Amrapali Homebuyers Relief Case: Supreme Court Dismisses Builders’ Plea for Interest Reduction

The case revolves around the interests of homebuyers who had invested in projects under the Amrapali Group of Companies in Noida and Greater Noida. The Supreme Court was faced with the challenge of ensuring justice for homebuyers while dealing with several builders and developers who sought financial relief similar to what was granted to the Amrapali projects.

Background of the Case

Several builders and developers, including M/s Prateek Infraprojects India Pvt. Ltd., CREDAI, NAREDCO, Paramount Propbuild Pvt. Ltd., ET Infra Developers Pvt. Ltd., and Surya Jyoti Software Pvt. Ltd., filed applications before the Supreme Court to recall its order dated November 7, 2022. The dispute began when homebuyers filed writ petitions seeking relief for undelivered flats due to financial mismanagement by the Amrapali Group.

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The Supreme Court, in its judgment dated July 23, 2019, in Bikram Chatterji & Ors. Vs. Union of India & Ors., took cognizance of the plight of homebuyers and ordered:

• Cancellation of Amrapali Group’s registration under RERA.
• Transfer of leasehold rights from Amrapali to a Court Receiver.
• Appointment of NBCC to complete stalled projects.
• Enforcement Directorate investigation into financial mismanagement.
• Homebuyers to deposit pending dues in a designated account for project completion.

Arguments by the Builders and Developers

• The builders argued that their financial situation was similar to the Amrapali Group’s and that they should also be entitled to interest relief.
• They contended that since the Supreme Court had reduced the interest rate for Amrapali projects, the same benefit should be extended to all developers in Noida and Greater Noida.
• They claimed that the economic impact of the COVID-19 pandemic made it difficult for them to fulfill their financial obligations.

Arguments by the Noida and Greater Noida Authorities

• The authorities opposed the builders’ plea, arguing that the relief granted to Amrapali was an exception based on fraudulent mismanagement and was not applicable to other builders.
• They contended that the developers had entered into lease agreements with full awareness of their financial obligations and should be held accountable.
• They highlighted that many of the builders seeking relief had already completed their projects and were only trying to evade payments due to the authorities.

Supreme Court’s Analysis and Judgment

The Court noted that the original proceedings were initiated solely to protect Amrapali homebuyers and were never meant to extend benefits to other builders. It emphasized that:

• The relief granted to Amrapali was due to extraordinary circumstances, including misappropriation of homebuyers’ funds.
• The builders seeking relief were not related to the Amrapali case and had not demonstrated any fraud or mismanagement that would justify similar relief.
• The developers had voluntarily entered into contracts with the Noida and Greater Noida authorities and were bound by the agreed terms.

The Court reaffirmed its order of November 7, 2022, which recalled earlier directions that had extended interest relief to builders. It dismissed the builders’ applications, ruling that:

• Interest rates for developers other than Amrapali should be calculated as per the government’s notification dated June 9, 2020.
• Builders cannot claim parity with Amrapali as they were not part of the fraud investigated by the Court.
• The attempt to misuse the Amrapali ruling to gain financial relief was unjustified.

Final Verdict

• The Supreme Court dismissed all applications filed by builders seeking a recall of the November 7, 2022, order.
• It upheld its decision that interest concessions granted to Amrapali projects would not apply to other developers.
• The ruling reinforced the principle that financial mismanagement by a builder cannot be used as a pretext for escaping contractual obligations.

The judgment ensures that the interests of homebuyers remain protected while preventing misuse of legal relief meant for exceptional cases like Amrapali.

Petitioner Name: Bikram Chatterji & Others.
Respondent Name: Union of India & Others.
Judgment By: Justice Ajay Rastogi, Justice Bela M. Trivedi.
Place Of Incident: Noida, Greater Noida.
Judgment Date: 27-02-2023.

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