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La Residentia project can't be declared part of Amrapali Group, says SC

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The Supreme Court on Tuesday refused to recall or revisit its 2019 orders to declare premium residential apartments La Residentia in greater Noida as part of the now defunct Amrapali Group and said that it would not be just and proper to hand over its development at this stage to the NBCC.

La Residentia project can't be declared part of Amrapali Group, says SC
The Supreme Court on Tuesday refused to recall or revisit its 2019 orders to declare premium residential apartments La Residentia in greater Noida as part of the now defunct Amrapali Group and said that it would not be just and proper to hand over its development at this stage to the NBCC.
The top court rejected the prayers of Amrapali La Residentia Flat Buyers Association and those supporting it saying that unlike all the other projects of the Amrapali Group which were handed over to the NBCC, the development of La Residentia has always been an on-going process.
It said that in all the other projects of Amrapali Group, either there was no development right from the inception or even if some development had been initiated, the same was completely at a standstill when the matters were taken up for consideration by this Court. A special bench of Justices U U Lalit and Ashok Bhushan directed that the company, La-Residentia Developers Private Limited, would continue with the construction and development of the residential project.
“In our considered view, it would not be just and proper to hand over the development at this stage to the NBCC as prayed for by the Association and the applicants supporting the Association. We, therefore, do not deem it appropriate to recall the orders dated July 23, 2019 and October 14, 2019 or to revisit the issue of whether the Company could be declared to be part of the Amrapali Group of Companies", the bench said.
The top court directed that 632 flats which were subject matter of Orders dated July 23, 2019 and October 14, 2019 shall be allowed to be sold by the Company to the interested persons or parties at a fair price or value. It, however, laid several conditions including that all the concerned transactions including the execution of appropriate documents or deeds should be countersigned by the Court receiver, senior advocate R Venkataramani or his nominee.
It said the price or value at which said flats are to be sold should be certified by the Court Receiver to be fair and appropriate and all the amounts received by way of such transactions of sale are credited to a separate account completely under the control of the receiver and/or his nominee.
The bench said that the injunction with respect said 632 flats, as directed in the Orders dated July 23, 2019 and October 14, 2019, shall stand modified to the extent and the difference between the amounts received from the concerned flat buyers for purchase of said 632 flats and the expenditure incurred on cost of construction shall finally be credited to the general account maintained for the benefit of the flat buyers of the Amrapali Group of Companies.
The bench said that as per the company's affidavit per square feet cost of construction incurred by the Company has been to the tune of Rs 1,657 per square feet whereas the per square feet cost of construction by the NBCC, if at this juncture the project is handed over to the NBCC, would be in the region of Rs 2,550 per square feet along with 8 percent consultation charges of the NBCC.
Thus, if the instant project is now handed over to the NBCC, it would result in escalation in costs to the detriment of the flat buyers. The figures also show that as against the original liability of Rs.155.10 crore, the Company has already discharged the liability towards the dues of GNIDA to the extent of Rs 117.10 crore, it said.
The top court had in its July 23, 2019 verdict had cracked its whip on errant builders for breaching the trust reposed by home buyers and ordered cancellation of the registration of the Amrapali Group under real estate law RERA, and ousted it from prime properties in the NCR by nixing the land leases. It had directed the state-run NBCC to complete the stalled projects of the Amrapali Group, whose directors Anil Kumar Sharma, Shiv Priya and Ajay Kumar are behind bars on the top court's order.
La Residentia, which has 3256 flats, is a residential project which is coming up in Greater Noida area of Uttar Pradesh. The court appointed two-forensic auditors in 2019 found that La Residentia, was launched in 2010-11 having an equity shareholding of 19.75 percent in the name of Stunning Construction Pvt. Ltd, an Amrapali Group Company.
The bench noted that in its 2019 verdict La Residentia was found to be coming in the category where the funds of the home buyers were diverted and where the projects were subsequently separated from the Amrapali Group. It said the court had directed that commensurate with the shareholding of Stunning Construction Pvt Ltd, either 19.75 percent of the land or 632 flats constituting about 19.40 percent of the total number of flats be surrendered by the La-Residentia Developers Private Limited, as that would be equivalent to the contribution of flat buyers which was diverted.
On October 14, 2019, the top court had directed La Residentia to submit an affidavit on the expenditure and total amount invested in the construction of 600 flats which were available for sale at the time and the company was injuncted from selling flats which were available. The flat buyers association of the project has moved the top court seeking recall or revisit of top court's order July 27, 2019 and direction to give the flat buyers similar protection as was extended to the other home buyers of Amrapali Group.