Holding

In cases of fraud and collusion by builders, authorities, and banks, the rights of home buyers are paramount, and the principle of fraud vitiates applies, preventing authorities and banks from recovering dues from the projects funded by home buyers.

Summary

Home buyers booked flats in various projects of the Amrapali Group of companies in Noida and Greater Noida, paying substantial amounts between 2010-2014. The builders failed to deliver possession within the promised 36 months and did not pay dues to the Noida and Greater Noida Authorities or repay loans taken from banks. A forensic audit revealed large-scale diversion of home buyers' funds through dummy companies, bogus bills, and violations of FEMA and FDI norms, with active connivance of officials from the authorities and banks. The Supreme Court held that the principle of 'fraud vitiates' applies, and the public trust doctrine imposes a duty on authorities to protect home buyers. The Court cancelled the registration of Amrapali companies under RERA and the lease deeds, appointed NBCC to complete construction, and directed that the dues of authorities and banks be recovered from other attached properties, not from the home buyers' investments. The Court also directed investigation by enforcement agencies and disciplinary action against the statutory auditor.

Issues considered

Whether the home buyers have a right to the flats despite the builder's default and diversion of funds?
Whether the mortgage created in favour of banks is valid given the conditional NOC and non-payment of dues to authorities?
Whether the Noida and Greater Noida Authorities can recover their dues from the projects and home buyers?
Whether the provisions of RERA protect the interests of home buyers in cases of fraud?
Whether the principle of 'fraud vitiates' and public trust doctrine apply to the facts of the case?

Legislation cited

Companies Act, 2013s. 164
Foreign Exchange Management Act, 1999
Insolvency and Bankruptcy Code, 2016s. 53, s. 7
Real Estate (Regulation and Development) Act, 2016s. 11, s. 17, s. 18, s. 19, s. 4, s. 5, s. 6, s. 7, s. 8
Registration Act, 1908s. 49
Transfer of Property Act, 1882s. 58
Uttar Pradesh Industrial Area Development Act, 1976s. 13, s. 13-A, s. 14

Subjects

HousingReal EstateFraudPublic Trust DoctrineRERAInsolvency and Bankruptcy CodeMortgageConsumer ProtectionForensic AuditDiversion of FundsFEMAMoney Laundering

Judgment

[2019] 9 S.C.R. 289 289

BIKRAM CHATTERJI & ORS. A
v.
UNION OF INDIA & ORS.
(Writ Petition (C) No. 940 of 2017)
JULY 23, 2019 B
[ARUN MISHRA AND UDAY UMESH LALIT, JJ.]
Housing:
Housing projects – By a Group of companies – Proposing to
construct approximately 42,000 flats – The projects were registered C
under RERA – Booking of flats by various home-buyers during the
years 2010-2014 – Standard Form of Allotment-cum-Flat Buyers
Agreement stated that delivery of possession within 36 months –
Builder got the land from Noida and Greater Noida Authorities on
paying 10% of the land price – Builders also took loans from the
D
Banks for the project on mortgaging the land with the Banks –
Home-buyers paid the amount from 50% to 100% abiding by the
payment schedule – Builders failed to deliver the flats within 36
months – They did not pay the balance amount towards the land to
the Noida and Greater Noida Authorities and also failed to repay
the loans taken from the Banks – Some of the consumers filed E
consumer complaint under Consumer Protection Act – Bank, for
recovery of the loan, filed company petition under s.7 of Insolvency
and Bankruptcy Code, 2016 – National Company Law Tribunal
(NCLT) appointed Interim Resolution Professional (IRP) and
declared Moratorium restricting institution of any suit against the
F
corporate debtor – Thereupon writ petitions u/Art.32 were filed by
home-buyers – Several orders by Supreme Court giving the builder
opportunity to go ahead with project work and complete the same –
Orders were not complied by the builder – Forensic audit of the
companies of the builder directed by the Court – Court directed
freezing of individual accounts of the Directors of all the 40 G
companies and also directed attachment of the properties in the
individual names of the Directors – Held: The Noida and Greater
Noida Authorities were grossly negligent in reviewing and monitoring
progress of the project and in collusion with the builders, failed to
take action for non-payment of its dues – They illegally permitted
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290 SUPREME COURT REPORTS [2019] 9 S.C.R.

A the builders to sub-lease the land – The officials of Authorities have
acted in clear breach of public trust and have failed to act as per
statutory mandate, Regulations and terms of the Lease Deed – The
mortgage of the land with the Bank was without obtaining clear
NOC which was a condition precedent for creation of Mortgage –
Thus, no mortgage in the eye of law has been created – Moreover,
B
the money borrowed from the Bank was not utilized for the project
and the same was diverted for creation of other assets – The Bank
also failed to check whether the money, in fact was required for the
project and used for the same – Therefore, the Banks and the
Authorities can realize their money only from those assets and from
C the Guarantors and not from investment of home buyers – There
has been blatant violation of provisions of RERA – In the
circumstances of the case, principle of ‘fraud vitiates’ is attracted
and such transaction would become unenforceable and would be
against the public trust doctrine – It is bounden duty of court not
only to save the home-buyers but also to ensure that they are not
D
cheated – Therefore, the registration of the builder companies under
RERA is cancelled – The Lease-Deeds in favour of the Companies
are also cancelled – Construction work in the projects is handed
over to NBCC – Rights of the lessee shall vest in the Court Receiver
– Real Estate Regulation and Development Act, 2016 – Uttar Pradesh
E Industrial Area Development Act, 1976.
Doctrines/Principles:
Principle of ‘fraud vitiates’ – Applicability of.
Doctrine of ‘public trust’ – Applicability of.
F Issuing directions, the Court
HELD : 1.1 In the instant matter, the question of larger
public importance is involved. A large–scale cheating has taken
place and middle and poor class home buyers have been duped
and deprived of their hardearned money and lifetime. By the
G 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. This is not only with respect
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 291

to the Amrapali builders that projects have not been completed A
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. [Para 69]
[531-F-G]
B
1.2 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 for construction of houses. C
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 D
activity is of the public importance as the real estate sector plays
a pivotal role in the fulfilment of needs of housing infrastructure.
[Para 73] [532-F-H]
2.1 It is apparent from the report of the forensic audit
submitted by Forensic Auditors that there is a serious kind of E
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 F
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 G
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
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292 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 sanctioning
B
of the loan and also in day to day transactions of Amrapali group
of companies. [Para 146] [580-D-H; 581-A]
2.2 No accounts were prepared w.e.f. the years 2015-2018
and money withdrawn was diverted during the said period. The
Statutory Auditor, failed in duty and was part of fraudulent
C 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
D without carrying interest for several years. There was total non–
monitoring by the bankers. The money laundering was resorted
to by Amrapali Group/ Directors. [Para 147] [581-B-C]
2.3 The statement filed on the expenditure of Rs.10,000
crores is nothing but a scrap of paper not supported by the books
E 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. [Para 142] [578-F-G]
2.4 The diversion of huge amount of Rs. 2,996.20 crores
has been rightly detected on Forensic Audit. The Forensic
F Auditors have given the details in their report along with reasons.
As to other amounts with respect to advances which are
recoverable, the explanation that there is a surrender of shares
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. The finding as to the diversion of home buyers’
G 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. [Paras 143, 144 and 145]
H [579-F-H; 580-A-B]
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 293

3.1 The public trust doctrine imposes on the State and its A
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
B
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– C
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.
[Para 73] [533-A-D]
D
Noida Entrepreneurs Association v. Noida & Ors. (2011)
6 SCC 508 : [2011] 8 SCR 25 ; Natural Resources
Allocation, In re, Special Reference No.1 of 2012
(2012) 10 SCC 1 : [2012] 9 SCR 311 ; Association of
Unified Tele Services Providers & Ors. v. Union of India
& Ors. (2014) 6 SCC 110 : [2014] 9 SCR 780 – relied E
on.
3.2 In the instant case, it is apparent that there are colossal
dues of Noida and Greater Noida Authorities. There were several
defaults in making the payment of the premium amount, lease
money, even the money payable to the farmers as compensation F
for land acquisition has not been paid by the builders, 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. [Para 76] [535-F-H; 536-A]
3.3 The transfer of the plot by the lessee was only on G
fulfilment of certain conditions. The dues of lessor towards the
cost of land were to be cleared in accordance with the schedule
of payment. It was specifically provided in lease deed condition
No.(ii)(c) that the lessee shall use the allotted plot for construction
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A of group housing/flats/plots. Condition No.(ii)(c)(iii) deals 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
B
thereon before making payment according to the schedule
specified in the lease deed of the plot to the lessor. 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
C execution of lease deed was to be treated as the date of possession.
The lessee was 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 was also provided in the case of violation of directions,
D
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. [Paras 78, 80 and 81] [536-E-F; 538-D-F; 540-B-D]
3.4 The lease deed/allotment was to be governed by the
E provisions of the U.P. Industrial Area Development Act, 1976
and by the rules and/or regulations made or directions issued
under the Act. The lessor w as required to monitor the
implementation of the project. In larger public interest the lessor
was also given a right to take back possession of the land/building
F by making payment at the prevailing rate. [Para 82] [541-C-E]
3.5 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
G 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

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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 295

its land of which dues had not been cleared. Thus, apparently, A
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. The action of the officials of the authorities has the
effect of causing unjust enrichment of builder from the land held
B
by the concerned authorities. It was wholly an illegal exercise
permitted. [Para 77] [536-B-D]
3.6 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 C
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 D
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 E
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. F
[Para 95] [549-B-E]
3.7 Public trust doctrine requires an affirmative action,
which was envisaged not only statutorily but under the Scheme
also. The Authorities were required to ensure that projects were
completed within the stipulated period, otherwise, the very G
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.

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296 SUPREME COURT REPORTS [2019] 9 S.C.R.

A They have violated every condition, but still, Authorities
were bent upon to condone everything. This reflects absolute
dereliction of duty cast upon the Authorities. [Para 96]
[550-B-C]
3.8 Thus, the officials of the Noida and Greater Noida
B 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. [Para 78]
[536-E-F]
4.1 With respect to the creation of mortgage deed in favour
C 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. One of the conditions on which permission to
D mortgage was that permission to mortgage was to 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 was to be governed by the terms and conditions of
E 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
condition. [Paras 83 and 84] [542-B-C; 543-C-E]
F
4.2 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
G 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. [Para 84] [543-F-G]
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 297

4.3 Issuance of conditional NOC was with ulterior motive, A
there was no 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
B
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 C
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, and there was a diversion
of money. [Para 85] [544-B-E]
4.4 The banks not only have failed to ensure that mortgage D
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. 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 E
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. It has been
observed in extensive detail in the forensic audit report that the
Banks did not monitor utilisation of funds and acted as a mute F
spectator to diversion which was almost happening evidently in
all banking transactions. [Paras 85 and 86] [544-G-H; 545-A-C]
4.5 There was negligence on the part of Bank of Baroda
and merely proceeding before the Court to recover the amount
is not going to serve the purpose. More so, in view of the finding G
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

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298 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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. [Para 93] [548-D-F]
B 4.6 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
C substantively liability would have been cleared. But by their
inaction and rather conniving, the buyers were cheated by the
Amrapali Group. [Para 97] [550-D-E]
4.7 Whatever complete/incomplete structures are there,
the Authorities are claiming that buyers have no right and they
D 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,
E 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
F vitiates” is clearly attracted and such a transaction would become
unenforceable and would be against the public trust doctrine.
Therefore, it is the bounden duty of the Court to act as parens
patria not only to save the home–buyers but also to ensure that
they are not cheated. [Para 97] [550-F-H; 551-A-B]
G 4.8 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
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 299

responsible for such act. At the same time to ensure that buildings A
are completed. [Para 98] [551-C-D]
4.9 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 B
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 C
of the money paid by the buyers as component of price of flats
even on account of payment to Authorities. [Para 123] [567-D-F]
4.10 The stand of the Noida 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 D
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 E
the banker’s duty to ensure that money made available was
invested in the project. [Para 126] [568-E-F]
4.11 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 F
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. The money
borrowed from banks was used to create other assets worth
thousands of crores. Thus, the banks can realise their money G
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. Home buyers are not
direct party to the bank loan, thus it was the duty of the bankers
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A 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
B
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,
C 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
D
as authorities, have to share the blame. [Para 127] [568-G-H;
569-A-E]
4.12 Though the home buyers 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
E promoters, that too in connivance with the bankers and officials
of the Noida and Greater Noida authorities. [Para 128] [569-F-G]
4.13 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
F 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
G of the 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
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 301

intended right from the beginning to complete the construction A
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
B
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. [Para 129] [570-A-E]
4.14 That apart, several attached properties have been put C
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. Amrapali group is instrumental in not allowing the
properties to be sold. There appears to be some invisible hand D
holding buyers out and even the bankers are not coming up to
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. They E
have sold several valuable properties during pendency of
petitions as pointed out by the Forensic Audit Report. In the
aforesaid circumstances, under the provisions of the RERA their
interest cannot be protected. [Para 130] [570-E-H; 571-A]
4.15 Considering the serious kind of fraud unearthed on F
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 G
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. Right from
2015, no construction activity has taken place. Account books
had not been maintained and money has been transferred

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A 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
B
it exemplary one that such fraudulent actions do not recur in
future, in real estate business in India. [Para 130] [571-A-D]
4.16 There was no force majeure condition or any legal
impediment and as such the period from 2011 to 2015 cannot be
treated as a moratorium period vis-à-vis the dues of Noida and
C 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. [Para 141] [577-F-G]
5.1 The Real Estate (Regulation and Development) Bill,
D 2013 (RERA) was 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. It is apparent from
the aims and objectives of RERA that the Act ensures greater
E 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. [Paras 104 and 105] [554-F;
557-E]

F 5.2 In view of the provisions of the RERA Act, in the instant
case, it was necessary to deposit the amount in the account. 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
G event of force majeure in case 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
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 303

Section 5 is valid for a period declared by the promoter. A
[Paras 109 and 110] [559-G-H; 560-A-B]
5.3 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 B
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 C
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. [Para 110] [560-B-D] D
5.4 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 E
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. [Para 111] [562-B]
5.5 Once registration lapses on non–completion of project
within the time stipulated or it is revoked the consequence ensue F
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 G
and cannot be left in between. [Para 112] [562-C-D]
5.6 As per the provisions of Section 11, the promoter shall
be responsible to obtain the completion certificate or the

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A 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
B
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
C being in force, it shall not affect the right and interest of the allottee.
[Para 113] [562-H; 563-A-C]
5.7 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
D may be. No title remains with the promoter. 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,
E building with interest in this behalf including compensation in
the manner as provided under the Act. [Paras 116 and 117]
[564-E-G]
5.8 It is apparent that RERA intends protection of home–
buyers and aims at completion of the buildings. The buildings
F have to be completed. The task has already been assigned to
NBCC by the Court 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
G 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. 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
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 305

transfer affected by the promoter of the common areas as defined A
in the RERA and otherwise reserved under the plan shall be
void and inoperative. [Paras 120 and 121] [566-F-H; 567-A]
5.9 The contention on behalf of the Bank is that the
agreement of promoter/builder with home buyers is unregistered
as such, no right has been created in the immovable property in B
view of the provisions contained in section 49 of the Registration
Act. The contention 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 C
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 permitted to be taken away by builder
or secured creditors in an illegal manner. The provisions of D
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.
[Para 132] [571-G; 572-A-B]
E
5.10 The two expressions of the provisions of Section
11(4)(g) of RERA Act 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 F
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 payment
of dues of premium and lease rent etc. Conditional permission to G
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.

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A 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,
B
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.
C 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
D
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
E process of law. 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),
F
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
G 11(4)(g) of RERA. [Para 133] [572-E-H; 573-A-E]
5.11 The Bank’s plea is 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
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 307

building, as the case may be, and if any such mortgage or charge A
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
B
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 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 C
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 this Court, it
D
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 E
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, it is held 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.
F
[Para 134] [573-F-H; 574-A-D]
5.12 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 G
the land is free from all 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

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A the encumbrance if any. The provision does not espouse the cause
of the bank in any manner whatsoever. [Para 135] [574-E-F]
5.13 It is not correct that in view of the provision of section
19(4) of RERA, the right of the allottees is restricted to only
receiving the compensation from the promoters. The provisions
B 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
C 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 compensation which
D is to be determined under the RERA. The rights of the allottees
are not restricted to only receiving the compensation. [Para 136]
[574-G-H]
5.14 As regards the plea that the RERA recognises and
protects interests of the lenders and does not in any manner take
E 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 it comes to the question of
protection of rights of buyers even if RERA had not been enacted,
F 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. The provisions of
RERA are beneficial to the home buyers and are intended to
insulate them from fraudulent action, ensures completion of the
G 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. The home buyers are not observed from the discharge
of their liability if any. At the same time, they have the right of

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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 309

enforcement of their right for compensation due to undue delay A
in completion of the project. [Para 137] [575-D-F]
5.15 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 B
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
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 authorities C
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. [Para 139] [576-C-F]
5.16 No part of the building can be directed to be D
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 E
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. [Para 140] [577-B-C]
5.17 There is duty enjoined under the RERA, there has to F
be a Central Advisory Council as well as the role of the State
Government is not ousted in order to protect against such frauds.
The Central Government and the State Government are directed
to take appropriate steps on the time–bound basis to do the
needful, all other such cases where the projects have remained
incomplete and home buyers have been cheated in aforesaid G
manner, it should be ensured that they are provided houses.
[Para 141] [578-C-D]

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310 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 6. As the basic obligations have not been complied with by
the promoters, they cannot also be entitled to FAR. In the instant
case, 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. [Para 122] [567-B]
B
7.1 There appears to be non-issuance of the completion
certificate, whereas the buildings are being occupied, completion
certificate is directed to be issued. 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
C 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
D 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
E 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. [Para 124] [567-F-H; 568-A-B]
7.2 In the facts and circumstances of the case, it would be
F absolutely improper for the Authorities to deny issuance of
occupancy or completion certificate, especially on the ground of
non–payment of dues. 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
G 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 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

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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 311

deposited with the concerned Authorities and the home buyers’ A
money had been diverted, which was more than the dues of the
Authorities and the Banks taken together. Had timely action
been taken by the Authority, no amount could have been diverted
and the position would have been different as it stands today.
The concerned Authorities have to issue occupancy certificate
B
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. [Para 101] [553-C-E] C
7.3 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. D
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, the Court has
directed the Authorities to provide basic necessities forthwith. E
The Central Government and Government of Uttar Pradesh are
also directed to ensure that everything is done to protect the
interest of the home-buyers without obliging the builders.
Obliging the builders by making certain concessions by the
Government would amount to perpetrating further fraud and F
unjust enrichment of builder. The case poses challenge to the
law enforcement agencies to act in tandem to book such culprits.
[Para 102] [553-E-H; 554-A]
7.4 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 G
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

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312 SUPREME COURT REPORTS [2019] 9 S.C.R.

A Construction, Ownership, and Maintenance) Act, 2010.
[Para 123] [567-C-D]
8.1 Because of the failure on the part of the Builders to
fulfil the obligations towards the buyers and the serious kind of
fraud which has been played by them upon the home buyers, the
B registration of Amrapali group of companies under the Real Estate
Regulation and Development Act, 2016 deserves to be cancelled.
[Para 148] [581-D-E]
8.2 Because of the gross violations of the conditions of lease
deeds executed by the Noida and Greater Noida Authorities in
C favour of Amrapali group of companies with respect to various
projects, the lease deeds are liable to be cancelled and the
rights thereupon shall vest in the Court Receiver. [Para 149]
[581-E-F]
8.3 The criminal cases have also been registered by the
D police. The Court proposes to monitor the progress of the
investigation. For violations of FEMA and FDI norms, the
Enforcement Directorate is directed to make 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. [Para 151] [582-B]
E
8.4 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. It is directed
that as per the findings recorded by the Forensic Auditors, the
money be deposited in this Court on a time–bound basis and
F other needful be done as observed by the Auditors. As the Court
has 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. [Para 152] [582-C-D]
G 8.5 It has also beem 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
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 313

or demolish them nor can enforce the charge against homebuyers/ A
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
B
entire life. They cannot be cheated once over again by sale of
the projects raised by their funds. The Noida and Greater Noida
Authorities have to issue the Completion/ Part Completion
Certificate, as the case may be, to execute tripartite agreement
and registered deeds in favour of the buyers on part–completion
or completion of the buildings, as the case may be or where the C
inhabitants are residing, within a period of one month. [Para 153]
[582-E-G]
8.6 The home buyers are directed to deposit the
outstanding amount under the Agreement entered with the
promoters within 3 months from today in the Bank account opened D
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. The percentage of profit of
NBCC is fixed at 8 percent. As it is a Government Undertaking,
NBCC has to ensure that DPR is prepared reasonably and E
the work to be completed as expeditiously as possible.
[Para 154 iii and 125] [583-D; 568-B-C]
8.7 The Institute of Chartered Accountants of India is
directed to initiate the appropriate disciplinary action against Mr.
Anil Mittal, CA for his conduct as reflected in various transactions F
and the findings recorded in the order and his overall conduct as
found on Forensic Audit. Let appropriate proceedings initiated
and concluded as early as possible within 6 months and a
report of action taken to be submitted to this Court. [Para 154
vii] [583-F-G] G
8.8 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, H
314 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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. [Para 154 ix] [584-B-C]
8.9 Shri R. Venkataramani, Senior Advocate is appointed
B 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.
[Para 154 x] [584-D]
C
8.10 The Court also directs 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
D properties. Registered conveyance deed shall also be executed
in favour of 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. The Noida and Greater Noida
Authorities are directed to take appropriate action to do the
E 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. [Para 154 xi] [584-E-G]
Case Law Reference
F [2011] 8 SCR 25 relied on Para 73
[2012] 9 SCR 311 relied on Para 74
[2014] 9 SCR 780 relied on Para 75
CIVIL ORIGINAL/APPELLATE JURISDICTION : Writ
G Petition (Civil) No. 940 of 2017.
(Under Article 32 of the Constitution of India)

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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 315

With A
Writ Petition (C) Nos. 947, 971, 942, 1041, 1018, 1116, 1144, 1156,
1206, 1242 of 2017, 8, 58, 21, 52, 91, 56, 57, 74, 134, 131, 160, 164, 182,
199, 226, 245, 281, 306, 298, 246, 267, 288, 460, 353, 378, 742, 829, 1397
of 2018, S.L.P.(C) No. 1879 of 2018, SMC (Crl.) No. 4 of 2018.
Maninder Singh, Vikramjit Banerjee, ASGs, Ms. V. Mohana, Vikas B
Singh, Gaurav Bhatia, M. G. Ramachandran, Shyam Divan, Ms. Vibha
Datta Makhija, Krishnan Venugopal, K. S. Namdar, S. B. Upadhyay,
V. K. Shukla, Debal Kr. Banerji, Ms. Geeta Luthra, P. N. Mishra, Rakesh
Khanna, Siddartha Dave, K. K. Rai, Rakesh Munjal, Neeraj Kishan
Kaul, Nikhil Nayyar, V. Shekhar, Sr. Advs., Biswajit Dubey, Uday Khare, C
Ms. Ruchi Choudhary, Ms. Ashita Chawla, Ms. Srideepa Bhattacharyya,
Aditya Marwah, Ms. Surabhi Khattar, Manpreet Lamba (for M/s. Cyril
Amarchand Mangaldas), Vibhu Shanker Mishra, Mukul Singh, B. V.
Balramdas, Ms. Ankita Sharma, Ms. Nikita Capoor, Prashant Singh,
Arvind Kumar Sharma, Raj Bahadur, Vikrant Yadav, Mrs. Misha Rohatgi,
Ekant Luthra, Nakul Mohta, Lalit Mohan, Johnson, Manoj Singh, Abhishek D
Sharma, Utkarsh Jaiswal, Himanshu Shekhar Tripathi, Rohitash Kumar
Sharma, Gaurav Goel, Paras Choudhary, Vishal Gupta, Arpit Rai, Aviral
Kashyap, Ms. Akansha Goyal, Rishi Matoliya, Ms. Sumati Sharma,
Kumar Mihir, Ms. Shayaree Basu Mallik, Sukant Vikram, Hitesh Kumar
Sharma, S. K. Rajora, Rajesh Kumar Gupta, Krishnam Mishra, Param E
K. Mishra, Nishant Kumar, Ms. Anisha Upadhyay, Shashank Singh, Rohit
Pandey, Ms. Yamini Raman Acharya, Varad Dwivedi, Ms. Manju Jetley,
Balraj Dewan, Vishnu Sharma, Sourav Roy, Ms. Anupama Sharma,
Prashant Kumar, Ashutosh Kumar, Gaurav Majumder, Abhay Kumar,
Alok Kumar Aggarwal, Ms. Anushruti, Ms. Pavni Poddar,
Ms. Gauri Goburdhan, Ms. Shivani L. Lohiya, Ms. Asmita Nanda, Sahil F
Modi, Ms. Anshul Duggal, Pranav Vashishtha, Kushagra Nigam,
Ms. Kritika Singh, Gaurav Goel, Manoj Singh, Altamish Siddiki, Abhishek,
Prateek Yadav, Anshul Duggal, Niraj Gupta, Fuzaail Khan, J. Abbas,
Ms. Shefali Jain, Mrs. Anushree Gupta, Prakash, Umair Ahmad Siddiqui,
Mohd. Waqous, Zeeshan Khan, Kabir Dixit, S. S. Ray, Manmeet Singh, G
Anugrah Robin Frey, Ankrit Gupta, Ms. Rakhi Ray, S. K. Pandey,
Anshul Rai, Chandrashekhar A. Chakalabbi, Awanish Kumar,
Ramkrishna Veerendra (for M/s. Dharmaprabhas Law Associates),
Mohd. Ehraz Zafar, Divyam Dhyani, Vivek Narayan Sharma, Abhishek
Aggarwal, Atul Sharma, Manmeet Singh, Mishra Saurabh, Anshuman
H
316 SUPREME COURT REPORTS [2019] 9 S.C.R.

A Dwivedi, M. L. Lahoty, Paban K. Sharma, Anchit Sripat, Himanshu
Shekhar, Sukant Vikram, Joby Varghese, Arif Eqbal, Abhinav Ankit,
Ms. Indrani Mukherjee, Ms. Tatini Basu, Ms. Rajkumari Banja, Nitin
Bajpai, Syed K. Ali, Rohit Sharma, Atul Agarwal, Rounak Nayar, Anshul
Chowdhary, Kumar Dushyant Singh, Shadan Farsat, Ms. Jahnavi Sindhu,
Ms. Shruti Narayan, Ranjan Kumar Pandey, Sandeep Bist, Ram Krishna,
B
Anuj Tiwari, Shikhar Srivastava, Ritwik Sahah, K. K. Bhatt,
Ms. Khushboo Khauja, Ms. Shobha Gupta, Joyshree Barman, Tahir
Ashraf Siddiqui, Amit Goel, Ms. Ruchi Goel, Ashwani Bhardwaj,
Ali Chaudhary, Azeem Kalebude, Jamnesh Kumar, A.D.N. Rao,
A. Venkatesh, Rahul Mishra, Rohit Kumar Singh, Ms. Stuti Mishra, Ms.
C Prerna Mehta, Ms. Gargi Khanna, Rajul Shrivastav, Mohit D. Ram,
Ms. Suman Tripathy, Pran Prasoon, R. P. Goyal, Naresh Kaushik, Manoj
Joshi, Rahul Kaushik, Vardhman Kaushik, B. Purushothama Reddy,
Rahul Sharma, Omung Raj Gupta, Devik Singh, Lakshay Juneja, Ms.
Lalita Kaushik, Ms. Priyanka Das, Somiran Sharma, Ms. Sheena Taqui,
Ms. Ragini Pandey, Gudipati G. Kashyap, Ms. Apoorva Pandey, Ms. T.
D
Archana, Rajinder Wali, B. K. Satija, Anurag Tandon, Ms. Sonam Gupta,
Kumar Sudeep, Somesh Chandra Jha, Ms. Neha Chaudhary, Sunil K.
Khatri, Ms. Shaila Arora, Badri Prasad Singh, Arvind Kumar, Manish
S. Verma, Ms. Astha Sharma, Shivam Sharma, Ms. Dimple Nagpal,
Abhigya, Ms. Sunita Yadav, Ms. Sheetal Rajput, Vivek Narayan Sharma,
E Pragyan Mishra, Ms. Mohika Jain, Mohd. Zaheb Husain, Dr. Shesh
Main Pandey, Rajeev Kumar Jha, Satyabrata Panda, Shashwat Panda,
Manoranjan P., Tejaswi Kumar Pradhan, Dinesh K. Garg, Abhishek Garg,
Dhananjay Garg, Deepak Mishra, Ramdhir Kumar Sinha, Vijay Kumar,
Thomas Oommen, Aniruddha P. Mayee, Vivek Srivastava, Ravi Bhushan
Upadhyay, Gajanand Kirodimal, Ms. Anisha Mathur, Saarthak Bansal,
F
Ms. Manju Jetley, Mrs. Veera Kaul Singh, Ms. Vijaya Singh, Ms. Akansha
Singh, Ms. Aishwarya Mishra, T. K. Joseph, P.K. Jayakrishna, Sandeep
Jha, Ram Ekbal Roy, Binay Kr. Das, Manoj Sharma, Kapil Kaushik,
Roopansh Poorohit, E.R. Sumathy, Ms. Savita Aggarwal, Ms. Kapnana
Kalra, Sanjay Kumar Visen, Ms. Ritu Rastogi, Ms. Sasmita Tripathy,
G Sanjeev Singh, Ms. Anandita Singh, Ms. Amisha Agarwal, Dushansho
Polo, Ms. Pallavi Pratap, Ms. Shikha Shrivastav, Ms. Shweta M.,
Ms. Neena Singh, Nitin Jain, Aneesh Mittal, Abhishek Agarwal, Atul
Sharma, Arunav Tewari, Ms. Mona K. Rajvanshi, Aneesh Mittal,
Ms. Shreya Sharma, Manish Kumar Saran, Sukant Vikram, R. Sathish,
Mrs. Indra Sawhney, Amit Pawan, Rameshwar Prasad Goyal, Prithvi
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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 317

Pal, Shishir Pinaki, Shovan Mishra, Raj Kamal, D. K. Sharma, Maheen A
Pradhan, Varun Tyagi, Siddhant Sharma, Mayank Sharma, Mrigank
Prabhakar, Ms. Jyoti Sharma, Gopal Jha, Binay Kumar Das, G. Balaji,
A. P. Mohanty, P. K. Pattnaik, Raghavendra Shukla, Robin Singh Solanki,
Kumar Mihir, G. C. Tyagi, Kailash Prashad Pandey, Ashok Kumar Singh,
Ms. Jasmine Damkewala, Ms. Sangeeta Singh, Prakash Ranjan Nayak,
B
Suchit Mohanty, Mrs. Vandana Kaushal Nee Mohanty, Sibo Sankar
Mishra, Ms. E. R. Sumathy, Dr. Alok K. Sharma, Naresh Kumar,
Ravindra Kumar, Rabin Majumder, Akhilesh Kumar Pandey, Abhimanyu
Bhandari, Ms. Nattasha Garg, Somesh Tiwari, Naveen Kumar,
T. Mahipal, Ms. Atishi Dipankar, Ajit Sharma, Satish Pandey, Shashank
Singh, Krishanu Mishra, Param Kumar Mishra, Kabir Dixit, Aishwarya C
Sinha, Ms. Priyanka Sinha, Alok Kumar Singh, Gaurav Goel, Mukesh
Kumar Maroria, Jaibir Singh Nayar, Akash Nayar, Ms. Sucharita Ganguly,
Siddhartha Jha, Ms. Rashmi Singh, Ashwani Bhardwaj, Tahir Ashraf
Siddiqui, Kaushal Yadav, Sanand Ramakrishnan, Ritesh Agrawal,
Raj Kamal, Mrs. Anil Katiyar, R. R. Rajesh, Raj Bahadur, Gaurav,
D
Sanjeev Bhatnagar, M. K. Verma, Prakash Kumar Singh, Pawanshree
Agrawal, Dharmendra Kumar Sinha, Ms. Astha Sharma, S. K. Verma,
Ms. Prerna Mehta, Ms. Amita Singh Kalkal, Divyakant Lahoti,
Dr. Shashwat Bajpai, Sharad Agarwal, Rohit Amit Shekdhar, Abhinav
Shrivastava, Rahul Gupta, Ms. Sana Kamra, S.S. Ray, Vaibhav Gulia,
Ms. Praveena Gautam, Aman Gupta, Dhananjay Garg, Rameshwar E
Prasad Goyal, Pawan Bhushan, Talha Abdul Rahman, Kunal Mimani,
Ms. Vishrutyi Sahni, Dheeraj Nair, Ms. Sonam Gupta, Smarhar Singh,
Virender Goswami, Gautam Narayan,. Ms. Soni Singh, Shamik Saha,
Manu Nair, Kuber Dewan, S.S. Shroff, Pradeep Misra, Daleep Dhyani,
Suraj Singh, Ms. Pallavi Pratap, Avneesh Arputham, Ms. Anuradha
F
Arputham, Sureshan P., Badri Prasad Singh, Aakarshan Aditya, Somesh
Chandra Jha, Ms. Sujata Kurdukar, Roopansh Purohit, Gautam Das,
Lalit Rana, C.M. Gopal, Sunil Kumar Sethi, Ms. Subasini S.,
Ms. Kamakshi S. Mehlwal, Ms. Charu Mathur, Anil Kumar Mishra-I,
Aditya Jain, Ms. Indra Sawhney, Mohit D. Ram, Ashwani Kumar
Upadhayay, Prashant Kumar Umrao, Veer P. Singh, Raghvendar Shukla, G
R.D. Upadhyay, Sumit Sinha, Ms. Payal Kakra, Sushant Chaturvedi,
Ajay Pratap Singh, Ms. Anindita Pujari, Ms. Arti Singh, Ms. Pooja Singh,
Kumar Dushyant Singh, Mrs. Gargi Khanna, Ranjan Kumar Pandey,
Mishra Saurabh, Mrinal Harsh Vardhan, Abhimanue Shrestha, Anoop
Prakash Awasthi, Ms. Anannya Ghosh, Brijesh Kumar Tamber,
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318 SUPREME COURT REPORTS [2019] 9 S.C.R.

A Ms. Shobha Gupta, Sanjay Kumar Visen, Sudhansu Palo, Abhitosh Pratap
Singh, Mrs. Swarupama Chaturvedi, Ms. Aparna Trivedi, Ms. Hima
Lawrence, Vikram, Anurag Rana, Ms. Nikita Tyagi, Ravindra Sadanand
Chingale, Brijesh Panchal, Vinod Yadav, Sudhir Naagar, Mushtaq Ahmad,
Ms. Suruchii Aggarwal, Ms. Abhigya, B. K. Satija, S.R. Setia, Vikram
Patralekh, Ms. Kriti Sondhi, Braj Kishore Mishra, M/S Vibhu Shanker
B
Mishra And Co., Ms. Puja Sharma, Anup Kumar Mishra, Balwinder
Singh Suri, Ms. Garima Sharma, Ms. Srishti Gupta, Ms. Aaryav Mehra
(for M/s. Kings and Alliance LLP), Ambhoj Kumar Sinha, P. K.
Jayakrishnan, M/S. V. Maheshwari & Co., Manoj Saxena, Nitish Massey,
Mrs. Mona K. Rajvanshi, Sibo Sankar Mishra, Ram Lal Roy, Abhishek
C Rajput, Praveen Jain, Annam D. N. Rao, Shri Gaichangpou Gangmei,
Ms. Dharitry Phookan, B. Krishna Prasad, Radhakanta Tripathy,
Ms. Chandan Ramamurthi, Joby P. Varghese, Nikilesh Ramachandran,
Ms. Roohina Dua, Ejaz Maqbool, Kaushik Choudhury, Kedar Nath
Tripathy, E. C. Vidya Sagar, Rajesh Kumar Gupta, Alok Kumar, Somya
Yadava, Snigdha Singh, Ashutosh Jain, Chirag Babbar, Ketul Hansraj,
D
Balaji Srinivasan, Aneesh Mittal, Ms. Shreya Sharma, Abhijit Sengupta,
Kumar Neeraj, Mrs. Lalita Kaushik, Arun K. Sinha, Raj Singh Rana,
Pankaj Kumar Singh, Anupam Dwivedi, Ms. Bharti Tyagi, Chandan
Kumar, Somiran Sharma, Ms. Arti Singh, Prasenjit Keswani, Kabir
Shanker Bose, Raghvendra Pratap Singh, Ankit Anand, Arvind Gupta,
E Dr. Sumant Bharadwaj, Ms. Mridula Ray Bharadwaj, Rakesh Kailash
Sharma, Ms. Tamanna Goyal, Ms. Iti Aggarwal, Chander Prakash (for
M/s. D.S.K. Legal), Binay Kumar Das, Chandan Kumar, Ms. Rituraj
Choudhary, Tarun Vaid, Siddharth Bansal, Shekhar Kumar, K. Paari
Vendhan, Ms. Vandana Sehgal, Ms. Gunjan Ahuja, Abhinav Shrivastava,
Somanatha Padhan, Sarvam Ritam Khare, Sanjay Kumar Dubey, Arvind
F
Kumar, Anil K. Chopra, Neeraj Shekhar, Ms. Charu Ambwani, Rajesh
Mahale, Vishal Gupta, Ravinder Kumar, Advs. for the appearing parties.
Applicant-in-person.
The Judgment of the Court was delivered by
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 319
[ARUN MISHRA, J.]

In the various projects, the Amrapali Group of Companies proposed to A
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- B
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 C
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.
4. The builder under Clause 19(a) was obliged to complete the
flats of M/s. Amrapali Centurion Park Private Limited within 30 months D
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. E
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 F
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 G
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 H
320 SUPREME COURT REPORTS [2019] 9 S.C.R.

A short, ‘the NCDRC’) by filing Consumer 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,
B 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
C 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
D 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
E petitions under Article 32, a plethora of intervention applications have
been filed.
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
F 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
G 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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 321
[ARUN MISHRA, J.]

the Insolvency and Bankruptcy Code, 2016. The moratorium imposed A
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.
B
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 have allotted huge plots to the builders by charging a
sum of approximately 10 percent and in most of the cases, thereafter no C
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 D
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 E
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 F
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 G
builder to deposit amount as ordered on 17.11.2017. It was also pointed
that in 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
H
322 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C
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
D
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
E 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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 323
[ARUN MISHRA, J.]

developers in addition to the Galaxy group have given their letters A
to collaborate with the respondent promoters for the said purposes
as testified by the documents available in compilation ‘B’.
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 B
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. C

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 D
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 E
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. F
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 G
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.”

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324 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
counsel appearing for Amrapali Group stated that they are ready to
undertake the completion of the projects of Amrapali Group and we
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
C 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
D
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:
E
“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.
F 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
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 325
[ARUN MISHRA, J.]

3. The following are the basket-wise proposals: A
FIRST BASKET
I. SAPHIRE – PHASE-I IN NOIDA :
In relation to Saphire Phase-I, consisting of 1033 units, the
time given is of 10+2 months for completion of the project. B
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.
C
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 D
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 E
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)
F
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 G
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.
H
326 SUPREME COURT REPORTS [2019] 9 S.C.R.

A The co-developer of the first basket is M/s. Galaxy Dreamhome
Developers Pvt. Ltd.
SECOND BASKET
PRINCELY ESTATE :
B 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
C 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.
D
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
E
agreed to.
THIRD BASKET
Amrapali-the promoter has proposed certain projects in
category-A, namely, Zodiac, Platinum, Titanium and Eden Park
F 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
G 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-
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 327
[ARUN MISHRA, J.]

developer is M/s. India Infoline Limited (IIFL) & M/s. Galaxy A
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 B
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 : C
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. D
CATEGORY B PROJECTS :
The following are category ‘B’ projects :
B.1. CENTURIAN :
A. CENTURIAN PARK: E

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 F
completed within 21 months.
C. TROPICAL :
Tropical comprises of 1240 units. The work shall be completed
within 30 months.
G
D. O-2 Valley :
O-2 Valley comprises of 800 units. The work shall be completed
within 12 months.

H
328 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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 :
D 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
E 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.
F 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
G 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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 329
[ARUN MISHRA, J.]

PROJECT COSMOS KOCHI : A
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 B
M/s. Ultra Home Constructions Pvt. Ltd.
The co-developer for both the Vananchal projects is M/s. IIFL.
FOURTH BASKET
I. DREAM VALLEY : C
The promoter of Dream Valley is Amrapali Dream Valley Pvt.
Ltd. 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.
D
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 E
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 : F
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.
G
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. H
330 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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.

C 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
D 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
E 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-developer and liability towards
the buyer shall remain with the promoter.
5. At this stage, we deem it appropriate to direct that an escrow
F 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.
G
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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 331
[ARUN MISHRA, J.]

numbers 11 and 15 are of high value. The unlaunched part of A
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
B
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 C
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 D
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. E

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 F
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 G
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;
H
332 SUPREME COURT REPORTS [2019] 9 S.C.R.

A iii. Chartered Accountant appointed by the developer; as
well as –
iv. Architect of buyers
v. Structural Engineer of buyers
B 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
C 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
D 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
E 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
F 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
G
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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 333
[ARUN MISHRA, J.]

swapping or there may be certain buyers not willing for A
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
B
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 C
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 D
the 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 E
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. F
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
G
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. H
334 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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-
B
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
C was again not complied with and the work was not undertaken and
inability was shown to deposit 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
D
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
E 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
F
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
G 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 also an admission made by Amrapali Group that there
was a diversion of more than Rs.2,765 crores from six projects. This
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 335
[ARUN MISHRA, J.]

Court observed that money could not have been diverted. That would A
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
B
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 C
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. D
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 : E
“No.D.17024...sic
Government of India
Ministry of Housing and Urban Affairs
Nirman Bhawan, New Delhi
Dated July 13, 2018 F
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. G
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/
H
336 SUPREME COURT REPORTS [2019] 9 S.C.R.

A Yamuna Expressway under the Chairmanship of Secretary,
Ministry of Housing and Urban Affairs.
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
B 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
C 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/-
D
(Akhil Saxena)
Deputy Secretary to the Govt. of India
Tel No.23062280
To

E 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,
F Noida-201304 (U.P.), India.
4. Dr. Ramesh Chandra, Chairman, Unitech Limited, 6,
Community Centre, Saket, New Delhi-110017.
Copy to :
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 337
[ARUN MISHRA, J.]

4. Deputy Secretary (Housing), MoHUA A
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 B
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 C
development in real estate with respect to the development of
residential and 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 D
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 E
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 F
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 G
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
H
338 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B 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.
C 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.
D 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.
E 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.
F 26. Stunning Construction Co. Pvt. Ltd.
27. Kapila Build Home Pvt. Ltd.
28. Gaurisuta Infrastructure Pvt. Ltd.
29. Gaurisuta Infra Solution Pvt. Ltd.
30. MSB Software Pvt. Ltd.
31. MVG Techno Consultant Pvt. Ltd.
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 339
[ARUN MISHRA, J.]

38. Amrapali Spring Valley Pvt. Ltd. A
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 B
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. C
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 D
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 E
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
F
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.
G
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
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340 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 17.5.2018, 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
B
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
C 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
D 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
E 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
F 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
G 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
H Group of companies. Similar advertisements have been issued
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 341
[ARUN MISHRA, J.]

earlier too. However, it was stated by the Chairman that they are A
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.
3. Pursuant to the directions issued by the Court, Amrapali Group
has placed on record the account numbers and other details of 38 B
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.
C
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 D
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. E

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 F
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 G
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 H
342 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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,
D 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 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,
E 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
F 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
G 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
H solve problems of other groups of companies also. However, the
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 343
[ARUN MISHRA, J.]

matters are pending in the Court, they have to appraise this Court A
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 B
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 C
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 D
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 E
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 F
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.
12. It was stated before us that the bank accounts of Amrapali
Healthcare Pvt. Ltd. have also been frozen and it is necessary to G
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 H
344 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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,
C 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.
D 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
E 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 conduct a forensic audit. On 6.9.2018 this Court directed the
F 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.
G
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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 345
[ARUN MISHRA, J.]

Kumar Sharma in terms of the Court’s order 10.5.2018 filed with A
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 B
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 C
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. D
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. E
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 F
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
G
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.
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346 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 report is received.
List on 6th September 2018.”
B 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
C 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
D 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.

E 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
F 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
G 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 was also submitted that valuation has also been
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 347
[ARUN MISHRA, J.]

ordered. We direct the Amrapali Group of companies and the A
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
B
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 C
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 D
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 E
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. F

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 G
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
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348 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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.
D 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
E 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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 349
[ARUN MISHRA, J.]

made by learned counsel on behalf of the three Directors of Amrapali A
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 the
police. This Court also directed issuance of a formal notice on the suo
moto contempt.
B
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 C
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, D
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. E
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 directed Statutory Auditors to comply with F
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 G
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

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350 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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.”
D
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.
E
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
F have been placed on record by Shri Pavan K. Aggarwal, Forensic
Auditor, along with his report and today we find that Shri Chander
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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 351
[ARUN MISHRA, J.]

opportunity to come out clean and live up to the reputation of a 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
B
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 C
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 D
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 E
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 F
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 G
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 Articles of Association
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352 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B 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
C 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
D 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
E 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
F directions were also issued to make the 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
G 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
H out by them.
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 353
[ARUN MISHRA, J.]

5. The names of all the related companies have also not been A
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
B
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 C
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 D
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. E
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 F
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 G
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

H
354 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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,
B
2018. The case will be taken up for considering non-compliance
of the order and for filing the wrong affidavits before this 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
C 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
D 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
E 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
F 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
G Amrapali Healthcare Private Limited, as pointed out in Annexure
11 is created out of funds belonging to the Amrapali group. That is
extracted hereunder:

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 355
[ARUN MISHRA, J.]

Annexure-11 A
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 B
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 C

Date of transaction
Area (sq. meters)-
Constructed area-
Sl. No. Shareholder’ % holding No. of shares
Name
D
1. Ultra Home 99.89 % 93,85,260
Constructions
Private
Limited
2. Swapnil 0.03 % 2500
Shikha E
3. Suvash 0.08% 7500
Chandra
Kumar
Total 100 % 93,95,260

* In FY 2016-17 the shares of Ultra Homes Construction Pvt. F
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 5.36 G
Construction
Private Limited
2. Others 0.32

H
356 SUPREME COURT REPORTS [2019] 9 S.C.R.

A List of Present Directors
Sl. No. Name Begin Date
1. Swapnil Shikha 27/11/2012
2. Suvash Chandra 27/11/2012
Kumar
B 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
C 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
D 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
E 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
F 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
G
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., which are in
possession of Amrapali Group of Companies and the estimates of
various raw materials for each and every building without which
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 357
[ARUN MISHRA, J.]

construction of a building is not possible to be undertaken to be A
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
B
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. C

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:
D
“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 E
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 F
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 G
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 why criminal action be not initiated against them on the basis of
H
358 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D 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
E 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
F 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
G 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 also be clarified by Amrapali
Group and supplied to the Forensic Auditors.”

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 359
[ARUN MISHRA, J.]

We also directed details of unsold apartments and flats of the A
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 B
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.) C

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: D
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 E
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 F
with shareholding:
Vidhyashree Buildcon Pvt Ltd (26%)
Nishant Creation Pvt Ltd (19%)
Anjali Buildcon Pvt Ltd (20%)
Agrawal Associates (Promoters) Ltd (5%) G
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
H
360 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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 Hi-Tech Construction Pvt Ltd (A sublessee
C 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.

D 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 –
E 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)
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 361
[ARUN MISHRA, J.]

Pvt. Ltd, which has applied for a revised sanction plan dated A
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 B
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
C
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:
D
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 documents regarding the creation of subleases on record. E
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 F
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 G
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 H
362 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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 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
D
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
E 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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 363
[ARUN MISHRA, J.]

behalf of M/s J.P. Morgan that in one company, Chandan Kumar A
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. B
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 C
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 D
permission to 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
E
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 F
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 G
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 H
364 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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,
D 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 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
E 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
F 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
G 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
H the provisions contained in sections 13 and 14 of the U.P. Industrial
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 365
[ARUN MISHRA, J.]

Area Development Act, 1976 (for short, ‘the Industrial Development A
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 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
B
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 C
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
D
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 E
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, etc.
F
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 G
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
H
366 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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,
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
D 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
E 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
F 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
G 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 and advance annual lease rent, and under the
conditional NOCs., the banks were required to obtain confirmation from
H the authorities as to payment of premium and lease money for the
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 367
[ARUN MISHRA, J.]

mortgage to become effective. The banks have not handed over copies A
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
B
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 C
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
D
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.
34. On behalf of the home buyers Association, it was submitted E
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 F
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 G
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 H
368 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B of Construction, Ownership, and Maintenance) Act, 2010 (for short, the
‘U.P. Apartments Act, 2010’). It is provided that the completion of the
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
C 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.
D 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
E 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,
F 40% premium was required to be paid. Balance 60% had to be paid in
eight half-yearly instalments along with interest.
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
G 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
H complete his project as per agreed policy; (ii) to exit the project; (iii)
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 369
[ARUN MISHRA, J.]

moratorium of two years on payment of balance premium; (iv) facility A
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% B
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 C
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 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 D
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 E
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 F
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. G

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
H
370 SUPREME COURT REPORTS [2019] 9 S.C.R.

A Housing 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
B
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
C 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
D 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.
E
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
F 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
G 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,
H it was submitted that its dues were Rs.3,234.71 crores as on 15.1.2019
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 371
[ARUN MISHRA, J.]

in respect of 5 group housing plots of Amrapali group. These dues inter A
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
B
pointed out on behalf of the Noida Authority have to be complied with.
Once completion certificate is 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 C
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 D
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 E
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 F
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 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 G
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
H
372 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D
every year and is 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
E 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
F 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
G 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
H Court quashed acquisition. It had to be stopped as per the order passed
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 373
[ARUN MISHRA, J.]

by the Allahabad High Court. When in 2016 Amrapali group again started A
to infuse capital and manpower, proceedings were initiated in NCLT by
Bank 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
B
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 C
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
D
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 E
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 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 F
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 G
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 H
374 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B
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 registration policies as
C 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
D 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
E 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
F 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
G 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 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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 375
[ARUN MISHRA, J.]

49. With respect to Amrapali Infrastructure Pvt. Ltd., it was A
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
B
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 C
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 D
loan of Leisure Valley Villa and Rs.0.5 crores were transferred for
payment of TDS liability of Amrapali hospital.
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 E
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 F
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 G
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 H
376 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 income-tax authorities, on appeal the error had
B
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/
C 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
D 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
E 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
F 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
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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 377
[ARUN MISHRA, J.]

their expertise and skill. Ultimately prayer had been made to evolve A
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, B
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. C

57. On behalf of Bank of Baroda, it has been submitted that
Forensic Auditors have made adverse comments without any basis. Bank
of Baroda 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 D
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 E
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 F
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 G
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
H
378 SUPREME COURT REPORTS [2019] 9 S.C.R.

A of which Rs.65.84 crores were disbursed for the construction and
development of an 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.
B
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
C 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
D
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
E 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 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,
F
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
G 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-
H section (h) of section 11(4) states that the promoter shall not create a
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 379
[ARUN MISHRA, J.]

mortgage or charge after an agreement to sell has been executed. A
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
B
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 Property Act, 1882.
The RERA is restricted to protect the rights and interests of the allottees C
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
D
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 E
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 F
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 G
invested their hard earned money in Amrapali projects and the
shareholders used these funds to 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
H
380 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D 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,
E 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
F 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
G 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 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 381
[ARUN MISHRA, J.]

of FEMA and distributed returns along with principal amount, even A
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
B
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 C
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
D
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 E
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 F
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 G
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 H
382 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C

Bank of Baroda and several other banks filed a petition before
NCLT under section 7 of the Code for triggering Corporate
Insolvency Resolution process in the matter of Amrapali Group
D 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
E
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
F 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.
G 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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 383
[ARUN MISHRA, J.]

2016, and thereafter partially recorded transaction in tally and a 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 B
The Following Firms carried out the Audit of the Group Companies
during the period:
Anil Ajay & Co.
BSR & Co.
C
Deloitte Haskins & Sells
SN Dhawan & Co.
Chander Wadhwa & Associates
Manoj Usha & Co.
Agarwal Seth & Co. D
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 E
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 F
Income Tax department amounted to Rs.842.42 Crores
approximately..
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 G
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. H
384 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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.
D 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
E 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
F 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
G
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
H instances have been enclosed below:
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 385
[ARUN MISHRA, J.]

Challan
Net Time of Time of
Time
A
Truck No. weight Date Gross tare
No. taken
in Kg Weight weight
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
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
B
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
C
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 D
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 E
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
F
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 G
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. H
386 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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 for the Financial Year 2013-14, it is observed that no
additional income has been shown. There is only jugglery of
C 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
D 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
E 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
F 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
G 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
H No. 205)
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 387
[ARUN MISHRA, J.]

It is unclear how the surrender of Rs.125 crore made during the A
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 B
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. C
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. D
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 E
Group in a statement recorded under section 132(4) of the Income
Tax Act has admitted that he provided accommodation/bogus bills.
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 F
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 G
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.
H
388 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D 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
E 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
F 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
G 06/06/16 Transferred to site cash 3,000,0000
12/05/16 Transferred to site cash 4,100,000

The above are only from one company which is tip of the iceberg
and actual amounts may be much higher.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 389
[ARUN MISHRA, J.]

Further cash payments are being made to number of parties A
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 B
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 C
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 D
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
E
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 F
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 G
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.
H
390 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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.
C 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
D 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
E 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
F 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:
G
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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 391
[ARUN MISHRA, J.]

d. Sale of flats at less than Rs 3,420 per square feet of saleable A
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 16 th day
December, 2010 were merely sham documents which were never B
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 C
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.
D
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 E
On 18.8.2012 - Rs.30 Crores
—————————
Total = Rs. 85 Crores
————————
ACPPL on receiving Rs.85 Crores, allotted Equity Shares worth F
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 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. G
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. H
392 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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,
C 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
————————
D
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
E 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
F 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.
G
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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 393
[ARUN MISHRA, J.]

after conversion to equity, it will not be eligible for interest A
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 B
except movement of funds. The list of such liabilities is under
preparation which are not payable.
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 C
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. D
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. E
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 F
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.
G
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. H
394 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D
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:
E Amrapali Leisure Valley Pvt Ltd
Amrapali Centurian Park Pvt Ltd
Amrapali Homes
Amrapali Grand
F 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.
G (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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 395
[ARUN MISHRA, J.]

equally conspired in the delay and diversion of home A
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 B
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 C
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 D
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:
E
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.
F
Since incorporation, loans (liability) and loans & advances (asset)
increased as under, without booking of any expense/income:

As on Loans (liability) Loans & advances (asset)
Amount (RS. ) Amount (RS. )
1st April 2014 83,00,000 1,12,39,917 G
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
H
396 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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.
D 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
E
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
F
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
G
8 Function Distributors Pvt. Ltd. 50,00,000 03-08-2012

9 Green Value Agro Farm Pvt. 30,00,000 01-08-2012 &
Ltd 03-08-2012
10 Infotech India Pvt Ltd 1,00,00,000 03-07-2012

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 397
[ARUN MISHRA, J.]

A
11 Kabir Enterprises Pvt Ltd 50,00,000 06-06-2012

12 Ladli Ji Enterprises Pvt Ltd 2,00,00,000 15-05-2012

13 Leisure Buildcon Pvt Ltd 50,00,000 25-04-2012

14 M/S Naksha Properties 84,00,000 19-04-2012 B
Pvt.Ltd
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
C
From 19-04-
2012 to 17-07-
2013
17 Ram Rahim Trading Co. 70,00,000 01-08-2012 &
Limited 02-08-2012

18 Randhir It Solutions Pvt Ltd 50,00,000 07-05-2012 D
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 E
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 40,00,000 25-04-2012
Ltd
25 Utkarsh Properties Solution 28,00,000 26-04-2012 ; F
16-09-2014 &
17-09-
2014
26 Vendure Agents Pvt Ltd 50,00,000 01-08-2012

27 Zarf Infra. Development Pvt 1,45,00,000 Received on
Ltd various dates G
From 26-04-
2012 to 04-08-
2012
28 Zoom Building Materials Pvt 1,00,00,000 10-05-2012 &
Ltd 11-05-2012
TOTAL 25,08,68,480
H
398 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B 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
C 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,
D 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
E 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
F 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,
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 399
[ARUN MISHRA, J.]

non group companies with whom no other transactions were A
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 Date of Acceptance
Rs. B
Ample Hotels and Resorts 20,000,000 20/04/12
Justify Vanijya Private Limited 4,000,000 22/06/12
Ladli ji Enterprises Private 5,900,000 25/04/12
Limited
Madhav Fincap Private Limited 15,000,000 24/04/12
Pan Realtors Private Limited 100,000,00 23/08/10
0 C
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. D
None of the 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, E
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 F
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. G
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.

H
400 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D 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.
E 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.
F 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.

G 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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 401
[ARUN MISHRA, J.]

Most of the above companies will qualify to be NBFC, which A
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 B
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 C
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 – D
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 E
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 F
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 G
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
H
402 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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 further received from Amrapali Sapphire Developers
Pvt Ltd, which received from homebuyers. Few instances are
hereunder:
C
Received in Amrapali Transferred to Transferred to Ultra
Sapphire Developers Pvt Amrapali Home Construction
Ltd primarily from home Infrastructure Ltd Pvt Ltd
buyers
INR 5.47 crore as on 4th INR 2 crore on 5th INR 2 crore on 5th
March 2010 March 2010 March 2010
D INR 1.90 crore on 5th INR 2 crore on 8th INR 2 crore on 8th
and 6th March 2010 March 2010 March 2010
INR 1.13 crore on 8th INR 2 crore on 9th INR 2 crore on 9th
March 2010 March 2010 March 2010

Amrapali Homes Projects Private Limited –It has been
observed that Mr. Prem Mishra was given INR 12.40 crore (under
E 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
F 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
G
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.
H MVG Techno Consultants Pvt Ltd – Tower at Noida
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 403
[ARUN MISHRA, J.]

Amrapali Infrastructure Pvt Ltd – recast factory at Greater A
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, B
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. C

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. D
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
E
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 F
Buxar, Bihar, Land Building and Plant & machinery
RudrakshInfracity Private Limited - bought shareholding from
JP Morgan in Amrapali Zodiac developers Pvt Ltd.
MannatBuildcraft Private Limited - bought shareholding from
JP Morgan in Amrapali Zodiac developers Pvt Ltd. G
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
H
404 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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:
B 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
C 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
D 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.
E 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
F
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/
G 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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 405
[ARUN MISHRA, J.]

done by the directors. Professional fee was booked as per wish A
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, B
and senior managers was a unique way of diverting money. Huge
amounts were paid without any agreements at the whims and
fancies of the 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 C
no 416-417).
Name of director Professional fee
received
(as per affidavit)

Anil Kumar Sharma 29,13,23,580 D
Shiv Priya 26,43,64,571

Ajay Kumar 5,76,90,240

Suvash Chandra Kumar 5,11,21,752

Amresh Kumar 68,11,110 E
Total 67,13,11,253

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). F
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. G
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
H
406 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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);
B
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 &
C 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,
D 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:
By Anil Kumar Sharma
E
Pa rticulars A mou nt

Amo unt Paid fo r Housin g Loan of Plo t no 88, 3,1 37,000
2057/7 resi Mago s Villa ge, G o a
Amo unt Paid fo r Housin g Loan of Jaypee 3,796, 452
Green E-11 Plot , S ector 128, No ida
Amo unt paid fo r purchasin g sha res 59,60 0,000
F Pu rchased Jew ellery 33,92 1,575
Pu rchased Car 5,613 ,572
In vestment in L IC an d Sta r U nio n D aich i – 18,2 38,326
In su rance P olicies
Expen se do ne durin g w eddin g of D au ghter 13,5 00,000
Sw apnil Sh ikha
Tran sfer to Su rabhee A dvertising Mah arani 3 8,500, 000
Bagh P roperty
G Tran sfer to Q ua lit y Synt hetic Indu st ries 30,000,0 00
Limited S urekha Grou p
Tran sfer to oth ers (Chan der Wa dh wa , 18,6 00,000
Sha sh ank Manoh ar, etc)
transfers t o family m embers 107,31 0,878
Pa yment by Stu nn ing C ons tructio n P vt Ltd of 44,510,320
direct tax
To tal 376,72 8,123
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 407
[ARUN MISHRA, J.]

By Shiv Priya A

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 B
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
C
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 D

By Ajay Kumar
Yogesh Chand 25,00,000
Transferred to Sweep Account 1,33,00,000
Ozone GSP Infratech 50,00,000 E
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 F
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 G
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.
H
408 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D 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.
E
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
F construction. Possibility of taking cash outside the books of accounts
cannot be ruled out.
Instances of misuse of funds are hereunder:
Anil Kumar Sharma
G Mr. Anil Kumar Sharma received funds from Amrapali group of
Companies which was used for acquiring personal properties, as
stated hereunder:
a. Property located at Plot no 88, 2057/7 Resi magos village
Goa-(Housing loan was paid for this property out of amount
H received from Group companies)
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 409
[ARUN MISHRA, J.]

b. Property located at Jaypee Green E-11 Plot, Sector 128, A
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. B
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
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 D
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
E
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 F
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

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 H
410 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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:
B
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
C
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
D
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 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.
8. Mr. Madan Mohan Sharma (Father of Anil Kumar Sharma)
F 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.
G 10. Following are the details of lockers held by family members
of Anil Kumar Sharma:
Pallavi Mishra –
a) in UCO bank account no 1557010000618
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 411
[ARUN MISHRA, J.]

b) in HDFC Bank account no 50100162844761 locker no A
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 B
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 - C
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 D
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 E
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 F
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 G

Note: He has not disclosed his association With Amrapali
Aadya Trading in his various affidavits furnished to the Hon’ble
Supreme Court of India.
H
412 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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)

C 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:
D 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
E 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

F 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
G
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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 413
[ARUN MISHRA, J.]

b. Cozy Habitat Builders Pvt Ltd Rs.15,00,000 A
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.
B
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 C
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. D
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 E
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 the residence of Mr. Shiv Priya
F
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 G
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
H
414 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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.
C
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
D 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
E
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
F 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
G 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:
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 415
[ARUN MISHRA, J.]

Date Particulars Amount A
16/08/2018 Mirae Asset MF 5,000,000
16/08/2018 Aditya Birla Mutual 5,000,000
Fund
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 B
Note: This amount can be attached and recovered by encashment
of these investments.
Sunil Kumar and Sunita Kumari (wife of Sunil Kumar)
1. While scrutinizing the Accounts of Gaurisuta Infrasolution C
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. D
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 E
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 F
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 G
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 H
416 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D 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
E 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.
10. Executives who colluded with directors
The executives of the Group colluded with the management to
F 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
G 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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 417
[ARUN MISHRA, J.]

The executives intentionally recorded transactions by switchover A
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 B
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 C
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. D
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 E
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 F
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 G
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, H
418 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 diversion of funds.
He was responsible for the whole accounts department and he
B 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
C 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
D 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.
E 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
F (iii) Vinayaka Square Private Limited
(iv) Shri Vinayaka Buildspace Private Limited
(v) Milestone Highrise Private Limited
Vinayaka Square Private Limited
G 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)
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 419
[ARUN MISHRA, J.]

Limited. The chairman of four companies CA Pankaj Mittal A
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 B
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. C
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 D
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.
As per Statement of Mr. Sanjeev Kumar Director of La Residentia E
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. F
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
G
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.
H
420 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C
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.
D
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
E 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.
F
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
G
(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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 421
[ARUN MISHRA, J.]

Kumar and Mr. Suvash Chandra Kumar for a period of 5 years A
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 B
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. C
(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
D
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 E
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 F
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. G
There are many other glaring short comings in the Audited Balance
Sheet & Financial Statements
a) I – Page 214)

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422 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B 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
C 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
D manipulation in the accounts.
c) Audit files handed over by Shri Anil Mittal Statutory Auditor
are 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
E 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.
F 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
G the flat number P-1104 in Amrapali Princely Estate on
account of Professional fees due and to be paid on account
of Audit fees.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 423
[ARUN MISHRA, J.]

13. Diversion of homebuyers funds A
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. B
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 C
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 D
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. E
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;
F
(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) G
(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:
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424 SUPREME COURT REPORTS [2019] 9 S.C.R.

A

B

C

D

E

F

G

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 425
[ARUN MISHRA, J.]

A

B

C

D

E

F

G

H
426 SUPREME COURT REPORTS [2019] 9 S.C.R.

A

B

C

D

E

Particulars Amount in
crores
Grand Total 4,968.07
Further Gaurisuta Infrast ructure Private Limited gave 25.00
F
Rs 25 crore advances to various parties as listed on page
no 92-93 Volume I
Further in Gauri suta Infrastructure Private Limited, 89.00
inventory of Rs 89 cro re unidentifiable page no 96
Volume I
G FDR as on 31st March 2015 page no 175 Volume I 61.97
Professional Fees Paid to Directors 100.53
Tax es paid by Stunning Const ruction on behalf of 24.90
promoters and family
Mo re than 700 flat s given to so called suppliers 350.00
Total diversion identified 5,619.47
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 427
[ARUN MISHRA, J.]

14. J P Morgan A
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. B
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 C
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 D
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 E
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 F
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. G
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
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428 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C
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
D 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
E 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
F (“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.
G (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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 429
[ARUN MISHRA, J.]

Okhla Industrial Development Authority and one time land A
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 B
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 C
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 31 st July, 2010 will be restricted to Rs 15
crore. D

(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 E
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 F
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.
G
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.
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430 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D 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.
E 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
F 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.
G (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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 431
[ARUN MISHRA, J.]

Shareholder’s Agreement but JP Morgan did not ensure A
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 B
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 C
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 D
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 E
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 F
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 G
(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.
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432 SUPREME COURT REPORTS [2019] 9 S.C.R.

A (B) Name of the firm – Sudit K. Parekh & Co.
Chartered Accountants
Name of the Partners–
I. Mr. Durgaprasad Khatri
B II. Mr. Tanwir Shirolka
III. Mr. Srikant V Jilla
IV. Ms. Deepti K.Ahuja
Ms Ahuja, then partner in SKP&Co.Chartered Accountants
C informed 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
D
4 no. of valuation certificates from2010-2015.

Valuation No of Face Value per Total amount Date of FC- Sold to
Report date shares Value share * TRS
9/09/2010 785715 10 1081.8172 85,00,00,00 20/10/2010 JP
Morgan
E 23/10/201 436508 10 2290.9 99,99,99,26 30/12/2013 Neelkanth
3 Buildcraft
Private
Limited
9/09/2014 97000 10 2577.25 24,99,93,20 30/09/2014 Rudraksh
Infracity
Private
Limited
F 10/04/201 34365 10 2910 10,00,02,10 29/07/2015 Rudraksh
5 Infracity
Private
Limited
10/04/201 17180 10 2910 4,99,93,800 6/10/2015 Rudraksh
5 Infracity
Private
G Limited
(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..
H EXTRACT from FEMA RULES;
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 433
[ARUN MISHRA, J.]

FEM (Transfer or Issue of Security by a Person Resident Outside A
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 B
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 C
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 D
resident 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 E
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 F
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: G
(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
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434 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D 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,

E (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
F 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
G 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 India travelled to Mauritius. Indian people signed the contract
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 435
[ARUN MISHRA, J.]

in India and Mauritius people signed the contract in Mauritius. A
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 B
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. C
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. D
(B) Mr Vivek Mittal, another director in Neelkanth Buildcraft
Private Limited is nephew of Statutory Auditor Mr Anil Mittal &
does small timejobs
Facts
E
th
Amrapali Zodiac Developers Pvt Ltd incorporated on 18
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
F
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; G
th
RS. 10 crore on 29 July 2015; and
RS. 5 crore on 6th October 2015.

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436 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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.
C ECB can be accessed under 2 routes
a) Automatic route and
b) Approval route.
A) Under Automatic route
Eligible borrowers can be corporates, including those in the
D 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
E 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’)
F 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
G not be used for acquisition of land in any of these permitted
uses.
ECBs are not permitted to be utilized for real estate
sector.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 437
[ARUN MISHRA, J.]

B) Under Approval route A
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 B
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 C
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
D
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 E
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.
F
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.
G
Section 77 states “(1) No company limited by shares, and no
company limited by guarantee and having a share capital,

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438 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C (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
D (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
E 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
F 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
G 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,

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 439
[ARUN MISHRA, J.]

ii. redemption of debentures, or preference shares or A
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;
B
(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; C
(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 D
securities of private and closely held companies is in
accordance with the guidelines as may be prescribed.
Misrepresentation of facts by investing the funds in the
form of private equity in the project namely Zodiac and then
diverting it from there to promoters and the promoters E
associated companies
As ECBs were not permitted in real estate sector under automatic
route, JP Morgan gave the said borrowings, the nomenclature of
equity shares having different return on investment as compared
to other equity shareholders. In fact JP Morgan remitted F
Rs.60 crore to Amrapali Leisure Valley Developers Pvt Ltd as
ECB without obtaining approval from competent authority.
Immediately on receipt of funds by Amrapali Leisure Valley
Developers Pvt Ltd, the funds were transferred to promoters and
associate companies of the group.
G
Had JP Morgan invested in the form of ECB, following would
have been the compliances to be fulfilled by recipient:
a) obtaining Loan Registration Number from RBI;
b) file ECB-2 returns every month to the RBI;
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440 SUPREME COURT REPORTS [2019] 9 S.C.R.

A c) withhold tax on interest payment to JP Morgan under section
195 of the ITA. As per Article 11 of the Avoidance of double
taxation agreement between India and Mauritius tax shall be
charged @7.5% of the gross amount of interest.
d) In fact JP Morgan would have to file its income tax return
B u/s 139 of ITA in India due to withholding tax on its interest
income borrower.
Relevant questions from FAQ issued by RBI with regard to
the Foreign Exchange Management (Transfer or Issue of Security
by a Person Resident Outside India) Regulations, 2017 dated
C November 7, 2017 as amended from time to time:
“Q.29: What is the concept of downstream investment and
Indirect Foreign Investment?
Answer: Downstream investment is investment made by an
Indian entity which has total foreign investment in it or an
D Investment Vehicle in the capital instruments or the capital, as the
case may be, of another Indian entity.
If the investor company has total foreign investment in it and is
not owned and not controlled by resident Indian citizens or is owned
or controlled by persons resident outside India then such investment
shall be “Indirect Foreign Investment” for the investee company.”
E
“Q.41: What is an investment vehicle?
Answer: Investment Vehicle is an entity registered and regulated
under relevant regulations framed by SEBI or any other authority
designated for the purpose. For the purpose of Schedule 8 of
F FEMA 20(R), an Investment Vehicle is a Real Estate Investment
Trust (REIT) governed by the SEBI (REITs) Regulations, 2014,
an Infrastructure Investment Trust (InvIt) governed by the SEBI
(InvIts) Regulations, 2014 and an Alternative Investment Fund
(AIF) governed by the SEBI (AIFs) Regulations, 2012. It does
not include a Venture Capital Fund registered under the erstwhile
G SEBI (Venture Capital Funds) Regulations, 1996.”
SUMMARY- NET SURPLUS/DEFICIT
1) Amount Realisable from the sale of the unsold inventory and
from home buyers (Residential and commercial) in various projects
and its extent.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 441
[ARUN MISHRA, J.]

Net surplus/deficit A

Total Estimated Cost to Net
Refund/
S.No Name of company Receivable Cost still to be Complete Surplus/
Shifitng
from Buyers incurred by NBCC (Deficit)

B
Amrapali Princely 38 - -
44
1 Estate Pvt.Ltd. (6)

12 - -
Amrapali Eden Park 5
2 Developers Pvt.Ltd. 7
C
70 - -
Amrapali Zodiac 61
3 Developers Pvt.Ltd. 10

Amrapali Leisure 1,887 267 -
1,586
4 Valley Pvt.Ltd. 35

575 - 2 D
Amrapali Centuiran 769
5 Park Pvt.Ltd. (196)
16 - -
6 Amrapali Grand - 16

Ultra Homes 580 40 3
Construction 26
7 Pvt.Ltd. 511
E
Amrapali Homes 7 - -
-
8 Project Pvt Ltd 7

Amrapali Dream 1,435 - -
1,657
9 Valley Pvt Ltd (222)

Amrapali Silicon 558 - -
477
10 City Pvt Ltd 81
F
Amrapali Smart 489 - -
City Developers Pvt 846
11 Ltd (357)

Amrapali Leisure 309 - -
Valley Developers 322
12 Pvt.Ltd. (13)
G
69 - -
90
Amrapali Sapphire
13 Developers Pvt Ltd (20)

6,046 307 5
Group Total 5,882 (148)
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442 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B *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
C
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.
D
*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)
E
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
F 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-
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 443
[ARUN MISHRA, J.]

S.no. Name of the company Number of Amount (In Refer Page A
Units Crores) Number
1 *Amrapali Sapphire 315 76.02 205 - Point No. 1
Developers Private
Limited
2 *Amrapali Leisure 222 - Point No. 1
Valley Developers 70 5.88
B
Private Limited
3 *Amrapali Smart City 261 18.97 232 - Point No. 1
Developers Private
Limited
4 *Amrapali Silicon City 468 73.05 257 - Point No. 1 C
Private Limited
5 *Amrapali Dream 1,752 24.11 248 - Point No. 1
Valley Private Limited
6 #Amrapali Leisure 122 8.53 2811
Valley Private Limited (Supplementary
Audit Report)
D
7 #Ultra Home 524 30.87 2811
Construction Private (Supplementary
Limited Audit Report)
8 #Amrapali Centurian 1,912 43.12 2811
Park Private (Supplementary E
Limited Audit Report)
9 #Amrapali Princely 146 6.70 2811
Estate Private Limited (Supplementary
Audit Report)
10 #Amrapali Zodiac 107 6.75 2811
Developers Private (Supplementary
F
Limited Audit Report)
11 #Amrapali Patel 179 27.31 2811
Platinum (Supplementary
Audit Report)
Total 5,856 321.31 G

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.
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444 SUPREME COURT REPORTS [2019] 9 S.C.R.

A # 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
B the 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
C
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
D 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
E 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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 445
[ARUN MISHRA, J.]

Chander Wadhwa) under a verbal instruction of Mr. Adikhari, A
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
B
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 C
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 D
La Residentia this proves that La Residentia was under the direct
control of Mr. Anil Sharma and Mr. Shiv Priya and is an entity of
Amrapali group.
The company is also using the Brand name/trademark of
Amrapali group on its letterheads. E

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. F
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, G
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
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446 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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:
C
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
D 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
E 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
F
Sky Tech Buildcon Private Limited 3,88,53,775
Skyline Tele Media Services Limited 3,48,02,771
Shantinath Enterprises 3,24,71,100
Red Star Tradex P Ltd. 3,00,00,000
Mohabbat S/o Abbas 2,66,99,000
G 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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 447
[ARUN MISHRA, J.]

recoverable from parties in case of Ultra Home Construction Pvt A
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 B
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. C
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 D
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. E
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 F
c) Continued to book till any inventory was left over in the
projects.
The customers booked the flat for:
a) Abode;
b) Investment; G
c) barter in advance;

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448 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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.
C 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.
D 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
E 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
F 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
G over the possession but still appearing in the Customer database
as undelivered. Both have paid less than 50% as per company
records.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 449
[ARUN MISHRA, J.]

S. PROJECT NAME CUSTOMER FLAT NO. POSSESSION POSSESSION A
No. NAME (as per customer) (as per details
provided to us)
1 Amrapali Zodiac MR. SAMEER JP-03 Handed over Not handed over
KR. SUNEJA
2 Amrapali Princely MRS. FP-01 Handed over Not handed over
Estate MRIGANKA
PRABHAT B
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) C
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 D
(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 E
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/ F
entity who have booked the flats subject to the verification of
their claim:
(a) For abode;
(b) For investment without interest and payments made by
bank; G
(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
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450 SUPREME COURT REPORTS [2019] 9 S.C.R.

A (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
B 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
C (ex ST)
1 Amrapali Grand MORPHEUS SECURITY T-7-G2 74,16,700
PVT. LTD
2 Amrapali Grand SANJEEV KUMAR T-6-G4 94,76,511
3 Amrapali Grand MAHESHKUMAR T-6-G2 84,99,961
D
4 Amrapali Eden IshwarKhandelwal D-2102 84,28,450
Park
5 Amrapali Eden AMRENDERKRJHA/ C-G01 1,40,00,000
Park SUNITA JHA
E 6 Amrapali Eden MAHESHKUMAR C-G02 70,75,000
Park
7 Amrapali Eden SUSHMA RANI/ VIJAY NARAYAC
N-G03 96,75,859
Park RAI
8 IMT Manesar SAI Glazing 323 82,09,095
F
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

G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 451
[ARUN MISHRA, J.]

A

B

C

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, D
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
E
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.
F
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 G
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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452 SUPREME COURT REPORTS [2019] 9 S.C.R.

A

B

C

D

E
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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 453
[ARUN MISHRA, J.]

Annexures. (Payment receipts, NOC, possession letter).that the A
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 B
Amrapali M/S. AMCON A-002 2525 80,38,484 80,38,484
Leisure BUILDCON PVT.
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 C
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 D
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 E
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. F
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
G
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 H
454 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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)
C
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
D 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 was independently not able to meet the
E 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
F 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
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 455
[ARUN MISHRA, J.]

Further they did a project in Ultra Home Construction Private A
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
B
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 C
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 D

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) E
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 F
Amrapali Leisure Valley Pvt Ltd – Akhil Sureka
Cheque signatories in the following companies
Amrapali Leisure Valley Pvt Ltd
Amrapali Dream Valley Pvt Ltd G

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 H
456 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 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
B
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
C 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
D
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
E 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
F 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
G 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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 457
[ARUN MISHRA, J.]

It was observed Rs.13.44 crore paid to Sureka Public Charitable A
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.
B
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 C
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 D
and Tubes Limited. Further, there are no business transactions
with the said party except routing of funds.
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 E
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 F
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 G
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. H
458 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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:
B Date Particulars Amount in Remarks
lakhs
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 1,004 Being Amount transfer as
C MauriaUdhyog Limited per letter signed by Mr. Anil
Sharma

19-04-2017 Transfer entry through 960 Being Amount transfer as
Sarvomme per letter signed by Mr. Anil
Infrastructure Private Sharma
Limited
Total 2,714.02
D
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
E 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
F 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 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.
G
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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 459
[ARUN MISHRA, J.]

Amrapali Grand gave loans and advances to below parties, which A
are recoverable as on 31st July 2018 amounting to INR 25.73
crore as per Tally data.
S. No. Name of the Amount Date of transaction
Company/Person

1 Anil Kumar Sharma 10,03,55,900 20.11.2007 to
25.07.2018 B
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 C
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 19,20,000 27.06.2017 to
Private Limited 13.07.2017 D
10 Jhamb Finance and 19,00,000 5.11.2015
Leasing Private Limited
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 E
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
F
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:
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 G
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. H
460 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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.
D 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:
Name of the Gross Nature of the
E Date Bill number Party Amount Tax Total Service
Jotindra
Steels & Erection
6/6/2014 JST/FBD/SG/0001 Tubes 5,000,000 618,000 5,618,000 Charges
Jotindra
Steels & Transportation
6/6/2014 JST/FBD/SG/0002 Tubes 2,532,000 78,239 2,610,239 Charges
Jotindra
Steels & Transportation
F 12/1/2014 Bill not available Tubes 247,500 7,648 255,148 Charges
Jotindra
Steels & Transportation
12/1/2014 Bill not available Tubes 365,000 11,279 376,279 Charges
Jotindra
Steels & Transportation
2/1/2015 Bill not available Tubes 221,400 6,841 228,241 Charges
Jotindra
G Steels & Transportation
2/1/2015 Bill not available Tubes 182,700 5,646 188,346 Charges
Jotindra
Steels & Transportation
3/31/2015 Bill not available Tubes 164,700 5,089 169,789 Charges
Jotindra
Steels & Transportation
3/31/2015 Bill not available Tubes 216,000 6,675 222,675 Charges
H Total 9,668,717
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 461
[ARUN MISHRA, J.]

Further, on scrutiny of the invoices issued by the JSTB it appears A
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.
B
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 C
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 D
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 E
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,
F
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. G
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. H
462 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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:
Amt. of
Sr. Date of the Bill Bill (In Date o f the Time Time
B No. bill No. Rs.) GR GR No. In Out
1 07.02.2015 698 1,652,641 07.02.2015 698 15:48 18:12
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
C 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
D 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

E 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
F 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
G 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:
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 463
[ARUN MISHRA, J.]

a) During the month of December 2015 there were 7 A
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 B
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 C
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 D
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.
When we questioned Mr. Navneet Sureka who approached
Amrapali group from trust side and who was approached in E
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. F
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
G
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)

H
464 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B construction equipments from Amrapali Infrastructure Private
Limited and paid Rs 8 crore on 13 th 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.
C
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
D 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
E 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
F 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
G 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 credit for a project was to be done in Mozambique.
H The group submitted a bogus bank guarantee for the said
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 465
[ARUN MISHRA, J.]

advance to Mozambique client from a bank namely A
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, B
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 C
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 D
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 E
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. F

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.
G
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.

H
466 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D signatories. When questioned . Vishnu, navneet and akhil Sureka
could not reply why they were the signatories when they were
neither shareholders, directors, employees.
Mauria Udyog Limited

E 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.
F 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
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 467
[ARUN MISHRA, J.]

Similarly, in the year 2012-13, supplies were made of TMT bar A
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 B
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 C
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 D
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 E
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 F
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 G
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 are used just for the purpose of money laundering. H
468 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D
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
E 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.
F 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.
G
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
H when desired by him and instructed by him.
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 469
[ARUN MISHRA, J.]

None of the directors ever attended a board meeting it was A
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
B
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 C
corporate history.
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 D
(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 E
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. F
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, G
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
H
470 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C List of companies are as under:
S.n o Name o f company Page no
1. Aptara Infra structure Pvt Ltd
2. Bhavya Housing Projects Private Lim ited
3. Bushells Developers Private Limited
4. Chintapurni Estates Private Limited
D
5 DH Education Services Pvt Ltd
6. Earthwell Developers Pvt Ltd
7. Eklavya Building Solutions Pvt Ltd
8. Bushells Rea lity Solutio n Private Limited
9. Saffron Pro pmart Consultancy Private
Lim ited
E 10. Ga urisutaBuildhome Private Lim ited
11. Ga urisuta Real Estate and Developers
Private Limited
12. Kamyani Realtors Private lImited
13. Kapila Buildin g So lution Priva te Limited
14. M aha mayaBuildco n Private Limited
15. Rinku Clothing Creatio n Private Limited
F 16. RRS Properties Private Limited
17. Spacewell Developers Private Limited
18. StatelinesBuildwell Private Lim ited
19. M ansarovar Textiles Private Limited
20. Rainbow Cotton Private Limited
21. Kamakshi Buildwell Private Limited
22. Golden Portfolio Consultant Private
G Lim ited
23. Double Esh In frastructure Private
Lim ited
24. Aashirwad Linens Private Limited
25. Aksh Real Estates Private Limited
26. AdhunikBuildtech Private Limited
H 27. Rinku Computech Private Lim ited
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 471
[ARUN MISHRA, J.]

We recommend the forfeiture of the following investment in the A
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.
B
The funds contributed by these 27 companies were originated
and routed from the Amrapali group companies.
Paid-Up Capital
S. Name of the No. of Investment in Number of Number % of
No. Company Shares which Amrapali Equity of Equity
Group Co. shares of Preference Shares
respective Shares of
co. respective C
co.

1 Aksh Real Estate Pvt Amrapali Centurian
Ltd 8,20,000 Park Pvt Ltd 36,50,000 8,50,000 22.47%

2 DH Education Amrapali Centurian
Services Pvt Ltd 5,01,500 Park Pvt Ltd 36,50,000 8,50,000 13.74%

3 Mansarovar Textiles Amrapali Centurian
Pvt Ltd 3,71,000 Park Pvt Ltd 36,50,000 8,50,000 10.16% D
4 Bhavya Housing Amrapali Leisure
Projects Pvt Ltd 1,000 Valley Pvt Ltd 10,000 4,57,334 10.00%

5 Kamayani Realtors Amrapali Leisure
Pvt Ltd 1,000 Valley Pvt Ltd 10,000 4,57,334 10.00%
Amrapali Leisure
6 Chintapurni Estates Valley Developers
pvt Ltd 1,000 Pvt Ltd 10,000 6,00,000 10.00%

7 Aashirwad Linens Amrapali Dream E
Pvt Ltd 1,500 Valley Pvt Ltd 10,10,000 - 0.15%

8 Rainbow Cotton Pvt Amrapali Dream
Ltd 1,000 Valley Pvt Ltd 10,10,000 - 0.10%

9 Rinku Clothing Amrapali Silicon
Creation Pvt Ltd 1,429 City Pvt Ltd 10,36,982 - 0.14%
Double Esh
10 Infrastructure Pvt Amrapali Smart
ltd 1,000 City Dev. Pvt Ltd 6,91,42,401 - 0.00% F
11 Earthwell Amrapali Smart
Developers Pvt Ltd 1,000 City Pvt Ltd 10,000 - 10.00%
Amrapali Smart
1,000 City Dev. Pvt Ltd 6,91,42,401 - 0.00%
12 Sapcewell Amrapali Smart
Developers Pvt ltd 1,000 City Pvt Ltd 10,000 - 10.00%
Amrapali Smart G
1,000 City Dev. Pvt Ltd 6,91,42,401 - 0.00%
13 GaurisutaBuildhome Mums Megha Food
Pvt Ltd 200 Park Ltd 10000 2.00%
14 Rinku computech Amrapali Biotech
Pvt Ltd 23,94,000 India Pvt Ltd 1,20,00,000 19.95%

15 Kamakshi Buildwell Mums Megha Food
Private Limited 500 Park Ltd 10000 5.00% H
472 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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

B 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
C 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
D
Sunita Bhagwani 20,00,000

Saffron Propmart Consultancy Pvt Ltd 7,10,00,000
TOTAL 17,77,83,110

E Date Particulars Transaction Balance

28-03-2018 Balance as on 28/03/2018 4,06,50,815
Payment to Saffron Propmart
29-05-2018 Less: Consultancy Private Limited 3,90,00,000

F Less: Payment to Preeti Jaiswal 1,50,000

Less: Other Payments 5,90,771

Balance before proceeds 9,10,044
from FDR

G Receipts From FDR

31-07-2018 Add: Proceeds from FDR 9,86,19,983

Balance after proceeds from 9,95,30,027
FDR

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 473
[ARUN MISHRA, J.]

Payments made out of A
receipts from
FDR
Net Payment to Saffron
31-07-2018 Less: Propmart Consultancy 3,20,00,000
Private Limited

01-08-2018 Less: Payment to Vandana 2,00,00,000
Wadhwa
B

23-10-2018 Less: Payment to Ample Hotels & 1,00,00,000
Resorts

23-10-2018 Less: Payment to Moral Sales 1,00,00,000

23-10-2018 Less: Payment to Mahalaxmi 1,00,00,000 C
Enterprises

23-10-2018 Less: Payment to Annex IT 70,00,000
Distributors

23-10-2018 Less: Payment to Anjali Buildcon 1,00,00,000
D
Other Payments 1,61,904

TOTAL 9,91,61,904

Balance as on 28-10-2018 3,68,123

24. Misuse of Bank Loan funds (Volume II Page No. 426- E
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; F
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 G
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.

H
474 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D 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)
E and 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-
F (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
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 475
[ARUN MISHRA, J.]

(iii) All insurance contracts, insurance proceeds. A
(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 B
(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 C
S.No . Particula rs A mo unt

1 U Tek Sa les Corporation 6,97,39,500

2 Taneja Building m ateria l S uppliers 4,24,01,000

3 Devki Nan dan Trading C o 3,00,00,000 D
4 Guru Kripa Tra ders-2 3,00,00,000

5 Sh ri Ba laji Cem en t & Hardwa re 2,89,61,000

6 Investo r Clinic Infratech Priva te L imited 2,00,00,000

7 Ma uria U dyo g Limited 3,00,00,000 E
8 Sh iva Trders 2,00,00,000

9 Sh iv Traders 1,75,00,000

10 Om Tra ders 1,35,00,000
F
11 Lakshmi Steel 1,20,81,351

12 Ma haveer Enterprises 1,00,00,000

13 Sidh ivina yak Tradin g Co mpany 1,00,00,000

14 Ram a Tradi ng C ompany 75,00,000
G
15 U da y En terprises 69,50,500

16 Orient Tra di ng C ompan y 68,96,800

17 Karti key Enterprises 68,72,600

18 Daya l Traders 68,42,300
H
476 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
R.K. Enterprises
19 67,50,500

20 MahaLuxmi Traders 67,32,500

21 Purnima Steel Syndicate 65,71,972
B
22 New Payal Traders 64,50,500

23 Shyam Sales Corporation 64,38,700

24 Kishan Steel Corporation 62,53,700

C 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
D
29 Guru Kripa Traders 50,00,000

30 Guru Nanak Trading C ompany 50,00,000

31 R R Enterprises 50,00,000

E 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
F
36 A.B Enterprises 48,16,654

37 Amit Steel 40,00,000

38 Barnala Steel Industries Ltd 36,72,008

G 39 S.R Steel 34,92,054

40 Kumar Trading Company 32,45,859

41 Quality Synthetics Private Limited 25,00,000

42 Shri Bankey Bihari Trading Company 25,00,000
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 477
[ARUN MISHRA, J.]

A
43 Jayem M anu fact uring Co Pvt Ltd 23,15,400

44 SBL Constructio n Private Li mit ed 22,10,040

45 A NAL CO ( INDIA ) PV T LTD 21,86,728

46 Kum ar Trading C O 19,53,325
B
47 BU IL D TECH INDU STRIES 19,06,800

48 M. K TRA DERS 16,20,370

49 Sh ree Ram Pl ywoo d 14,79,510

50 A RU NA CHAL TIMBER TRADERS PVT LTD 13,98,400 C
51 Naveen A sso ci ates 13,60,217

52 Deepa k Mehta & A ssocia tes 13,50,000

53 Raj Sh ree Ispat 10,92,584
DREAM INTERIORS & DEVEL OPERS (P)
54 LTD 10,00,790 D
55 A rya n C orpo ra te So lout ions Pvt Ltd 10,00,000

56 A stech Market ing Priva te L imited 6,81,321

57 Jotin dra Steel & Tubes L td 5,00,250
E
58 A mrapali Infrastructu re Pri vate L imi ted 2,94,829

TO TA L 51,37,23,732

Few examples of diversion of funds are as under:
1. Guru Kripa Traders-2
F
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
G
05/10/2010 Bank of Baroda Payment 15000000.00 15000000.00
A/C No - Dr
21580200000079

H
478 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
06/10/2010 Bank of Baroda Payment 5000000.00 20000000.00
A/C No - Dr
21580200000079

B 15/10/2010 Bank of Baroda Payment 5000000.00 25000000.00
A/C No - Dr
21580200000079

16/10/2010 Bank of Baroda Payment 5000000.00 30000000.00
C A/C No - Dr
21580200000079

29/12/2010 STEEL Purchase 1105440.00 28894560.00
U.P Dr
D 01/01/2011 STEEL Purchase 1137012.00 27757548.00
U.P Dr
01/01/2011 STEEL Purchase 1127296.00 26630252.00
U.P Dr
01/01/2011 STEEL Purchase 1081575.00 25548677.00
U.P Dr
01/01/2011 STEEL Purchase 1114169.00 24434508.00
E U.P Dr
02/01/2011 STEEL Purchase 1096914.00 23337594.00
U.P Dr
02/01/2011 STEEL Purchase 1078802.00 22258792.00
U.P Dr
03/01/2011 STEEL Purchase 1091563.00 21167229.00
U.P Dr
F 03/01/2011 STEEL Purchase 858603.00 20308626.00
U.P Dr
04/01/2011 STEEL Purchase 1107007.00 19201619.00
U.P Dr
04/01/2011 STEEL Purchase 1084429.00 18117190.00
U.P Dr
05/01/2011 STEEL Purchase 1077003.00 17040187.00
G U.P Dr
05/01/2011 STEEL Purchase 1062433.00 15977754.00
U.P Dr
05/01/2011 STEEL Purchase 1054560.00 14923194.00
U.P Dr
06/01/2011 STEEL Purchase 1112498.00 13810696.00
U.P Dr
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 479
[ARUN MISHRA, J.]

06/01/2011 STEEL Purchase 1118674.00 12692022.00 A
U.P Dr
07/01/2011 STEEL Purchase 1034488.00 11657534.00
U.P Dr
07/01/2011 STEEL Purchase 1087996.00 10569538.00
U.P Dr
08/01/2011 STEEL Purchase 1082110.00 9487428.00
U.P Dr
08/01/2011 STEEL Purchase 1054092.00 8433336.00 B
U.P Dr
09/01/2011 STEEL Purchase 1116534.00 7316802.00
U.P Dr
10/01/2011 STEEL Purchase 1109399.00 6207403.00
U.P Dr
10/01/2011 STEEL Purchase 1073727.00 5133676.00
U.P Dr
10/01/2011 STEEL Purchase 1087996.00 4045680.00 C
U.P Dr
11/01/2011 STEEL Purchase 1062669.00 2983011.00
U.P Dr
11/01/2011 STEEL Purchase 889730.00 2093281.00
U.P Dr
12/01/2011 STEEL Purchase 1023600.00 1069681.00
U.P Dr
13/01/2011 STEEL Purchase 1097561.00 27880.00 Cr
D
U.P
31/03/2012 REBETE & Journal 27880.00
DISCOUNT
30027880.00 30027880.00

2. Shri Balaji Cement & Hardware E

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. F

Date Particulars Vch Type Debit Credit Balance
19/03/2011 Bank of Baroda Payment 3949500.00 3949500.00
A/C No - Dr
21580200000079
21/03/2011 Bank of Baroda Payment 3851500.00 7801000.00
A/C No - Dr G
21580200000079
26/03/2011 Bank of Baroda Payment 6450500.00 14251500.00
A/C No - Dr
21580200000079
28/03/2011 Bank of Baroda Payment 6550800.00 20802300.00
A/C No - Dr
21580200000079
H
480 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
31/03/2011 BADARPUR Purchase 456225.00 20346075.00
U.P Dr
31/03/2011 Cement Purchase 490875.00 19855200.00
U.P Dr
31/03/2011 STEEL Purchase 495666.00 19359534.00
U.P Dr
B 31/03/2011 BADARPUR Purchase 471345.00 18888189.00
U.P Dr
31/03/2011 Cement Purchase 496650.00 18391539.00
U.P Dr
31/03/2011 STEEL Purchase 483946.00 17907593.00
U.P Dr
31/03/2011 Cement Purchase 505313.00 17402280.00
C U.P Dr
31/03/2011 BADARPUR Purchase 525945.00 16876335.00
U.P Dr
31/03/2011 STEEL Purchase 27300.00 16849035.00
U.P Dr
31/03/2011 Cement Purchase 493763.00 16355272.00
U.P Dr
D 31/03/2011 BADARPUR Purchase 476280.00 15878992.00
U.P Dr
31/03/2011 STEEL Purchase 470905.00 15408087.00
U.P Dr
31/03/2011 Cement Purchase 502425.00 14905662.00
U.P Dr
31/03/2011 BADARPUR Purchase 510678.00 14394984.00
E U.P Dr
31/03/2011 STEEL Purchase 469124.00 13925860.00
U.P Dr
31/03/2011 Cement Purchase 501843.00 13424017.00
U.P Dr
31/03/2011 BADARPUR Purchase 438375.00 12985642.00
U.P Dr
31/03/2011 Cement Purchase 750750.00 12234892.00
F U.P Dr
31/03/2011 BADARPUR Purchase 754950.00 11479942.00
U.P Dr
31/03/2011 STEEL Purchase 766725.00 10713217.00
U.P Dr
31/03/2011 Cement Purchase 782513.00 9930704.00
U.P Dr
G 31/03/2011 BADARPUR Purchase 754320.00 9176384.00
U.P Dr
31/03/2011 STEEL Purchase 767644.00 8408740.00
U.P Dr
31/03/2011 Cement Purchase 779625.00 7629115.00
U.P Dr

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 481
[ARUN MISHRA, J.]

A
31/03/2011 BADARPUR Purchase 778260.00 6850855.00
U.P Dr
31/03/2011 Cement Purchase 788288.00 6062567.00
U.P Dr
01/04/2011 Rodi Purchase 884331.00 5178236.00
U.P Dr
01/04/2011 Cement Purchase 931392.00 4246844.00 B
U.P Dr
01/04/2011 Rodi Purchase 882872.00 3363972.00
U.P Dr
01/04/2011 Bricks Purchase 853965.00 2510007.00
U.P Dr
01/04/2011 STEEL Purchase 844356.00 1665651.00
U.P Dr C
02/04/2011 Bank of Baroda Payment 2310500.00 3976151.00
A/C No - Dr
21580200000079
02/04/2011 Bank of Baroda Payment 5848200.00 9824351.00
A/C No - Dr
21580200000079
02/04/2011 Cement Purchase 935550.00 8888801.00 D
U.P Dr
02/04/2011 Sand Purchase 839969.00 8048832.00
U.P Dr
04/04/2011 Bricks Purchase 876120.00 7172712.00
U.P Dr
04/04/2011 Sand Purchase 831527.00 6341185.00
U.P Dr E
05/04/2011 STEEL Purchase 841333.00 5499852.00
U.P Dr
05/04/2011 STEEL Purchase 849350.00 4650502.00
U.P Dr
06/04/2011 Bricks Purchase 884147.00 3766355.00
U.P Dr
06/04/2011 Cement Purchase 284130.00 3482225.00 F
U.P Dr
07/04/2011 Rodi Purchase 884321.00 2597904.00
U.P Dr
07/04/2011 Cement Purchase 931392.00 1666512.00
U.P Dr
12/04/2011 Bricks Purchase 872193.00 794319.00
U.P Dr
12/04/2011 STEEL Purchase 853780.00 59461.00Cr
G
U.P
28961000.00 29020461.00
Closing Balance 59461.00
29020461.00 29020461.00

H
482 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B 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
C 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 Payment
A/C No - 2,00,00,000 2,00,00,000
21580200000079
D 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
15/12/2010 STEEL Purchase
U.P 12,47,950 1,58,40,180
16/12/2010 STEEL Purchase 12,47,945 1,45,92,235
E U.P
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
F 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
G 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
H U.P 10,79,473 14,66,896
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 483
[ARUN MISHRA, J.]

12/01/2011 STEEL Purchase A
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 Journal
A/c 1,179

20000000.00
2,00,00,000
B
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 Payment 50,00,000 50,00,000 C
No - 60036386553
03/06/2010 Hardware Item Purchase 8,76,488 41,23,512
U.P
24/06/2010 Hardware Item Purchase 9,20,241 32,03,271
U.P
03/07/2010 Hardware Item Purchase 7,57,796 24,45,475
U.P
04/07/2010 Hardware Item Purchase 7,56,000 16,89,475 D
U.P
05/07/2010 Hardware Item Purchase 7,20,421 9,69,054
U.P
10/08/2010 Steel Purchase Purchase 9,77,734 8,680
U.P
14/09/2010 HDFC BANK(L.N) Payment 50,00,000 49,91,320
22/09/2010 BOM-SEC51 A/C Payment 60,00,000 1,09,91,320
No - 60036386553 E
27/09/2010 Bank of Baroda Payment 85,00,000 1,94,91,320
A/C No -
21580200000079
01/10/2010 Bank of Baroda Payment 50,00,000 2,44,91,320
A/C No -
21580200000079
22/10/2010 BOM-SEC51 A/C Payment 1,50,00,000 3,94,91,320
No - 60036386553 F
25/10/2010 HDFC BANK(C.P)- Payment 1,00,00,000 4,94,91,320
14018640000045
01/02/2011 Hardware Item Purchase 9,90,150 4,85,01,170
U.P
01/02/2011 Hardware Item Purchase 9,49,200 4,75,51,970
U.P
01/02/2011 Hardware Item Purchase 9,98,025 4,65,53,945
U.P
G
01/02/2011 Hardware Item Purchase 9,48,518 4,56,05,427
U.P
01/02/2011 Hardware Item Purchase 9,18,750 4,46,86,677
U.P
01/02/2011 Hardware Item Purchase 9,06,203 4,37,80,474
U.P
01/02/2011 Hardware Item Purchase 7,80,780 4,29,99,694
U.P H
484 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
01/02/2011 Hardware Item Purchase 9,45,000 4,20,54,694
U.P
01/02/2011 Hardware Item Purchase 11,08,275 4,09,46,419
U.P
01/02/2011 Hardware Item Purchase 9,41,850 4,00,04,569
U.P
B 01/02/2011 Hardware Item Purchase 12,81,000 3,87,23,569
U.P
01/02/2011 Hardware Item Purchase 9,06,780 3,78,16,789
U.P
01/02/2011 Hardware Item Purchase 9,08,523 3,69,08,266
U.P
01/02/2011 Hardware Item Purchase 7,38,203 3,61,70,063
C U.P
01/02/2011 Hardware Item Purchase 11,24,928 3,50,45,135
U.P
01/02/2011 Hardware Item Purchase 9,70,305 3,40,74,830
U.P
01/02/2011 Hardware Item Purchase 8,93,550 3,31,81,280
U.P
01/02/2011 Hardware Item Purchase 8,91,030 3,22,90,250
D U.P
01/02/2011 Hardware Item Purchase 8,94,548 3,13,95,702
U.P
01/02/2011 Hardware Item Purchase 8,49,450 3,05,46,252
U.P
01/02/2011 Hardware Item Purchase 9,31,718 2,96,14,534
U.P
01/02/2011 Hardware Item Purchase 9,31,718 2,86,82,816
E U.P
01/02/2011 Hardware Item Purchase 8,80,530 2,78,02,286
U.P
01/02/2011 Hardware Item Purchase 9,63,375 2,68,38,911
U.P
01/02/2011 Hardware Item Purchase 10,62,810 2,57,76,101
U.P
F 01/02/2011 Hardware & Purchase 9,29,198 2,48,46,903
Sanitary Items U.P
01/02/2011 Hardware Item Purchase 8,13,750 2,40,33,153
U.P
02/02/2011 Hardware Item Purchase 8,56,800 2,31,76,353
U.P
03/02/2011 Hardware & Purchase 11,98,050 2,19,78,303
Sanitary Items U.P
G
04/02/2011 Hardware & Purchase 9,85,950 2,09,92,353
Sanitary Items U.P
05/02/2011 Hardware & Purchase 10,58,925 1,99,33,428
Sanitary Items U.P

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 485
[ARUN MISHRA, J.]

A
06/02/2011 Hardware Item Purchase 9,39,750 1,89,93,678
U.P
07/02/2011 Hardware Item Purchase 8,04,825 1,81,88,853
U.P
08/02/2011 Hardware Item Purchase 9,50,250 1,72,38,603
U.P
09/02/2011 Hardware Item Purchase 8,80,824 1,63,57,779 B
U.P
09/02/2011 Hardware & Purchase 8,30,771 1,55,27,008
Sanitary Items U.P
10/02/2011 Hardware & Purchase 7,70,921 1,47,56,087
Sanitary Items U.P
11/02/2011 Hardware & Purchase 7,88,130 1,39,67,957
Sanitary Items U.P C
12/02/2011 Hardware Item Purchase 9,03,693 1,30,64,264
U.P
13/02/2011 Hardware Item Purchase 8,31,180 1,22,33,084
U.P
14/02/2011 Hardware Item Purchase 6,44,532 1,15,88,552
U.P
14/02/2011 Hardware Item Purchase 9,58,073 1,06,30,479 D
U.P
15/02/2011 Hardware Item Purchase 9,56,802 96,73,677
U.P
16/02/2011 Hardware Item Purchase 9,25,344 87,48,333
U.P
17/02/2011 Hardware Item Purchase 9,03,231 78,45,102
U.P
18/02/2011 Hardware Item Purchase 6,48,732 71,96,370 E
U.P
18/02/2011 Hardware Item Purchase 8,02,578 63,93,792
U.P
19/02/2011 Hardware Item Purchase 8,49,912 55,43,880
U.P
20/02/2011 Hardware Item Purchase 9,77,550 45,66,330
U.P
21/02/2011 Hardware Item Purchase 8,68,004 36,98,326 F
U.P
22/02/2011 Hardware Item Purchase 10,56,930 26,41,396
U.P
23/02/2011 Hardware Item Purchase 8,29,500 18,11,896
U.P
24/02/2011 Hardware Item Purchase 9,21,413 8,90,483
U.P
25/02/2011 Hardware Item Purchase 8,79,564 10,919 G
U.P
31/03/2012 REBETE & Journal 10,919
DISCOUNT
54500000.00 5,45,00,000

H
486 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B balance.
Date Particulars Vch Type Debit Credit Balance
29/09/2010 Bank of Baroda Payment
A/C No - 1,00,00,000 1,00,00,000
21580200000079

C 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
D 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 Payment
A/C No - 2,00,00,000 2,01,00,016
E 21580200000079

13/05/2011 STEEL Purchase
U.P 22,15,039 1,78,84,977
16/05/2011 STEEL Purchase
U.P 20,97,410 1,57,87,567
17/05/2011 STEEL Purchase
F 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 21,09,193 93,63,039
U.P
30/05/2011 STEEL Purchase
U.P 21,72,250 71,90,789
30/05/2011 STEEL Purchase
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 487
[ARUN MISHRA, J.]

22/08/2011 STEEL Purchase A
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 B
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
C
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 D
Closing Balance
2,88,02,028

5,88,02,028 5,88,02,028

1. In the case of Amrapali Princely Estate Pvt Ltd:
E
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. F
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 G
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: H
488 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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

C 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
D Bank of India Loan A/c No-
11 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

E 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
F
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. 16,62,747
G
22 GAURISUTA INFRASOLUTION PVT.LTD 10,00,000

23 AAUSH RAJ 7,95,339

24 Pradhan Projects 1,02,271

H TOTAL 51,29,19,265
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 489
[ARUN MISHRA, J.]

(i) Fixed deposit – The Company made a fixed deposit of A
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 B
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
C
(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 D
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 E
parties as stated hereunder:
Name of party Amount (RS. in crore)
Gaurisuta Infrastructure Private Limited 2.00
Siddhi Interiors Private Limited 0.40
F
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 G
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
H
490 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
Total 18.88

25. OTHER OBSERVATIONS
1. Cozy Habitat Builders Pvt. Ltd.
It is holding 25% shareholding in Heart Beat City Project Controlled
C
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
D 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
E 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
F 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)
G
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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 491
[ARUN MISHRA, J.]

T6-G06 that was allotted to the said party in Amrapali Grand on A
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.

B

C

D

This shows that this money has been taken away by the
Management and hence should be recovered from them.
E
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. F

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. G

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
H
492 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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.

C

D

E

F

G

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 493
[ARUN MISHRA, J.]

This entry seems to be a mere adjustment entry since there is no A
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 B
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. C
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 D
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 1 st E
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 F
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.
G
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 NCLT. The matter is still in dispute at NCLT for the
claimed loan of 17.50 crores lodged by Royalgolf on Amrapali
Infra.
H
494 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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:
D
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
E submitted.
1) Prem Mishra Indore.
2) O2 Valley Noida
3) Heart beat city projects Noida.
F 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
G 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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 495
[ARUN MISHRA, J.]

Limited. There is no resolution on record authorizing Mr. Anil A
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
B
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, C
2015, 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 D
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 E
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. F
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 G
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

H
496 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D
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
E 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.
F We have categorized the Chart-D transactions into following 3
categories:
Category A – The properties attached should be sold off and
recover the amount.
Category B – The properties attached should continue to be
G attached.
Category C- The properties attached should be released
off.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 497
[ARUN MISHRA, J.]

A
Name of Name of the Area Category Date of Page no of
Company of party to which transfer supplementary
Amrapali Group allotment/sale report
was made
CATEGORY-A

Ultra Home SKN Hospitality 1067.50 A 15th March 2791-2796
Construction Pvt Ltd sq. mtr. 2017 B
Pvt Ltd
Amrapali Homes Bhuvneshwar 6.52 A Available 2781
Project Pvt Ltd land Acres
Amrapali Homes Pradeep Mishra 123171 A 21st August 2779-2780
Project Pvt Ltd sq. ft. 2017
Amrapali Sarvome 7108 A 10th July 2768-2769
Smartc Housing Pvt Ltd sq. ft. 2017
ity Developers C
Pvt Ltd
Amrapali Dream High Life 8500 A Available 2770
Valley Pvt Ltd Commercial sq. ft.
Amrapali Bihariji 22621 A 10th July 2767-2768
Smartcity Developers Pvt sq. ft. 2017
Developers Pvt Ltd
Ltd
Amrapali Bihariji High 31202 A 10th July 2782-2783 D
Leisure Valley Rise Pvt Ltd sq. ft. 2017
Pvt Ltd
Amrapali Bihariji High 13928 A 10th July 2782-2783
Leisure Valley Rise Pvt Ltd sq. ft. 2017
Pvt Ltd
Amrapali Bihariji High 7020 A 10th July 2785-2786
Centurian Park Rise Pvt Ltd sq. ft. 2017
Pvt Ltd E
Amrapali Bihariji 22621 A 10th July 2785-2786
Centurian Park Properties Pvt sq. ft. 2017
Pvt Ltd Ltd
Ultra Home Shri Viniyak 6120 A 2nd April 2790
Construction Avas Pvt Ltd sq. ft. 2014
Pvt Ltd
Amrapali Sarvome 16500 A 10th July 2775-2776
Leisure Valley Housing Pvt Ltd sq. ft 2017 F
Developers
Private Limited
CATEGORY-B

Hi-Tech City Anita Chandok 4027.31 B 21st July 2755-2756
Developers Pvt sq. 2016
Ltd yards
Amrapali SBL 14500 B 23rd August 2765 G
Smartcity Construction sq. ft. 2016
Developers Pvt Pvt Ltd
Ltd
Amrapali SBL 18450 B 23rd August 2765
Smartcity Construction sq. ft. 2016
Developers Pvt Pvt Ltd
Ltd
H
498 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
Amrapali Bhatia 6120 B Available 2766
Smartcity Properties sq. ft.
Developers Pvt
Ltd
Amrapali Bhatia 22200 B 6th May 2777
B Leisure Valley Properties sq. ft. 2015
Developers Pvt
Ltd
Hi-Tech City Sarbjit Leasing 1245.23 B 23rd July 2756-2758
Developers Pvt and Finance sq. 2016
Ltd Company yards
Amrapali Vaishnavi 10261 B 13th 2758-2764
Hospitality Vahini Mount sq. ft. November
C Services Pvt Ltd Life Hospitality 2017
Pvt Ltd
Sangam Anjali 3.13 B 24th April 2753
Colonizers Pvt Consultants Hectare 2017
Ltd
Amrapali Dr. J P Sharma 2.1 B June 2017 2764
Hospitality Bigha
D Services Pvt Ltd
Amrapali Homes Ajit Kumar & 11245 B 9th October 2780-2781
Project Pvt Ltd Kriti Agarwal sq. ft. 2017
Amrapali Deepak Kumar 1560 B 20th August 2784
Leisure Valley sq. ft. 2016
Pvt Ltd
Amrapali Dream Bihariji 16000 B 10th July 2770-2771
E Valley Pvt Ltd Developers Pvt sq. ft. 2017
Ltd
Amrapali Dream SBL 6500 B 5th July 2771-2772
Valley Pvt Ltd Construction sq. ft. 2017
Pvt Ltd
Amrapali Silicon SBL 20640 B 2nd May 2778
City Pvt Ltd Construction sq. ft. 2017
Pvt Ltd
F Amrapali Silicon Nirala India 16436 B 15th 2778-2779
City Pvt Ltd Developers Pvt sq. ft. October
Ltd 2015
Amrapali Dream Mr. Vinay Garg 11000 B 15th 2769
Valley Pvt Ltd sq. ft. February
2018
Ultra Home V. 82.937 B 18th 2795-2796
G Construction Thiruvenkitam Cents January
Pvt Ltd & Thushara 2012
Reddy
Amrapali One 16360 B 25th 2786-2787
Centurian Park Flameboyant sq. mtr. September
Pvt Ltd Realty Pvt Ltd 2013

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 499
[ARUN MISHRA, J.]

CATEGORY-C A
Sangam Radheshyam 3.28 C 19th Feb 2754-2755
Colonizers Pvt Yadav, Keshav Hectare 2015
Ltd Yadav,
Surender
Yadav, Narayan
Yadav &
Lakhan Yadav B
Amrapali PSK Finance 14853 C 15th July 2782
Leisure Valley Solution Pvt sq. ft. 2014
Pvt Ltd Ltd
Amrapali Star Land Craft 23395 C 31st July 2784-2785
Leisure Valley Pvt Ltd sq. mtr. 2013
Pvt Ltd
Amrapali Dream Shri Balaji Hi 12479 C 31st July 2772-2773 C
Valley Pvt Ltd Tech sq. mtr. 2013
Construction
Pvt Ltd
Amrapali Dream K V Developers 19986 C 7th June 2773
Valley Pvt Ltd Pvt Ltd sq. mtr. 2013
Amrapali Dream J M Housing 33537 C 5th June 2773-2774
Valley Pvt Ltd Ltd sq. mtr. 2013 D
Amrapali Dream Samridhi 27989 C 17th June 2774
Valley Pvt Ltd Realty Home sq. mtr. 2013
Pvt Ltd
Amrapali Hawelia 14920 C 5th June 2787-2788
Centurian Park Builders Pvt sq. mtr. 2013
Pvt Ltd Ltd
Amrapali DSD Homes Pvt 14760 C 20th June 2788
Centurian Park Ltd sq. mtr. 2013 E
Pvt Ltd
Amrapali Elegant 14590 C 1st June 2788-2790
Centurian Park Infracon Pvt Ltd sq. mtr. 2013
Pvt Ltd
Amrapali PSK Finance 12500 C 15th April 2766
Smartcity Solution Pvt sq. ft. 2016
Developers Pvt Ltd F
Ltd

29. Further Assets To be Attached
Inventory of plots at Jaipur – of company names Sangam
Colonisers Pvt Ltd
G
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

H
500 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 30. Statement of cash flow
Receipt and Payment Statement (Amount in crores)
S.No Name of the Company Amount Cost of Remarks/Assumptions
received as Construction
per Chart- taken from
B of latest
affidavit of audited
B promoters financial
submitted statements
on 3rd available
Dec'18
1 Received from Customers
Amrapali Centurian Park Pvt
Ltd 1050.83 573
C Amrapali Dream Valley Pvt
Ltd 1270.5 549
Amrapali Leisure Valley Pvt The group received Rs 11573
Ltd 1563.17 594 Crore from th homebuyers
Amrapali Sapphire and spent Only Rs. 7,389
Developers Pvt Ltd 1186.66 828 Crore on construction
Amrapali Silicon City Pvt Ltd 1468.79 1126 including land payment to
Amrapali Smartcity authorities. It is pertinent to
D Developers Pvt Ltd 1230.87 780 note it includes borrowing
Amrapali Zodiac Developers cost also. Any amount of
Pvt Ltd 835.69 566 expenditure which was
Hi Tech City Developers Pvt outstanding is not considered
Ltd 113.18 104.16 in the given tabe and it is
Amrapali Eden Park prepared on the bsia of
Developers Pvt Ltd 171 175.14 audited financial statements
latest available upto March
Sangam Colonizer Pvt Ltd 9.58 7.61 2015 except one company for
E Amrapali Grand 217 104.98 which it is March 2016. It was
Amrapali Princely Estate Pvt found at any given point of
Ltd 724.55 578 time the amount received
Amrapali Leisure Valley from homebuyers was never
Developers Pvt Ltd 505.19 355 in short
Amrapali Homes Project Pvt
Ltd* 103 103
Ultra Home Construction Pvt
F Ltd* 1123.12 945
Sub Total (A) 11573.13 7388.89

Sales of
2 Property/FSI/Facilities 358.68 As per affidavit
The amount paid to bank as
per Chart B of affidavit is
G 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
3 Bank 2712.02 1827 financial statements of 2015.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 501
[ARUN MISHRA, J.]

The amount borrowed in A
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 B
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
4 FDI/Financial Institution 520 65 unapproved purposes.
Number has been taken from C
affidavit and has not been
5 Investors 300 200 verified by us.
Number has been taken from
affidavit and has not been
6 Partner Investment 150 150 verified by us.
Sub Total (B) 4040.7 2242
Grand Total (A+B) 15613.83 9630.89
Difference 5982.94 Short cashflow D

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
E
Mrs. Manju Rajpal and Mr. Ramesh Rajpal HUF each invested
Rs 7.5 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 F
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 G
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
H
502 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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.
D 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
E 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.

F 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
G 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%.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 503
[ARUN MISHRA, J.]

Exotique Exports, an entity of Mr Rajpal, invested Rs 5 crore in A
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 Cum Corporate Hub at Plot No. Sector – 2
Manesar, Gurgaon, Haryana for Rs 5Cr however the value of 5
B
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 C
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. D
(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 E
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) F
(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 G
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
H
504 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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-
B 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.
C
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.
D 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.
(vii) The company has also received Rs. 2.35 crores & Rs. 3.55
E 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.
F (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
G
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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 505
[ARUN MISHRA, J.]

Opinion A
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 B
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 C
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 D
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
E
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 F
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. G
Waiting for your response.”
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.
H
506 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D 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:
S. No. Particulars Amount in Crores
E 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 1,991.69
F
ii) Commercial Areas 345.78
5 Amount recoverable from KMP’s and their Relatives:
i) Professional fee 100.53
ii) Advances Recoverable 152.24
iii) Cash in hand 69.36
G iv) Other recoverable 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 507
[ARUN MISHRA, J.]

1. Sale of Flats at lower prices A
Total amount involved in under-valued transactions in
respect of Companies audited by us is
Rs.321.31 Crores as per summary given below:

B
S.no. Name of the company Number of Amount (In Refer Page Number
Units Crores)
1 Amrapali Sapphire 315 76.02 Volume – I Page No.
205 - Point No. 1
Developers Private Limited
2 Amrapali Leisure Valley Volume – I Page No.
Developers Private Limited 70 5.88 222 - Point No. 1 C
3 Amrapali Smart City 261 18.97 Volume – I Page No.
232 - Point No. 1
Developers Private Limited
4 Amrapali Silicon City Private 468 73.05 Volume – I Page No.
Limited
257 – Point No. 1
5 Amrapali Dream Valley Private 1,752 24.11 Volume – I Page No.
Limited D
248 - Point No. 1
6 Amrapali Leisure Valley Private 122 8.53 2811
Limited (Supplementary
Audit Report)

7 Ultra Home Construction 524 30.87 2811
Private (Supplementary E
Audit Report)
Limited
2811
8 AmrapaliCenturian Park Private 1,912 43.12
(Supplementary
Limited
Audit Report)
9 Amrapali Princely Estate Private 146 6.70 2811 F
Limited (Supplementary
Audit Report)

10 Amrapali Zodiac Developers 107 6.75 2811
Private (Supplementary

Limited Audit Report)

11 Amrapali Patel Platinum 179 27.31 2811
G
(Supplementary
Audit Report)
Total 5,856 321.31

H
508 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 Refer Page
B (In Number
Crores)
1 Amrapali Sapphire 46.44 Volume – I Page No.
Developers Private Limited2 207 – Point No. 2
2 Amrapali Leisure Valley 200.53 Volume – I Page No.222
Developers Private Limited – Point No. 2

C 3 Amrapali Smart City 400.00 Volume – I Page No.232
Developers Private Limited – Point No. 2
4 Amrapali Silicon City Private 390.00 Volume – I Page No.257
Limited – Point No. 2
5 Amrapali Dream Valley Private 724.14 Volume – I Page No.248
Limited – Point No. 2
6 AHS Joint Venture 3.10 Volume – II Page
D No.276 – Point No. 4
7 Hi Tech City Developers Volume – II Page
Private Limited (Immediately 2.37 No.283 – Point No. 11
recoverable)
Volume II - Section XXII
8 Ultra Home Construction Private 65.08 (Page No. 563– 568)
Limited
E Volume II - Section XXII
9 Amrapali Princely Estate Private 28.17 (Page No. 563 – 568)
Limited
Amrapali Zodiac Developers Private Volume II - Section XXII
10 Limited 26.56 (Page No. 563 – 568)
Volume II - Section XXII
11 Amrapali Leisure Valley Private 1470.94 (Page No. 563 – 568)
F Limited
Volume II - Section XXII
12 Amrapali Centurian Park Private 240.17 (Page No. 563 – 568)
Limited
Volume II - Section XXII
13 Amrapali Eden Park Private 4.71 (Page No. 563 – 568)
Limited
Volume II - Section XXII
G
14 Amrapali Grand 15.56 (Page No. 563 – 568)
15 Amrapali Homes Project Pvt. Ltd. Volume II - Section
6.88XXIII (Page No. 569)
Total 3624.65

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 509
[ARUN MISHRA, J.]

3. Amount recoverable from buyers of Commercial Area A
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 Refer Page No.
(In
Crores)
1 Amrapali Sapphire Developers Private 7.14 Volume – I Page B
Limited No.207- Point No. 3
2 Amrapali Leisure Valley Developers Volume – I Page
Private Limited 1.68 No.222- Point No. 3

3 Amrapali Smart City Developers Private 19.58 Volume – I Page
Limited No.232- Point No. 3
4 Amrapali Silicon City Private Limited 2.48 Volume – I Page
No.257- Point No. 3 C
5 Amrapali Dream Valley Private Limited 6.12 Volume – I Page
No.248- Point No. 3
Volume – II Section
6 Ultra Home Construction Private Limited 38.03 XXII (Page No. 563 –
568)
Volume – II Section
7 7Amrapali Princely Estate Private Limited 5.50 XXII (Page No. 563 –
568) D
Volume – II Section
8 Amrapali Zodiac Developers Private 2.08 XXII (Page No. 563 –
Limited 568)
Volume – II Section
9 Amrapali Leisure Valley Private Limited 3.58 XXII (Page No. 563 –
568)
Volume – II Section
10 Amrapali Eden Park Private Limited 3.64 XXII (Page No. 563 –
E
568)
Total 89.83

4. Unsold Inventory
There is unsold inventory of flats and Commercial areas amounting
to Rs.2337.47Crores F
approximately as per details given below:
a) Unsold Inventory of Flats
S.no. Name of the company Number Approximat Page No.
of Units e Realizable
in Value Reference G
Residential (In Crores)

1 Amrapali Sapphire Developers Private 14 14.45 Volume – I
Page No.39-
Limited
Point No. 4a H
510 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
2 Amrapali Leisure Valley Developers 329 100.67 Volume – I
Page No.39-
Private Limited
Point No. 4a
3 Amrapali Smart City Developers Private 183 65.29 Volume – I
Page No.39-
Limited
B 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-
C Point No. 4a
6 Amrapali Leisure Valley Pvt. Ltd.* 1203 412.91 Volume – II
Section XXII
(Page No.
563 – 568)
D 7 Amrapali Centurian Park Pvt. Ltd.* 981+2 329.34 Volume – II
Section XXII
(Page No.
563 – 568)
8 Amrapali Eden Park Developers Pvt. 4 2.47 Volume – II
Section XXII
Ltd.* (Page No.
E 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
F (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
G

*Estimated Realizable value Noida @ Rs 4,500 approximately
psf and Greater Noida @ Rs3,000 approximately psf (Amount in
Crores).

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 511
[ARUN MISHRA, J.]

b) Unsold Inventory of Commercial Area/Shops A

S.no. Name of the Company Unsold Approxima Page
te No.
Commercial Realizable refere
Value (In nce
Inventory Crores)

B
1 Amrapali Sapphire Developers 1 Shop 0.71 Volume –
Private Limited I Page
No.39-
Point No.
4b
2 Amrapali Leisure Valley Nursery Volume –
Developers Private Limited I Page
Schools,
7.00 No.39- C
NursingHomes
Point No.
and MilkBooth 4b
3 Amrapali Smart City 1 Shop 0.49 Volume –
I Page
No.39-
Point No.
Developers Private 1 Nursery School 4.00 4b D
Limited

4 A m r ap a li S ilic on C i ty P r iv ate Vo lum e –
N u rs e r y S c h oo l
Li m i ted 11 . 0 0 I P age
& M i lk B o ot h N o. 39 -
P o in t N o.
4b
5 Am ra p a li D r e am V a ll ey Pr i va te 1 8 S h o p s, Vo lum e –
Li m i ted N u rs e r y
S c h oo l s ,
I P age
N o. 39 -
E
N u rs in g H o m e s P o in t N o.
a n d S e n io r 4b
S e c o n d ar y 44 . 4 7
S c h oo l s
6 Am ra p a li E d e n Pa r k D ev e lop e r s 1 .4 0 Vo lum e
P vt . L td . 1 – II
S e c tio n
X X II
(P ag e
N o.
F
5 63 –
5 68 )
7 Am ra p a li C e n tu r ia n P a r k P v t. L td . 17 5.7 1 Vo lum e
– II
S e c tio n
X X II
(P ag e
N o.
5 63 –
5 68 ) G
8 U ltr a H o m e C o n s t r u c tio n P v t. 31 8 + 487 2 71 . 0 0 Vo lum e
Lt d . – II
S e c tio n
X X II
(P ag e
N o.
5 63 –
5 68 )
T o tal 3 4 5 .7 8
H
512 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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) (Under Disclosure in
B
Rs. in Cr. Affidavit)Rs. in Cr.

Anil Kumar Sharma 29.13 8.75
Shiv Priya 26.43 24.65
Ajay Kumar 5.76 -
Suvash Chandra Kumar 5.11 -
C
Amresh Kumar 0.68 -
Total 67.13 33.40

b) Advances recoverable
A sum of Rs.152.24 crores is recoverable from the Directors
D 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
E 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
F 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 Amount Anil Kumar Shiv Priya Ajay Others
company (In Sharma and and family Kumar
Crores) family and family
G 1 Amrapali Sapphire 0.50 0.02 0.39 0.09 -
Developers Private
Limited (Page No.
202-219)
2 Stunning 17.43 6.4 5.57 1.7 3.76
Construction Private
Limited (Page No.
196-201)
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 513
[ARUN MISHRA, J.]

3 Amrapali Smart City 0.02 - - - 0.02 A
Developers Private
Limited (Page No.-
229-244)
4 Amrapali Silicon 0.28 0.05 0.23 - -
City Private Limited
(Page No. 255-266)
5 AHS Joint Venture 9.58 6.18 3.12 0.28 - B
(Page No.- 273-278)
6 Amrapali 113.54 73.25 35.15 5.14 -
Infrastructure
Private Limited
(Page No. 286-306)
7 Sangam Colonizers 0.03 - - - 0.03
Private Limited C
(Page No.189-192)
8 Amrapali Hospitality 6.62 6.55 - - 0.07
Services Private
Limited (Page No.
346-350)
9 Hi Tech City 4.24 4.24 - - -
Developers Private
Limited (Page No.
D
279-285)
Total 152.24 96.69 44.46 7.21 3.88

Recoverable from other KMPs is as under :
E

ChanderWadhwa and Family 2.55
Mohit Gupta and Family 0.16
SuvashChander Kumar 0.67
Amresh Kumar 0.17
F
NishantMukul 0.12
Adhikari Devi Prasad and Family 0.02
Anil Mittal and Company (Statutory Auditor) 0.19

Total 3.88

Cash in Hand G

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:
H
514 SUPREME COURT REPORTS [2019] 9 S.C.R.

A S. no. Name of the Company A mount (In Crores)
1 Stunning Construction Private L imi ted 0. 17

2 A mrap ali Sapphire Developers Priva te L imited 0. 11

3 A mrapali Leisure Va lley De ve lopers Private 0. 23
L imited
4 A mrapali Smart City Developers Private L imited 10.79
B 5 A mrapali Silic on City Private Limited 3. 58

6 A mrapali D ream Val ley Private Limited 8. 02

7 H i-tec h City Developers Private Limited 0. 46

8 A mrapali Infrastructure Priva te Limited 3. 16

9 Sangam Colonizers Priva te L imited 0. 15
C 10 Nav odaya Properties Private Limited 0. 24

11 H awthorne Intellect Management Solutions 0.01
P rivate Limited
12 M SB Software Technology Private Limited 0. 70

14 G aurisutaInfrasolution Private L imi ted 0. 01

17 A mrapali H ospi ta lity Services Private Limited 0. 01
D
18 K apilaBuildhome Private L imited 0. 03

19 M annatBuildcraft Private Limite d 0. 20

20 Ultra Home Construction Pri vate Limited 0.22

21 AmrapaliCenturian Park Private Limi ted 7.45

E 22 Amrapali E den Park D evelopers Pri vate Limited 2.00

23 Amrapali G ra nd 0.50

24 Amrapali H omes 0.19

25 Amrapali H omes Projects Private L imite d 0.23

26 Amrapali L eisure V alley Private Limited 9.79

F 27 Amrapali Media Vision Private L imited 9.67

28 Amrapali Prince ly Es tate Private Li mi ted 5.02

29 Amrapali Smart City Private Limited 0.50

30 Amrapali Zodiac Devel opers Private L imited 3.84

31 Gaurisu ta Inf ras tru cture Private Li mi ted 0.02
G 32 MV G Techno Consultants Priva te Limited 0.13

33 Noida Texfab Private Limited 0.13

34 La Residentia D evelopers Private Limi ted 0.30

35 Amrapali Biotech Indi a Private L imited 1.50

Total 69 .36
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 515
[ARUN MISHRA, J.]

a) Advance Recoverable from Non-Related Parties A
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 crores + Rs.326.46 crores and should be recovered
from the management of the Amrapali group of Companies. B
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. C
S. no. Name of the Company Amount (In Refer Page No.
Crores)
1 Amrapali Sapphire Developers 73.06 Volume – I Page
Private Limited
No.40- Point No.4c
2 Amrapali Leisure Valley Developers 19.67 Volume – I Page
No.40- Point No.4c
Private D
Limited
3 Amrapali Smart City Developers 17.20 Volume – I Page
Private Limited 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 C ity Developers Private 8.91 Volume – I Page E
Limited No.40- Point No.4c
7 Amrapali Infrastructure Private 40.24 Volume – I Page
No.40- Point No.4c
Limited
8 Sangam Colonizers Private Lim ited 0.36 Volume – I Page
No.40- Point No.4c
9 Amrapali Power and Cement Private 0.91 Volume – I Page
Limited No.40- Point No.4c
10 Hawthorne Intellect 0.17 Volume – I Page F
M anagemen t Solutions No.40- Point No.4c
Private Limited
11 Amrapali Aerocity Private Limited 0.01 Volume – I Page
No.40- Point No.4c
12 Amrapali Buddha Developers Private 0.47 Volume – I Page
Limited No.40- Point No.4c
13 Gaurisuta In frasolution Private 1.24 Volume – I Page
Limited No.40- Point No.4c G
14 Amrapali Hospitality S ervices Private 13.55 Volume – I Page
Limited No.40- Point No.4c
15 Kapila Buildho me Private Limited 0.41 Volume – I Page
No.40- Point No.4c
16 M ums Mega Food Park Private 1.29 Volume – I Page
Limited No.40- Point No.4c
17 M annat Buildcraft Private Limited 0.99 Volume – I Page
No.40- Point No.4c H
516 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
18 Amrapali Patel Platinum 7.85 Volume – I Page
No.40- Point No.4c
19 Stunning Constructions Private 0.44 Volume – I Page
Limited No.40- Point No.4c
20 Amrapali Dream Valley Private 3.23 Volume – I Page
Limited No.40- Point No.4c
21 Amrapali Grand 29.17 Annexure X.2 Final
B
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. 3.02 Annexure X.2 Final
Ltd. Report Volume – IV
C 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
D 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
E 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

F 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
G 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):
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 517
[ARUN MISHRA, J.]

Particulars As on 31st As on 31st As on 31st As on 31st A
March, 2007 March, 2008 March, 2009 March, 2010

Capital Account 3,00,00,000 50,00,000 (6,10,00,000) (7,10,00,000)

Note: The negative figures represent debit/ recoverable balance. B
The aforesaid amount of Rs.7.10 crores should be recovered
from 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 C
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. D
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 E
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 F
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
G
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. H
518 SUPREME COURT REPORTS [2019] 9 S.C.R.

A Particulars As on As on As on As on As on As on As on As on
31st 31st 31st 31st 31st 31st 31st 31st
March, March, March, March, March, March, March, March,
2008 2009 2010 2011 2012 2013 2014 2015
Capital 4.22 4.25 4.26 4.32 4.35 4.35 4.30 4.30
Account
Current (12.56) (14.82) (14.82) (14.82) (14.82) (14.82) (14.82) (14.82)
B Account

Note: The negative figures represent debit/ recoverable balance.
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
C
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.
D 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.
E 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.
F
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
G 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
H available upto financial year 2014-15.
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 519
[ARUN MISHRA, J.]

ii. The deed of dissolution has not been notarized. A
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.
B
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 C
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. D

Financial Year Name of Party Expense Debited Amount
2012-13 Staff Incentive 2,252,720
Labour
charges of
E
2014-15 Unity Contractor Contractor 1,600,000
ShailenderaDhwaj (T Z-
2014-15 803) - 1,399,500
2013-14 MV Ayer (TL-506) - 1,000,000
Other Petty Amounts F
between 20,000 to 10
Lakhs 39,516,262
Total 45,768,482

6. Diversion of home buyer’s funds G
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:
H
520 SUPREME COURT REPORTS [2019] 9 S.C.R.

A
S.no. Name of the company Amount Refer Page No.
(In
Crores)
1 Amrapali Sapphire Developers Private Limited 113.98 Volume – I Page
B No.210- Point No. 7
2 Amrapali Leisure Valley Developers Private 134.25 Volume – I Page
No.224- Point No. 7
Limited
3 Amrapali Smart City Developers Private 532.76 Volume – I Page
No.233- Point No. 7
Limited
C 4 Amrapali Silicon City Private Limited 347.36 Volume – I Page
No.259- Point No. 7
&8
5 Amrapali DreamValley 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
D
Total 1,588.59

7. Non genuine purchases from suppliers
The total amount of non-genuine/ bogus purchases amounting to
E Rs.842.42 crores approximately. Details are as follows:
Non genuine purchases from Suppliers
(Refer Page No. 2800 Supplementary Report& Annexure
No. S-4)
F Rs. 837.12 crore
Add: Land development charges booked without supporting
documents
Rs. 7.30 crore

G Total Rs. 842.42 crore
8. Recovery from Others
A sum of Rs.32.69 croresis recoverable from others as per details
given below:

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 521
[ARUN MISHRA, J.]

Sr. No. Name of the Co mpany Amo unt Refer Page No. A
in crores
1 Advance Con struct ions Private 25.02 Vo lum e – I Page
Lim ited No.43
2 ATN Infratech Private Limited 0.70 Vo lum e – I Page
No.43
3 AlokRan jan 0.25 Vo lum e – I Page B
No.43
4 RinkuCom putech 1.19 Vo lum e – I Page
No.43
5 Casita Propmart Private 0.08 Vo lum e – I Page
No.43
Lim ited
6 Digital India (Co ntrolled by Anil 0.86 Vo lum e – I Page
No.43 C
Mittal)
7 AadhunikBuildtech Private 0.12 Vo lum e – I Page
No.43
Lim ited
8 Kapila B uilding So lut ions 0.05 Vo lum e – I Page
No.43

9 Ozo ne GSP Infratech 0.42 Vo lum e – I Page D
No.43
10 Ro yalgolf Link City 4.00 Vo lum e – I Page
No.43
Project Private
Lim ited
Tot al 32.69
9. Unexplained cash deposits/jewellery E
Details are as under :
Name of person Amount/ Refer Page No.
value (in
crore)
Anil Kumar Sharma (Cash) 5.73 Volume II - page no F
419, Point no 7
1.50 Volume II - page no
420, Point no 12
Raj Dulari (mother of Anil 0.13 Volume II - page no
Kumar Sharma) (Cash) 420, Point no 9
Shiv Priya (cash) 6.00 Volume II - page no G
422, Point no 6
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 H
522 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C
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
D 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
E 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.
F
a) Noida Authority
S . no. Name of the Company A mou nt
(In
C ro res)
1 Amrapa li Sa pphire Developers Pri va te 348.8

G Li mited
2 Eden park Develo pers Private Li mited 31.7
3 Amra pali Silicon City Pri vate L imited 537.9
4 Amrapa li Princely Estate Private Lim ited 149.6
5 Amra pali Patel Platinum 115.5
6 Amrapa li Zodia c Developers Private Li mited 276.1
H To tal 1,459.6
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 523
[ARUN MISHRA, J.]

b) Greater Noida Authority A

S.no. Name Amount
(In
C rores)
1 Am rapali Smart City Developers Pvt Ltd 628.06 B
2 Am rapali Leisure Valley Developers Pvt Ltd 255.37
3 Am rapali Leisure Valley Pvt Ltd 914.33
4 Am rapaliCenturian Park Pvt Ltd 569.36
5 Am rapali Dream Valley Pvt Ltd 718.28
Total 3,085.4
C
Grand Total 4,545
(a+b)

11. Balance payable against Term Loans
Date of Total (In
Name of the Company Name of the bank Confirmation Crores) D
Indian Overseas Bank 31-12-2018 16.15
Ultra Home Constructions
Private Limited Corporation Bank 5/2/2019 91.49
Amrapali Smart City Developers Private
Limited Corporation Bank 5/2/2019 143.74
Amrapali Leisure Valley Andhra Bank 5/2/2019 98.04
Developers Private Limited E
Bank of Maharashtra 5/2/2019 179.02
A/c
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
F
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 G
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 company.
(b). The report also reveals various disturbing features that no
accounts were prepared from 2015 to 2018 and money was withdrawn H
524 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B 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
C 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
D 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 the company.
E (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
F 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
G
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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 525
[ARUN MISHRA, J.]

would not have dared to launder the money from one company to another A
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
B
evidently in all banking 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 C
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 D
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 E
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. F
(k). Several companies were created solely for the purpose of
routing funds. These companies did not have any material transaction as
per the main object for which they were incorporated and did not have a
business since their incorporation.
G
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:
H
526 SUPREME COURT REPORTS [2019] 9 S.C.R.

A (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
B
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
C 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.
D (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
used for money laundering.
(6) Rudraksha Infracity Private Limited
E
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.

F (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
G 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
H cash.
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 527
[ARUN MISHRA, J.]

(10) Amrapali Spring Valley Private Limited A
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 B
of 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 C
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 D
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
E
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 F
Private Limited created from home buyers’ funds. It deserves to be
sold.
(16) Amrapali Centurian Park Private Limited
The Forensic Auditors have found bogus booking of expenditure
G
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 H
528 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 &
B
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
C 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
D just acting faces for 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
E 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.
F
(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
G
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.
H Shareholders used the money of home buyers for allotment of shares in
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 529
[ARUN MISHRA, J.]

the company. The records of certain lands purchased by the company A
disappeared, the details of which have been given. The company has
advances recoverable amounting to Rs.111 crores.
(22) Amrapali Grand
Bihariji Ispat Udyog Limited always had negative capital. Loans
and advances amounting to Rs.25.73 crores have been diverted. The B
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. C
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 D
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 E
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 F
and this fact has not been 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 G
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
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530 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C J.P. Morgan. Sudit K. Parikh & Co., Chartered Accountants and the
Auditors made the valuation on the basis of information provided by J.P.
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
D 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
E 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 :

F (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
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 531
[ARUN MISHRA, J.]

66. The Forensic Auditors have also reported duplicate allotment A
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 B
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 C
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 D
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.
CONSIDERATION OF SUBMISSIONS E

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 F
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 G
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
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532 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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 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
C 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
D 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
E 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
F 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 for construction of houses. The land has been given to
them by the authorities on a concessional basis by making payment of
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 533
[ARUN MISHRA, J.]

IN RE: PUBLIC TRUST DOCTRINE A
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 B
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- C
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 that has evolved over
the years by this Court. In Noida Entrepreneurs Association v. Noida D
& 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 E
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.
F
*** *** ***
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 G
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
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534 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D 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).”
E 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
F 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 therefore, has to sub-serve general
G 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,
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 535
[ARUN MISHRA, J.]

compensation is payable by the State (or its instrumentality). But A
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
B
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:
C
“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 D
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 E
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 F
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 G
amount, lease money, even the 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
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536 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D 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 the land held by the concerned authorities. It was wholly an illegal
exercise permitted.
E 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
F 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:
G “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,
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 537
[ARUN MISHRA, J.]

with the prior approval of LESSOR on payment of transfer charges A
@ 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 B
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. C

(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. D
(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 E
described 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) F

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 G
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
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538 SUPREME COURT REPORTS [2019] 9 S.C.R.

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
B 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.

C 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
D 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 with the part transfer of the plot. It lays down normally
the permission for part-transfer of the plot shall not be granted under
E
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:
F
“(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
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 539
[ARUN MISHRA, J.]

ii) Husband/wife and their dependent children will not be A
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 B
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 C
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 D
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 E
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. F
Permission of sub-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. G
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.
H
540 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.”
B (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
C 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,
D 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
E will have no right to claim 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,
F 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
G 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.

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 541
[ARUN MISHRA, J.]

4. If at the same time of cancellation, the plot is occupied by the A
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
B
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.” C

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 D
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: E
“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) and by the rules and/or regulations made or
directions issues, under this Act.
7. The Lessor will monitor the implementation of the project. F
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 G
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
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542 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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
D 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:-

E (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
F 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
G 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.
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 543
[ARUN MISHRA, J.]

(iii) Each allottee/sub-lessee of the dwelling units shall have to A
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 B
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 C
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- D
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 condition No.2 extracted above. Thus, when the E
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 F
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 G
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
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544 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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 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
C 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
D
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
E 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
F
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 ensure that mortgage was effected in accordance with
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 545
[ARUN MISHRA, J.]

borrowed from bank, in fact, was not required for completion of these A
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.
B
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 C
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 D
immediately on receipt, 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 E
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 F
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 G
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 H
546 SUPREME COURT REPORTS [2019] 9 S.C.R.

A Directors and shareholders had no income, Rudraksha Infracity Pvt.
Ltd. was incorporated to receive funds from Mannat Buildcraft which
was also 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
B
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
C 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
D
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
E 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 the value of
share to siphon out the money of home buyers through J.P. Morgan.
F 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
G 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
H the signing of loan agreement with the lender for obtaining Loan
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 547
[ARUN MISHRA, J.]

Registration Number. In case J.P. Morgan had invested in the form of A
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
B
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.
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 C
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 D
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.
E
(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, F
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 G
of fund by ASCPL to ACPPL is termed as absolutely violative of FDI
Rules and 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
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548 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
C 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.
D 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 the finding of the Forensic Audit that there was no necessity
of obtaining the loan from the Bankers as Amrapali Group had sufficient
E 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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 549
[ARUN MISHRA, J.]

Limited was not ready to subscribe to the capital was no ground for A
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.
95. The leases had been granted by Noida and Greater Noida B
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 C
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- D
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 E
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 F
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 G
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.”
96. The Authorities have failed to take action under the aforesaid
provisions. The Authorities have also failed to perform the statutory H
550 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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
D 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 Group. Authorities did not object when mortgages were effected
E 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
F 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
G 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
H and the builders are permitted to take away the innocent home-buyers’
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 551
[ARUN MISHRA, J.]

money without being accountable to their action/inaction. From tomorrow A
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
B
with Authorities and 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 C
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 D
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 E
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 F
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 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 G
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. H
552 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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 would depend upon payment of the dues and
the Authorities, later on, will have no mechanism to recover the dues,
D
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
E 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.
F
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-
G 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
H of flat, but has not been deposited with the concerned Authorities and
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 553
[ARUN MISHRA, J.]

the home buyers’ money had been diverted, which was more than the A
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
B
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, C
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
D
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. E
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 F
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 G
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. H
554 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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 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
C 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
D 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
E 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
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 555
[ARUN MISHRA, J.]

Protection Act, 1986 is available as a forum to the buyers in the A
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.
B
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 C
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 D
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 E
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. F

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, G
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
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556 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B 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
discharge any obligations imposed on him under the
C 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;
D (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
E 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
F 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;
G
(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;

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 557
[ARUN MISHRA, J.]

(i) to appoint an adjudicating officer by the Authority for A
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 B
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 C
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. D
(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
E
cast upon promotors as well as the effort has been made to make
consumer also responsible.
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
F
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 G
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
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558 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
Regulatory Authority established under the Act. The provisions of the
C 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.
D 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
E 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
F 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:

G “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: —
(l) a declaration, supported by an affidavit, which shall be signed
by the promoter or any person authorised by the promoter, stating:-
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 559
[ARUN MISHRA, J.]

(A)** 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 B
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 C
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 D
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
E
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
F
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 G
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
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560 SUPREME COURT REPORTS [2019] 9 S.C.R.

A extension of registration under Section 6, it is only in the event of force
majeure in case 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.
B
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
C 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
D
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
E 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
F approval given by the competent authority;
(c) the promoter is involved in any kind of unfair practice or
irregularities.
Explanation.— For the purposes of this clause, the term “unfair
practice means” a practice which, for the purpose of promoting
G 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,—
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 561
[ARUN MISHRA, J.]

(i) falsely represents that the services are of a particular A
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

(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. C
(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 D
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
E
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 F
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, G
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 development
works in accordance with the provisions of section 8; H
562 SUPREME COURT REPORTS [2019] 9 S.C.R.

A (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
B 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
C 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
D 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
E 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
F this section shall take effect until the expiry of the period of appeal
provided under the provisions of this Act:
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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 563
[ARUN MISHRA, J.]

services on reasonable charges, till taking over of the maintenance by A
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
B
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.- C

(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, D
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;”
E
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
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. F
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 G
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
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564 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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:
B
“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,
C 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:
D 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.”
E 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.
F 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
G 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
H plans along with the specifications, approved by the competent
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 565
[ARUN MISHRA, J.]

authority and such other information as provided in this Act or the A
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 B
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
of allottees shall be entitled to claim the possession of the common C
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 D
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. E

(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.
F
(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 G
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). H
566 SUPREME COURT REPORTS [2019] 9 S.C.R.

A (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
B 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
C 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.”
D 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
Authority, whereas Chapter VI deals with the Central Advisory Council.
The provisions relating to Real Estate Appellate Tribunal are provided in
E 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
F 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
G 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
H or transfer affected by the promoter of the common areas as defined in
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 567
[ARUN MISHRA, J.]

the RERA and otherwise reserved under the plan shall be void and A
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
wrongly mentioned and worked out at 3.50 by the Amrapali Group. In B
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 C
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 D
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 E
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.
F
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 G
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 H
568 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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.
B
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.
C 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 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
D 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
E 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
F 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
G 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 the bank. The money borrowed from banks
H was used to create other assets worth thousands of crores. Thus, the
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 569
[ARUN MISHRA, J.]

banks can realise their money from those assets and from guarantors A
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
B
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 C
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
D
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
perpetuate another fraud on the innocent home buyers in facts of the E
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 F
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 G
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.
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570 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
have met with non-compliance with all impunity. Thereafter on the
assurance of the 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
C 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’
D
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.
E 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
F 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 finance the purchasers, is the genuine grievance
pointed out at the Bar. Be that as it may. Entire gamut of facts indicates
G 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,
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 571
[ARUN MISHRA, J.]

the submission raised on behalf of Amrapali group that under the provisions A
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
B
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 C
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
D
make it exemplary one that such fraudulent 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 E
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 F
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. G
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.

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572 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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 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
B
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)
C 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,
D 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
E 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
F totally illegal manner without 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 573
[ARUN MISHRA, J.]

facts of the case, that any amount of the bankers or that of authorities A
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
B
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 C
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
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
D
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 E
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 F
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, G
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
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574 SUPREME COURT REPORTS [2019] 9 S.C.R.

A the mortgage. There could not 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
B
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,
C 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
D
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
E 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 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
F 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
G 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
H promoters. We wholly disagree with the submission. It is made in oblivion
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 575
[ARUN MISHRA, J.]

of the provisions of Section 8 of the RERA which provides for completion A
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
B
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 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 C
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 D
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 E
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 F
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.
138. It was submitted by learned senior counsel on behalf of the G
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 H
576 SUPREME COURT REPORTS [2019] 9 S.C.R.

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
B
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.
C 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
D in every case even if the promoter has completed the project and realised
the charges 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
E 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
F 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
G 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

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 577
[ARUN MISHRA, J.]

breach of condition or breach of rules, etc. by the promoters/ builders. A
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 the building can be demolished. Buildings
have to come up and completed even the ones which are at the nascent
B
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 C
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- D
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 E
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 F
was no force majeure 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 G
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
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578 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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,
C 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 cases where the projects have remained incomplete and home
buyers have been cheated in an aforesaid manner, it should be ensured
D
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.
E 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
F 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.
G
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:

H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 579
[ARUN MISHRA, J.]

CHART “E” DETAILS OF MAJOR COMPANIES FROM A
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 31 st March
2015
S. No . Nam e of Companies Net amoun t Transm itted/ B
Transferred from these
companies of Am ra pali
Group of Compa nies (A)
Amount in Cr,

1 Amrapali Sma rt City Dev. Pvt. Ltd. 538.59

2 Amrapali Centurian Park Pvt. Lt d. 518.78 C
3 Amrapali Dream Valley Pvt. Ltd. 445.33

4 Amrapali Leisure Valley Pvt. Ltd. 431.11

5 Amrapali Silico n C ity Pvt. Ltd. 391.57

6 Amrapali Leisure Valley Dev. Pvt. 237.53 D
Ltd.
7 Amra pali Zodiac Dev. Pvt. Ltd. 224.47

8 Amra pali Princely Estate Pvt. Ltd. 186.99

9 Amrapali Sapphire Dev. Pvt. Ltd. 21.84
E
Grand To tal 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 F
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.
145. As to other amounts with respect to advances which are
recoverable, the explanation that there is a surrender of shares by Mr. G
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. H
580 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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
B
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
C 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, we
have no word to specify the extent of fraud played. Least said is better
D
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
E 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.
F 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
G 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
H
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 581
[ARUN MISHRA, J.]

diversion of money immediately after sanctioning of the loan and also in A
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 B
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 C
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. D
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.
E
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 F
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 G
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. H
582 SUPREME COURT REPORTS [2019] 9 S.C.R.

A 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,
B we propose to monitor the progress of the investigation. For violations of
FEMA and FDI norms, we direct the Enforcement Directorate to make
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
C 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/
D 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
E 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
F diverted fraudulently, thus, fraud cannot be perpetuated against them by
selling the flats and depriving them of hard-earned money and savings
of entire life. They cannot be cheated once over again by sale of the
projects raised by their funds. The Noida and Greater Noida Authorities
have to issue the Completion/ Part Completion Certificate, as the case
may be, to execute tripartite agreement and registered deeds in favour
G
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
H RERA shall stand cancelled;
BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 583
[ARUN MISHRA, J.]

(ii) The various lease deeds granted in favour of Amrapali Group A
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 B
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 C
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 3 months from today in the Bank account opened in
UCO Bank in the Branch of this Court. The amount deposited D
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 E
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. F
(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 G
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 H
584 SUPREME COURT REPORTS [2019] 9 S.C.R.

A the Court within one month from today and to do the needful
in the 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
B 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
C 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
D 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
E 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 homebuyers, they are to be placed in
F 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
G
and electricity to home buyers forthwith.
155. Let the cases be listed for further hearing before us on
9.8.2019.

H Kalpana K. Tripathy Directions issued.