and no  expense was also booked.      2. In the case of Amrapali Eden Park Developers Pvt Ltd:  

Eden Park Developers Pvt Ltd received term loan of RS.  45 crore for  development of project ‘Amrapali Eden Park’ in March 2013 from  Corporation Bank to develop a housing project. Against this, the  company mortgaged plot No 27, Block F, Sector-50, Noida, Gautam  Budh Nagar, U.P.     Immediately on receipt, these funds were diverted to several third  parties as stated hereunder:    

Name of party Amount (RS.  in crore)  

Gaurisuta Infrastructure Private Limited 2.00  

Siddhi Interiors Private Limited 0.40  

Ishaan Housing & Construction 1.00  

Ishaan Infotech 1.00  

Ishaan Infraestates India Private Limited 1.00  

Reinfo Tech Estates Private Limited 1.00  

Gaurisuta Infrastructure Private Limited 2.48  

S.R. Steels 0.50  

Tashima Construction Private Limited 0.50  

Witty One Stop Solution Private Limited  0.50  

Happy Worker Private Limited 0.50

156  

 Spyy Traders Private Limited 0.50  

New Tech Shelters Private 0.50  

BOM-CA-60024309220 3.00  

Dynamic Realcom Private Limited 2.00  

Financial World Private Limited 2.00  

Total 18.88  

25. OTHER OBSERVATIONS    1. Cozy Habitat Builders Pvt. Ltd.  It is holding 25% shareholding in Heart Beat City Project Controlled by  

three Companies namely Three Platinum, Softtech Pvt. Ltd., Pebbles  Prolease Pvt. Ltd. and baseline Infra Developers Pvt. Ltd.  Cozy Habitat Builders Pvt. Ltd. Received Rs. 30,00,000 from  Amrapaliand Paid Rs. 15,00,000 to Mr. Shiv Priya. We are therefore the  opinion thatthat Rs. 15,00,000 should be recovered from Cozy Habitat  Builders Pvt. Ltd. and be deposited to the treasury of the Honourable  Supreme court.  

2. DFC Projects Private Limited  The management of DFC Projects Pvt. Ltd. as informed were providing  services to Amrapali Group for arranging funds. We found that there  invoices were paid within a period of 2-3 days from the date of raising  the invoices which raises a doubt whether there were the invoices raised  for services rendered or were adjustments. The properties/flats were  booked in the name of DFC group about which the directors  Mr.Pankaj Sharma and Mr.VinayRai showed total ignorance.  Consequent to the questioning they agreed to surrender the flats.    (Refer ANNEXURE XIII.6)  

3. Chaudhary ENT Udyog (Supplier of Bricks)  

As per the copy of the receipts issued by Amrapali Group of Companies,  it has been observed that the party had paid INR 500,000 in cash on  24th February, 2017 vide receipt number 3074 Dated 24.02.2017 (Copy  enclosed) on account of flat Number T6-G06 that was allotted to the  

said party in Amrapali Grand on account of outstanding amounts due  from Amrapali Group of Companies. The Company has not recorded the  receipt of the aforesaid amount of INR 500,000 in their books of  account.

157  

This shows that this money has been taken away by the Management  and hence should be recovered from them.    It was further informed by the supplier, that Amrapali Group of  Companies committed a fraud since this flat is already sold to Mr.  Nikhil Kumar Datta. The party came to know of this on 31st August,  2018, when he received a letter dated 18th August, 2018 from IDBI  Bank seeking payment for overdue amount in the name of Mr. Nikhil  Kumar Datta.     This a serious kind of fraud done by the Amrapali Group of Companies.  The party has even written a letter to Police, Uttar Pradesh against the  aforesaid fraud. Copy of the said letter to police along with the letter  issued by IDBI Bank to Mr. Nikhil Kumar Datta has been enclosed as  Annexure 34-D.  

4. Closing Inventory as per Audited Financial Statement as on  31st March, 2015  There is no stock list, valuation certificate or any documentary evidence  regarding physical verification with the company or in the Statutory  Auditors file. We are of the view that these are only arbitrary figures  shown in the Audited Financial Statements.    5. Fixed Assets  a) Building Account  During the financial year 2013-14 a sum of INR 80.34 crores has been  capitalized to Building A/c by crediting various purchase/expense  account as per journal voucher passed on 31/03/14 as per the copy of  the voucher given below.  

158  

This entry seems to be a mere adjustment entry since there is no  Valuation report on the basis of which these expenses are capitalized to  Building account and no working sheet of the same is available.    We are of the view that this amount has been taken away by the  Management of the Company and this amount should be recovered  from them.    6. Royalgolf Link City Projects Private Limited  It has been observed that a sum of INR 4 Crores approximately is  recoverable from M/s Royalgolf Link City Projects Private Limited  (Royalgolf) in the books of Amrapali Infrastructure Pvt. Ltd. on account  of supply of precast materials.      Mr. Shiv Priya was the Director of this Company from 26.9.2014 (Date  of Incorporation of   the company) to 3.4.2017.  This Company was  formed as SPV for Cozy/Bagadiya Group of Companies with Mr. Shiv  Priya as the Director of Royalgolf launched for project “Hemisphere” .  Amrapali Group of Companies through Ultra Home Construction Private  Limited and Amrapali Infrastructure Pvt. Ltd. had given loan to  Royalgolf mainly for purchase of land and its registration thereof.  A  dispute arose amongst the Company in six months of its operations and  on 1st April, 2015 a Loan Settlement Agreement was signed between  Amrapali Group, Cozy/ Bagadiya Group vide which 30 Villas valuing  approximately INR 50.47 cr. were earmarked for Amrapali Group.     Amrapali Infrastructure Pvt. Ltd. (Infra) was the Supplier of Precast  Building material and they were to supply these materials for  “Hemisphere” project worth INR 67 crores approximately.  However,  Infra could supply only 24% of the contract value and due to difference  between Amrapali Group and Royalgolf, the contract was terminated in  June, 2017.    Proceedings under IBC 2016 were initiated by Royalgolf against Infra  and they filed a claim for INR 17.50 crores with the IRP appointed by

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 NCLT.  The matter is still in dispute at NCLT for the claimed loan of  17.50 crores lodged by Royalgolf on Amrapali Infra.    7. Hire Charges Received   The Group companies had paid hire/erection charges from the various  group companies for example Amrapali Infrastructure received  Rs.170.15 crores during the period 2008-15. (Volume II – Page 306) It  was further observed that there have been no details regarding the  equipment given on hire to each company and the basis of raising bills  on account of hire charges. It seems that bills for hire charges have  been raised on arbitrary basis and there are no comparative quotations  for the same available.  

26. STATUS OF DATA AVAILABILITY  

 There is overlapping in accounting data from April 2016 to September  2016 and we found that few entries were entered in FARVISION and few  in the tally for the said period.    Due to scarcity of time audit not completed of following  companies/entities/persons:    

• Amrapali Princely Estate Pvt. Ltd.  

• Jotindra steels & tubes Ltd.    The following companies were carved out by Amrapali Group, which are  being audited and a report on these companies will be submitted.    

1) Prem Mishra Indore.  2) O2 Valley Noida  3) Heart beat city projects Noida.  

 27. M.S. Dhoni    It is observed that the Company Amrapali Sapphire Developers Private  Limited has paid a sum of Rs. 6.52 Crores out of the total amount of Rs.  42.22 Crores paid from the Amrapali group of Companies to Rhiti  Sports Management Private Limited during the years 2009 - 2015.      This sum has been paid on account of Agreements executed by Shri  Anil Kumar Sharma, CMD for and on behalf of Amrapali Group of  Companies with Rhiti Sports Management Private Limited.  There is no  resolution on record authorizing Mr. Anil Kumar Sharma, CMD to enter  into an agreement on behalf of all Amrapali group of Companies.     There were various agreements as per details given below:     a) Endorsement Agreement dated 22nd November, 2009    According to this agreement Mr. Mahendra Singh Dhoni will make  himself available to the Chairmen for three days along with one  representative of Rhiti Sports. There are no documents held on record  for compliance of this condition.    b)  According to the Agreement for sponsorship dated 20th March, 2015,

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 Amrapali Group of Companies got right to advertise as Logo Space at  various places in the IPL 2015 for Chennai Super Kings.  It is observed  that this Agreement is on plain paper and executed only between  Amrapali and Rhiti Sports Management Private Limited and there are  no signatories on behalf of Chennai Super Kings to this Agreement. No  Resolution in favour of Shri Arun Pandey, Signatory of Rhiti Sports  Management Private Limited is attached with the said Agreement.    This clearly shows that these Agreements have just been made for  payment of amounts to Rhiti Sports Management Private Limited  Company are Sham Agreements and made just for making payments to  Rhiti Sports Management Private Limited.  We feel that Home Buyers  money has been diverted illegally and wrongly to Rhiti Sports  Management Private Limited and should be recovered from them as the  said Agreement in our opinion do not stand the test of Law.  

Amrapali Mahi Developers Pvt Ltd  

• Mr. Mahendra Singh Dhoni, husband of Ms. Sakshi Singh  Dhoni (director of company) was the brand ambassador of  Amrapali group and have carried out a number of transactions  with respect to endorsement of Amrapali group’s projects. He  has entered in agreements with other group company.  

• We are informed verbally that this company was incorporated  for development of a project in Ranchi. An MOU was also  entered between the parties though we were not provided a copy  of that. We understand that copy of MOU is available with Mr.  Adhikari.  

In Amrapali Sapphire Developers Private Limited a Flat (Flat No – TC- P04) has been booked in the name of Rhiti Sports Management Private  Limited by passing an adjustment entry. However Mr Sanjay Pandey of  Rhiti Sports Management Pvt Ltd denied booking of any such flat. He  also confirmed that neither the company nor any individual has any flat  in Amrapli Group. Mr Pandey confirmed that no due diligence was  carried out before accepting the brand endorsement though he informed  that brand value and paying capacity was seen. No Agreement was  provided though it was agreed that it would be provided by 11th March,  2019. Expenses were reimbursed to Rhiti Entertainment Private Limited  a group company, without any agreement.    28. Properties alienated     Chart D    The group started alienated the properties starting from 2015-16 , and  many properties were transferred when the case was pending before the  Honourable Court with a criminal mind to alienate the assets. The  funds were routed from one account to another and properties were  registered in benami names.  For the assets sold up to 31/3/2015, we didn’t generally find anything  in contravention of the details submitted in affidavit Chart D.    We have categorized the Chart-D transactions into following 3  categories:

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 Category A – The properties attached should be sold off and  recover the amount.  Category B – The properties attached should continue to be  attached.   Category C- The properties attached should be released off.  

Name of  Company of  Amrapali  Group  

Name of the  party to which  allotment/sale  was made   

Area Category Date of  transfer  

Page no of  supplementary  report  

CATEGORY-A  

Ultra Home  Construction  Pvt Ltd  

SKN Hospitality  Pvt Ltd  

1067.50  sq. mtr.  

A 15th March  2017  

2791-2796  

Amrapali  Homes Project  Pvt Ltd  

Bhuvneshwar  land  

6.52  Acres  

A Available 2781  

Amrapali  Homes Project  Pvt Ltd  

Pradeep Mishra 123171  sq. ft.  

A 21st August  2017  

2779-2780  

Amrapali  Smartc  

ity Developers  Pvt Ltd  

Sarvome  Housing Pvt Ltd  

7108  sq. ft.  

A 10th July  2017  

2768-2769  

Amrapali  Dream Valley  Pvt Ltd  

High Life  Commercial   

8500  sq. ft.  

A Available 2770  

Amrapali  Smartcity  Developers Pvt  Ltd  

Bihariji  Developers Pvt  Ltd  

22621  sq. ft.  

A 10th July  2017  

2767-2768  

Amrapali  Leisure Valley  Pvt Ltd  

Bihariji High  Rise Pvt Ltd  

31202  sq. ft.  

A 10th July  2017  

2782-2783  

Amrapali  Leisure Valley  Pvt Ltd  

Bihariji High  Rise Pvt Ltd  

13928  sq. ft.  

A 10th July  2017  

2782-2783  

Amrapali  Centurian Park  Pvt Ltd  

Bihariji High  Rise Pvt Ltd  

7020  sq. ft.  

A 10th July  2017  

2785-2786  

Amrapali  Centurian Park  Pvt Ltd  

Bihariji  Properties Pvt  Ltd  

22621  sq. ft.  

A 10th July  2017  

2785-2786  

Ultra Home  Construction  Pvt Ltd  

Shri Viniyak  Avas Pvt Ltd  

6120  sq. ft.  

A 2nd April  2014  

2790

162  

 Amrapali  Leisure Valley  Developers  Private Limited  

Sarvome  Housing Pvt Ltd  

16500  sq. ft  

A 10th July  2017  

2775-2776  

CATEGORY-B  

Hi-Tech City  Developers Pvt  Ltd  

Anita Chandok 4027.31  sq.  yards  

B 21st July  2016  

2755-2756  

Amrapali  Smartcity  Developers Pvt  Ltd  

SBL  Construction  Pvt Ltd  

14500  sq. ft.  

B 23rd August  2016  

2765  

Amrapali  Smartcity  Developers Pvt  Ltd  

SBL  Construction  Pvt Ltd  

18450  sq. ft.  

B 23rd August  2016  

2765  

Amrapali  Smartcity  Developers Pvt  Ltd  

Bhatia  Properties  

6120  sq. ft.  

B Available 2766  

Amrapali  Leisure Valley  Developers Pvt  Ltd  

Bhatia  Properties  

22200  sq. ft.  

B 6th May  2015  

2777  

Hi-Tech City  Developers Pvt  Ltd  

Sarbjit Leasing  and Finance  Company  

1245.23  sq.  yards  

B 23rd July  2016  

2756-2758  

Amrapali  Hospitality  Services Pvt Ltd  

Vaishnavi  Vahini Mount  Life Hospitality  Pvt Ltd  

10261  sq. ft.  

B 13th  November  2017  

2758-2764  

Sangam  Colonizers Pvt  Ltd  

Anjali  Consultants  

3.13  Hectare  

B 24th April  2017  

2753  

Amrapali  Hospitality  Services Pvt Ltd  

Dr. J P Sharma 2.1  Bigha  

B June 2017 2764  

Amrapali  Homes Project  Pvt Ltd  

Ajit Kumar &  Kriti Agarwal  

11245  sq. ft.  

B 9th October  2017  

2780-2781  

Amrapali  Leisure Valley  Pvt Ltd  

Deepak Kumar 1560  sq. ft.  

B 20th August  2016  

2784  

Amrapali  Dream Valley  Pvt Ltd  

Bihariji  Developers Pvt  Ltd  

16000  sq. ft.  

B 10th July  2017  

2770-2771

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 Amrapali  Dream Valley  Pvt Ltd  

SBL  Construction  Pvt Ltd  

6500  sq. ft.  

B 5th July  2017  

2771-2772  

Amrapali  Silicon City Pvt  Ltd  

SBL  Construction  Pvt Ltd  

20640  sq. ft.  

B 2nd May  2017  

2778  

Amrapali  Silicon City Pvt  Ltd  

Nirala India  Developers Pvt  Ltd  

16436  sq. ft.  

B 15th  October  2015  

2778-2779  

Amrapali  Dream Valley  Pvt Ltd  

Mr. Vinay Garg 11000  sq. ft.  

B 15th  February  2018  

2769  

Ultra Home  Construction  Pvt Ltd  

V.  Thiruvenkitam  & Thushara  Reddy  

82.937  Cents  

B 18th  January  2012  

2795-2796  

Amrapali  Centurian Park  Pvt Ltd  

One  Flameboyant  Realty Pvt Ltd  

16360  sq. mtr.  

B 25th  September  2013  

2786-2787  

CATEGORY-C  

Sangam  Colonizers Pvt  Ltd  

Radheshyam  Yadav, Keshav  Yadav,  Surender  Yadav, Narayan  Yadav &  Lakhan Yadav  

3.28  Hectare  

C 19th Feb  2015  

2754-2755  

Amrapali  Leisure Valley  Pvt Ltd  

PSK Finance  Solution Pvt  Ltd  

14853  sq. ft.  

C 15th July  2014  

2782  

Amrapali  Leisure Valley  Pvt Ltd  

Star Land Craft  Pvt Ltd  

23395  sq. mtr.  

C 31st July  2013  

2784-2785  

Amrapali  Dream Valley  Pvt Ltd  

Shri Balaji Hi  Tech  Construction  Pvt Ltd  

12479  sq. mtr.  

C 31st July  2013  

2772-2773  

Amrapali  Dream Valley  Pvt Ltd  

K V Developers  Pvt Ltd  

19986  sq. mtr.  

C 7th June  2013  

2773  

Amrapali  Dream Valley  Pvt Ltd  

J M Housing  Ltd  

33537  sq. mtr.  

C 5th June  2013  

2773-2774  

Amrapali  Dream Valley  Pvt Ltd  

Samridhi  Realty Home  Pvt Ltd  

27989  sq. mtr.  

C 17th June  2013  

2774

164  

 Amrapali  Centurian Park  Pvt Ltd  

Hawelia  Builders Pvt  Ltd  

14920  sq. mtr.  

C 5th June  2013  

2787-2788  

Amrapali  Centurian Park  Pvt Ltd  

DSD Homes Pvt  Ltd  

14760  sq. mtr.  

C 20th June  2013  

2788  

Amrapali  Centurian Park  Pvt Ltd  

Elegant  Infracon Pvt  Ltd  

14590  sq. mtr.  

C 1st June  2013  

2788-2790  

Amrapali  Smartcity  Developers Pvt  Ltd  

PSK Finance  Solution Pvt  Ltd  

12500  sq. ft.  

C 15th April  2016  

2766  

29. Further Assets To be Attached  

• Inventory of plots at Jaipur – of company names Sangam  Colonisers Pvt Ltd  

• Amrapali Power & Cement Pvt Ltd – Land from Charu Rai yet to be  identified, Land from UPSIDC yet to be identified.  

• Vinayaka Projects at Greater Noida    

30. Statement of cash flow  

Receipt and Payment Statement  (Amount in crores)  

S.No Name of the Company Amount  received  as per  Chart-B of  affidavit of  promoters  submitted  on 3rd  Dec'18  

Cost of  Construction  taken from  latest  audited  financial  statements  available  

Remarks/Assumptions  

1 Received from Customers        

  Amrapali Centurian Park Pvt  Ltd 1050.83 573  

The group received Rs 11573  Crore from th homebuyers  and spent Only Rs. 7,389  Crore  on construction  including land payment to  authorities. It is pertinent to  note it includes borrowing  cost also. Any amount of  expenditure which was  outstanding is not considered  in the given tabe and it is  prepared on the bsia of  audited financial statements  latest available upto March  2015 except one company for  which it is March 2016. It was  found at any given point of  time the amount received  

  Amrapali Dream Valley Pvt  Ltd 1270.5 549  

  Amrapali Leisure Valley Pvt  Ltd 1563.17 594  

  Amrapali Sapphire  Developers Pvt Ltd 1186.66 828  

 Amrapali Silicon City Pvt Ltd 1468.79 1126  

  Amrapali Smartcity  Developers Pvt Ltd 1230.87 780  

  Amrapali Zodiac Developers  Pvt Ltd 835.69 566  

  Hi Tech City Developers Pvt  Ltd 113.18 104.16  

  Amrapali Eden Park  Developers Pvt Ltd 171 175.14  

 Sangam Colonizer Pvt Ltd 9.58 7.61

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 Amrapali Grand 217 104.98 from homebuyers was never  in short   

  Amrapali Princely Estate Pvt  Ltd 724.55 578  

  Amrapali Leisure Valley  Developers Pvt Ltd 505.19 355  

  Amrapali Homes Project Pvt  Ltd* 103 103  

  Ultra Home Construction Pvt  Ltd* 1123.12 945  

 Sub Total (A) 11573.13 7388.89    

2  Sales of  Property/FSI/Facilities 358.68   As per affidavit  

3 Bank 2712.02 1827  

The amount paid to bank as  per Chart B of affidavit  is  2394 crore. We could not  verify the number of amount  paid in absence of details  being not available. We  worked out the otstanding  loan amount from audited  financial statements of 2015.  

4 FDI/Financial Institution 520 65  

The amount borrowed in  against private equity which  has no liabilty of principal  and interest and the investor  would recover his its  investments by selling the  shares on/off market.   Investment in the form of  compulsory convertible  debenture and optionally  convertible would have  interest liabilty upto date of  conversion. the debenture  were note converted on due  dates . Furthermore the  amount invested was diverted  immediately upon receipt to  unapproved purposes.   

5 Investors 300 200  

Number has been taken from  affidavit and has not been  verified by us.  

6 Partner Investment 150 150  

Number has been taken from  affidavit and has not been  verified by us.  

Sub Total (B) 4040.7 2242    

Grand Total (A+B) 15613.83 9630.89    

Difference 5982.94 Short cashflow  

     1 The above does not include the cash received from customers.  2 * Assumed the figure as given  in the affidavit.  

 31. Mrs. Manju Rajpal and Mr. Ramesh Rajpal  

Mrs. Manju Rajpal and Mr. Ramesh Rajpal HUF each invested Rs 7.5

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 crore in May 2011 on interest in Amrapali Leisure Valley Private  Limited. The rate of interest is 18%. However he claimed in his  submission that it was an investment in residential property for his  staff because he was having a plan to shift his business operations in  Noida. He submitted that he acquired this property for residence of his  staff. On reviewing the return of income of Mrs. Manju Rajpal (Refer  annexure S-1 of supplementary report page no. 2823) and Mr.  Ramesh Rajpal we found that amount invested in various units as given  below:    1. Mr. Ramesh Rajpal – Unit No A-388 admeasuring 20,200 sq. feet  in Amrapali Leisure Valley Private Limited for RS 7.5 Cr. However, due  to company’s inability to handover the said villa, 8 units were allotted  instead. Refer Annexure S-2 of supplementary report page no. 2824    

We found Unit No A-388 in Amrapali Leisure Valley Private Limited is  booked in the name of Mr. Joginder Sharma on 13th February, 2016  admeasuring area 2525 sq. feet for a value of Rs 1.29 crore. It depicts  very clearly that there was no unit admeasuring an area of 20,200  sq feet and the amount was invested for a purpose to avail Capital  Gain benefits and earn interest on investment at the rate 18% p.a. It is  recommended that the units allotted as per Annexure S-2 of  supplementary report page no. 2824 should be treated as vacant and  be available for sale.     2. Mrs. Manju Rajpal – Unit No A-396 admeasuring 17,675 sq. feet in  Amrapali Leisure Valley Private Limited for RS 7.5 Cr claimed as Long  term Capital gain. It is claimed, due to company’s inability to handover  the said villa, 53 units were allotted instead. Refer Annexure S-3 of  supplementary report page no. 2825-2826.    We found Unit No A-396 in Amrapali Leisure Valley Private Limited is  booked in the name of Mr. Satya Vir Srivastava on 14th July, 2014  admeasuring area 2525 sq. feet for a value of Rs 65.5 Lakh. It depicts  very clearly that there was no unit admeasuring an area of 17,675  sq feet and the amount was invested for a purpose to avail Capital Gain  benefits and earn interest on investment at the rate 18% p.a. It is  recommended that the units allotted as per Annexure S-3 of  supplementary report page no. 2825-2826 should be treated as  vacant and be available for sale.     The amount invested in residential property is claimed as Capital gain.  

Subsequently in the year 2017, the villas were shifted from Amrapali  Leisure Valley Private Limited to Royalgolf Link, Amrapali Princely  Estate Private Limited, Amrapali Zodiac Developers Private Limited,  Amrapali Silicon City Private Limited, Amrapali Dream Valley Private  Limited and Amrapali Smart City Developers Private Limited and the  villas numbers are attached. (Refer Annexure 2.2 and Annexure 2.3)    For the amount invested of Rs 15 crore, Rs 12.25 crore has been paid to  him in the form of interest at the rate of 18%.    Exotique Exports, an entity of Mr Rajpal, invested Rs 5 crore in 2010 at  the interest rate of 18%. It had been paid Rs 4.55 till February 2016 in  the form of interest. It is submitted that 5 units namely Unit no. 118,  119, 120, 121, 122 were purchased in Amrapali Commercial Complex

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 Cum Corporate Hub at Plot No. Sector – 2 Manesar, Gurgaon, Haryana  for Rs 5Cr however the value of 5 units as per Builder Buyer Agreement  is Rs 3.19 Cr.    32. M/s Surbhaee Advertising Private Limited  (Immovable Property-A3A, Maharani Bagh, New Delhi)  

(i) Mr. Paramjit Gandhi, Mr. Gagandeep Gandhi & Ms. Jasmine  Gandhi are the directors of the company M/s Surbhaee Advertising  Private Limited.    The shares of M/s Surbhaee Advertising Private Limited were  purchased by Mr. Paramjeet Gandhi & M/s Special Tools Private  Limited (a company owned by him & his family) for Rs 1.59 crore for  which no agreement was provided by them.  

 (ii) It was informed that principal business of the company is  Advertising of Projects. However no income has been earned from its  principal business activity or any other source.    (iii) The company is holding an immovable property at A3A Maharani  Bagh, New Delhi admeasuring approximately 800 sq yards.   

It is also stated that the family of Mr. Anil Kumar Sharma is residing in  the same house against which no rent deed is agreed between Mr. Anil  Kumar Sharma & Mr. Paramjit Gandhi (Surbhaee Advertising Private  Limited)    (iv) When asked to Mr. Paramjit Gandhi who resides in Ghaziabad that  why he purchased the property in New Delhi 4-5 years back, he replied  that he wanted to shift to this property.    However the fact is that he has never shifted to Delhi & all the  renovation & maintenance work was overlooked by Mr. Anil Kumar  Sharma.    (v) The company has also taken loan of Rs. 25 crores from Aditya  Birla Finance Limited in the FY 2016-17 against the hypothecation of  the property which was purchased for Rs 1.59 crore. This indicates the  property value was much higher on the date of transfer.    (vi) The company has advanced Rs. 25.88 crores as short term loans &  advances to the following parties-  

1. Chandan Homes Private Limited- Rs. 6.89 crores.  2. Inderjeet Arora- Rs. 1.25 crores.  3. Ishwar Steels- Rs. 2.18 crores  4. Jai Kishan Estate Developers Private Limited- Rs. 1.33 crores.  5. Shekri Finance & Investment Private Limited- Rs. 3.10 crores.  6. Shubha Green Private Limited- Rs. 4.77 crores.  7. Special Tools Private Limited- Rs. 3.37 crores.  8. PJ Buildtech Private Limited- Rs. 0.55 crores.  9. Paradise System Private Limited- Rs. 0.52 crores.  10.  Jiwan Kumar Arora- Rs. 0.50 crores.  11.  Shubhkamna Buildtech Private Limited- Rs. 0.25 crores.  

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 (vii) The company has also received Rs. 2.35 crores & Rs. 3.55 crores  from Mr. Ritik Kumar Sinha & Miss Swapnil Shikha respectively, also  directors in M/s Surbhaee Advertising Private Limited in the FY 2016- 17 out of funds received from Amrapali group of companies enrouted  via the account of Mr. Anil Kumar Sharma.    (viii) It implies that the property which was bought for Rs 1.59 crore,  the amount has been funded out of Amrapali Group funds routed by  Mr. Anil Kumar Sharma who is family member and from them to  Surbhaee Advertising Private Limited. Two of his family members were  made director to have a control on the property of a value of Rs 50 Cr. It  further proves that the difference between the value of property and the  price at which it was transferred to Mr. Paramjit Gandhi was paid in  cash out of cash amount received in Amrapali Group by booking of  bogus expenditure and selling the flats undervalued.  

Opinion  Based on the facts stated above, in our opinion the property at A3A  Maharani Bagh, New Delhi is a “Property” belongs to Mr. Anil Kumar  Sharma/Amrapali group held in the name of the company M/s  Surbhaee Advertising Private Limited.    33. Facility Sold  It is found that the facilities sold under various projects as shown in  Chart M of Affidavit submitted on 3Rd December, 2018 are mere  adjustment entries (Refer Annexure S-10 of supplementary report  page no. 2958-2959).    We found that the buyer is not aware of that he has purchased any land  for the mentioned facility. We further found that there is no account in  the name of the said buyers in many cases to whom the facilities were  sold. It is recommended that the facilities sold so far should be  attached.  

34. Mr.Prem Mishra  We are of the opinion and also given to understand from various  sources that the group diverted funds in the range of 500-600 crore in  Madhya Pradesh projects in particular Indore. Mr.Prem Mishra has  appeared in response to the court notice and he was non-cooperative.  We have also received a communication supporting our views,  reproduced below-  

“Good Evening Sir,  

Hope you are doing well, this is regards Amrapali Scam of CMD Anil  

Sharma, as per my information CMD has transferred 1 thousand crore to  

the different Amrapali Townships project of M.P. through Mr. Prem  

Mishra. The details of the same on paper is available with me. If you can  

arrange some time and allow me to have a detail discussion of the same,  

that would be great.Kindly inform me two days prior to the meeting date,  

as I am from XXXXXX. need to do some arrangements for the same, its a  

request.  

Waiting for your response.”  

169  

 We could not complete the examination of Mr.Prem Mishra in Indore  project due to paucity of time and request it to be included in the  second audit.    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.    

35. Summary of recoverable amounts  

Total recoveries from undermentioned areas:  

1. Sale of Flats at lower prices  Total amount involved in under-valued transactions in respect of Companies  audited by us is  

S. No. Particulars Amount in Crores  

1 Sale of Flats at lower Prices 321.31  

2 Amount receivable from home buyers 3,624.65  

3 Amount receivable from buyers of Commercial Area 89.83  

4 Unsold Inventory  

i) Flats  ii) Commercial Areas  

1,991.69  

345.78  

5 Amount recoverable from   

i) Professional fee  ii) Advances Recoverable  iii) Cash in hand  iv) Other recoverable  

KMP’s   

and their Relatives:   

100.53  

152.24  

69.36  

582.68  

6 Diversion of home buyer’s funds 3,152.30  

7 Non genuine purchases from suppliers 842.42  

8 Recovery from Others 32.69  

9 Unexplained cash deposits/jewellery 14.94  

Total 11,320.42

170  

 Rs.321.31 Crores as per summary given below:  

S.no. Name of the company Number  

of Units  

Amount (In  

Crores)  

Refer Page  Number  

1 Amrapali Sapphire  

Developers Private Limited  

315 76.02 Volume – I Page No.  205 - Point No. 1  

2 Amrapali Leisure Valley  

Developers Private Limited  

70  

5.88  Volume – I Page No.  

222 - Point No. 1  

3 Amrapali Smart City  

Developers Private Limited  

261 18.97 Volume – I Page No.  232 - Point No. 1  

4 Amrapali Silicon City Private  Limited  

468 73.05 Volume – I Page No.  

257 – Point No. 1  

5 Amrapali Dream Valley Private  Limited  

1,752 24.11 Volume – I Page No.  

248 - Point No. 1  

6 Amrapali Leisure Valley  Private Limited  

122 8.53 2811  

(Supplementary  

Audit Report)  

7 Ultra Home Construction  Private  

Limited  

524 30.87 2811  

(Supplementary  

Audit Report)  

8 AmrapaliCenturian Park  Private  

Limited  

1,912 43.12 2811  

(Supplementary  

Audit Report)  

9 Amrapali Princely Estate  Private Limited  

146 6.70 2811  

(Supplementary  

Audit Report)  

10 Amrapali Zodiac Developers  Private  

Limited  

107 6.75 2811  

(Supplementary  

Audit Report)  

11 Amrapali Patel Platinum 179 27.31 2811  

(Supplementary  

Audit Report)  

Total 5,856 321.31   

2. Amount Recoverable from Home Buyers  A sum of Rs.3624.65 crores is recoverable from home buyers. Detailed  summary is as under:  

S.no. Name of the company Amount  (In  Crores)  

Refer Page  Number

171  

1 Amrapali Sapphire  Developers Private Limited2  

46.44 Volume – I Page No.  207 – Point No. 2  

2 Amrapali Leisure Valley  Developers Private Limited  

200.53 Volume – I Page No.222  – Point No. 2  

3 Amrapali Smart City  Developers Private Limited  

400.00 Volume – I Page No.232  – Point No. 2  

4 Amrapali Silicon City Private  Limited  

390.00 Volume – I Page No.257  – Point No. 2  

5 Amrapali Dream Valley Private  Limited  

724.14 Volume – I Page No.248  – Point No. 2  

6 AHS Joint Venture 3.10 Volume – II Page  No.276 – Point No. 4  

7 Hi Tech City Developers  Private Limited (Immediately  recoverable)  

 2.37  

Volume – II Page  No.283 – Point No. 11  

 8  

 Ultra Home Construction Private  Limited  

 65.08  

Volume II - Section XXII  (Page No. 563– 568)  

 9  

 Amrapali Princely Estate Private  Limited  

 28.17  

Volume II - Section XXII  (Page No. 563 – 568)  

 10  

Amrapali Zodiac Developers  Private  Limited  

 26.56  

Volume II - Section XXII  (Page No. 563 – 568)  

 11  

 Amrapali Leisure Valley Private  

Limited  

 1470.94  

Volume II - Section XXII  (Page No. 563 – 568)  

 12  

 Amrapali Centurian Park Private  Limited  

 240.17  

Volume II - Section XXII  (Page No. 563 – 568)  

 13  

Amrapali Eden Park Private  Limited  

4.71  

Volume II - Section XXII  (Page No. 563 – 568)  

 14  

 Amrapali Grand  

 15.56  

Volume II - Section XXII  (Page No. 563 – 568)  

     15 Amrapali Homes Project Pvt. Ltd.                        6.88  

Volume II - Section  XXIII (Page No. 569)  

Total 3624.65   

3. Amount recoverable from buyers of Commercial Area  A sum of Rs.89.83 crores is recoverable from buyers of Commercial  area. Detailed summary is asunder:  

S.no. Name of the company Amount  (In  

Crores)  

Refer Page No.  

1 Amrapali Sapphire Developers Private  Limited  

7.14 Volume – I Page  No.207- Point No. 3  

2 Amrapali Leisure Valley Developers  Private Limited  

 1.68  

Volume – I Page  No.222- Point No. 3

172  

3 Amrapali Smart City Developers Private  Limited  

19.58 Volume – I Page  No.232- Point No. 3  

4 Amrapali Silicon City Private Limited 2.48 Volume – I Page  No.257- Point No. 3  

5 Amrapali Dream Valley Private Limited 6.12 Volume – I Page  No.248- Point No. 3  

 6  

 Ultra Home Construction Private  Limited  

 38.03  

Volume – II Section  XXII (Page No. 563 –  568)  

 7  

 7Amrapali Princely Estate Private  Limited  

 5.50  

Volume – II Section  XXII (Page No. 563 –  568)  

 8  

 Amrapali Zodiac Developers Private  

Limited  

 2.08  

Volume – II Section  XXII (Page No. 563 –  

568)  

 9  

 Amrapali Leisure Valley Private  Limited  

 3.58  

Volume – II Section  XXII (Page No. 563 –  568)  

 10  

 Amrapali Eden Park Private Limited  

 3.64  

Volume – II Section  XXII (Page No. 563 –  568)  

Total 89.83   

4. Unsold Inventory  There is unsold inventory of flats and Commercial areas amounting to  

Rs.2337.47Crores  

approximately as per details given below:  

a) Unsold Inventory of Flats  S.no

.  Name of the company Number  

of Units  in  

Residential  

Approxima te  Realizable  Value  

(In Crores)  

Page No.  

Reference  

1 Amrapali Sapphire Developers Private  

Limited  

14 14.45 Volume – I  Page No.39-  Point No. 4a  

2 Amrapali Leisure Valley Developers  

Private Limited  

329 100.67 Volume – I  Page No.39-  Point No. 4a  

3 Amrapali Smart City Developers Private  

Limited  

183 65.29 Volume – I  Page No.39-  Point No. 4a  

4 Amrapali Silicon City Private Limited 191 154.25 Volume – I  

Page No.39-  

Point No. 4a  

5 Amrapali Dream Valley Private Limited 1833 660.91 Volume – I  Page No.39-  Point No. 4a

173  

6 Amrapali Leisure Valley Pvt. Ltd.* 1203 412.91 Volume – II  

Section XXII  

(Page No.  

563 – 568)  

7 Amrapali Centurian Park Pvt. Ltd.* 981+2 329.34 Volume – II  Section XXII  (Page No.  563 – 568)  

8 Amrapali Eden Park Developers  

Pvt. Ltd.*  

4 2.47 Volume – II  Section XXII  (Page No.  563 – 568)  

9 Amrapali Princely Estate Pvt. Ltd.* 3 4.54 Volume – II  Section XXII  (Page No.  563 – 568)  

10 Amrapali Zodiac Developers Pvt. Ltd.* 27 41.48 Volume – II  Section XXII  (Page No.  563 – 568)  

11 Ultra Home Construction Pvt. Ltd.* 459 205.38 Volume – II  Section XXII  (Page No.  563 – 568)  

Total 5,229 1991.69   

*Estimated Realizable value Noida @ Rs 4,500 approximately psf and  Greater Noida @ Rs3,000 approximately psf (Amount in Crores).    

b) Unsold Inventory of Commercial Area/Shops    

S.no. Name of the Company Unsold  

Commercial  

Approxim ate  Realizable  Value (In  

Crores)  

Page  No.  

refere nce  

 Inventory   

1 Amrapali Sapphire Developers  

Private Limited  

1 Shop 0.71 Volume –  

I Page  

No.39-  

Point No.  

4b  

2 Amrapali Leisure Valley  Developers Private Limited  

Nursery  Schools,  NursingHomes  

and MilkBooth  

 7.00  

Volume –  I Page  No.39-  Point No.  4b  

3 Amrapali Smart City 1 Shop 0.49 Volume –  

I Page  

No.39-

174  

Point No.  

Developers Private 1 Nursery School 4.00 4b  

Limited     

5. Amount recoverable from Key Managerial Persons and their  Relatives  

a) Professional fees paid to directors Rs.100.53 crore  

Name of Director Professional Fees  

(As per Affidavit)  

Rs. in Cr.  

(Under Disclosure in  

Affidavit)Rs. in Cr.  

4 Amrapali Silicon City Private  Limited  

Nursery School  

& Milk Booth  

 11.00  

Volume –  

I Page  No.39-  Point No.  4b  

5 Amrapali Dream Valley Private  Limited  

18 Shops,  Nursery  Schools,  Nursing Homes  and Senior  

Secondary  

Schools  

44.47  

Volume –  I Page  No.39-  Point No.  4b  

6 Amrapali Eden Park  Developers Pvt. Ltd.  

 1  

1.40 Volume  – II  Section  XXII  (Page  No.  563 –  568)  

7 AmrapaliCenturian Park Pvt. Ltd. 17 5.71 Volume  – II  Section  XXII  (Page  No.  

563 –  

568)  

8 Ultra Home Construction  Pvt. Ltd.  

318 + 487 271.00 Volume  – II  Section  XXII  (Page  No.  

563 –  

568)  

Total 345.78  

175  

Anil Kumar Sharma 29.13 8.75  

Shiv Priya 26.43 24.65  

Ajay Kumar 5.76 -  

Suvash Chandra Kumar 5.11 -  

Amresh Kumar 0.68 -  

Total 67.13 33.40  

b) Advances recoverable  A sum of Rs.152.24 crores is recoverable from the Directors on  account of their taxes paid, advance given for purchase of Shares and  

Other Advances given including their family members. The companies  gave advances which were neither adjusted nor squared off against any  future purchases or services under taken by the companies from the  said parties nor were received back by the companies Stunning  Construction Private Limited had made payments of Direct Taxes  which were neither received back by the Company nor adjusted  against any services.  In other words the said advances are still  standing to the debit (recoverable from these parties) in the books of  the Company. This includes a sum of INR 17.43 Crores paid on  behalf of directors, senior employees and their family members.  Please refer executive summary on Page 39 of Volume 1 of Final Report.      Summarized as below:  

S.no. Name of the  company  

Amount  (In  

Crores)  

Anil Kumar  Sharma and  

family  

Shiv Priya  and family  

Ajay  Kumar  

and  family  

Others  

1 Amrapali Sapphire  Developers Private  Limited (Page No.  202-219)  

0.50 0.02 0.39 0.09 -  

2 Stunning  Construction Private  Limited (Page No.  196-201)  

17.43 6.4 5.57 1.7 3.76  

3 Amrapali Smart City  Developers Private  Limited (Page No.-  229-244)  

0.02 - - - 0.02  

4 Amrapali Silicon  

City Private Limited  

(Page No. 255-266)  

0.28 0.05 0.23 - -  

5 AHS Joint Venture  (Page No.- 273- 278)  

9.58 6.18 3.12 0.28 -  

6 Amrapali  

Infrastructure  

113.54 73.25 35.15 5.14 -

176  

Private Limited  

(Page No. 286-306)  

7 Sangam Colonizers  Private Limited  (Page No.189-192)  

0.03 - - - 0.03  

8 Amrapali Hospitality  Services Private  Limited (Page No.  346-350)  

6.62 6.55 - - 0.07  

9 Hi Tech City  

Developers Private  

Limited (Page No.  

279-285)  

4.24 4.24 - - -  

Total 152.24 96.69 44.46 7.21 3.88  

Recoverable from other KMPs is as under:  

Name of the Party  Amount as on  

31stMarch, 2018  

ChanderWadhwa and Family 2.55  

Mohit Gupta and Family 0.16  

SuvashChander Kumar 0.67  

Amresh Kumar 0.17  

NishantMukul 0.12  

Adhikari Devi Prasad and Family 0.02  

Anil Mittal and Company (Statutory Auditor) 0.19  

Total 3.88  

 Cash inHand  

Cash in hand of various Companies is not physically available nor  deposited in the banks and siphoned by the Directors amounting to  Rs.69.36 crores should be recovered from the Directors as per details  given below:  

S. no. Name of the Company Amount (In Crores)  

1 Stunning Construction Private Limited 0.17  

2 Amrapali Sapphire Developers Private Limited 0.11  

3 Amrapali Leisure Valley Developers Private  Limited  

0.23  

4 Amrapali Smart City Developers Private Limited 10.79  

5 Amrapali Silicon City Private Limited 3.58  

6 Amrapali Dream Valley Private Limited 8.02

177  

 7 Hi-tech City Developers Private Limited 0.46  

8 Amrapali Infrastructure Private Limited 3.16  

9 Sangam Colonizers Private Limited 0.15  

10 Navodaya Properties Private Limited 0.24  

11 Hawthorne Intellect Management Solutions  Private Limited  

0.01  

12 MSB Software Technology Private Limited 0.70  

14 GaurisutaInfrasolution Private Limited 0.01  

17 Amrapali Hospitality Services Private Limited 0.01  

18 KapilaBuildhome Private Limited 0.03  

19 MannatBuildcraft Private Limited 0.20  

20 Ultra Home Construction Private Limited 0.22  

21 AmrapaliCenturian Park Private Limited 7.45  

22 Amrapali Eden Park Developers Private  Limited  

2.00  

23 Amrapali Grand 0.50  

24 Amrapali Homes 0.19  

25 Amrapali Homes Projects Private Limited 0.23  

26 Amrapali Leisure Valley Private Limited 9.79  

27 Amrapali Media Vision Private Limited 9.67  

28 Amrapali Princely Estate Private Limited 5.02  

29 Amrapali Smart City Private Limited 0.50  

30 Amrapali Zodiac Developers Private Limited 3.84  

31 Gaurisuta Infrastructure Private Limited 0.02  

32 MVG Techno Consultants Private Limited 0.13  

33 Noida Texfab Private Limited 0.13  

34 La Residentia Developers Private Limited 0.30  

35 Amrapali Biotech India Private Limited 1.50  

Total 69.36  

a) Advance Recoverable from Non-Related Parties     

Amounts given as advances to third parties without any business  transactions which have not been adjusted along with the amount  received/paid for the Non–Genuine transactions amounts to Rs.256.22

178  

 crores + Rs.326.46 crores and should be recovered from the management  of the Amrapali group of Companies.    The Company has given advances to various parties. The said advances  that were given by the Company were neither adjusted nor squared off  against any future purchases or services. No details regarding Pan,  Address and Nature of Advance has been given to us. The actual amount  may be much higher.    

S. no. Name of the Company Amount (In  

Crores)  

Refer Page No.  

1 Amrapali Sapphire Developers  Private Limited  

73.06 Volume – I Page  

No.40- Point No.4c  

2 Amrapali Leisure Valley Developers  

Private  

Limited  

19.67 Volume – I Page  No.40- Point No.4c  

3 Amrapali Smart City Developers  Private Limited  

17.20 Volume – I Page  No.40- Point No.4c  

4 Amrapali Silicon City Private Limited 50.41 Volume – I Page  No.40- Point No.4c  

5 AHS Joint Venture 15.81 Volume – I Page  No.40- Point No.4c  

6 Hi-tech City Developers Private  Limited  

8.91 Volume – I Page  No.40- Point No.4c  

7 Amrapali Infrastructure Private  

Limited  

40.24 Volume – I Page  No.40- Point No.4c  

8 Sangam Colonizers Private Limited 0.36 Volume – I Page  No.40- Point No.4c  

9 Amrapali Power and Cement Private  Limited  

0.91 Volume – I Page  No.40- Point No.4c  

10 Hawthorne Intellect  Management Solutions  Private Limited  

0.17 Volume – I Page  No.40- Point No.4c  

11 Amrapali Aerocity Private Limited 0.01 Volume – I Page  No.40- Point No.4c  

12 Amrapali Buddha Developers Private  Limited  

0.47 Volume – I Page  No.40- Point No.4c  

13 Gaurisuta Infrasolution Private  Limited  

1.24 Volume – I Page  No.40- Point No.4c  

14 Amrapali Hospitality Services Private  Limited  

13.55 Volume – I Page  No.40- Point No.4c  

15 Kapila Buildhome Private Limited 0.41 Volume – I Page  No.40- Point No.4c  

16 Mums Mega Food Park Private  Limited  

1.29 Volume – I Page  No.40- Point No.4c  

17 Mannat Buildcraft Private Limited 0.99 Volume – I Page  No.40- Point No.4c  

18 Amrapali Patel Platinum 7.85 Volume – I Page  No.40- Point No.4c  

19 Stunning Constructions Private  Limited  

0.44 Volume – I Page  No.40- Point No.4c

179  

 20 Amrapali Dream Valley Private  

Limited  3.23 Volume – I Page  

No.40- Point No.4c  

21 Amrapali Grand 29.17 Annexure X.2 Final  

Report Volume – IV  

22 Amrapali Homes 21.41 Annexure X.2 Final  Report Volume – IV  

23 La residential Developers Pvt. Ltd. 23.35 Annexure X.2 Final  Report Volume – IV  

24 Amrapali Eden Park Developers  Pvt. Ltd.  

3.02 Annexure X.2 Final  Report Volume – IV  

25 Gaurisuta Infrastructure Pvt. Ltd. 0.46 Annexure X.2 Final  Report Volume – IV  

26 Jhamb Finance & Leasing Pvt.  Ltd.  

5.93 Annexure X.2 Final  Report Volume – IV  

27 Ultra Home Construction Pvt. Ltd. 87.68 Annexure X.2 Final  Report Volume – IV  

28 Amrapali Homes Project Pvt. Ltd. 55.01 Annexure X.2 Final  Report Volume – IV  

29 Amrapali Zodiac Developers Pvt.  Ltd.  

28.07 Annexure X.2 Final  Report Volume – IV  

30 Amrapali Smart City Pvt. Ltd. 0.95 Annexure X.2 Final  Report Volume – IV  

31 Amrapali Leisure Valley Pvt. Ltd. 51.62 Annexure X.2 Final  Report Volume – IV  

32 Amrapali Media Vision Pvt. Ltd. 4.96 Annexure X.2 Final  Report Volume – IV  

33 Amrapali Health care Pvt. Ltd. 0.22 Annexure X.2 Final  Report Volume – IV  

34 Stunning Construction Pvt. Ltd. 14.61 Annexure X.2 Final  Report Volume – IV  

Total 582.68   

Advance Construction co Pvt ltd is/was a partner holding 9% in  Amrapali Patel Platinum and 66% in AHS Joint Venture Project with  Ultra Home Construction Pvt Ltd. They overdrew 7.10 crore and 14.81  crore from the respective joint venture totaling to 21.91 crore  

 While scrutinizing the documents sent by Advance Construction  Company Private Limited, detail of capital contribution of the Advance  Construction Company Private Limited as on 1st April, 2008 and  thereafter is as under (as per tally data and confirmed by Advance  Construction Company Private Limited):  

Note: The negative figures represent debit/ recoverable balance.    The aforesaid amount of Rs.7.10 crores should be recovered from  

Particulars As on 31st  March, 2007  

As on 31st  March, 2008  

As on 31st  March, 2009  

As on 31st  March, 2010  

Capital Account 3,00,00,000 50,00,000 (6,10,00,000) (7,10,00,000)

180  

 the said party along with interest of Rs.7.24 Crores (computed at  12% p.a. simple interest) in view of the undermentioned  observations:    

• The clause 12 of MOU dated 11th November, 2006 clearly states that  the profit would be divided amongst the partners in the profit-sharing  ratio.    

• The Audited Financial Statements of the firm for the financial year  2013-14 reflect the   firms Reserve and Surplus as Rs.35,433 only.    

• No other clause in the MOU states regarding payment of Interest on  Capital.    

• It is not understood that how the said Company has withdrawn  

Rs.10.10 Crores on an investment of Rs.3 Crores invested for only a  period of 1.5 years from this partnership firm. No satisfactory  explanation has been given to us by the Management.  

Even the ledger account sent by the said Company confirms that they  owe Rs.7.10 Crores to this firm as on 31st March, 2018 after which an  entry has been passed in the books of accounts.  

 As per supplementary partnership cum deed of retirement dated 31st  Day of March, 2014, 2 partners namely M/s Patel Engineering Limited  and M/s Advance Construction Company Private Limited have retired  from the partnership and M/s Amrapali Infrastructure Private Limited  has joined as a partner with M/s Ultra Home Construction Private  Limited. However, the amount of Rs.7.10 Crores was not adjusted and  was shown as payable to Amrapali Patel Platinum by Advance  Construction Company Private Limited since 2014 till 2018. Further,  The Audited Financial Statements of Amrapali Infrastructure Private  Limited for the financial year 2013-14 and thereafter don’t reflect any  investment in Amrapali Patel Platinum.    All the aforesaid facts clearly depict that the aforesaid supplementary  partnership cum deed of retirement, ledger of Amrapali Patel Platinum  in the books of Advance Construction Company Private Limited are  contradictory and fabricated.  

 While scrutinizing the Audited financial statements/Tally data detail of  capital contribution of the Advance Construction as on 1st April, 2008  and thereafter is as under:     (Amount in Crores)  

Particulars As on  31st  March,  2008  

As on  31st  March , 2009  

As on  31st  March , 2010  

As on  31st  March , 2011  

As on  31st  March , 2012  

As on  31st  March , 2013  

As on  31st  March , 2014  

As on  31st  March , 2015  

Capital  Account  

4.22 4.25 4.26 4.32 4.35 4.35 4.30 4.30  

Current  Account  

(12.56) (14.82) (14.82) (14.82) (14.82) (14.82) (14.82) (14.82)  

Note: The negative figures represent debit/ recoverable balance.

181  

 The aforesaid amount of Rs.10.52 crores should be recovered from  the said party along with interest of Rs.17.78 croresupto 31st  March 2018 (computed at 12% p.a. simple interest) in view of the  undermentioned observations:    

a. It is not understood that how the said Company has withdrawn  Rs.14.82 crores on an investment of Rs.4.30 crores. No satisfactory  explanation has been given to us by the Management.  

b. As informed to us by Advance Construction vide their mail dated  6th March, 2019, the Company had effectively retired from the said  partnership and all the project related responsibilities were handed over  to Mr. Sharma, (of Ultra Home) and the same was evidenced by an MOU  dated 17th January, 2006.  

 This explanation given by Advance Construction is not satisfactory  since the Company is continuing as a partner and the subsequent  Audited Financial Statements have also been signed by Advance  Construction as a Partner sharing profit/ loss. This shows that MOU as  referred by Advance Construction is bogus/ legally not enforceable.   

c. Further, Partnership firm has been legally dissolved as per  dissolution deed dated 2nd Day of April, 2018. This shows that Advance  Construction is continuing as a partner in this firm till this date. It has  also been mentioned in the dissolution deed that the accounts of the  firm have been made upto 31st March, 2014 to the mutual satisfaction  of all the parties here to. Even this dissolution deed is dated 2nd April,  2018 doesn’t seem to be genuine in view of the following observations:  

i. It refers to the Audited Financial Statements for the financial year  2013-14, whereas the Audited Financial Statements are available  upto financial year 2014-15.  

ii. The deed of dissolution has not been notarized.  iii. The Witnesses to this Dissolution Deed are incomplete in so far,  

name and address of witness number 1 is not there and signature  of witness number 2 is not there.  

iv. There is no copy of the resolution available authorizing Mr. Shiv  Priya to sign the deed of dissolution.  

 The Company has made cash payments to various parties exceeding INR  20,000 in contravention to The Income Tax Act 1961, to the tune of INR  45,768,482 in just one company namely Amrapali Sapphire Developers  

Pvt Ltd. This is just tip of the iceberg and actual amount may be much  much higher. Most of these payments are not supported by evidence. It  was further observed that neither the Statutory auditor has mentioned  these cash payments exceedingRs.20,000 in his report and nor any  addition has been made by the Income Tax department in framing the  Assessments for the Assessment year 2014-15 vide order dated  31.03.2016.  

Financial  

Year Name of Party Expense Debited Amount  

2012-13 Staff Incentive 2,252,720   

2014-15 Unity Contractor Labour 1,600,000  

182  

 charges of  

Contractor  

2014-15  

ShailenderaDhwaj (T Z-

803) -    1,399,500   

2013-14 MV Ayer (TL-506) -    1,000,000   

Other Petty Amounts  

between 20,000 to 10  

Lakhs  39,516,262  

Total 45,768,482  

6. Diversion of home buyer’s funds  Further as per financial statements and the books of accounts  scrutinized by us up to 31st March 2015, a sum of Rs.1,588.59 Crores  has been diverted to other projects, other group companies, directors  and their relatives and senior employees. As per summary given below:  

S.no. Name of the company Amount  

(In  

Crores)  

Refer Page No.  

1 Amrapali Sapphire Developers Private Limited 113.98 Volume – I Page  No.210- Point No. 7  

2 Amrapali Leisure Valley Developers Private  

Limited  

134.25 Volume – I Page  No.224- Point No. 7  

3 Amrapali Smart City Developers Private  

Limited  

532.76 Volume – I Page  No.233- Point No. 7  

4 Amrapali Silicon City Private Limited 347.36 Volume – I Page  No.259- Point No. 7  & 8  

5 Amrapali Dream Valley Private Limited 457.82 Volume – I Page  No.251- Point No. 7  

6 Hi Tech Developers Private Limited 2.42 Volume – II Page  No.281- Point No. 2  

Total 1,588.59   

7. Non genuine purchases from suppliers    

The total amount of non-genuine/ bogus purchases amounting to  

Rs.842.42croresapproximately. Details are as follows:  

Non genuine purchases from Suppliers  

(Refer Page No. 2800 Supplementary Report& Annexure No. S-4)             

Rs. 837.12 crore  

Add: Land development charges booked without supporting documents              Rs.     7.30 crore

183  

 Total               Rs. 842.42 crore  

8. Recovery from Others  A sum of Rs.32.69 croresis recoverable from others as per details given  below:  

Sr. No. Name of the Company Amount  

in  

crores  

Refer Page No.  

1 Advance Constructions Private  

Limited  

25.02 Volume – I Page  

No.43  

2 ATN Infratech Private Limited 0.70 Volume – I Page  No.43  

3 AlokRanjan 0.25 Volume – I Page  No.43  

4 RinkuComputech 1.19 Volume – I Page  No.43  

5 Casita Propmart Private  

Limited  

0.08 Volume – I Page  No.43  

6 Digital India (Controlled by Anil  

Mittal)  

0.86 Volume – I Page  No.43  

7 AadhunikBuildtech Private  

Limited  

0.12 Volume – I Page  No.43  

8 Kapila Building Solutions Private Limited 0.05 Volume – I Page  No.43  

9 Ozone GSP Infratech 0.42 Volume – I Page  No.43  

10 Royalgolf Link City

Project Private  

Limited  

4.00 Volume – I Page  No.43  

Total 32.69   

9. Unexplained cash deposits/jewellery    Details are as under:  

Name of person Amount/

value (in  

crore)  

Refer Page No.  

Anil Kumar Sharma (Cash) 5.73 Volume II - page no  

419, Point no 7  

1.50 Volume II - page no  

420, Point no 12  

Raj Dulari (mother of Anil  

Kumar Sharma) (Cash)  

0.13 Volume II - page no  

420, Point no 9  

Shiv Priya (cash) 6.00 Volume II - page no  

422, Point no 6

184  

1.00 Volume II - page no  

422, Point no 11  

Shiv Priya (Jewellery) 0.58 Volume II - page no  

422, Point no 11  

Total 14.94   

10. Balance due to Noida Authority and Greater Noida Authority as  per affidavits submitted by them before Hon’ble Supreme Court of India  

 The Group paid only 1st installment to Noida and Greater Noida  authorities and did not pay in almost all the cases the installment due,  lease rent and interest under one pretext or another. The Group has not  made any provision for additional interest due to delay in payments of  installments. We had issued a letter dated 30th January, 2019 to Noida  Authority to send us the complete information/ documents regarding  the amounts due from Amrapali Group of Companies. But we have not  received any such details from the Noida Authority. In these  circumstances balance due to Noida Authority Couldn’t be verified by  us.    It was further informed to us by the management of Amrapali that  Noida and Greater Noida authorities have submitted three claims before  the Honourable Supreme court.  We were produced one of the annexure  of the affidavit and the same is reproduced below.   

 We found that Noida/Greater Noida authority administration was non  active for reasons best known to them. Amrapali group never paid the  2nd installment but Noida and Greater Noida authorities continued to  allot large size land to them without fail. They never bothered to issue  even a notice to be pasted at site for the information of home buyers  that the land dues had not been paid so that home buyers could be  cautious and on alert. In spite of non receipt of any installment, lease  rent, interest they were very trumped in giving no objection certificate  for the borrowings to Amrapali group from different sources like JP  Morgan, ICICI and Aditya Birla Pvt equity funds and/or various banks.        

a) Noida Authority  S. no. Name of the Company Amount  

(In  

Crores)  

1 Amrapali Sapphire Developers Private  

Limited  

348.8  

2 Eden park Developers Private Limited 31.7  

3 Amrapali Silicon City Private Limited 537.9  

4 Amrapali Princely Estate Private Limited 149.6  

5 Amrapali Patel Platinum 115.5  

6 Amrapali Zodiac Developers Private Limited 276.1  

Total 1,459.6  

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b) Greater Noida Authority    

S.no.  

Name  

Amount  

(In  

Crores)  

1 Amrapali Smart City Developers Pvt Ltd 628.06  

2 Amrapali Leisure Valley Developers Pvt Ltd 255.37  

3 Amrapali Leisure Valley Pvt Ltd 914.33  

4 AmrapaliCenturian Park Pvt Ltd 569.36  

5 Amrapali Dream Valley Pvt Ltd 718.28  

Total 3,085.4  

Grand Total  

(a+b)  

4,545  

11. Balance payable against Term Loans  

Name of the Company  

Name of the bank  Date of  

Confirmation  

Total (In  

Crores)  

Ultra Home Constructions  

Private Limited  

Indian Overseas Bank 31-12-2018 16.15  

Corporation Bank 5/2/2019 91.49  

Amrapali Smart City Developers Private  

Limited  

Corporation Bank  

5/2/2019  

143.74  

Amrapali Leisure Valley  Developers Private Limited  

Andhra Bank 5/2/2019 98.04  

Bank of Maharashtra  

A/c  

5/2/2019 179.02  

Andhra Bank 5/2/2019 13.56  

Bank of Maharashtra 5/2/2019 22.24  

Amrapali Silicon City Private Limited Bank of Maharashtra 5/2/2019 95.34  

Total 659.58  

Note: Information in respect of bank loans has been given to the  extent of availability of documents.”  

61(a).  The aforesaid is the summary of report of the Forensic Audit which  

states that the Group collaborated with external parties like J.P. Morgan in  

contravention of FEMA and distributed returns along with the principal  

amount, even though it did not book gains within the business of the

186  

company.  

(b). The report also reveals various disturbing features that no accounts  

were prepared from 2015 to 2018 and money was withdrawn out of it and  

diverted from one company to another.  The entire transactions were not  

being entered into Tally.  The opening balances were not entered properly.   

In April 2015, the Amrapali Group introduced Far Vision an ERP, which  

was also not implemented properly.  

(c). There was no information about purchases from the supplier.  During  

a search in 2013, it was held by Income Tax Authorities that purchases are  

being made from bogus suppliers without receiving the goods physically.   

Bogus expenses and cash has been surrendered by Amrapali Group in the  

income tax search.  

(d). The amount shown as developmental charges is not supported by  

evidence or vouchers.  The total bogus expense has been ascertained to  

Rs.842.42 crores.  An amount of Rs.0.25 crore was paid to Mr. Alok Ranjan  

towards brokerage.      

(e). The company has also made unusual cash payments in the financial  

year 2016-2017 by transferring cash to the Site, but the same is not  

supported/authenticated by the Site Cash In-charge.  Certain payments  

have not been found to be genuine.  

(f). The Group Companies purchased gold bar worth Rs.5.88 crore, which  

is a personal expense and it should be recovered from the management of

187  

the company.  

(g). The amount disbursed by Banks was not utilised for constructions of  

projects and the funds of homebuyers as well as the amount disbursed  

from the Banks were diverted to unapproved uses, namely, creation of  

personal assets of Directors; creation of assets in closely held companies by  

Directors along with their partners and relatives; funds were used for  

personal expenses of Directors; funds were advanced to unrelated entities  

for several years without levying interest on unrealized amount, the  

recoverable amount from third parties has amounted to Rs.326 crores;  

creation of discreet projects for personal income; and construction of assets  

for other projects.  

(h). There were negligence and non-monitoring by Bankers.  There was a  

transfer of funds from one company to another company to a third  

company and so on and so forth on the same dates would not have been  

possible without the active support of the Bankers.  They turned blind eye  

to all the transfers and did not inquire, which were being routed every day.   

If they had been alive to the situation, the Management would not have  

dared to launder the money from one company to another according to  

their whims and fancies and the Bankers are solely responsible for the  

negligence on their part.  The Bankers did not do any monitoring.  The  

Bank of Maharashtra and Andhra Bank also failed to do the monitoring.   

Even the basic checks were foregone.  The Banks acted as a mute spectator  

to unapproved diversion which was happening evidently in all banking

188  

transactions.  Even, Noida and Greater Noida Authorities were grossly  

negligent in reviewing and monitoring the progress of projects and did not  

take any action for non-payment of land dues and continued to allot land  

to Amrapali Group for the reasons best known to them.  

(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 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

189  

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.    

 (5) Kapila Buildhome Private Limited  

It financed a sum of Rs.392.68 crores.  It accepted non-interest  

bearing inter-corporate deposits from non-group companies, which was

190  

used for money laundering.  

 (6) Rudraksha Infracity Private Limited  

It was consisting of office boys and relative of Anil Mittal, Statutory  

Auditor, which was created to receive money from Mannat Buildcraft  

Private Limited and to transfer it to J.P. Morgan Investments by purchasing  

it at exorbitant rates and for no other transaction.  

 (7) Mannat Buidcraft Private Limited  

It was created for money laundering of Rs.120 crores, only for few  

transactions.    

   (8) Amrapali Magadh Developers Private Limited   

It did not carry out any principal business activity.  The purpose of its  

creation is not clear.  The shareholders paid the share application money in  

cash.  

 (9) Amrapali Mahi Developers Private Limited  

It received share capital in cash and all the expenses were paid in  

cash.    

 (10) Amrapali Spring Valley Private Limited  

It was created for the purpose of routing and diversion of funds  

amounting to Rs.186 crores has been found.  

(11) Amrapali Media Vision Private Limited  

It was created making movies.  There was no necessity of creation of

191  

this company for advertising.  It was created to divert funds to make  

movies.  Rhiti Management Private Limited was paid Rs.24 crores for  

professional charges and advertisement expenses etc.  

 (12) Hawthrone Intellect Management Solutions Private Limited  

It had paid up capital of Rs.1 lakh and incurred losses of Rs.2.33  

crores.  The expenses are inflated to wipe off the various loans and  

advances received from sister concerns.  The entries have found to be  

dubious and the amount of loss of Rs.2.33 crores to be recovered from the  

Directors as it was wiping off the amount of the homebuyers.  

 (13) Amrapali Smart City Private Limited  

It is stated in the report that plot allotted to Amrapali Smart City  

Private Limited was cancelled, therefore, money receivable from Greater  

Noida is Rs.18.35 crores.  

 (14) Amrapali Biotech India Private Limited  

It was created for routing funds.  The ICD's are either from the group  

companies or received from outside the group companies through  

adjustment entries.  

 (15) Amrapali Healthcare Private Limited  

 It formed the property by funds of Ultra Home Construction Private  

Limited created from home buyers’ funds.  It deserves to be sold.  

192  

(16) Amrapali Centurian Park Private Limited  

The Forensic Auditors have found bogus booking of expenditure and  

certain adjustments against bogus billings of River Sand for an amount of  

Rs.3.60 crores.  

(17) Amrapali Leisure Valley Private Limited  

 Mr. Akhil Kumar Surekha became the Director and thereafter most  

diversions of funds took place through the current account.  The funds of  

the company were transferred to and fro with companies in which Surekha  

family had control.  FSI was sold without taking approval from Great Noida  

Authority.  The money received from Bihari High Rise Private Limited was  

diverted to Jotindra Steel & Tubes Limited and Ozone GSP Infratech by  

routing it through Ultra Home Construction Private Limited. Bihariji High  

Rise Private Limited, Jotindra Steel & Tubes Limited and Mauria Udyog  

Limited are owned by Surekha family.  There was bogus booking of  

expenditure since March 2018 also of Rs.2.86 crores and other bogus  

entries of huge amounts.  

(18) Amrapali Homes  

It has been found that Mauria Udyog Limited has to pay Rs.20 crores  

and the same be recovered.  

 (19) La Residentia Developers Private Limited  

The consortium of five members was created, which was controlled by  

Amrapali Group.  The shareholders and directors were just acting faces for

193  

outsiders.  There was diversion of funds since beginning of the project  

itself.  The company purchased raw material from Amrapali Infrastructure  

Private Limited amounting to Rs.67.45 lakhs, but not even a single penny  

was paid since then.  The loan amount of Rs. 49 crores were taken.  On the  

other hand, there was withdrawal by Directors and advances given to the  

related parties and entities.  Amrapali Group transferred some of their  

buyers to La Residentia Developers Private Limited and the payment for the  

same was received by Amrapali Group.  They were reflected as customers  

in the customer data of Amrapali Group.  The company is using the brand  

name/trademark of Amrapali Group on its letterheads.  

 (20) Amrapali Homes Projects Limited  

Mr. Prem Mishra was given Rs.12.40 crores for purchase of land since  

1st April 2008, out of which Rs.10 crores are still receivable from him.   

Rs.55.87 crores are recoverable amounts and out of which Rs.20.75 crores  

pertain to advances against land which has not been charged to cost of  

construction.  

(21) Ultra Home Construction Private Limited  

The flats were allotted on false promises, forged documents and  

certain allotted flats did not exist in the approved building plan.   

Shareholders used the money of home buyers for allotment of shares in the  

company.   The records of certain lands purchased by the company  

disappeared, the details of which have been given.  The company has  

advances recoverable amounting to Rs.111 crores.  

194  

(22) Amrapali Grand  

Bihariji Ispat Udyog Limited always had negative capital.  Loans and  

advances amounting to Rs.25.73 crores have been diverted.  The other  

diversions have also been noticed in the report.  

 (23) Amrapali Eden Park Developers Private Limited  

There is no substance in the nature of transactions of the company.   

It was for routing funds form one entity to another to hidden objective.   

Banks loans were diverted as advances to third parties.  The funds were  

diverted for purposes other than development.  

 63. Several companies were created for building assets.  There was no  

compliance of the statutory obligations by the companies.  The annual  

returns and audited financial statements have not been filed after  

31.3.2015.  The Registrar of Companies has disqualified the Directors,  

namely, Mr. Anil Kumar Sharma, Mr. Amresh Kumar, Mr. Shiv Priya, Mr.  

Ajay Kumar and Mr. Suvash Chandra Kumar for a period of 5 years under  

Section 164(2) of the Companies Act, 2013.  The Company has not been  

regular in payment of TDS and service tax and has also not filed relevant  

returns after 31.3.2015.  Mr. Anil Mittal, CA (Statutory Auditor) and Mr.  

Chander Wadhwa, CFO were in connivance with each other.  Mr. Anil  

Mittal, CA blindly signed the accounts and along with Mr. Chander  

Wadhwa, CFO is grossly involved in making manipulation in the accounts.   

He has received payment on account of professional charges in the name of  

companies in which his relatives were Directors and this fact has not been

195  

disclosed in the audited financial statement.  A sum of Rs.52.07 crore was  

adjusted on account of professional fees due and to be paid on account of  

audit fees.  Further, a sum of Rs.16.36 crore was adjusted against a flat in  

Amrapali Princely Estate on account of audit fees.  They incorporated 27  

additional companies identified.  They were shell companies, whose share  

capital was mostly subscribed in cash and the transfer of shares was also  

in cash leaving no audit trail.  The home-buyers funds to the extent of  

Rs.5,619.47 crores have been diverted.  There was diversion of funds to  

various suppliers, fake purchases and advances without any adjustment.   

Siphoning off funds had also taken place by way of booking under-valued  

transactions in respect of the sale of flats.  The Forensic Auditors have also  

traces of receiving cash from home-buyers, which is not accounted for in  

the books of accounts.  The home-buyers funds were diverted to the tune of  

Rs.5,619.47 crores to the other companies through (i) payment of  

professional fee to Directors for Rs.100.53 crores; (ii) bogus billing for  

Rs.842.42 crores; (iii) under-valuing of flats to the tune of Rs.321.21  

crores; (iv) brokerage was paid against flats which were not sold by the  

company; and (v) inter-corporate deposits were given to related entities.  

 64. In J.P. Morgan, had also been found to routing money and in  

violation of FEMA by the Forensic Auditors.  As pointed out, the equity  

shares were purchased at an exorbitant price to suit the requirements of  

J.P. Morgan.  Sudit K. Parikh & Co., Chartered Accountants and the  

Auditors made the valuation on the basis of information provided by J.P.

196  

Morgan Investments.  Amrapali Zodiac Developers Pvt. Ltd. has diverted  

home buyers fund and there was no need for any investment from J.P.  

Morgan.  It was in the knowledge of Mr. Suraj Chhabria and also in the  

knowledge of J.P. Morgan that money had been diverted.  

 65. Rule 4 of FEMA Rules has been referred by the Forensic Auditors  

pointing out that External Commerical Borrowings (ECB) can be accessed  

under two routes namely Automatic Route and Approval Route.  Under  

Automatic Route, the ECB is not permitted to be utilized for real estate  

sector, whereas under Approval Route the ECB are not permitted to be  

utilized for real estate.  Rs.60 crores were remitted to Amrapali Leisure  

Vally Developers Pvt. Ltd. by J.P. Morgan without obtaining approval from  

the competent authority so as to make investment in the form of ECB.  It is  

necessary to comply with the following :  

(a) obtaining Loan Registration Number from R.B.I.;  

(b) file ECB-2 returns every month to the R.B.I.;  

(c) withhold tax on interest payment to J.P. Morgan under Section  

195 of the Income Tax Act.  As per Article 11 of the Avoidance of  

Double Taxation Agreement between India and Mauritius, the  

tax shall be charged @ 7.5 percent of the gross amount of  

interest;  

(d) J.P. Morgan would have to file its income tax return under  

Section 139 of the Income Tax Act in India due to withholding  

tax on its interest income borrower.

197  

66. The Forensic Auditors have also reported duplicate allotment of flats.   

They have provided the details of flats.  Flats were alloted (residential and  

commercial) to the brokers and suppliers of which list has been given.   

Utilities like Milk Booth, nursery schools, senior secondary schools,  

nursing homes alloted to various parties should be cancelled.  

67. With respect to Sureka Group, it is pointed out in the Forensic Audit  

Report that they have been a partner in various projects and were  

authorised cheque signatories in various companies.  It is observed that  

Rs.13.44 crores were paid to Surekha Public Charitable Trust, which is a  

group institution of Jotindra Steel and Tubes Limited, which amount  

should be recovered from Jotindra Steel & Tubes Limited.  An amount of  

Rs.9,506,120 should also be recovered from Surekha Group.  Funds were  

routed through Synergy Freightways Pvt. Ltd.  Mr. Atul Kumar was alloted  

a flat which was not by way of adjustment.  The amount should be  

recovered or his flat may be attached.  

 68. With respect to R.N. Traders, an amount of Rs.2,714.02 lakhs have  

been withdrawn by the management for the purpose of their own use and  

should be recovered from the management.  There is a billing of Rs.5.28  

crores for the financial year 2015-16 in the name of Mauria Udyog Limited.   

Forfeiture of the investments has also been suggested in the group  

companies named by the Forensic Auditors.  

198  

CONSIDERATION OF SUBMISSIONS  

69. In the instant matter, the question of larger public importance is  

involved. It is a shocking and surprising state of affairs that such large-

scale cheating has taken place and middle and poor class home buyers  

have been duped and deprived of their hard-earned money and lifetime  

savings and some of them had taken a loan from the bank and they are not  

getting houses. Bank has made payment to the builder, owners have the  

liability of making payment of amount with interest, home buyers are still  

waiting for their dream houses to be completed. This is not only with  

respect to the Amrapali builders that projects have not been completed as  

reflected in the affidavits of Noida and Greater Noida Authorities. More  

than 70% of the projects have not been completed which were initiated  

way-back in the year 2008-09 and were supposed to be completed within 3  

years. By the Amrapali Group, the buyers' money which has been obtained  

has not been invested in the construction activities, rather it has been  

diverted to a great extent. Money obtained from the banks has also not  

been invested in the projects and has been diverted elsewhere to acquire  

other assets.  

 70. There are huge liabilities of Noida and Greater Noida Authorities and  

though builders were asked way back on 17.11.2017 to deposit 10% of the  

amount with the Noida and Greater Noida authorities, that order was  

repeated again on 18.1.2018 but still that has not been complied with.  

Thereafter on the basis of joint note, this Court directed Amrapali group of

199  

companies to complete the projects but the order was not complied with.  

Various wrong representations were made in this Court. Developers backed  

out and an application was filed to waive the condition of deposit of Rs.250  

crores to start work by the Amrapali group that shows that its action was   

mala fide and it never intended to complete various projects as rightly  

found by the forensic auditors and that their intention was to divert the  

funds and this they had done at a large scale as is borne out from their  

report.  

71. The question involved in the case is whether the builders and  

promoters can be permitted to usurp and divert the money of home buyers  

and home buyers can be left in the lurch as a silent spectator. As per the  

Noida and Greater Noida authorities, in case the lease-deed is snapped, the  

entire constructed buildings shall have to be demolished within 3 months.  

As per the bankers, they have a charge on the property as the land has  

been mortgaged to them and until and unless their amount is paid, the  

builder will have no right on the property which has been constructed by  

their money, and the buyers have also to wait for the satisfaction of the  

dues.  

 72. In our opinion, if the real estate business has to survive in India, it  

has to be answerable to the public and has necessarily to uphold the trust  

reposed in builders/promoters. They have been paid huge amounts not  

only by the home buyers but also, they have to pay a huge amount for the  

public land given to them on lease by Noida and Greater Noida Authorities

200  

for construction of houses. The land has been given to them by the  

authorities on a concessional basis by making payment of 10% amount at  

the time of allotment. The builders have to be accountable to public/home  

buyers as well as the authorities and bankers. It is a matter relating to  

housing needs dealing with shelter place, such an activity is of the public  

importance as the real estate sector plays a pivotal role in the fulfilment of  

needs of housing infrastructure.  

IN RE: PUBLIC TRUST DOCTRINE  

73. The public trust doctrine imposes on the State and its functionaries a  

mandate to take affirmative action for effective management, and the  

citizens are empowered to question its ineffectiveness. The land of the  

farmers had been acquired for the purpose of housing and infrastructure  

needs by the State Government and handed over to the concerned  

authorities for construction. They are bound to ensure that builders act in  

accordance with the objective behind the acquisition of land and the  

conditions on which allotment had been made. It was a duty of concerned  

officials; they are not only enjoined to ensure that the rights of the home  

buyers are protected but also the interests of the authorities; and bankers.  

The public authorities are duty-bound to observe that the leased property  

is not frittered away along with the money of the home buyers. Affirmative  

action was clearly enjoined upon them not only under the statutory  

provisions of various enactments but also under the public trust doctrine

201  

that has evolved over the years by this Court. In Noida Entrepreneurs  

Association v. Noida & Ors. (2011) 6 SCC 508, this Court has observed:  

"38. The State or the public authority which holds the property for the  public or which has been assigned the duty of grant of largesse, etc.  acts as a trustee and, therefore, has to act fairly and reasonably. Every  holder of a public office by virtue of which he acts on behalf of the  State or public body is ultimately accountable to the people in whom  the sovereignty vests. As such, all powers so vested in him are meant  to be exercised for public good and promoting the public interest.  Every holder of a public office is a trustee.  

***   ***   ***  40. The Public Trust Doctrine is a part of the law of the land. The  doctrine has grown from Article 21 of the Constitution. In essence, the  action/order of the State or State instrumentality would stand vitiated  if it lacks bona fides, as it would only be a case of colorable exercise of  power. The Rule of Law is the foundation of a democratic society. (Vide  Erusian Equipment & Chemicals Ltd. v. State of W.B., AIR 1975 SC  266, Ramana Dayaram Shetty v. International Airport Authority of  India, AIR 1979 SC 1628, Haji T.M. Hassan Rawther v. Kerala  Financial Corpn., AIR 1988 SC 157, Shrilekha Vidyarthi v. State of U.P.,  AIR 1991 SC 537; and M.I. Builders (P) Ltd. v. Radhey Shyam Sahu,  AIR 1999 SC 2468).  

***   ***   ***  41. Power vested by the State in a Public Authority should be viewed  as a trust coupled with duty to be exercised in larger public and social  interest. Power is to be exercised strictly adhering to the statutory  provisions and fact-situation of a case. "Public Authorities cannot play  fast and loose with the powers vested in them". A decision taken in an  arbitrary manner contradicts the principle of legitimate expectation.  An Authority is under a legal obligation to exercise the power  reasonably and in good faith to effectuate the purpose for which power  stood conferred. In this context, "in good faith" means "for legitimate  reasons". It must be exercised bona fide for the purpose and for none  other. (Vide Commr. of Police v. Gordhandas Bhanji, AIR 1952 SC 16,  Sirsi Municipality v. Ceceila Kom Francis Tellis, AIR 1973 SC 855, State  of Punjab v. Gurdial Singh, AIR 1980 SC 319, Collector (District  Magistrate) v. Raja Ram Jaiswal, AIR 1985 SC 1622, Delhi Admn. v.  Manohar Lal, (2002) 7 SCC 222 and N.D. Jayal v. Union of India, AIR  2004 SC 867)."  

 74. In Natural Resources Allocation, In re, Special Reference No.1 of 2012,  

(2012) 10 SCC 1, the Court observed:   

“172. The judgment in LDA v. M.K. Gupta, (1994) 1 SCC 243, brings  out the foundational principle of executive governance. The said  foundational principle is based on the realization that sovereignty  vests in the people. The judgment, therefore, records that every limb of  the constitutional machinery is obliged to be people oriented. The  fundamental principle brought out by the judgment is, that a public  authority exercising public power discharges a public duty, and

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 therefore, has to sub-serve general welfare and common good. All  power should be exercised for the sake of society. The issue which was  the subject matter of consideration, and has been noticed along with  the citation, was decided by concluding that compensation shall be  payable by the State (or its instrumentality) where inappropriate  deprivation on account of improper exercise of discretion has resulted  in a loss, compensation is payable by the State (or its instrumentality).  But where the public functionary exercises his discretion capriciously,  or for considerations which are malafide, the public functionary  himself must shoulder the burden of compensation held as payable.  The reason for shifting the onus to the public functionary deserves  notice. This Court felt, that when a court directs payment of damages  or compensation against the State, the ultimate sufferer is the  common man because it is tax-payers money out of which damages  and costs are paid."  

 75. In Association of Unified Tele Services Providers & Ors. v. Union of  

India & Ors.  (2014) 6 SCC 110, the Court observed:   

"4. We have indicated, the worth of spectrum to impress upon the fact  that the State actions and actions of its agencies/ instrumentalities/  licensees must be for the public good to achieve the object for which it  exists, the object being to serve public good by resorting to fair and  reasonable methods. State is also bound to protect the resources for  the enjoyment of general public rather than permit their use for purely  commercial purposes. Public trust doctrine, it is well established, puts  an implicit embargo on the right of the State to transfer public  properties to private party if such transfer affects public interest.  Further, it mandates affirmative State action for effective management  of natural resources and empowers the citizens to question ineffective  management."  

76. In the instant case, it is apparent that there are colossal dues of  

Noida and Greater Noida Authorities. The dues of Noida Authorities as on  

30.4.2019 are Rs.2191.38 crores and dues of Greater Noida authority are  

stated to be Rs.3234.71 crores as on 15.1.2019. Thus, the total dues of  

Noida and Greater Noida authorities are more than Rs.5426.09 crores; by  

now more than Rs.5500 crores. Payments were made to Noida authorities  

in 2010 and some amount in 2013; in-between or thereafter, except one or  

two payments no other amount has been paid. There were several defaults  

in making the payment of the premium amount, lease money, even the

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money payable to the farmers as compensation for land acquisition has not  

been paid by the builders, as is apparent from the account statement filed  

on behalf of the Noida authority. Though the builder has realised from  

home buyers the amount payable to authorities of Noida and Greater Noida  

as a component of the price payable by them.  

77. Once the Noida and Greater Noida Authorities knew very well that  

there were defaults, they could not have allotted further land to the  

Amrapali group without insisting for payment of its dues. Secondly, it was  

not open to the authorities to permit the sub-leases of plot of land executed  

by builders, thereby allowing the leaseholder to earn a huge amount  

without making payment of the amount due to them. The officials of the  

authorities have acted in clear breach of public trust. They have permitted  

the defaulting leaseholders to earn the amount by sub-leasing its land of  

which dues had not been cleared. Thus, apparently, the officials of the  

authorities acted clearly in collusion with the builders and overlooked the  

interest of the Authorities and home buyers while permitting the sub-leases  

of plot of land to be granted. It passes comprehension how the officials of  

the authorities could have permitted such sub-leases in the factual  

scenario of the case when even the basic obligation to raise the  

construction was not being fulfilled by the builders and they were not  

paying the dues of premium, lease money etc.  The action of the officials of  

the authorities has the effect of causing unjust enrichment of builder from

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the land held by the concerned authorities. It was wholly an illegal exercise  

permitted.  

78. We are of the considered opinion that the officials of the Noida and  

Greater Noida authorities have acted clearly in a breach of public trust and  

apart from that, they have failed to act as per the statutory mandate, the  

regulations and the terms of the lease deed. The transfer of the plot by the  

lessee was only on fulfilment of certain conditions. The dues of lessor  

towards the cost of land were to be cleared in accordance with the schedule  

of payment.  Following provision is contained in lease deed dated 3.8.2010  

entered into between Greater Noida Industrial Development Authority and  

M/s. Amrapali Leisure Valley Developers Pvt. Ltd. The relevant provision  

with respect to the transfer of the plot is extracted hereunder:  

“TRANSFER OF PLOT  

. Without obtaining the completion certificate the Lessee shall have the  right to sub-divide the allotted plot into suitable smaller plots as per  planning norms and to transfer the same to the interested parties up  to 30.0.2010, or as decided by the Lessor, with the prior approval of  LESSOR on payment of transfer charges @ 2% of allotment rate.  However, the area of each of such sub-divided plots should not be less  than 20,000 sq. mtrs. However, the individual flat/plot will be  transferable with prior approval of the LESSOR as per the following  conditions:-    

(i) The dues of LESSOR towards the cost of the land shall be paid in  accordance with the payment schedule specified in the Lease Deed  before executing of sub-lease deed of the flat.  (ii) The lease deed has been executed.  (iii) Transfer of flat will be allowed only after obtaining completion  certificate for the respective phase by the Lessee.  (iv) The sub-Lessee undertakes to put to use the premises for the  residential use only.  (v) The Lessee has obtained building occupancy certificate from the  Building Cell/Planning Department, GREATER NOIDA.  (vi) First sale/transfer of a flat/plot to an allottee shall be through a  Sub-lease/Lease Deed to be executed on the request of the Lessee to  the LESSOR in writing.  (vii) No transfer charges will be payable in case of the first sale,  including the built-up premises on the sub-divided plot(s) as described

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 above. However, on a subsequent sale, transfer charges shall be  applicable on the prevailing rates as fixed by the LESSOR.  (viii) Rs. 1000/- shall be paid as processing fee in each case of transfer  of flat in addition to transfer charges.”     

(emphasis supplied)      

79. In the lease deed, the schedule of payment was fixed. Two years was  

the period of the moratorium and thereafter payment was to be made on  

expiry of 23.10.2012, onwards up to 23.4.2020. In case of default in  

depositing the amount, the interest @ 15% compounded half yearly shall be  

leviable. With respect to the extension of time, it is provided that in  

exceptional circumstances, time to deposit for payment of balance due  

amount may be extended by the CEO for 15% interest compounded half  

yearly. The extension of time, in any case, cannot be allowed for more than  

60 days for each instalment to be deposited, subject to a maximum of 3  

such extensions during the entire payment schedule. The provision relating  

to the extension of time is extracted hereunder:  

“A.  EXTENSION OF TIME  

1. In exceptional circumstances, the time of deposit for the payment of  balance due amount may be extended by the Chief Executive Officer of  the Lessor.  2. However, in such cases of time extension, interest @ 15% per  annum compounded half yearly shall be charged on the outstanding  amount for such extended period.  3. Extension of time, in any case, shall not be allowed for more than  

60 days for each instalment to be deposited, subject to maximum of  three (3) such extensions during the entire payment schedule.  4. For the purpose of arriving at the due date, the date of issuance  of allotment letter will be reckoned as the date of allotment.”     

 80.  The lease was granted for a term of 90 years. It is specifically provided  

in lease deed condition No.(ii)(c) that the lessee shall use the allotted plot  

for construction of group housing/flats/plots. Condition No.(ii)(c)(iii) deals

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with the part transfer of the plot. It lays down normally the permission for  

part-transfer of the plot shall not be granted under any circumstances. The  

lessee shall not be entitled to complete the transaction for sale, transfer,  

assign or otherwise part with possession of the whole or any part of the  

building constructed thereon before making payment according to the  

schedule specified in the lease deed of the plot to the lessor. Relevant  

condition No.2(c)(iii) is extracted hereunder:  

"(c) The Lessee shall use the allotted plot for construction of Group  Housing/flats/plots. However, the Lessee shall be entitled to allot the  dwelling units on a sub-lease basis to its allottee and also provide  space for facilities like Roads, Parks, etc. as per their requirements,  convenience with the allotted plot, fulfilling requirements or building  bye-laws and prevailing and under mentioned terms and conditions to  the Lessor. Further transfer/sublease shall be governed by the transfer  policy of the Lessor.    i) Such allottee/sub Lessee should be a citizen of India and  

competent to contract.  ii) Husband/wife and their dependent children will not be separately  

eligible for the purpose of allotment and shall be treated as single  entity.  

iii) Normally, the permission for the part transfer of plot shall not be  granted under any circumstances. The Lessee shall not be  entitled to complete transaction for sale, transfer, assign or  otherwise part with possession of the whole or any part of the  building constructed thereon before making payment according to  the schedule specified in the lease deed of the plot to the Lessor.  However, after making payment of premium of the plot to the  Lessor as per schedule specified in the lease deed, permission for  transfer of built-up flats or to part with possession of the whole or  any part of the building constructed on the Group Housing Plot,  shall be granted and subject to payment of transfer charges as  

per policy prevailing at the time of granting such permission of  transfer. However, the Lessor reserves the right to reject any  transfer application without assigning any reason. The Lessee will  also be required to pay transfer charges as per the policy  prevailing at the time of such permission of transfer.  

 The permission to transfer the part of the built-up space will be  granted subject to execution of tripartite sub-lease deed which shall be  executed in a form and format as prescribed by the lessor. On the  fulfilment of the following conditions: -    

a) The lease deed of the plot has been executed and the Lessee has  made the payment according to the schedule specified in the lease  deed of the plot, interest and one-time lease rent. Permission of sub-

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 lease deed shall be granted phase wise on payment of full premium  (with interest up to the date of deposit) of the plot of that phase.  

b) Every sale done by the Lessee shall have to be registered before the  physical possession of the property is handed over.  

c) The Lessee has obtained building occupancy certificate from the  Planning Department, Greater Noida.  

d) The Lessee shall submit list of individual allottees of flats within 6  months from the date of obtaining occupancy certificate.  

e) The Lessee shall have to execute sublease in favour of the individual  allottees for the developed flats/plots in the form and format as  prescribed by the LESSOR.  

f) The Sub-Lessee undertakes to put to use the premises for the  residential use only.”          

(emphasis supplied)  

81. In view of the aforesaid clause, by way of sub-lease of the plot, the  

transfer of plots could not have been made by the lessee. The lessee was  

required to start construction within 12 months from the date of  

possession. The date of execution of lease deed shall be treated as the date  

of possession. The lessee shall be required to complete the construction of  

minimum 15% of the total FAR of the allotted plot as per the approved  

layout plan and get occupancy/completion certificate within 3 years from  

the date of execution of the lease deed. Cancellation of lease deed is also  

provided in the case of violation of directions, or rules, regulations or in  

case of the default on the part of the lessee for breach or violation of terms  

and conditions of the registration/allotment/lease and/or non-deposit of  

allotment amount. In the case of cancellation, if the plot is occupied by the  

lessee, an amount equivalent to 25% of the total premium of the plot shall  

be forfeited and possession of the plot will be resumed by the lessor with   

structure thereon, if any, and the lessee will have no right to claim

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compensation thereof. The provision relating in lease deed as to its  

cancellation is extracted hereunder:    

“CANCELLATION OF LEASE DEED  

In addition to the other specific clauses relating to cancellation, the  Lessor, as the case may be, will be free to exercise its right of  cancellation of the lease in the case of:-  1. Allotment being obtained through misrepresentation/suppression  of material facts, misstatement and/or fraud.  2. Any violation of directions issued or rules and regulation framed  by Lessor or by any other statutory body.  3. Default on the part of the Lessee for breach/violation of terms  and conditions of registration/allotment/lease and/or non-deposit of  allotment amount.  4. If at the same time of cancellation, the plot is occupied by the  Lessee thereon, the amount equivalent to 25% of the total premium of  the plot shall be forfeited and possession of the plot will be resumed by  the Lessor with structure thereon, if any, and the Lessee will have no  right to claim compensation thereof. The balance, if any, shall be  refunded without any interest. The forfeited amount shall not exceed  the deposited amount with the Lessor and no separate notice shall be  given in this regard.    5. If the allotment is cancelled on the ground mention in sub-clause  1 above, then the entire amount deposited by the lessee till the date of  cancellation shall be forfeited by the Lessor and no claim whatsoever  shall be entertained in this regard.”    

   82. As provided by clause 6, the lease deed/allotment shall be governed  

by the provisions of the U.P. Industrial Area Development Act, 1976 and by  

the rules and/or regulations made or directions issued under the Act.  

Clause 7 requires the lessor to monitor the implementation of the project.  

The applicants who do not have a firm commitment to implement the  

project within the time limits prescribed are advised not to avail the  

allotment. In larger public interest the lessor under clause 13 is also given  

a right to take back possession of the land/building by making payment at  

the prevailing rate. Condition Nos.6, 7 and 13 are extracted hereunder:  

“6. The Lease Deed/allotment will be governed by the provisions of the  U.P. Industrial Area Development Act, 1976 (U.P. Act No.6 of 1976)

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 and by the rules and/or regulations made or directions issues, under  this Act.    7. The Lessor will monitor the implementation of the project.  Applicants who do not have a firm commitment to implement the  project within the time limits prescribed are advised not to avail the  allotment.    13. The Lessor in larger public interest may take back the possession  of the land/building by making payment at the prevailing rate.”  

 (emphasis supplied)  

Thus, it is apparent that the officials of the concerned authorities  

have not discharged their duty in accordance with the trust enjoined upon  

them under aforesaid terms and conditions of lease deed, thus, by their  

inaction, enabled cheating of the home buyers at a large scale. They were  

well aware of what was happening on the spot.  

IN RE: MORTGAGE  

83. With respect to the creation of mortgage deed in favour of bankers  

etc., Noida Authority has submitted that every mortgage permission is  

granted by the Noida Authority to the individual company of Amrapali  

group wherein a provision is made that Noida Authority has first  

charge/priority over all other charges including those created in favour of  

banks and financial institutions. The conditions on which permission to  

mortgage had been granted are as under:  

“This is to inform you that Noida shall have no objection for the  purpose of financing his investment in the project on Group Housing  Plot No.001, Sector 119, Noida in favour of Nationalised  Banks/Financial Institutions/HUDCO, New Delhi or to issue NOC to  mortgage the said land to facilitate the housing loans of the final loans  of the final purchasers subject to such terms and conditions as may  be decided by the Authority at the time of granting the permission.  This permission is being granted subject to the condition that in the  mortgage deed, following clauses will be included:-   

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 (i) That the financial institution in whose favour mortgage permission  is required should be recognised by the Reserve Bank of India/National  Housing Bank/HUDCO New Delhi. Noida shall have the first charge  towards the pending payment in respect of plot/flat allotted/lease  rent/taxes or any other charges as informed or levied by the Authority  on the plot and the banks/financial institutions/HUDCO New Delhi,  shall have the second charge on the dwelling units thus being  financed.    (ii) The mortgage permission shall be effective on making full  payment of premium and up to date annual lease rent of group  housing plot and after execution of sub-lease deed in favour of allottee  of the dwelling unit and the allottee/sub-lessee shall be governed by  the terms and conditions of allotment/lease deed of the plot to be  executed and sub-lease deed to be executed in favour of the allottee  

sub-lessee. In the event of sale/transfer of flat, transfer charges at the  rate prevailing at the time of transfer shall be payable to Noida.    (iii) Each allottee/sub-lessee of the dwelling units shall have to  intimate Noida of the creation of the mortgage in favour of  bank/financial institutions/employer and the bank/financial  institution/employee of the allottee shall also keep Noida informed  about the dwelling units thus financed.    (iv) It is further to inform you that in the case of cancellation of lease,  Noida Authority will give 30 days’ notice to nationalised  Banks/financial institutions/HUDCO, New Delhi prior to exercising its  right of re-entry on the premises.”     

(emphasis supplied)  

84. The permissions to mortgage containing aforesaid clauses have been  

placed on record along with affidavit dated 22.11.2018. It is apparent from  

the second condition, subject to which permission to mortgage shall be  

effective on making full payment of the premium and up to  date  annual  

lease rent of  group housing plot and after execution of the sub-lease deed  

in favour of the allottee of the dwelling unit, the allottee/sub-lessee shall be  

governed by the terms and conditions of allotment/lease deed of  the plot to  

be executed and sub-lease deed to be executed in favour of the  

allottee/sub-lessee. Since at no point of time, payment of premium due had  

been made and up to date annual lease rent had not been paid, no  

mortgage could have been created in favour of the bank in view of specific

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condition No.2 extracted above. Thus, when the conditional permission  

granted by the authority was furnished to the bank for obtaining the loan  

by promoters/builders, it was incumbent upon Bank officials to ascertain  

from the concerned authorities that the premium due under the leases has  

been paid and lease rent due up to date has also been paid.  In order to  

create a mortgage, it was necessary to obtain clear NOC in order to create  

effective mortgage deed. As that has not been done so far, no mortgage in  

the eye of law has been created in favour of the bank. It was not open to  

the bankers to mortgage the land in view of the conditional permission to  

create mortgage, the mortgage created in violation of condition cannot be  

said to be effective in accordance with law as the land was owned by the  

concerned authorities and the lessees had right to mortgage only subject to  

fulfilment of conditions imposed by the lessor/authorities.  

 85. On behalf of Noida and Greater Noida authorities, it was pointed out  

that they had taken steps reminding the lessees to pay dues by issuing  

notices w.e.f. 2007 to 2017. In our opinion, in spite of no payment made by  

lessees, failure to take action, makes their position further worse. As no  

effective action had been taken and officials have permitted wilfully  

contumacious violations of conditions of the lease. Right under their nose  

and to their knowledge serious kind of fraud had been taking place and  

officials have clearly connived with builders. In spite of construction  

activity lying stand still for years together dues not being paid.  As a matter  

of fact, issuance of conditional NOC was with ulterior motive, there was no

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reason to issue such a conditional permission, subject to which mortgage  

could have been made.  They could not have issued any conditional  

permission for creation of a mortgage also without payment of amount due,  

permission has been issued obviously for being misused, in collusion with  

the officials of the bank and Authorities. It was incumbent upon the  

concerned authorities not to issue such an NOC for a mortgage and it was  

incumbent upon the bank officials in order to create a valid mortgage to  

ascertain from the Noida and Greater Noida Authorities that the condition  

imposed by them as condition precedent to create a mortgage had been  

fulfilled and to obtain clear NOC. But that is how in illegal manner the  

public money is obtained from banks for the purpose of construction  

activity and then it was not used for that purpose, as found in the forensic  

audit report in which it is rightly pointed out that there was a diversion of  

money.  The amount of loan advanced by banks was not used for the  

purpose it had been obtained for a particular project and it was diverted to  

other companies. It was happening not only under the nose of Noida and  

Greater Noida authorities, but was directly in the knowledge and  

connivance of the bankers as day-to-day transactions in the bank accounts  

were pointing out that the money was being siphoned and diverted for  

other purposes routinely, not being utilised for the purpose it was given.  

Thus, all of them have helped in perpetuating the fraud on the home  

buyers by Amrapali group of companies, its various Directors, officials and  

others who have been specified in minute details in the forensic audit  

reports. The case also indicates that not only the banks have failed to

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ensure that mortgage was effected in accordance with the law, but also  

they have failed to check whether money was in fact, required for the  

projects and was used for purpose it was lent. By the collusion, the money  

paid by home buyers to builders which included money payable to the  

Authorities could be diverted, had the deposit made by home buyers been  

unutilised, money due under lease would have been paid to authorities  

before the creation of the mortgage. Money borrowed from bank, in fact,  

was not required for completion of these projects as the money paid by the  

buyers was enough for that purpose, but that was also diverted and the  

money obtained from the banks was also not utilised for the purpose it was  

taken and it was well within the knowledge of the bankers and Authorities  

that the funds were being diverted, but they remained mute spectators.   

 DIVERSION OF FUNDS  

86. It has been observed in extensive detail in the forensic audit report  

that the Bank of Baroda, Syndicate Bank, Bank of India, Corporation Bank  

did not monitor utilisation of funds and acted as a mute spectator to  

diversion which was almost happening evidently in all banking  

transactions. In the case of Amrapali Zodiac Developers, Bank of Baroda  

has advanced an amount which was diverted immediately on receipt. The  

details have been given in the forensic auditors' report extracted above.  

There was no amount due as on the date of the transfer. In the case of  

Amrapali Princely Estate Pvt. Ltd., the details have been given with respect  

to the Syndicate Bank and Bank of India as to how immediately on receipt,

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the funds were diverted to several parties. In the case of Amrapali Eden  

Park Developers Pvt. Ltd., there was a receipt from the Corporation Bank,  

and similar is the position. Immediately the funds were diverted to the  

third parties as detailed in the forensic report. Details of diversion of loan  

funds have been given in a tabular form in Section XII from pages 426 to  

457 of the report.  The submissions which have been raised on behalf of  

Bank of Baroda that due observance of norms was observed before  

sanctioning the loan, before disbursal and an independent Lenders'  

Engineer had been appointed in order to monitor the contract. Monitoring  

was done during and post disbursal of loan by Bank of Baroda. As a matter  

of fact, the bank has not been able to show what steps it has taken to stop  

the diversion of funds to third parties on the same date of disbursal of the  

amount. The aforesaid stand of the Bank is falsified by the Forensic  

Auditors’ report.  

 87. The transactions of Amrapali Zodiac Developers Pvt. Ltd. with J.P.  

Morgan were clearly in order to avoid the provisions of the Companies Act.  

It is apparent that Mr. Anil Mittal, Statutory Auditor, did not report his  

interest and disclosed about his relatives and junior employee as Director  

and shareholders. Mr. Chandan Kumar was a junior employee and Mr.  

Atul Mittal was his relative. Thus, it is apparent that Rudraksha Infracity  

Pvt. Ltd. was created for money laundering as aforesaid two Directors and  

shareholders had no income, Rudraksha Infracity Pvt. Ltd. was  

incorporated to receive funds from Mannat Buildcraft which was also

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created by Mr. Chander Wadhwa, CFO through his close associates. After  

receiving money from Mannat Buildcraft Pvt. Ltd., the same was  

transferred to J.P. Morgan Investments for purchasing equity shares of  

Amrapali Zodiac Pvt. Ltd. at an exorbitant price. There was no transaction  

before or after these transfers of monies in the aforesaid dummy  

companies.  To suit the requirement of J.P. Morgan Investments, in  

entirety incorrect valuation report was prepared by M/s. Sudit K. Parikh &  

Co., Chartered Accountants. The methodology and procedures defined of  

computation of fair market value were not followed at the time of exit. J.P.  

Morgan was having full control on Amrapali Zodiac Developers and no  

action could have taken as per clause 10.4.3 without investors' approval.  

The profit cannot be recognised until the project is completed. Thus, there  

cannot be any distributable amount as profit for distribution to J.P.  

Morgan. It has also been found by the Forensic Auditors that J.P. Morgan  

was in the knowledge of the fact that Amrapali Zodiac Developers had paid  

the money received to other companies of Amrapali group. Advances  

exceeded the limits specified in the shareholders’ agreement, but J.P.  

Morgan did not ensure bringing back the money. It was accepted by Mr.  

Suraj Chhabria that it was in his knowledge and that of J.P. Morgan that  

the money has been diverted from shareholder’s agreement and share  

subscription agreement. The valuation of the shares did not follow the  

correct methodology of discounted cash flow as detailed out by the forensic  

auditors. The valuation exercise was done backwardly in order to inflate

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the value of share to siphon out the money of home buyers through J.P.  

Morgan.  

 88. The FEMA rules prohibited the kind of transactions which were  

entered into with J.P. Morgan.  Rule 4 of FEMA has been clearly violated.  

Master Circular No.8/2010-2011 of July 1, 2010, dealing with external  

commercial borrowings and trade credits clearly provides that external  

commercial borrowings are not permitted to be utilised for real estate  

business under the automatic route. The term real estate excludes the  

development of the integrated township. It was not a case of development of  

the integrated township. Even if it is taken to be a case of integrated  

township as submitted on behalf of J.P. Morgan, then also for approval  

route, hedging is required as pointed out by the Forensic Auditors in their  

report and borrowers had to submit their report about the signing of loan  

agreement with the lender for obtaining Loan Registration Number. In case  

J.P. Morgan had invested in the form of ECB, following would have been  

the requirements: (i) obtaining Loan Registration Number from the RBI; (ii)  

file ECB-2 returns every month to the RBI, (iii) to pay tax on interest  

payment to J.P. Morgan; and (iv) to file income tax return. We are in  

agreement with the findings of the forensic auditors in this regard. It is  

clear that it was a methodology adopted by the group to siphon out the  

funds of the home buyers in violation of the FEMA rules and the  

notifications and by the creation of dubious companies for which  

appropriate action is warranted by the concerned authorities.

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89. The report of Forensic Audit also indicates that the Company has  

received a sum of Rs.140 crores during the financial year 2012-13 from  

IPFFI Singapore PTE Limited under Foreign Direct Investment Scheme.  As  

per FEMA Rules, this amount was to be invested in real estate construction  

projects only.  

90. The IPFFI Singapore PTE Limited which was incorporated on  

20.5.2011, entered into a Share Subscription Agreement with ASCPL on  

23.8.2012 and paid a sum of Rs.140 crores to ASCPL in the following  

manner on 7.8.2012:  

(a) INR 85 crores received in Axis Bank, Indirapuram Branch on  

7.8.2012.  

(b) INR 55 crores received in BOB Escrow Account on 7.8.2012.  

 Thus, a total sum of Rs.140 crores was received in Axis Bank.  The  

amount was received in Axis Bank of INR 85 crores was transferred to  

Amrapali Centurian Park Pvt. Ltd. in three proportion.  On 7.8.2012, Rs.5  

crores were transferred.  On 8.8.2012, an amount of Rs.50 crores was  

transferred and on 18.8.2012, Rs.30 crores were transferred.  The ACPPL  

on receiving Rs.85 crores allotted equity shares worth INR 85 lakhs to  

ASCPL and balance INR 84.15 crores were treated as share premium  

account.  There is no valuation report available as to how the share  

premium of INR 84.15 crores had been calculated.  This transfer of fund by  

ASCPL to ACPPL is termed as absolutely violative of FDI Rules and

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agreement.  With respect to Rs.55 crores routed from IPFFI Singapore in  

the Escrow Account of Bank of Baroda, Escrow Account was transferred  

from 8.8.2012 to 28.9.2012 in the account of Bank of Baroda and used for  

payment of term loan instalments of OBC and Bank of Maharashtra for  

repayment of their term loan instalment.  This money was not meant for  

payment of term loan instalment as per FDI Rules.  It was to be used in the  

construction.  

91. The ASCPL did not use the money for the project which was received  

from IPFII Singapore but transferred Rs.85 crores to ACPPL and Rs.55  

crores to repay bank loan instalments and repay the outstanding creditors  

provided for in the books and standing in the books.  The said payments  

have rightly been held by Auditors to be in contravention of the FDI norms  

and rules and for which the money was brought in India.  

92. From 2013 to 2015, ASCPL has paid interest of Rs.58.81 crores @ 17  

percent, which is a highly abnormal rate.  A sum of Rs.14.41 crores was  

paid on 31.3.2013.  Likewise, on 31.3.2014, Rs.22.20 crores were paid and  

on 31.3.2015, another amount of Rs.22.20 crores was paid.  The violations  

were made with the knowledge of the IPFII Singapore and they were in  

connivance with the ASCPL.  

93. The stand of the Bank of Baroda that they have independently  

appointed Lender’s Engineer is of no avail.  There was negligence on the  

part of Bank of Baroda and merely proceeding before the Court in 2017 to  

recover the amount is not going to serve the purpose.  More so, in view of

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the finding of the Forensic Audit that there was no necessity of obtaining  

the loan from the Bankers as Amrapali Group had sufficient money from  

the home buyers, which has also been diverted and has not been utilised in  

the construction activities.  Other assets have been created with the help of  

the same and the borrowings have been used in order to siphon off the  

money by making payment of some unusual amount not only to J.P.  

Morgan, but also to IPFII Singapore in violation of the FEMA Rules and FDI  

Rules as found by the Auditors in the respective cases.  

94. It was submitted that the Bank of Baroda has obtained the deed of  

corporate guarantee inter alia from Ultra Homes Construction Ltd, Rinku  

Clothing Creations Pvt. Ltd., Jotindra Steels and Tube Limited and  

Vidyashree Buildcon Pvt. Ltd.  RoC search report and CA certificate had  

also been obtained.  Lender's Legal Counsel Report dated 2.3.2012  

verifying the validity and enforceability of financing documents and  

creation of securing on assets of ASCPL is also on record.  Jotindra Steels  

and Tubes Limited issued a corporate guarantee, it was absolutely  

improper for the Bank of Baroda to discharge the bank guarantee without  

payment of amount in view of the fact that Jotindra Steels and Tubes  

Limited was not ready to subscribe to the capital was no ground for Bank  

of Baroda to discharge Jotindra Steels and Tubes Limited.  Once guarantee  

has been given and in view of the finding recorded by the Forensic Auditors  

as to the nature of bid by the Jotindra Steels and Tubes Limited and other  

persons, it is apparent that action was illegal.

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95. The leases had been granted by Noida and Greater Noida Authorities  

subject to the provisions contained in U.P. Industrial Area Development  

Act, 1976.  Section 13 of the U.P. Industrial Area Development Act, 1976  

deals with imposition of penalty and mode of recovery of arrears, which  

states that where any transferee makes any default in the payment of any  

consideration money or instalment thereof or any other amount due on  

account of the transfer of any site or building by the Authority or any rent  

due to the Authority in respect of any lease or where any transferee or  

occupier makes any default in payment of any amount of fee or tax levied  

under the Act, in addition to the amount of arrears, a further sum not  

exceeding that amount shall be recovered from the transferee or occupier  

by way of penalty.  Under Section 13-A, any amount payable to the  

Authority under Section 13 shall constitute a charge over the property and  

may be recovered as arrears of land revenue or by attachment and sale of  

property in the manner provided under the provisions of Uttar Pradesh  

Municipal Corporations Act, 1959 (Act no.2 of 1959).  Section 14 provides  

for the resumption of any site or building and forfeiture of whole or any  

part of the money if any paid in respect thereof.  

“14. (1) In the case of non-payment of consideration money or any  instalment thereof on account of the transfer by the Authority or  any site or building or in case of any breach of any condition of  such transfer or breach of any rules or regulations made under this  Act, the Chief Executive Officer may resume the site or building so  transferred and may further forfeit the whole or any part of the  money if any paid in respect thereof.     (2) Where the Chief Executive Officer order resumption of any site or  building under sub-section (1) the Collector may, on his requisition,  cause possession thereof to be delivered to him and may for that  purpose use or cause to be used such force as may be necessary.”  

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96. The Authorities have failed to take action under the aforesaid  

provisions.  The Authorities have also failed to perform the statutory duty  

cast upon them to take prompt action.  Merely filing of the case against  

Unitech Builders by way of petition in this Court did not furnish any  

grounds to the Authorities to remain silent spectator on the perpetration of  

fraud committed on the home buyers by Amrapali Group of Companies.   

Public trust doctrine requires an affirmative action, which was envisaged  

not only statutorily but under the Scheme also.  They were required to  

ensure that projects were completed within the stipulated period,  

otherwise, the very purpose of the grant would stand frustrated and  

colossal loss of public money.  Amrapali Group did not pay even the  

amount due to be paid to the landowners on the part of land acquisition, it  

did not pay premium annual lease amount interest to Authorities.  They  

have violated every condition, but still, Authorities were bent upon to  

condone everything.  This reflects absolute dereliction of duty cast upon  

the Authorities.  

 97. The Noida and Greater Noida Authorities and the Bankers have  

permitted diversion of funds of home-buyers and the possession of other  

assets by Amrapali Group.  The buyers' money had been diverted, which  

was meant for construction on payment of dues of Authorities in case they  

were paid timely by the Amrapali Group to the Authorities and to the  

Banks substantively liability would have been cleared.  But by their  

inaction and rather conniving, the buyers were cheated by the Amrapali

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Group.  Authorities did not object when mortgages were effected in favour  

of Banks in violation of conditions.  Bankers could not have violated  

conditions.  Now, whatever complete/incomplete structures are there, the  

Authorities are claiming that buyers have no right and they have the first  

charge on the structure as they have to recover the amount, only thereafter  

if anything is left out, can be paid to the buyers.  In case the submission is  

accepted, it would amount to playing further fraud upon the fraud.  It was  

incumbent upon the Authorities as well as the Banks to prevent the fraud.   

Now, if Banks, as well as the Authorities, are permitted to recover the  

amount from the home-buyers' investment, in that case, it would be  

equally unjust and would be against the conscience of the law and nothing  

would be left for buyers not even a brick and the structures have come up  

by investing their money.  Law never permits unjust gain based upon  

fraud.  The principle “fraud vitiates” is clearly attracted and such a  

transaction would become unenforceable and would be against the public  

trust doctrine.  Real estate business can never prosper in case of breach of  

trust, bankers, Authorities in connivance and the builders are permitted to  

take away the innocent home-buyers' money without being accountable to  

their action/inaction.  From tomorrow huge money will be collected from  

home buyers by the builder, banks would act in connivance and the  

Authorities sleep in slumber, permitting diversion of money of  

buyers/bankers, etc., and the home-buyers will be paying the dues of all  

concerned without investment of a penny by builder and rather they are  

diverting the money of the home-buyers in connivance with Authorities and

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Bankers and they are left without dream homes.  If that is a factual  

scenario, no Court can permit such fraud to be perpetrated.  Since “fraud  

vitiates”, the bounden duty of the Court is to act as parens patria not only  

to save the home-buyers but also to ensure that they are not cheated.  

 98. Authorities and Bankers have not acted in furtherance of public  

interest and failed to perform duties enjoined upon them.  The kind of  

fraud that has taken place not only in Amrapali Group of Companies but at  

large as more than 70 percent of the various projects have not come up, is  

alarming to the Courts to take affirmative steps with the direction to  

prevent such frauds, restore the money of home-buyers and to punish  

incumbents responsible for such act.  At the same time to ensure that  

buildings are completed.  It cannot be denied that lifetime savings of home-

buyers have been invested for purchase of a house with the faith and trust  

they have given the money.  The scheme of the Government is to promote  

the real estate for which land had been acquired, even poor farmers have  

not been paid the compensation.  The land allotted at throw away prices of  

10%, the allotment premium has not been paid and in an illegal manner  

plots have been allotted on huge amount by builders is another fraud in  

collusion with Authorities.  

 99. How buyers get their houses and can be suitably compensated for the  

delay that has taken place in the matter and they are left at the juncture  

where the builder has diverted the funds for the last several years and no  

construction activities have taken place.  For several years, no accounts

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were maintained from 2015 till date and a lot of money had been  

withdrawn from the Banks.  The orders passed by this Court on  

22.11.2017 to deposit 10 percent of the amount was not complied with by  

the Amrapali Group.  Thereafter again on 17.5.2018, this Court permitted  

them to carry forward the project, but they did not do so and were not  

ready to deposit the amount of Rs.250 crores to show their bona fide to  

undertake construction activity and efforts had been made to wriggle out of  

assurances on which basis this Court had passed the orders.  

100. On behalf of Authorities provisions contained in Section 13 of the  

Uttar Pradesh Apartment (Promotion of Construction, Ownership, and  

Maintenance) Act, 2010 has been pressed into service.  It is submitted that  

transfer cannot be made in favour of home-buyer without executing the  

Transfer Deed.  As per Section 5 of Act of 2010, flat buyers become entitled  

to ownership and possession of the Apartment and undivided interest in  

the common areas as specified in the deed of the Apartment.  It is further  

submitted that tripartite sub-lease deed has to be entered into in order to  

transfer ownership to the home-buyers, consisting of Authorities, builders  

and home-buyers and before that is done, it is necessary for builder to  

obtain the completion certificate on fulfilment of certain conditions.  The  

main objection raised by the counsel is with respect to the issuance of  

completion certificate is default of the payment of amount with interest to  

be made under lease and relating to fire safety.  It is also pointed out that  

completion certificate is necessary to be issued, the issuance of the same

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would depend upon payment of the dues and the Authorities, later on, will  

have no mechanism to recover the dues, once registered conveyance deed  

is executed in favour of home-buyers.  According to Authorities, the buyers  

may contend that they have paid the entire consideration to the builder,  

who has defaulted in making the payment for the flat and the privity of  

making the payment is between the concerned Authorities and the builder.   

It is also submitted on behalf of Authorities that in part completion also,  

the certificate can be issued against the part payment received, however,  

the completion certificate would be issued in the same proportion minus 10  

percent so that financial interest of the Authorities is protected.  Sub-lease  

deed would be executed as per the present policy up to 90 percent of the  

proportion in which part payment has been received.   

 101. In our opinion, in the ordinary course, there cannot be any dispute  

with respect to the aforesaid propositions.  However, in the instant case,  

the facts indicate that 9000 families are residing for the last several years  

out of the sheer necessity of shelter place and they have not been provided  

with electricity connections and other facilities due to non-issuance of  

occupancy certificate by the concerned authorities.  Most of them have paid  

the entire amount to the builders.  The amount outstanding as against  

home buyers have to be used in completion of building.  The payment to be  

made to concerned Authorities had also been collected by the builder from  

home buyers as component of price of flat, but has not been deposited with  

the concerned Authorities and the home buyers’ money had been diverted,

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which was more than the dues of the Authorities and the Banks taken  

together.  Had timely action been taken by them no amount could have  

been diverted and the position would have been different as it stands  

today. However, since we have attached various other properties where  

home buyers’ money has been invested, the rights of the Authorities as well  

as bankers to get the money recovered from the other properties of the  

builder Amrapali Group/Directors and where they have invested money  

and belonging to the guarantors in the various transactions.  However, at  

the same time for want of payment to Authorities and Bankers by the  

builder under these facts and circumstances, it would be absolutely  

improper for the Authorities to deny issuance of occupancy or completion  

certificate, especially on the ground of non-payment of dues.  As per the  

interim orders, we have ensured that fire safety devices are fitted in  

buildings at appropriate places wherever necessary and in case it is lacking  

at any place we have to ensure that they are fitted and there are no other  

violations pointed out in the construction so far made.  Thus, the  

concerned Authorities have to issue occupancy certificate as well as  

completion certificate with respect to the projects in which home buyers  

residing without insisting for the payment of their dues. This Court has to  

monitor the payment of the dues to the Authorities as well as the Bankers,  

from guarantors and other proprietors.   The innocent buyers cannot be  

made to suffer for no fault on their part.  

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102. Once Authorities have allowed 9000 home-buyers to occupy the  

premises without terminating the lease on the ground that occupation is  

illegal.  Obviously, builders have put them in possession, they are not the  

encroachers and they have invested their valuable saving and have no  

other shelter place to live.  They cannot be deprived of their houses and  

cannot be left without basic necessities of life like water, electricity, etc.   

The concerned Authorities are responsible to provide electricity, water, and  

all other basic amenities to buyers as they have the right to occupy the  

premises.  In the peculiar facts of the case, we have directed the  

Authorities to provide basic necessities forthwith.  We also direct the  

Central Government and Government of Uttar Pradesh to ensure that  

everything is done to protect the interest of the home-buyers obviously  

without obliging the builders.  Wherever we seek any favour for home-

buyers, we see that defrauding parties i.e., promoters/builders are further  

obliged by making certain concessions by the Government that would  

amount to perpetrating further fraud and unjust enrichment of builder.   

The case poses challenge to the law enforcement agencies to act in tandem  

to book such culprits.   

103. When there are defaults galore, creation of fake and dummy  

companies in an unbridled manner, it passes comprehension that how the  

Statutory Auditor has failed to discharge the duty cast upon him and the  

officials of the Amrapali Group also shared hard earned money of home-

buyers in an illegal manner by siphoning it off.  Directors had obtained

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salaries without doing anything.  Money is diverted and siphoned off in  

other projects.  Office junior employees, peons and relatives etc. were  

inducted as Directors just to defraud the home-buyers of their money and  

to siphon it out.  Without material being supplied, a large amount of money  

had been paid by way of forge purchases as a method to divert money even  

through authorised signatories and the Companies of the relatives, family  

members and relations of the Directors and Guarantors also.  In the case  

fraud is to such large extent, it is difficult to capsulise the facts in a narrow  

compass, for that when we see the report and good job done by the  

Forensic Auditors to unearthed the fraud.  They have gone into minute  

details forensically and done their job extremely well, due to which serious  

kind of fraud has been unearthed with the involvement of so many persons  

as referred to by them.  We direct the concerned Authorities to look into the  

violation of the FEMA and FDI norms as projected by the Forensic Auditors  

in their report and to submit progress report in this Court.  

IN RE: RERA  

104. The Bill was passed in the Rajya Sabha on 10.3.2016 and in the Lok  

Sabha on 15.3.2016.  The Bill intended to standardise business practices  

and transactions in the real estate sector.  It intends to ensure consumer  

protection.  It intends to regulate transaction related to both residential  

and commercial projects.  The Statement of Objects and Reasons are as  

under:  

“STATEMENT OF OBJECTS AND REASONS

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 The real estate sector plays a catalytic role in fulfilling the need and  demand for housing and infrastructure in the country.  While this  sector as grown significantly in recent years, it has been largely  unregulated, with absence of professionalism and standardisation  and lack of adequate consumer protection.  Though the Consumer  Protection Act, 1986 is available as a forum to the buyers in the real  estate market, the recourse is only curative and is not adequate to  address all the concerns of buyers and promoters in that sector.   The lack of standardisation has been a constraint to the healthy  and orderly growth of industry.  Therefore, the need for regulating  the sector has been emphasised in various forums.    2. In view of the above, it becomes necessary to have a Central  legislation, namely, the Real Estate (Regulation and Development)  Bill, 2013 in the interests of effective consumer protection,  

uniformity, and standardisation of business practices and  transactions in the real estate sector.  The proposed Bill  provides  for the establishment of the Real Estate Regulatory Authority (the  Authority) for regulation and promotion of real estate sector and to  ensure sale of plot, apartment or building, as the case may be, in an  efficient and transparent manner and to protect the interest of  consumers in real estate sector and establish the Real Estate  Appellate Tribunal to hear appeals from the decisions, directions or  orders of the Authority.    3. The proposed Bill will ensure greater accountability towards  consumers, and significantly reduce frauds and delays as also the  current high transaction costs.  It attempts to balance the interests  of consumers and promoters by imposing certain responsibilities on  both.  It seeks to establish symmetry of information between the  promoter and purchaser, transparency of contractual conditions,  set minimum standards of accountability and a fast-track dispute  resolution mechanism.  The proposed Bill will induct  professionalism and standardisation in the sector, thus paving the  way for accelerated growth and investments in the long run.    4. The Real Estate (Regulation and Development) Bill, 2013 inter  alia provides for the following, namely:-    

(a) to impose an obligation upon the promoter not to book, sell  or offer for sale, or invite persons to purchase any plot,  apartment or building, as the case may be, in any real  

estate project without registering the real estate project  with the Authority;  

(b) to make the registration of real estate project compulsory in  case where the area of land proposed to be developed  exceed one thousand square meters or number of  apartments proposed to be developed exceed twelve;  

(c) to impose an obligation upon the real estate agent not to  facilitate sale or purchase of any plot, apartment or  building, as the case may be, without registering himself  with the Authority;  

(d) to impose liability upon the promoter to pay such  compensation to the allottees, in the manner as provided  under the proposed legislation, in case if he fails to

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 discharge any obligations imposed on him under the  proposed legislation;  

(e) to establish an Authority to be known as the Real Estate  Regulatory Authority by the appropriate Government, to  exercise the powers conferred on it and to perform the  functions assigned to it under the proposed legislation;  

(f) the functions of the Authority shall, inter alia, include – (i)  to render advice to the appropriate Government in matters  relating to the development of real estate sector; (ii) to  publish and maintain a website of records of all real estate  projects for which registration has been given, with such  details as may be prescribed; (iii) to ensure compliance of  the obligation cast upon the promoters, the allottees and  the real estate agents under the proposed legislation;  

(g) to establish an Advisory Council by the Central  

Government to advice and recommend the Central  Government on – (i) matters concerning the implementation  of the proposed legislation; (ii) major questions of policy;  (iii) protection of consumer interest; (iv) growth and  development of the real estate sector;  

(h) to establish the Real Estate Appellate Tribunal by the  appropriate Government to hear appeals from the direction,  decision or order of the Authority or the adjudicating  officer;  

(i) to appoint an adjudicating officer by the Authority for  adjudging compensation under sections 12, 14 and 16 of  the proposed legislation;  

(j) to make provision for punishment and penalties for  contravention of the provisions of the proposed legislation  and for non-compliance of orders of Authority or Appellate  Tribunal;  

(k) to empower the appropriate Government to supersede the  Authority on certain circumstances specified in the  proposed legislation;  

(l) to empower the appropriate Government to issue directions  to the Authority and obtain reports and returns from it.  

 (5) The Notes on clauses explain in detail the various provisions  contained in the Real Estate (Regulation and Development) Bill,  2013.    (6) The Bill seeks to achieve the above objectives.”    

105. It is apparent from the aims and objectives that Act ensures greater  

accountability towards consumers and significantly reduce fraud and  

delays.  Accountability standards have been laid down where duties cast  

upon promotors as well as the effort has been made to make consumer also  

responsible.

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106. Before coming to the rival submission with respect to RERA, we deem  

it appropriate to note certain provisions.  Common areas have been defined  

under Section 2(n).  The apartment has been defined under Section 2(e).   

Section 2(k) defines carpet area, whereas Section 2(q) defines completion  

certificate.  Completion certificate to mean that certificate issued by  

competent authority certifying that the project has been developed  

according to the sanctioned plan, layout plan and specifications as  

approved by the competent authority.  Occupancy certificate has been  

defined in Section 2(zf) which states that certificate issued by the  

competent authority permitting occupation of any building which has  

provision for civic infrastructures such as water, sanitation, and electricity.   

Section 2(zk) defines promoter as a person who constructs or causes to be  

constructed an independent building or a building consisting of  

apartments or converts an existing building for the purpose of selling to  

other persons; a person who develops land into a project; any development  

authority or any other public body; an apex State level co-operative  

housing society etc.; any other person who acts himself as a builder,  

coloniser, contractor, developer, estate developer or by any other name;  

and such other person who constructed any building or apartment for sale  

to general public.  

107. It is provided under Section 3 that no promoter shall advertise,  

market, book, sell or offer for sale any plot, apartment or building in any  

real estate project or part of it without registration with the Real Estate

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Regulatory Authority established under the Act.  The provisions of the Act  

have also been made applicable to the ongoing projects on the date of  

commencement of the Act and for which completion certificate has not  

been issued, the promoter shall make an application to the Authority for  

registration of said project within three months from the date of  

commencement of the Act.  

The projects of Amrapali Group have registration under the RERA is  

an admitted fact.  The provisions of the RERA are applicable is also not in  

dispute.  

108. Section 4 requires the application to be filed with specified documents  

for the purpose of registration.  As per Section 4(2)(l)(D), 70 percent of the  

amount realised for the real estate project from the allottees, from time to  

time, shall be deposited in a separate account to be maintained in a  

scheduled bank to cover the cost of construction and the land cost and  

shall be used only for that purpose and the promotor shall withdraw only  

to the proportion of the percentage of completion of the project.  The  

accounts have to be audited in every six months and chartered accountant  

has to certify that amounts collected for a particular project have been  

utilised for that project and the withdrawal has been in compliance with  

the proportion of the percentage of the completion of the project.  The  

provisions of Section 4(2)(l)(D) is extracted hereunder:  

“4. Application for registration of real estate projects.- (1)**  (2) The promoter shall enclose the following documents along with  the application referred to in sub-section (1), namely: —   

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 (l) a declaration, supported by an affidavit, which shall be signed by  the promoter or any person authorised by the promoter, stating:-  (A)**  (B)**  (C)**  (D) that seventy per cent of the amounts realised for the real estate  project from the allottees, from time to time, shall be deposited in a  separate account to be maintained in a scheduled bank to cover the  cost of construction and the land cost and shall be used only for  that purpose:  

Provided that the promoter shall withdraw the amounts from the  separate account, to cover the cost of the project, in proportion to  the percentage of completion of the project:  

Provided further that the amounts from the separate account shall  be withdrawn by the promoter after it is certified by an engineer, an  architect and a chartered accountant in practice that the  withdrawal is in proportion to the percentage of completion of the  project:  

Provided also that the promoter shall get his accounts audited  within six months after the end of every financial year by a  chartered accountant in practice, and shall produce a statement of  accounts duly certified and signed by such chartered accountant  and it shall be verified during the audit that the amounts collected  for a particular project have been utilised for that project and the  withdrawal has been in compliance with the proportion to the  percentage of completion of the project.  

Explanation.- For the purpose of this clause, the term "schedule  bank" means a bank included in the Second Schedule to the  Reserve Bank of India Act, 1934 (2 of 1934);”  

   109. When we consider the provisions in the instant case, it was necessary  

to deposit the amount in the account.  In the year 2015, the RERA was in  

contemplation and certain provisions came into force on 1.5.2016 and  

some more Sections i.e., 3 to 19, 40, 59 to 70 and 79 and 80 came into  

force with effect from 1.5.2017.  

 110. A blatant violation of the provisions of RERA has been done by the  

Amrapali Group.  Since RERA contemplates timely completion of projects  

once registration has been granted under Section 5 and extension of  

registration under Section 6, it is only in the event of force majeure in case

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there is no default on the part of the promoter, registration can be extended  

in aggregate for the period not exceeding one year.  Force majeure shall  

mean a case of war, flood, drought, fire, cyclone, earthquake or any other  

calamity caused by nature.  The registration granted under Section 5 is  

valid for a period declared by the promoter.  Section 7 provides that the  

Authority may on receipt of a complaint or suo motu or on the  

recommendation of the competent authority revoke the registration granted  

under Section 5 in case promoter makes default in doing anything required  

by or under the Act or the rules or the regulation made thereunder; the  

promoter violates any of the terms of approval given by the competent  

authority; the promoter is involved in any kind of unfair practice or  

irregularities.  It is also independently provided that in case the promoter  

indulges in any fraudulent practices, the registration can be revoked.   

Upon revocation of the registration, the promoter shall be debarred from  

accessing the website in relation to that project under Section 7(4)(a).   

Under Section 7(4)(b), the Authority shall facilitate the remaining  

development works to be carried out in accordance with provisions of  

Section 8.  Provisions of Section 7 is extracted hereunder:  

“7. Revocation of registration. - (1) The Authority may, on receipt  of a complaint or suo motu in this behalf or on the recommendation  of the competent authority, revoke the registration granted under  section 5, after being satisfied that—  

(a) the promoter makes default in doing anything required by  or under this Act or the rules or the regulations made  thereunder;     (b) the promoter violates any of the terms or conditions of the  approval given by the competent authority;     (c) the promoter is involved in any kind of unfair practice or  irregularities.  

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   Explanation.— For the purposes of this clause, the term  "unfair practice means" a practice which, for the purpose of  promoting the sale or development of any real estate project  adopts any unfair method or unfair or deceptive practice  including any of the following practices, namely:—  

 (A) the practice of making any statement, whether in  writing or the visible representation which,—     

(i) falsely represents that the services are of a  particular standard or grade;     (ii) represents that the promoter has approval or  affiliation which such promoter does not have;     (iii) makes a false or misleading representation  concerning the services;   

 (B) the promoter permits the publication of any  advertisement or prospectus whether in any newspaper  or otherwise of services that are not intended to be  offered;   

 (d) the promoter indulges in any fraudulent practices.   

 (2) The registration granted to the promoter under section 5 shall  not be revoked unless the Authority has given to the promoter not  less than thirty days notice, in writing, stating the grounds on  which it is proposed to revoke the registration, and has considered  any cause shown by the promoter within the period of that notice  against the proposed revocation.     (3) The Authority may, instead of revoking the registration under  sub-section (1), permit it to remain in force subject to such further  terms and conditions as it thinks fit to impose in the interest of the  allottees, and any such terms and conditions so imposed shall be  binding upon the promoter.     (4) The Authority, upon the revocation of the registration,—    

(a) shall debar the promoter from accessing its website in  

relation to that project and specify his name in the list of  defaulters and display his photograph on its website and also  inform the other Real Estate Regulatory Authority in other  States and Union territories about such revocation or  registration;     (b) shall facilitate the remaining development works to be  carried out in accordance with the provisions of section 8;     (c) shall direct the bank holding the project back account,  specified under subclause (D) of clause (I) of sub-section (2) of  section 4, to freeze the account, and thereafter take such  further necessary actions, including consequent de-freezing of  the said account, towards facilitating the remaining

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 development works in accordance with the provisions of  section 8;     (d) may, to protect the interest of allottees or in the public  interest, issue such directions as it may deem necessary.”    

 111. It is clear that RERA intends for completion of the project in case any  

fraud is committed by the promoter and the activity is not completed, the  

home-buyers cannot be left in lurch, allowing the prayer on behalf of  

Bankers as well as by the Authorities would amount to unfair treatment of  

home buyers in the facts of this case.  It is too late for them to submit that  

home buyer has no rights in the teeth of the provisions contained in the  

RERA, which intends to prevent fraud.   

112. Once registration lapses on non-completion of project within the time  

stipulated or it is revoked the consequence ensue as enumerated in Section  

8 of RERA, the Authority is enjoined upon the duty to consult with the  

appropriate Government to take such action as it may deem including the  

carrying out of the remaining development works by competent authority  

or by the association of allottees or any other manner as may be  

determined by the Authority.  The development work has to be completed  

and cannot be left in between.  Section 8 reads thus;  

“8.  Obligation of Authority consequent upon lapse of or on  revocation of registration.- Upon lapse of the registration or on  revocation of the registration under this Act, the Authority, may  consult the appropriate Government to take such action as it may  deem fit including the carrying out of the remaining development  works by competent authority or by the association of allottees or in  any other manner, as may be determined by the Authority:    Provided that no direction, decision or order of the Authority under  this section shall take effect until the expiry of the period of appeal  provided under the provisions of this Act:    

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 Provided further that in case of revocation of registration of a project  under this Act, the association of allottees shall have the first right  of refusal for carrying out of the remaining development works.”    

113. Functions and duties of the promoter are specified in Section 11.  As  

per the provisions of this Section, the promoter shall be responsible to  

obtain the completion certificate or the occupancy certificate.  He shall also  

be responsible for providing and maintaining the essential services on  

reasonable charges, till taking over of the maintenance by the association  

of the allottees.  The promoter shall enable the formation of an association  

or society or co-operative society or federation of allottees.  He shall pay all  

outgoings until he transfers the physical possession to the allottee.  After  

he has executed an agreement for sale for any apartment, plot or building,  

he may not mortgage or create a charge on such an apartment, plot or  

building and if any such mortgage or charge is made or created then  

notwithstanding anything contained in any other law for the time being in  

force, it shall not affect the right and interest of the allottee.  It is clearly  

provided under Section 11(4)(h), which is extracted hereunder:  

“11.  Functions and duties of promoter.-    (4) The promoter shall—    (h) after he executes an agreement for sale for any apartment, plot  or building, as the case may be, not mortgage or create a charge on  such apartment, plot or building, as the case may be, and if any  such mortgage or charge is made or created then notwithstanding  anything contained in any other law for the time being in force, it  shall not affect the right and interest of the allottee who has taken  or agreed to take such apartment, plot or building, as the case may  be;”  

 114. It is clear that is the duty of the promoter to abide by the time  

schedule of the completion of the project of the allottee.  The time of

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completion of the project is fixed from the date of the agreement.  Though  

the RERA has come into force after the mortgage had been created, the  

intendment of RERA is that after the execution of the agreement no such  

mortgage or charge should be created.  

115. Section 14 provides adherence to sanctioned plans and project  

specifications by the promoter.  Section 15 deals with the obligations of the  

promoter in case of transfer of a real estate project to a third party.  The  

promoter shall not transfer or assign his majority rights and liabilities to a  

third party without obtaining the prior written consent of two-thirds  

allottees and without the prior written approval of the Authority.  Section  

16 deals with obligations of promoter regarding the insurance of real estate  

project.  Section 17 provides for the transfer of title.  It is incumbent upon  

the promoter to execute a registered conveyance deed in favour of the  

allottee along with undivided proportionate title in the common areas to the  

association of the allottees or the competent authority and the possession  

of the plot, apartment or building, as the case may be, shall be handed over  

to the allottees and the common areas to the association of the allottees or  

the competent authority, as the case may be.  Section 17(1) is extracted  

hereunder:  

"17. Transfer of title.- (1) The promoter shall execute a registered  conveyance deed in favour of the allottee along with the undivided  proportionate title in the common areas to the association of the  allottees or the competent authority, as the case may be, and hand  over the physical possession of the plot, apartment of building, as  the case may be, to the allottees and the common areas to the  association of the allottees or the competent authority, as the case  may be, in a real estate project, and the other title documents  pertaining thereto within specified period as per sanctioned plans as  provided under the local laws:  

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   Provided that, in the absence of any local law, conveyance deed in  favour of the allottee or the association of the allottees or the  competent authority, as the case may be, under this section shall  be carried out by the promoter within three months from date of  issue of occupancy certificate.”  

116. It is apparent that after the transfer of conveyance deed, the title  

vests in the allottee and of the common area in the association of the  

allottees or the competent authority as the case may be.  No title remains  

with the promoter.    

117. Section 18 deals with the return of amount and compensation.  In  

case promoter fails to complete or is unable to give possession of an  

apartment, plot or building, he shall be liable on demand to the allottees.   

In case the allottee wants to withdraw from the project, without prejudice  

to any other remedy available, the promoter has to return the amount  

received in respect of that apartment, plot, building with interest in this  

behalf including compensation in the manner as provided under the Act.  

118. The rights and liabilities of allottees are provided in Section 19, which  

is reproduced hereunder:  

“19.  Rights and duties of allottees.- (1) The allottee shall be  entitled to obtain the information relating to sanctioned plans,  layout plans along with the specifications, approved by the  competent authority and such other information as provided in this  Act or the rules and regulations made thereunder or the agreement  for sale signed with the promoter.     (2) The allottee shall be entitled to know stage-wise time schedule of  completion of the project, including the provisions for water,  sanitation, electricity and other amenities and services as agreed to  between the promoter and the allottee in accordance with the terms  and conditions of the agreement for sale.     (3) The allottee shall be entitled to claim the possession of  apartment, plot or building, as the case may be, and the association

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 of allottees shall be entitled to claim the possession of the common  areas, as per the declaration given by the promoter under sub- clause (C) of clause (I) of sub-section (2) of section 4.     (4) The allottee shall be entitled to claim the refund of amount paid  along with interest at such rate as may be prescribed and  compensation in the manner as provided under this Act, from the  promoter, if the promoter fails to comply or is unable to give  possession of the apartment, plot or building, as the case may be, in  accordance with the terms of agreement for sale or due to  discontinuance of his business as a developer on account of  suspension or revocation of his registration under the provisions of  this Act or the rules or regulations made thereunder.     (5) The allottee shall be entitled to have the necessary documents  

and plans, including that of common areas, after handing over the  physical possession of the apartment or plot or building as the case  may be, by the promoter.     (6) Every allottee, who has entered into an agreement for sale to  take an apartment, plot or building as the case may be, under  section 13, shall be responsible to make necessary payments in the  manner and within the time as specified in the said agreement for  sale and shall pay at the proper time and place, the share of the  registration charges, municipal taxes, water and electricity charges,  maintenance charges, ground rent, and other charges, if any.     (7) The allottee shall be liable to pay interest, at such rate as may be  prescribed, for any delay in payment towards any amount or  charges to be paid under sub-section (6).     (8) The obligations of the allottee under sub-section (6) and the  liability towards interest under sub-section (7) may be reduced  when mutually agreed to between the promoter and such allottee.     (9) Every allottee of the apartment, plot or building as the case may  be, shall participate towards the formation of an association or  society or cooperative society of the allottees, or a federation of the  same.     (10) Every allottee shall take physical possession of the apartment,  plot or building as the case may be, within a period of two months  

of the occupancy certificate issued for the said apartment, plot or  building, as the case may be.     (11) Every allottee shall participate towards registration of the  conveyance deed of the apartment, plot or building, as the case may  be, as provided under sub-section (1) of section 17 of this Act.”  

119. Certain rights and duties as well as the liabilities to pay interest in  

case of default on the part of allottees are also provided in the provisions  

contained in Section 19.  Chapter V provides for Real Estate Regulatory

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Authority, whereas Chapter VI deals with the Central Advisory Council.   

The provisions relating to Real Estate Appellate Tribunal are provided in  

Chapter VII.  Chapter VIII contains provisions relating to offences,  

penalties, and adjudication and Chapter IX deals with finance, accounts,  

audits, and reports.  

 120. It is apparent that RERA intends protection of home-buyers and aims  

at completion of the buildings.  The buildings have to be completed, for  

that, we are required to pass orders.  We have already assigned the task to  

NBCC for completion of buildings as the promoters/builders have failed to  

complete the building within the time fixed and the time which could have  

been extended.  Now, more than 10 years have passed and buyers were  

given the assurances that they would get flats within three years period by  

the promoter/builder.  The maximum time fixed in RERA has also expired  

and extension could not have been beyond 1 year.  

 121. It is clear that common areas as provided under Section 17 have to be  

ultimately handed over to the Association of Allottees or the Competent  

Authority as the case may be.  Thus, any sub-lease, alienation or transfer  

affected by the promoter of the common areas as defined in the RERA and  

otherwise reserved under the plan shall be void and inoperative.  

122. As the basic obligations have not been complied with by the  

promoters, they cannot also be entitled to FAR.  It was pointed out on  

behalf of Authorities that permissible FAR is 2.75, whereas it has been

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wrongly mentioned and worked out at 3.50 by the Amrapali Group.  In the  

instant case, we find that there is serious kind of fraud by the promotors as  

such they cannot be said to be entitled to avail the FAR to utilise it or to  

alienate and more so when they have failed to complete the projects and  

pay the dues.  

123. It is also apparent from the provisions of the Act of 1976 as well as  

RERA and also the case set up by the Authorities that partial occupation  

certificate can also be issued.  The completion certificate can be issued  

partially also as per the provisions of Uttar Pradesh Apartment (Promotion  

of Construction, Ownership, and Maintenance) Act, 2010.  The main  

obstacle is said to be non-deposit of the amount which may be ordered to  

be paid, for that we may clarify in the peculiar facts and circumstances of  

the case, it has to be secured and recovered by way of selling other  

attached properties and the one, which have been created out of the  

diverted funds of the home-buyers and property of guarantors etc.  The  

banks' borrowings have to be taken care of in a similar manner.  The  

money payable to the Authorities had been diverted and huge amount of  

buyers’ money had not been invested in the projects neither any part of the  

money of bank borrowings, in fact, were spent in the construction as found  

by the Forensic Auditors.  The promoters are held accountable for the  

diversion of the money paid by the buyers as component of price of flats  

even on account of payment to Authorities.  

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124. There appears to be non-issuance of the completion certificate,  

whereas the buildings are being occupied, we direct issue of completion  

certificate.  This Court has to monitor the payment of dues of the  

Authorities and Banks and that outstanding are not going to create hurdle  

in the execution of the registered document/conveyance deed in favour of  

home buyers.  It has to be executed by the concerned Authorities as well as  

by the Court Receiver and by the home buyers.  The amount which is due  

on the part of home buyers has to be deposited in the account, which has  

been opened, in the UCO Bank by this Court.  It has to be utilised firstly  

for the purpose of completion of the buildings and for providing other  

facilities and the home buyers of incomplete projects also have to deposit  

the outstanding amount on their part in the aforesaid account opened in  

the UCO Bank and out of that amount, it has to be disbursed as per the  

orders to be passed by this Court for the purpose of construction and  

outstanding if any, shall be used for the purpose of payment of  

compensation to home buyers for the period of delay as per the agreement  

or as may be determined ultimately and other dues.  

125. With respect to percentage of profit of NBCC, we fix it at 8 percent.   

As it is a Government Undertaking, NBCC has to ensure that DPR is  

prepared reasonably and the work to be completed as expeditiously as  

possible.  

 126. Learned senior counsel on behalf of Bank of Baroda submitted that  

Amrapali Group as per the conditions of the lease deed executed by the

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Noida Authority had the right to mortgage the land with the prior  

permission of the authority for raising loans for the purpose of financing  

investment in the project. No doubt the lease deed contained a stipulation  

as to mortgage with prior permission but no clear-cut permission had been  

obtained from Noida authority. Noida authority has clearly stated as rider  

that until and unless the entire due premium is paid along with lease  

money due, no mortgage can be effected. The stand of the authority is clear  

that without payment of land dues no mortgage could be effected.  Thus, in  

fact in the eye of the law no mortgage could be created as there was no  

permission to mortgage unless the dues were paid and thus the bank could  

not have mortgaged the property before clearance of the dues of the Noida  

Authority, and secondly, the mortgage was permissible for the purpose of  

financing the investment in the project. As a matter of fact, when this was  

the stipulation, it was the banker's duty to ensure that money made  

available was invested in the project.  

 127. The Forensic Auditors’ report makes it apparent that Bankers have  

failed to ensure and oversee that the money was invested in the projects. It  

was diverted elsewhere as rightly found by the Forensic Auditors. Thus, no  

charge can be said to have been created by bank loans on the projects as  

the money, in fact, it has not been used in the projects as such home  

buyers cannot be saddled with liability and also the projects. Even what  

was paid by the home buyers, had not been used in the projects and  

stands diverted. There was, in fact, no necessity for raising the loans from

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the bank. The money borrowed from banks was used to create other assets  

worth thousands of crores. Thus, the banks can realise their money from  

those assets and from guarantors and not from the investment of home  

buyers, not from the buildings in which loans granted by banks have not  

been invested, which have been erected partially or some are at the nascent  

stage, for which hard-earned money has been paid by the home buyers.  

Home buyers are not direct party to the bank loan, thus it was the duty of  

the bankers and Noida authorities, if they wanted  to impose their charge,  

to ensure that no fraud takes place and money is invested in the projects  

for the purpose for which it has been taken not only the money paid by the  

home buyers but obtained from the banks and due to be paid to Noida  

authorities, is not usurped illegally by promoter/builder.  Though it was  

realised as part of the component of the price of flat from the home buyers,  

by the promoters/builders its illegal diversion was permitted by Amrapali  

Group in connivance with the officers of the authorities and the bank.  

Thus, the very condition of investment in the project by bankers, subject to  

which the mortgage was permissible, had been violated. Thus, it cannot be  

said that any charge of the banks has been created on the projects. The  

charge would be on the property which has been purchased/created by  

dubious methods. It would be inequitable to fasten the charge against the  

investment made by the home buyers whereas they have not been  

benefited and rather have been cheated by the promoters for which  

bankers, as well as authorities, have to share the blame. We cannot

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perpetuate another fraud on the innocent home buyers in facts of the case  

of fastening liability of amounts payable to Authorities and Bankers.     

 128.  Learned senior counsel on behalf of the Bank of Baroda, also  

submitted that the home buyers are not secured creditors, as such they  

have no right over secured creditors. While making the aforesaid  

submissions the provisions of RERA have been ignored. Though they may  

not be a secured creditor, they have a right to be treated in accordance  

with the law, fairly and they cannot be subjected to a fraudulent action by  

the promoters, that too in connivance with the bankers and officials of the  

Noida and Greater Noida authorities.  Even otherwise, in such a situation  

the court has to come to their rescue and protect their interests, and it is  

the duty of the court to ensure that buyers get flats and development work  

is completed as intended under the RERA and the flats are handed over to  

home buyers after completion. In case the fraud is permitted to be  

perpetrated on the home buyers, the very purpose of enactment of RERA  

would stand defeated.  

129.  No doubt about it as submitted on behalf of Amrapali group of  

companies, that the provisions of RERA are for protecting the interests of  

promoters also. No doubt about it that the RERA intends to protect the  

interests of the promoters and home buyers both. However, in the instant  

case, we have given the opportunity to the promoters to deposit the 10% of  

the amount in December 2017 and January 2018 but orders have met with  

non-compliance with all impunity. Thereafter on the assurance of the

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Amrapali Group that it would undertake the construction work and a joint  

plan was submitted after great wastage of time and energy and then order  

dated 17.5.2018 was passed that was also not complied with. It was passed  

on a condition that a sum of Rs.250 crores to be deposited which was also  

not deposited by the Amrapali group to show its bona fide. The Group  

never intended right from the beginning to complete the construction work,  

has been rightly observed by Forensic Auditors. Thereafter, we have  

assigned the work to the NBCC. But at the same time, the effort has been  

made by Amrapali Group/ its Directors to sell the property which has been  

created by diversion of home buyers’ funds.  Incorrect facts have been  

stated and suppressions have been made in various affidavits filed in this  

Court that the certain properties are not encumbered. Various applications  

are being filed one after the other by the encumbered holders with respect  

to several properties that they have the charge over the said property.  

 130. That apart, several attached properties have been put to sale by DRT  

under the orders of this Court. In most of the cases, no buyers have turned  

up and/or the price offered by forming a cartel are too low. The property  

cannot be sold at throw away price. For example, in the case of a hospital  

situated at Noida, the very group of doctors wanted to purchase, it who are  

running it, at a paltry sum by forming a cartel. Aforesaid is one of the  

examples of cartel formation that is how Amrapali group is instrumental in  

not allowing the properties to be sold. There appears to be some invisible  

hand holding buyers out and even the bankers are not coming up to

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finance the purchasers, is the genuine grievance pointed out at the Bar. Be  

that as it may. Entire gamut of facts indicates the contumacious conduct of  

Amrapali Group, proper and correct disclosures on oath have not been  

made, even encumbrances are not being specified clearly in spite of  

repeated orders passed by us. They have sold several valuable properties  

during pendency of petitions as pointed out by the Forensic Audit Report.  

In the aforesaid circumstances, the submission raised on behalf of  

Amrapali group that under the provisions of the RERA their interest should  

be protected.  In our opinion, considering the serious kind of fraud  

unearthed on the forensic audit, formation of dummy companies, violation  

of  norms of foreign investment, violation of FEMA, siphoning off the money  

of home buyers, making payment of dividend without profits and a  

methodology had been devised of valuing the shares on an unreasonable  

higher basis so as to siphon out the money of the home buyers to J.P.  

Morgan etc. The creation of a large number of assets with the help of  

money of the home buyers.  The Forensic Audit unfolds the true story of  

Amrapali Group.  Right from 2015, no construction activity has taken  

place. Account books had not been maintained and money has been  

transferred continuously. No audit was made.  Money was taken out from  

banks, and fake purchases have been made.  Thus, they are not at all  

entitled for any indulgence under the provisions of the RERA. In view of  

their unholy conduct, defying description, their contumacious fraudulent  

conduct totally disentitles them and they are required to be dealt with as  

sternly as possible so as to make it exemplary one that such fraudulent

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actions do not recur in future, in real estate business in India.  We are not  

a country in which Courts will permit such action and permit a person to  

go scot-free.   

 131. The agreement initially executed in favour of home buyers to  

purchase flats may not create any right in the property in praesenti, it will  

be only on the execution of the registered document that title is going to be  

perfected, but investment in project is only of home buyers.  In this case,  

as they have paid money invested in projects, it is for the courts to do  

complete justice between the parties and to protect the investment so made  

and interests of home buyers and to ensure that they get the perfect title  

and the fruits of their hard earned money and lifetime savings invested in  

the projects.  

 132. On behalf of Bank of Baroda, learned senior counsel submitted that  

the agreement of promoter/builder with home buyers is unregistered as  

such, no right has been created in the immovable property in view of the  

provisions contained in section 49 of the Registration Act. The submission  

ignores and overlooks the provisions of RERA which intends to prevent  

such frauds on home buyers and ensure completion of projects and that of  

the agreement between promoters and buyers. There are various rights  

under the agreement as well as under the RERA. The agreement entered  

into at the time of allotment is the basis of the investment in the projects  

made by home buyers, it cannot be said to be a scrap of paper. It is their  

valuable investment which is required to be protected and cannot be

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permitted to be taken away by builder or secured creditors in an illegal  

manner. The provisions of section 17 of the Registration Act no doubt  

provide that a document of title requires compulsory registration, no doubt  

registered document has to be executed that also has to be taken care of by  

the Court so as to protect the interest of home buyers.  

 133. Learned senior counsel appearing on behalf of the Bank of Baroda  

urged that by virtue of the provisions contained in section 11(4)(g) of the  

RERA Act, it is the duty of the promoter to pay all outgoings until he  

transfers the physical possession of the real estate project to the allottee or   

the association of allottees, which he has collected from the allottees, for  

the payment of  outgoings, including the land cost, ground rent, municipal  

or other legal taxes, charges for water or electricity, maintenance charges,  

including the mortgage loan and interest on mortgages or other  

encumbrances and such other liabilities payable to competent authorities,  

banks and financial institutions, which are related to the project. The two  

expressions of the provisions of Section 11(4)(g) are significant. Firstly,  

which the promoter has collected from the allottees. Secondly "which are  

related to the project". In the instant case dues of the Noida/Greater Noida  

authorities have been collected from the allottees by the promoters but the  

authorities have permitted diversion of said amount by not taking any  

action in view of the chronic default right from the beginning. Though they  

knew that the promoter had booked the flats, even the permission to grant  

sub-lease of the plot had been granted in totally illegal manner without

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payment of dues of premium and lease rent etc. Conditional permission to  

the mortgage was issued without payment of the premium lease money etc.   

so as to perpetuate the fraud being done by the promoters. The mortgage  

created ought to have been objected in view of the conditions subject to  

which it could have been done.  Obviously, it was done by Amrapali Group  

in connivance with officials of Authorities including the bankers. Thus  

when the authorities have themselves permitted  fraudulent action money  

has been diverted, which has been paid by home buyers for payment to  

Authorities also, as premium was component of price and as bankers have  

also permitted diversion of loan amount, mostly on same day, it cannot be  

said in the facts of the case, that any amount of the bankers or that of  

authorities remains invested in the project. The sine qua non is the  

expression "which are related to the project" would mean that that amount  

recoverable from the allottee is the one which has been invested in the  

project. A third person can be held liable for the money payable to secured  

creditors in case it has been invested in the project, in case it has not been  

spent in constructions, same cannot be permitted to be realised from the  

project/home buyers, the investment of home buyers cannot be frittered  

away and to fasten liability upon the innocent buyers/allottees in that  

event would tantamount to perpetrating yet another fraud on them.  

Accountability, as per law, has to be fastened on promoters/builders and  

all concerned. It would amount to total deprivation of money of home  

buyers without any fault on their part or legal liability. It would amount to  

fastening liability upon them once over again by misuse of the process of

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law. The factual matrix unfolded on forensic audit indicates serious kind of  

fraud that has taken place which would shut the enforcement of liability  

clause as against the home buyers.  The provisions of the first and second  

charge cannot come to the rescue of Authorities/Bankers. Under Section  

11(4)(g) the promoter has to pay all outgoings which he has collected from  

the allottees, the payment of outgoings includes land cost, ground rent,  

charges for water or electricity, maintenance charges etc. As per the proviso  

to Section 11(4)(g), the promoter shall continue to be liable, even after the  

transfer of the property, to pay such outgoings and penal charges, if any, to  

the authorities. Outgoings which have been collected by the promoter can  

be and have to be recovered in the facts and circumstance of the case from  

them as intended by section 11(4)(g) of RERA.   

 134. Learned senior counsel on behalf of the Bank of Baroda submitted  

that the provisions of section 11(4)(h) of RERA provides that the promoter,  

after he executes an agreement for sale for any apartment, plot or building,  

cannot mortgage or create a charge on such an apartment, plot or building,  

as the case may be, and if any such mortgage or charge is made or created  

then it shall not affect the right and interest of the allottee who has taken  

or agreed to take such apartment, plot or building, as the case may be. The  

provision has a non-obstante clause. As the provision has given an  

overriding effect by non-obstante clause, the provision is no help to the  

banks as the agreement had been by promoters with home buyers entered  

into earlier in point of time to the creation of the mortgage. There could not

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have been any mortgage created subsequently and even if validly created, it  

would not affect the right and interest of the allottee as intended by RERA.  

Thus, the right and interest of the allottee are safeguarded by virtue of the  

provisions contained in section 11(4)(h). As the project was pending, the  

provision intends to confer a right on the allottee and save the allottees and  

also their interests from such liability. Even if the provision is held not  

applicable on the ground that RERA came into force later, since there was  

no valid mortgage as held by us, it was incapable of affecting the right or  

interest of the allottee. Had it been ensured that the money due to Noida  

and Greater Noida authorities was paid by the promoters to the authorities,  

the fraud of siphoning of money would not have taken place to the extent it  

has been done.  Moreover, the money borrowed from banks has not been  

invested in the projects. In fact, projects required no funding. It would be  

iniquitous to charge the allottees with the bankers' money. Thus, in the  

peculiar facts and circumstances of the case, we hold that rights or  

interests of the allottees are not at all affected by the mortgage created by  

the bankers or by the dues of the Noida or Greater Noida authorities.  

135. On behalf of the Bank of Baroda, Shri Maninder Singh learned senior  

counsel has submitted that section 4(2)(1) of the RERA requires the  

promoter to disclose the prior encumbrance. Therefore, the RERA  

contemplates the creation of encumbrance even before the project is  

registered and such a plot can be offered to allottees. Basically, a  

declaration is required under section 4(2)(l)(A) that the land is free from all

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encumbrances or as the case may be, details of the encumbrances, if any,  

on such land, should be disclosed. The intention is that the allottee should  

know about the encumbrance if any. The provision does not espouse the  

cause of the bank in any manner whatsoever.  

 136. On the strength of the provision of section 19(4) of RERA, learned  

senior counsel has submitted that the allottee should be entitled to claim  

the refund and compensation, if the promoter fails to comply or is unable  

to give possession of the apartment, plot or building in accordance with the  

terms of the agreement for sale or due to discontinuance of his business as  

a developer on account of suspension or revocation of his registration  

under the provision of the RERA or the rules and regulations made  

thereunder. He submitted that the right of the allottees is restricted to only  

receiving the compensation from the promoters. We wholly disagree with  

the submission. It is made in oblivion of the provisions of Section 8 of the  

RERA which provides for completion of the development projects by the  

competent authority or by the association of allottees or in any other  

manner, as may be determined and the association of allottees shall have  

the first right of refusal for carrying out the remaining development work is  

the wholesome provision contained in the second proviso to section 8. To  

claim compensation is at the option of the allottee if the allottee wants to go  

out. That is an additional right, not the only right conferred under the  

RERA. He cannot be left in lurch but is entitled to claim the refund if he so  

desires. It is his option to claim the refund along with interest and

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compensation which is to be determined under the RERA.  The rights of the  

allottees are not restricted to only receiving the compensation as  

submitted. The submission is too tenuous to be accepted.  

137. A submission has also been raised that the RERA recognises and  

protects interests of the lenders and does not in any manner take away  

rights under any of the existing statutes such as T.P. Act, Debt Recovery  

Tribunal Act, SARFAESI Act. It is apparent from a perusal of RERA, which  

is a special Act, that certain rights have been created in favour of the  

buyers. The provisions of RERA have to prevail. When we come to the  

question of protection of rights of buyers even if RERA had not been  

enacted, under aforesaid laws in the facts of the case, a different view could  

not have been taken. However, there is no dispute that the bankers would  

have the right to recover their dues from whom and in what manner is the  

question which we have already answered. The provisions of RERA are  

beneficial  to the home buyers and are intended to insulate them from  

fraudulent action, ensures completion of the building and it is the duty of  

the court to protect and ensure the home buyers’ interest and at the same  

time to hold them responsible for the duties enjoined upon them under the  

said statute. We are not absolving the home buyers from the discharge of  

their liability if any. At the same time, they have the right of enforcement of  

their right for compensation due to undue delay in completion of the  

project.  

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138.  It was submitted by learned senior counsel on behalf of the Greater  

Noida authority that title has to pass in home buyers by way of registered  

document as provided in section 17(1)(b) of the Registration Act and section  

13 of the U.P. Apartments Act, 2010 and also the provisions of the lease  

deed. The deed of transfer will be a tripartite sub-lease deed. Completion  

certificate has to be obtained, for that it has to be applied for. Dues of the  

authorities have to be paid before a completion certificate is issued. The  

charge of Noida and Greater Noida authority has priority over other  

charges. None of the aforesaid submissions impress us so as to defeat the  

rights of home buyers. We have already dealt with that the dues have to be  

recovered in accordance with law from the properties which have been  

created by the funds which have been diverted and the property of the  

directors etc. In order to do complete justice between the parties so that the  

faith of public is not shaken in the real estate sector and such frauds are  

prevented in the future. We cannot permit the authorities in the facts and  

circumstances of the case to deal with the rights of the home buyers in  

arbitrary and in an unjust manner.  

139. In case the authorities are making allotment of plots at a paltry sum  

of 10% and giving the builders 8 years period to make payment of premium  

with a moratorium of 2 years then the period runs to 10 years and the  

project is to be completed within 3 years. It is clear that the authorities  

have to be very vigilant for securing their interests otherwise in every case  

even if the promoter has completed the project and realised the charges

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from the home buyers and has not deposited the amount due to the  

authorities, in case no action is taken by the Authorities, can it be taken  

after 10 years against home buyers.  The question arises whether innocent  

home buyers would have to pay the amount to authorities which they have  

already paid to promoters as part of the component of cost of flats or plots  

as the case may be, whether they are to be saddled once over again with  

the liability to pay, though the amount paid by them has been illegally  

usurped and diverted elsewhere and not paid to the authorities and they  

have acted in connivance of officials. The authorities have to be vigilant in  

such cases and not to tolerate the default. They have to blame themselves  

for their inaction and have to wait for the realisation of dues by sale of  

other properties and as against guarantors etc.  The projects have to be  

completed as mandated by Section 8 of RERA  

 140. It was submitted that the authorities on cancellation of the lease have  

to forfeit 25% of the amount and have to resume the lands along with the  

structure. It cannot be done in view of the provisions of RERA, particularly  

in view of the provisions of section 8 and other beneficial provisions  

contained in the said Act. Under section 14 of the Act of 1976, there can be  

forfeiture of the entire amount also, in case of breach of condition or  

breach of rules, etc. by the promoters/ builders. Be that as it may. We hold  

and direct no action under any provisions derogatory to the interest of  

home buyers can be taken either by the authorities or the bankers in the  

peculiar facts and circumstances of the case, that is to say, that no part of

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the building can be demolished. Buildings have to come up and completed  

even the ones which are at the nascent stage as mandated by RERA. No  

doubt about it that in case of failure to pay the dues the onus of payment  

of land dues has to be passed on to the buyers on pro-rata basis but in the  

instant case they have already paid the substantial amounts, huge amount  

has been permitted to be diverted by the authorities and bankers as such  

they have to wait for recovery and cannot act in a manner further  

detrimental to the interests of the home buyers.  

 141. On behalf of Amrapali group, learned senior counsel submitted that  

there were force majeure conditions in completing the projects. There were  

legal impediments in the completion of projects within the period given in  

the flat-buyers agreement during the period from 2011-15.  The  

submission is baseless. It is apparent that the Full Bench of the High  

Court though held that the land acquisition was vitiated but still it was  

upheld.  The High Court did not quash it for the reason that development  

has taken place. Higher compensation was ordered to be paid. That order  

was affirmed by this Court in 2015 in Savitri Devi v. State of U.P. (2015) 7  

SCC 21. There was no interim stay granted by the High Court on  

construction work, is made clear by the Noida and Greater Noida  

authorities. There was no room to entertain any doubt as to the fact  

whether for a particular village the acquisition had been quashed. There  

was no quashing of land acquisition and moreover, there was no stay. Only  

higher compensation was ordered to be paid. There was no force majeure

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condition or any legal impediment as such the period from 2011 to 2015  

cannot be treated as a moratorium period vis-à-vis the dues of Noida and  

Greater Noida authorities. The submission made as to the farmers'  

agitation etc. is too vague and 30% of the projects have come up; whereas  

70% have not yet come up, out of the projects in Noida and Greater Noida  

alone. It goes to indicate how at large-scale middle-class home buyers have  

been defrauded of their hard-earned money, taken away by the affluents  

and the officials in connivance with each other. Law has to book all of  

them. We are hopeful that law will spread its tentacular octave to catch all  

culprits responsible for such kind of fraud causing deprivation to home  

buyers. It is shocking and surprising that so many projects have remained  

incomplete. Several lakhs of home buyers have been cheated.  As if there is  

no machinery of law left to take care of such situation and no fear left with  

the promoters/builders that such acts are not perceivable in a civilised  

society.  Accountability is must on the part of everybody, every institution  

and in every activity. We fail to understand the standard of observance of  

the duties by public authorities has gone so down that such frauds take  

place openly, blatantly, and whatever legal rights exist only on papers and  

people can be cheated on such wide scale openly, brazenly and with the  

knowledge of all concerned. There is duty enjoined under the RERA, there  

has to be a Central Advisory Council as well as the role of the State  

Government is not ousted in order to protect against such frauds. We  

direct the Central Government and the State Government to take  

appropriate steps on the time-bound basis to do the needful, all other such

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cases where the projects have remained incomplete and home buyers have  

been cheated in an aforesaid manner, it should be ensured that they are  

provided houses. The home buyers cannot be made to suffer when we are  

governed by law and have protective machinery. Question is of will power  

to extend the clutches of law to do the needful.  We hope and trust that  

hope and expectation of home buyers are not going to be belied.  

142. We are not impressed by the submission that Amrapali Group had  

taken the lands and had paid a part of dues and has invested a certain  

amount. The statement of the expenditure of the money of the home  

buyers, in the construction activity that has been filed in the Court, is not  

supported by documents and is prima facie a scrap of paper. We have  

called the concerned incumbents who have prepared it and cross-checked  

from them and we are satisfied that the statement filed on the expenditure  

of Rs.10,000 crores is nothing but a scrap of paper not supported by the  

books of account, supporting documents. It has to be outrightly rejected as  

there is an attempt made on siphoning off, apparent from the report of the  

Forensic Auditors also.   

143. In his affidavit, Anil Kumar Sharma has given details of companies  

from which funds were transferred to the extent of Rs.2,996.20 crores to  

different group companies, mainly from following nine companies:  

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 CHART “E” DETAILS OF MAJOR COMPANIES FROM WHERE FUNDS WERE  

TRANSFERRED IN THE FORM OF ICD AND SHARE CAPITAL AS PER BALANCE  SHEET TILL 2015  

Consolidated Amount Transferred from Amrapali Group till 31st March  2015  

S. No. Name of Companies Net amount Transmitted/  Transferred from these  companies of Amrapali  Group of Companies (A)   

Amount in Cr,    

1 Amrapali Smart City Dev. Pvt. Ltd. 538.59    

2 Amrapali Centurian Park Pvt. Ltd. 518.78    

3 Amrapali Dream Valley Pvt. Ltd. 445.33    

4 Amrapali Leisure Valley Pvt. Ltd. 431.11    

5 Amrapali Silicon City Pvt. Ltd. 391.57    

6 Amrapali Leisure Valley Dev. Pvt.  Ltd.  

237.53    

7 Amrapali Zodiac Dev. Pvt. Ltd. 224.47    

8 Amrapali Princely Estate Pvt. Ltd. 186.99    

9 Amrapali Sapphire Dev. Pvt. Ltd. 21.84    

  Grand Total  

 2,996.20  

The diversion of huge amount has been rightly detected on Forensic  

Audit.  

 144. Learned senior counsel appearing on behalf of Amrapali Group also  

submitted that the under-valued transactions have been found of INR  

321.31 crores which is incorrect. The Forensic Auditors have given the  

details in their report along with reasons, we agree with them and have no  

hesitation to reject the submission.    

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145. As to other amounts with respect to advances which are recoverable,  

the explanation that there is a surrender of shares by Mr. Shiv Priya, etc. is  

not supported by books of accounts. There is no basis to contend so. No  

proper explanation has been given on behalf of Amrapali Group. Shares  

were purchased by Mr. Anil Kumar Sharma in his own name. It was clearly  

an advance. It was not purchased in the name of the company but in the  

individual's name. There was cash in hand and other recoverable also, no  

proper explanation has been offered. Cash in hand has to be deposited  

back as it belongs to home buyers. The finding as to the diversion of home  

buyers' funds is based on the figures worked on the basis of minute  

accounting as reflected in the auditors' report. There is no proper answer to  

each and every entry which have been gone into by the Auditors. General  

and broad submissions have been made which are flimsy and have no legs  

to stand. Thus, the objections are rejected. The professional fee could not  

have been realised by the Directors. They were not the employees. They  

have not rendered any professional services. They along with other  

employees, statutory auditors, CFO, etc. have formed a cartel to defraud  

the home buyers for siphoning off their money. Dummy companies were  

created in the names of peons, boys of office, the relation of statutory  

auditor, CFO, etc. and several companies were created only for the purpose  

of few transactions.  The fact discloses how the fraud has been perpetrated  

upon the home buyers which defies description which could not have been  

unearthed except by skilful exercise done by the Forensic Auditors.  Thus,

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we have no word to specify the extent of fraud played. Least said is better  

as to the entire gamut of the facts and entire scenario of the case.  

 146. It is apparent from the report of the forensic audit submitted by  

Forensic Auditors that there is a serious kind of fraud played upon the  

buyers in active connivance with the officials of the Noida and Greater  

Noida Authorities and that of the banks. The money of the home buyers  

has been diverted. The Directors diverted the money by the creation of  

dummy companies, realizing professional fees, creating bogus bills, selling  

flats at undervalue price, payment of excessive brokerage, etc. They have  

obtained investment from J.P. Morgan in violation of FEMA and FDI norms.  

The shares were overvalued for making payment to J.P. Morgan. It was  

adopted as a device for siphoning off the money of the home buyers to  

foreign countries. In view of the huge money collected from the buyers and  

comparable investments made in the projects, there was no necessity to  

obtain a loan from banks. The amount so obtained was not used in the  

projects. The mortgage deeds in favour of the banks were not permissible  

due to non-payment of dues of the Noida and Greater Noida Authorities.  

The Noida and Greater Noida Authorities issued conditional NOCs. to  

create mortgages subject to payment of dues which were not paid. They  

issued such NOCs in collusion with builders. It was incumbent upon the  

bankers also to obtain clear unconditional NOCs. which were not obtained  

and to ensure that the dues were paid to Noida and Greater Noida  

authorities. They permitted diversion of money immediately after

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sanctioning of the loan and also in day to day transactions of Amrapali  

group of companies.   

 147. No accounts were prepared w.e.f. the years 2015-2018 and money  

withdrawn was diverted during the said period.  The Statutory Auditor,  

Mr.Mittal failed in duty and was part of fraudulent activities as found in  

the Forensic Report.  The money obtained from banks was diverted to  

unapproved uses such as for the creation of personal assets of Directors,  

creation of assets in closely held companies by the Directors along with  

their partners and relatives, for personal expenses of Directors, to give  

advances without carrying interest for several years. There was total non-

monitoring by the bankers. The money laundering was resorted to by  

Amrapali Group/ Directors.  The Noida and Greater Noida Authorities were  

grossly negligent in reviewing and monitoring the progress of the projects  

and in collusion with leaseholders failed to take action concerning non-

payment of dues and illegally permitted the group to sub-lease the land  

without payment of dues. Bogus allotments of flats were made. There were  

other irregularities galore.   

 148. Because of their failure to fulfil the obligations towards the buyers  

and the serious kind of fraud which has been played by them upon the  

home buyers, the registration of Amrapali group of companies under the  

Real Estate Regulation and Development Act, 2016 deserves to be  

cancelled.  

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149. Because of the gross violations of the conditions of lease deeds  

executed by the Noida and Greater Noida Authorities in favour of Amrapali  

group of companies with respect to various projects, are liable to be  

cancelled and the rights thereupon shall vest in the Court Receiver.   

 150. There was no valid mortgage created in favour of Banks and there  

was a huge diversion of money paid by homebuyers which were more than  

required for payment of dues of the Noida/ Greater Noida Authorities and  

banks. The buyers have paid the dues of Noida and Greater Noida  

authorities as a component of the price for flats. Thus, the premium and  

other dues payable under the lease deeds to the Noida and Greater Noida  

Authorities, cannot be recovered from the home buyers or the projects in  

question. The dues as may be ordered shall be recovered by sale of other  

properties which have been created by the diversion of funds and have  

been attached by this Court. The banks have also failed to ensure that the  

money was used in the projects. As found in the forensic audit, there was  

no necessity of obtaining loans from the banks and it has not been used for  

the purpose it was obtained. The Authorities and Bankers have violated the  

doctrine of public trust and their officials, unfortunately, acted in collusion  

with builders. The dues of the banks are also to be recovered from the  

other attached properties as observed by us.  

 151. The criminal cases have also been registered by the police, we  

propose to monitor the progress of the investigation. For violations of FEMA  

and FDI norms, we direct the Enforcement Directorate to make

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investigation in accordance with the law and submit reports quarterly to  

this Court. Money laundering aspect is also to be looked into by concerned  

authorities.   

 152. It has been found in the Forensic Audit Report that there are several  

recoverable from various companies as well as from individuals, Directors  

and other incumbents. We direct that as per the findings recorded by the  

Forensic Auditors, the money be deposited in this Court on a time-bound  

basis and other needful be done as observed by the Auditors. As we have  

approved the report, let the concerned companies/ Directors/ individuals  

take steps in compliance with the observations and findings made by  

Auditors to refund the amount and or to do needful as suggested within  

one month.  

 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 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

267  

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.  

(v) The home buyers are directed to deposit the outstanding  

amount under the Agreement entered with the promoters within

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3 months from today in the Bank account opened in UCO Bank  

in the Branch of this Court.  The amount deposited by them  

shall be invested in the fixed deposit to be disbursed under the  

order of this Court on phase-wise completion of the  

projects/work by the NBCC.  

(vi) In view of the finding recorded by the Forensic Auditors and  

fraud unearthed, indicating prima facie violation of the FEMA  

and other fraudulent activities, money laundering, we direct  

Enforcement Directorate and concerned authorities to  

investigate and fix liability on persons responsible for such  

violation and submit the progress report in the Court and let  

the police also submit the report of the investigation made by  

them so far.  

(vii) We direct the Institute of Chartered Accountants of India to  

initiate the appropriate disciplinary action against Mr. Anil  

Mittal, CA for his conduct as reflected in various transactions  

and the findings recorded in the order and his overall conduct  

as found on Forensic Audit.  Let appropriate proceedings are  

initiated and concluded as early as possible within 6 months  

and a report of action taken to be submitted to this Court.  

(viii) We direct various Companies/ Directors and other incumbents  

in whose hands money of the home buyers is available as per  

the report of Forensic Auditors, to deposit the same in the Court  

within one month from today and to do the needful in the

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manner as observed. The last opportunity of one month is  

granted to deposit the amount and to do the needful failing  

which appropriate action shall be taken against them.  

(ix) Concerned Ministry of Central Government, as well as the State  

Government and the Secretary of Housing and Urban  

Development, are directed to ensure that appropriate action is  

taken as against leaseholders concerning such similar projects  

at Noida and Greater Noida and other places in various States,  

where projects have not been completed. They are further  

directed to ensure that projects are completed in a time-bound  

manner as contemplated in RERA and home buyers are not  

defrauded.   

(x) We appoint Shri R. Venkataramani, learned Senior Advocate, as  

the Court Receiver.  The right of the lessee shall vest in the  

Court Receiver and he shall execute through authorized person  

on his behalf, the tripartite agreement and do all other acts as  

may be necessary and also to ensure that title is passed on to  

home buyers and possession is handed over to them.   

(xi) We also direct Noida and Greater Noida Authorities to execute  

the tripartite agreement within one month concerning the  

projects where homebuyers are residing and issue completion  

certificate notwithstanding that the dues are to be recovered  

under this order by the sale of the other attached properties.   

Registered conveyance deed shall also be executed in favour of

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homebuyers, they are to be placed in the possession and they  

shall continue to do so in future on completion of projects or in  

part as the case may be.  We direct the Noida and Greater Noida  

Authorities to take appropriate action to do the needful in the  

matter. The Water Works Department of the concerned area and  

the Electricity Supplier are directed to provide the connections  

for water and electricity to home buyers forthwith.  

 155. Let the cases be listed for further hearing before us on 9.8.2019.  

  ………………….…..J.  

        (Arun Mishra)  

      …………………..….J.  

       (Uday Umesh Lalit)  

July 23, 2019;  

New Delhi.