Bikram Chatterji Vs Union of India

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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL/ APPELLATE JURISDICTION

WRIT PETITION (C) NO.940/2017

BIKRAM CHATTERJI & ORS. ..PETITIONER(S)

VERSUS

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

WRIT PETITION (C) NO.947/2017

WRIT PETITION (C) NO.971/2017

WRIT PETITION (C) NO.942/2017

SPECIAL LEAVE PETITION (C) NO.1879/2018

WRIT PETITION (C) NO.1041/2017

WRIT PETITION (C) NO.1018/2017

WRIT PETITION (C) NO.1116/2017

WRIT PETITION (C) NO.1144/2017

WRIT PETITION (C) NO.1156/2017

WRIT PETITION (C) NO.1206/2017

WRIT PETITION (C) NO.8/2018

WRIT PETITION (C) NO.1242/2017

WRIT PETITION (C) NO.58/2018

WRIT PETITION (C) NO.21/2018

WRIT PETITION (C) NO.52/2018

WRIT PETITION (C) NO.91/2018

WRIT PETITION (C) NO.56/2018

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WRIT PETITION (C) NO.57/2018

WRIT PETITION (C) NO.74/2018

WRIT PETITION (C) NO.134/2018

WRIT PETITION (C) NO.131/2018

WRIT PETITION (C) NO.160/2018

WRIT PETITION (C) NO.164/2018

WRIT PETITION (C) NO.182/2018

WRIT PETITION (C) NO.199/2018

WRIT PETITION (C) NO.226/2018

WRIT PETITION (C) NO.245/2018

WRIT PETITION (C) NO.281/2018

WRIT PETITION (C) NO.306/2018

WRIT PETITION (C) NO.298/2018

WRIT PETITION (C) NO.246/2018

WRIT PETITION (C) NO.267/2018

WRIT PETITION (C) NO.288/2018

WRIT PETITION (C) NO.460/2018

WRIT PETITION (C) NO.353/2018

WRIT PETITION (C) NO.378/2018

WRIT PETITION (C) NO.742/2018

WRIT PETITION (C) NO.829/2018

SMC (CRL.) NO.4/2018

WRIT PETITION (C) NO.1397/2018

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J U D G M E N T

Arun Mishra, J.

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

Amrapali Group in the Noida and Greater Noida.

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

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

various projects, the Amrapali Group of Companies proposed to construct

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

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

other world-class amenities were also promised.

3. Various home buyers booked their apartments during the period

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

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

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

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

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

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

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

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

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

of entire amount thereof.

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

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

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

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

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

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

possession.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Some of the consumers approached the National Consumer Dispute

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

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

Protection Act, 1986.

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

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

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

triggering the Corporate Insolvency Resolution Process in the matter of

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

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

Moratorium was also declared thereby restricting the institution of any

suits against the corporate debtor including execution of any judgment,

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

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

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

corporate debtor in respect of its property under the Securitisation and

Reconstruction of Financial Assets and Enforcement of Security Interest

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

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

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

Silicon City Private Limited with 98.84 percent shareholding. Both the

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

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

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

intervention applications have been filed.

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

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

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

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

53. Corporate builder heavily counts upon the home buyers as

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

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

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

the liquidation proceedings of discriminatory nature. The very survival of

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

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

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

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

Insolvency and Bankruptcy Code, 2016. The moratorium imposed by

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

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

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

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

several projects.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

in the Forensic Auditor Report speaks for itself.

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

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

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

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

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

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

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

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

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

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

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several places firefighting devices were not installed though the places were

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

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

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

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

passed by this Court:

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

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

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

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

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

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

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

joint proposal with respect to providing project wise information of the

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

counsel appearing for Amrapali Group stated that they are ready to

undertake the completion of the projects of Amrapali Group and we

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

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

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

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

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

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

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

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

documents that money had been transferred to certain other companies,

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

transferee company including the names of the Director and for what

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

projects are to be completed.

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

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

FIRST BASKET

I. SAPHIRE – PHASE-I IN NOIDA :

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

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

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

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

SECOND BASKET

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

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

THIRD BASKET

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

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

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

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

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

FOURTH BASKET

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

submitted in this Court.

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

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

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

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

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

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

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

certain unencumbered properties of Amrapali Group for payment of these

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

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

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

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

18

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

19

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

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

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

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

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

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

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

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

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

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

Ministry of Housing and Urban Affairs

Nirman Bhawan, New Delhi Dated July 13, 2018

Meeting Notice

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

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

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

Sd/- (Akhil Saxena)

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

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

Sd/- (Anil Saxena)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

representations and now want to wriggle out of it.

Following order was passed on 2.8.2018, recalling the order dated

17.5.2018:

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

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

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

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

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

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

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

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

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

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

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

incomplete information had been submitted on behalf of Directors of

Amrapali Group of Companies.

16. The National Building Construction Corporation Ltd. had been

appointed by this Court to complete the construction vide order dated

12.9.2018.

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

various companies including the Managing Directors to file affidavits

regarding immovable properties and moveable properties and their

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

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

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

27

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

audit. Following order was passed on 4.9.2018 :

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

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

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

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

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

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

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

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

Suggestions be made on the next date of hearing.

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

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report is received.

List on 6th September 2018."

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

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

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

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

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

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

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

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

companies vide order dated 12.9.2018. This Court also directed remaining

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

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

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

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

passed by this Court on 26.9.2018 :

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

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

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

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

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

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

19. On 9.10.2018 when despite the orders dated 12.9.2018 and

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

phone or the facility of telecommunication without permission in writing of

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

moto contempt.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

seriously and the incumbents punished suitably. The last opportunity was

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

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directed Statutory Auditors to comply with the requisition made by the

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

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

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

Court observed in para 5 thus :

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

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

About the creation of companies consisting of his nephew as Director

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

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

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

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

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

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

33

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

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

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

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

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

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

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

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

pointing out appointment order, authorisation, authority to sign any

voucher and his entire role in the organisation thus:

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

34

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

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

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

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

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

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

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

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

Mauritius and Singapore with Amrapali group of companies be disclosed

with details on affidavit. We directed the Amrapali group of

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

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

family members or acquaintance were included as Director and all the

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

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

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

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

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

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

35

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

order vide order dated 13.11.2018 thus:

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

36

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

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

Annexure-11

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

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

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

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

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

Sl. No. Shareholder’ Name

% holding No. of shares

1. Ultra Home Constructions Private Limited

99.89 % 93,85,260

2. Swapnil 0.03 % 2500

37

Shikha

3. Suvash Chandra Kumar

0.08% 7500

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

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

Construction

Private Limited

5.36

2. Others 0.32 List of Present Directors

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

Kumar 27/11/2012

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

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

38

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

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

sell the property. Other facts were also noted.

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

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

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

under:

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

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

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

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

Court observed that let the Amrapali group of companies and their

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

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

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

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

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

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

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

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

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

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

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

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

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

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

last opportunity was given to do so.

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

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

40

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

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

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

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

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

requisite directions:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

42

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

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

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

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

names of the investors and beneficiaries who invested in the Mauritius

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

dues were pointed out against individuals and Directors also. Against

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

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

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

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

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

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

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

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

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

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

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

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

Rudraksha Forensic auditors pointed out that two persons namely

43

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

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

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

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

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

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

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

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

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

44

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

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

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

This Court also issued other directions with respect to the persons

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

directions were also issued.

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

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

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

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

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

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

45

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

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

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

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

various affidavits of the Directors and the interim report of forensic

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

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

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

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

Sundaram learned senior counsel was also heard and the learned counsel

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

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

Amrapali group. On 2.5.2019 and on 8.5.2019 certain directions were

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

reserved for orders.

SUBMISSIONS

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

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

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

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

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

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

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

46

cancellation clause in case of cancellation and imposing penalty and for

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

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

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

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

and not taking any stringent action against Amrapali Group which had

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

47

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

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

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

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

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

connected companies may be ordered. Bank accounts with Bank of

Baroda are operationalised towards maintenance and electricity as families

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

other dues in their accounts which have become defunct after the

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

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

electricity and maintenance services by nominating a Joint Signatory in

place of IRP.

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

buyers has urged that there is the distinction between mortgage and

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

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

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

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

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

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

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

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

48

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

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

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

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

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

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

power and discharging public duty.

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

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

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

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

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

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

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

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

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

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

the project to protect the interest of the public.

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

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

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

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

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

49

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

banks were required to obtain confirmation from the authorities as to

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

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

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

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

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

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

and are beneficiaries of the Banking Companies (Acquisition and Transfer

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

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

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

demonstrate the collusion between Amrapali Authorities and the banks.

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

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

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

must be directed to complete the construction by realising only the

remaining dues from home buyers under their agreements with Amrapali,

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

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

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

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

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

completing the projects.

50

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

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

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

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

money. Construction has not progressed and money has been diverted

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

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

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

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

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

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

released the complete payment amounts to the builder without the

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

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

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

promised homes. Certain incumbents who have taken loan are compelled

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

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

the Forensic Auditors.

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

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

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

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

51

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

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

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

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

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

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

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

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

promoter. Others are waiting for the completion of buildings.

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

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

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

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

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

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

authority in accordance with the prevailing policies and rates which have

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

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

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

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

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

instalments along with interest.

52

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

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

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

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

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

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

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

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

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

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

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

projects financially viable.

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

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

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

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

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

completion certificates. Noida Authority, being a responsible public

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

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

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

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

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

53

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

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

the provisions of the New Okhla Industrial Development Area Building

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

Building Regulations requires the allottee to submit a notice of completion

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

the Fire Department, Explosives department and Environment department.

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

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

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

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

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

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

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

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

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

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

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

Apartments Act, 2010 is also to be filed.

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

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

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

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

54

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

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

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

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

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

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

lease only on payment of dues of authorities.

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

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

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

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

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

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

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

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

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

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

by the home buyers without compliance of mandatory provision of

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

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

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

resulted in their eventual eviction.

55

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

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

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

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

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

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

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

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

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

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

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

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

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

recovered.

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

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

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

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

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

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

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

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

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

56

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

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

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

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

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

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

not parties to the lease deed.

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

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

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

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

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

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

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

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

physical possession after issuance of completion certificate. The provisions

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

the lease deed.

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

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

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

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

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

57

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

unjust enrichment by Amrapali as they have realised dues from home

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

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

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

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

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

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

58

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

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

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

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

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

greater complications as construction had commenced with third-party

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

cancellation of lease deeds was not resorted to.

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

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

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

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

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

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

developers to flat owners in 5 different housing projects in Indirapuram

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

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

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

Noida and Greater Noida authorities in their respective areas. Immediately

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

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

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

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

59

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

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

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

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

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

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

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

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

Sanctuary which also hindered the work. Higher compensation was

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

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

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

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

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

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

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

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

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

timely.

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

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

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

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

60

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

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

inspection indicated that substantial construction had been carried out.

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

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

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

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

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

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

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

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

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

amounts due from Raipur and Bhubaneswar Housing Board which are

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

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

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

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

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

Reputed builders may be engaged for undertaking the construction of the

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

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

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

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

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

61

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

appropriate Committee may be constituted for supervision. Amrapali group

shall extend all help in the building of the projects.

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

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

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

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

cases, the customers took possession of various Towers in partially

unfinished conditions and managed the pending work by themselves. In

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

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

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

accordingly.

48. With respect to other amounts recoverable from

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

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

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

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

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

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

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

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

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

62

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

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

affidavit.

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

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

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

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

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

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

Anil Kumar Sharma has surrendered the shares in favour of Amrapali

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

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

of Rs.35.1 crores.

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

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

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

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

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

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

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

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

hospital.

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

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

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

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

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

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

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

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

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

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

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

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

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

against genuine business transactions. There is a possibility that such

expenses have not been booked and squared off.

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

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

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

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

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

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

crores and Rs.1,300 crores respectively. With respect to non-genuine

purchases from suppliers, though a sum of Rs.554 crores was given to the

64

income-tax authorities, on appeal the error had been corrected by the

income-tax authorities. There was an error in the report of the forensic

auditors. The report of the forensic auditors as to non-existing companies

is also not correct. It is further submitted that Gaurisuta Infrasolution Pvt.

Ltd., which manufactures PVC doors and windows had business

transactions with Amrapali group, payment/advances were made to them.

It is a fact that parties are related. It does not mean that all transactions

are dubious. Law does not prevent such transactions. The short term and

long-term loans to third parties were not for diverting loan funds and home

buyer funds to group companies.

53. With respect to Auditors’ list of 27 companies formed for the purpose

of routing the cash of the companies, were formed before demonetisation.

With respect to J.P. Morgan Property Mauritius Company-II, Amrapali

Zodiac Developers Pvt. Ltd. transferred money to another company to buy-

back stake in J.P. Morgan but did not do it directly as share buy-back

rules did not permit such transactions. It may be maximum violations of

the Companies Act but is not a diversion of money. With respect to FEMA,

it is submitted that again it is a violation of ECB guidelines but again it

was not a case of diversion of money. Money was needed for construction,

therefore, arrangement with J.P. Morgan was made.

54. With respect to doubt of Forensic Auditors as to the genuineness of

interest paid by Amrapali Silicon City Pvt. Ltd. to IPFFI and claiming

interest @ 17% which is very high, it was submitted that rate of interest

65

depends upon the money lending transactions and is not illegal or

prohibited in law.

55. With respect to charging for professional services and fee by

Directors, it was stated that a person rendering professional services

should have a membership of professional bodies and have some certificate

of practice. A lot of companies pay a professional/consulting fee to

outsiders to assist them in their business. Amrapali group has also paid

salaries and consultation fees to Directors as they were providing their

expertise and skill. Ultimately prayer had been made to evolve some

mechanism for completion of housing projects.

56. On behalf of Royal Golf Link City Projects Pvt. Ltd., it is submitted

that a loan of Rs.50 crores or Rs.48,52,05,100 was paid by Ultra Home

Constructions Pvt. Ltd. to Royal Golf. Interest @ 9% amounting to

Rs.5,83,42,977 has been paid to Ultra Home. Subsequently, the agreement

has been entered into to repay Rs.50,46,78,022 by 31.3.2017 or in lieu

thereof 30 Villas have to be allotted by Royal Golf to Ultra Homes. This

Court has attached 30 Villas allotted to Ultra Home. It is ready to give 30

Villas by 30.4.2021 or to refund the amount of Rs.48,46,78,022 in 4 equal

quarterly instalments in full and final settlement of all claims of Amrapali

group.

57. On behalf of Bank of Baroda, it has been submitted that Forensic

Auditors have made adverse comments without any basis. Bank of Baroda

66

had deployed suitable methods to monitor the utilisation of funds. No

diversion of funds was permitted by Bank of Baroda. Monitoring of the loan

was done and before sanction of the loan, the net worth of the

promoters/Directors of ASCPL was ascertained. Bank of Baroda relied

upon a letter dated 29.7.2010 from Noida to ASCPL. The term loan

agreement was executed amongst ASCPL, Bank of Baroda, Bank of

Maharashtra and Oriental Bank of Commerce "Consortium" for a term loan

of Rs.300 crores. After execution of due documents and deeds of corporate

guarantee issued in favour of Bank of Baroda, corporate guarantees were

submitted by Ultra Homes Construction, Jotindra Steels and Tubes Ltd.

along with Vidhyashree Buildcon. Pvt. Ltd. RoC search report of guarantors

was also obtained. NOC of Noida dated 21.2.2012 for mortgaging the

project site to procure a term loan from the consortium was also obtained.

A detailed project report was issued by Solomon Consulting Pvt. Ltd. There

was the appointment of independent lender's Engineer and thereafter

accounting was done, post-disbursal of loan by Bank of Baroda. The money

was released on the basis of lenders Engineers advice of Rs.49 crores out of

Rs.55 crores. Thus, there was no lack of due diligence and considering the

progress of construction, steps had been taken by the Bank of Baroda to

protect its interests after the account became NPA. Active steps were taken

to recover the amount. The similar mechanism had been adopted for

Amrapali Infrastructure Pvt. Ltd. With respect to Ultra Homes Construction

Pvt. Ltd., also a loan of Rs.75 crores was sanctioned out of which Rs.65.84

crores were disbursed for the construction and development of an

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Integrated Information Technology Park, (IT Park), Hotel, Commercial

complex, service apartments and residential complex on Plot No.59, Sector

Knowledge Park-V, Greater Noida, which were executed by Mr. Anil Kumar

Sharma, Mr. Ajay Kumar, Mr. Shiv Priya and Mr. Madan Mohan Sharma.

Amrapali Zodiac Developers Pvt. Ltd. was granted a loan of Rs.75 crores. It

was not utilised for payment of the cost of land or for payment of

construction cost. The amount has been repaid and the account has been

closed. The money may have been routed through various suppliers and

contractors. The remittance of money is nothing but an example of due

conduct of business. With respect to the release of the corporate guarantee

of M/s. Jotindra Steel and Tubes Pvt. Ltd., it is submitted that they were

unable to infuse share capital as required and seemed unable to do so in

the future as well. The shares due to M/s. Jotindra Steel and Tubes Pvt.

Ltd. were also allotted to M/s. Ultra-Homes Construction Pvt. Ltd. Thus,

the Bank of Baroda granted the request for release of the corporate

guarantee in favour of M/s. Jotindra Steel and Tubes Pvt. Ltd. Amrapali

group had the right to mortgage the property as per the mortgage deed.

There was no bank charge on the property mortgaged by Amrapali group.

As per clause 15 of the mortgage deed, the buyer shall have no right after

paying all amounts. The developer shall continue to have full authority over

the flat unless a registered deed is executed in favour of the allottee. It is

also submitted that the home buyers are not secured creditors. The home

buyers were to acquire the premises on sub-lease basis which was never

intended or stated anywhere that a sale would take place. The allottee shall

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not have any lien or interest on the flat unless sub-lease deed is executed.

Therefore, they are not secured creditors, they have no right, title or

interest or lien on the basis of allotment from flat buyer agreement. It is

further submitted that the agreement does not create any rights in

praesenti with a promise to enter into a future agreement. It does not

create any right, title, interest or claim in the immovable property. In the

absence of registration of document under the Registration Act, no rights

are created in the immovable property in question under section 49 of the

Registration Act.

58. With respect to RERA provisions, it has been submitted by Bank of

Baroda that section 11(4) of RERA deals with the interaction between

repayment to secured creditors and rights of allottees. Sub-section (h) of

section 11(4) states that the promoter shall not create a mortgage or charge

after an agreement to sell has been executed. Therefore, the promoter is

permitted to create such mortgage or charge prior to the execution of an

agreement to sell. Section 4(2)(1) of RERA requires the promoter to disclose

the prior encumbrance to the real estate authority. Under section 34(b) it is

required to publish and maintain a website of records. Section 19(4)(1) of

RERA provides that if the promoter fails to complete or is unable to give

possession of an apartment, plot or building, the rights of allottees are

restricted to receive the compensation from the promoter. The rights of

allottees under section 19 of RERA can be contrasted with the right of the

mortgagee who secured creditors under section 58 of the Transfer of

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Property Act, 1882. The RERA is restricted to protect the rights and

interests of the allottees from the promoters and developers. RERA

recognises and protects the rights of the lenders and does not in any

manner take away any right under the existing statutes like the T.P. Act,

SARFAESI, etc. RERA has not brought any change in the nature of the

rights of home buyers. The Bank is entitled to receive its money along with

interest in the event of failure to repay by builder/ promoter.

IN RE: FORENSIC AUDITORS

59. The Forensic Auditors have submitted their report running into eight

volumes. It has been observed that the Amrapali Group was started in

2003 by Mr. Madan Mohan Sharma. Later on, it was managed by his son

Mr. Anil Sharma. He gradually expanded his team and Mr. Shiv Priya, Mr.

Ajay Kumar, Mr. Nishant Mukul, Mr. Chander Wadhwa, Mr. Mohit Gupta,

Mr. Adhikari Das, and others joined in. By 2010, the Amrapali Group was

leading real estate development firms, promising to offer luxury and

comfort. In the beginning, the Amrapali Group has constructed and

completed certain projects and earned the goodwill of the general public in

the real estate business. The Amrapali Group used unfair means to

promote themselves. It made false promises to lure the public to invest in

its projects, purposefully delayed construction, cheated home-buyers for

the title of flats and trapped home-buyers in rental returns. The Amrapali

Group floated several companies. The public invested their hard earned

money in Amrapali projects and the shareholders used these funds to

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infuse capital in other companies/entities. Home buyers were cheated by

making false promises/claims for example selling of flats which were not

even part of the master plan of projects or unapproved in the master plan,

double booking of the same flat by different customers. The homebuyers

funds were diverted to other companies/directors through payment of

professional fees, by way of booking of bogus bills of Rs.837 crores, by

selling flats as undervalued prices in book and received differential market

value in cash, by paying commission and brokerage on bogus booking of

flats and by way of granting inter-corporate deposits of Rs.3,000 crores to

related entities and Rs.500 crores to unrelated entities/trusted partners for

ultimately diverting funds to unapproved uses.

SUMMARY OF REPORT OF FORENSIC AUDIT

60. The summary of report submitted by Forensic Auditors in the Court

is as under:

1. Brief Introduction

Amrapali Group started its operations in the year 2003 in Delhi. It was started by Mr. Madan Mohan Sharma who managed it for a brief period. Thereafter the operations of the Group were managed by his son - Mr. Anil Sharma. Gradually, he expanded his team and Mr. Shiv Priya, Mr. Ajay Kumar, Mr. Nishant Mukul, Mr. Chander Wadhwa, Mr. Mohit Gupta, Mr. Adhikari Das and other trusted partners/executives joined in. The Group was into the business of construction of residential complexes, townships, offices, commercial complexes. The Group built good reputation in the public and launched several projects in various cities in India. By 2010, the Group was a leading real estate development firms in India and particular in North India, promising to offer luxury and comfort in every project that it takes up. Subsequently, Mr. Mahender Singh Dhoni became brand ambassador of the Group.

To achieve good standing in the eyes of public, the Group used unfair means to promote themselves. The Group made false promises to lure public to invest in its projects, purposefully delayed construction, cheated homebuyers over title of flats, trapped homebuyers in rental returns, sold flats at exorbitantly low prices and recovered market price in cash from them, among other unfair means adopted by them. The Group floated

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several companies through its directors, staff, trusted partners which were incorporated solely to divert homebuyers funds. The Group collaborated with external parties like JP Morgan in contravention of FEMA and distributed returns along with principal amount, even though it did not book gains within the business of the company. Similarly, it collaborated with several other third parties and invested in other projects and built a cycle of returns in the form of unaccounted cash. The Group treated moneys received from home buyers as its own capital and used this money for investing in exclusively personal purposes, for example in constructing Amrapali hospital, hotels, malls, making movies etc. The Group booked bogus expenses and routed funds to trusted partners. The Group also used homebuyers funds for building personal properties, investment in mutual funds, expenses in daughter’s wedding, purchase of luxury cars, watches, building luxurious houses for directors etc. The Promoters diversified to different verticals i.e. Education, Entertainment (in making

movies), FMCG, infrastructure, Shopping Malls, technology parks, hotel etc. from the diverted Home Buyers funds. The Promoters didn’t invest any paisa in such verticals and the whole empire was created out of the diversion.

The Promoters created a web of more than 150 companies (Page No. 16-19 Volume I) for routing the funds and creating assets. About 100 Companies were under the supervision and control of promoters used mainly for the purpose of diversion of funds. The Directors and Shareholders of these Companies were benami and were the trusted junior employees of promoters. CFO and the Statutory Auditors.

It is observed that the Company, i.e. management, CFO, the Statutory Auditors and key managerial persons deliberately and for reasons best known to them did not prepare the accounts till 31st March, 2018 or thereafter as nobody wanted to let anybody know where the funds moved from 31.3.2015 onwards. In absence of Book of Accounts, we are constrained to report that the management deliberately withdrew the Bank Balances for making payments to some person and brought down the huge bank balance to negligible amount.

The management has diverted the Home Buyers’ funds from one Company to another Company in a very clever, pre-planned and clandestine manner. The management could not have done this without the full support of its CFO and the Statutory Auditors. As per the submissions

made, many companies were controlled by CFO and the Statutory Auditors to which huge funds have been transferred. It can therefore, be easily said that both CFO and the Statutory Auditor were Master Mind behind these types of planning for diversion and the misuse of funds. It may be important to mention here that funds were transferred from one Company to another and to third and to fourth and so on thereby absolutely confusing any person to find out the real trail where the money has gone, since there are more than 100 Companies through which these funds have been routed over the period.

2. HISTORY OF ALLEGATIONS

Bank of Baroda and several other banks filed a petition before NCLT under section 7 of the Code for triggering Corporate Insolvency Resolution

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process in the matter of Amrapali Group Companies.

Homebuyers filed petition seeking construction and possession of around 42000 flats booked in Amrapali Group

On 6th September 2018, Supreme Court appointed Mr. P K Aggarwal and

Mr. Ravi Bhatia as joint forensic auditors to audit into the matter.

ACCOUNTING PACKAGE

The group was using Tally till March, 2015 for all of its group companies. In April 2015, it introduced Far Vision an ERP which was not implemented properly. The opening balances were not properly entered. In November 2016, the group left half way Far vision and started recording partial transaction in tally.

To avoid the traceability, of the transactions, the Promoters and CFO and Adhikari (G.M Accounts) recorded the financial transactions up to March 2015 in Accounting Package tally, then shifted to FARVISION from April 2015 and continued till March 2016, and thereafter partially recorded transaction in tally and a for a few companies in FARVISION and thereafter in tally. This was intentionally plan. The companies of the group stopped getting the annual accounts prepared and filing returns to Roc and Income tax. 3. Auditors

The Following Firms carried out the Audit of the Group Companies during the period:

• Anil Ajay & Co.

• BSR & Co.

• Deloitte Haskins & Sells

• SN Dhawan & Co.

• Chander Wadhwa & Associates

• Manoj Usha & Co.

• Agarwal Seth & Co.

• Kumar Chopra & Associates

4. Non genuine purchases from suppliers

Purchase bills have been accounted for in the books of accounts without receipt of physical goods and purchase bills have been accounted for of suppliers who do not exist. There was an Income Tax search and seizure on 9th September, 2010 and 7th August, 2013. During the search held on 7th August, 2013, it was held by the Income Tax Authorities that purchases are being made from bogus suppliers without receiving the goods physically. The total amount of purchases from such suppliers as observed by the Income Tax department amounted to Rs.842.42 Crores approximately..

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In order to confirm the genuineness of these suppliers and a few other suppliers we have sent written communication/ letters by speed post to them in order to confirm the transactions with the Amrapali Group of Companies. Most of these letters have been received back with the remarks “No such firm exists at the specified address”.

In addition to above, there is no system of calling quotations for purchases and there is no internal control with respect to inventory. We have spotted out further certain non-genuine supplies as per details given below: (i) M/s B S Promotors

There have been sales to M/s B S Promoters amounting to Rs. 21.15 Crores during the period 2013-16 from one Company of Amrapali

Group and the same goods were re-purchased into another Company of Amrapali Group at a margin of 5% approximately.

These transactions seem to be mere accommodation entries, where all purchase/ sales are recorded on a single day only. Further, it was also explained that M/s B S Promotors have made the sales against Bank Letter of Credit which has been discounted by them from their bankers. This seems to be a case of manipulation with the banks also since there is no movement of goods but entries within the Amrapali Group only.

Further, it is observed the balance outstanding of INR 5.11 Crores due to the B S Promotors as on 31st March, 2016, has been adjusted against payment made by home buyers directly to the B S Promotors and by allotting a flat to M/s B S Promotors. However, the authorized representative of the B S Promotor has refuted this fact vehemently and asserted that it has not received any payment from the home buyers of the Amrapali Group, nor it has received any flat. Thus, the flat allotted to B S Promoters on paper needs to be attached and put to sale. Moreover, a sum of INR 1.06 crores as 5% of the margin earned by M/s B S Promoters needs to be recovered from him as they have neither received goods nor supplied any good and only acted as Billing agent for which they need not be claiming INR 1.06 crores as their margin.

(ii) Kanodia Cements

While scrutinizing the purchase bills of this supplier it was noted that

the slips of Weigh Bridge in the case of purchase of Bajri trucks show time interval of 4-5 Minutes only. This doesn’t seem to be possible that a full truck of Bajri takes only 4-5 minutes to enter into the site and come back on the weigh bridge again with empty truck in 4-5 minutes. No satisfactory explanation has been furnished by the management regarding this issue. Sample of such instances have been enclosed below:

Challan No.

Truck No. Net weight in Kg

Date Time of Gross Weight

Time of tare weight

Time taken

6524 HR74A-5331 30,720 2/3/2015 18:31 18:36 5 Min

6477 HR74A-3499 32,120 2/3/2015 18:34 18:39 5 Min

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6437 HR74A-5331 29,230 23/2/2015 18:08 18:12 4 Min

6435 HR74A-8194 31,020 23/2/2015 17:55 18:00 5 Min

6429 HR74A-8194 30,640 22/2/2015 15:50 15:55 5 Min

6289 HR74A/5331 29,150 17/2/2015 15:08 15:13 5 Min

6291 HR74A/8194 30,240 17/2/2015 15:00 15:05 5 Min

6250 HR74-9144 30,710 12/2/2015 18:25 18:30 5 Min

6176 HR55T/5754 30,090 15/2/2015 15:54 15:58 4 Min

6265 HR74A-8194 29,490 15/2/2015 15:52 15:56 4 Min

6179 HR74A-1620 28,270 8/2/2015 16:39 16:43 4 Min

6261 HR74A-8194 30,930 14/2/2015 17:32 17:36 4 Min

6220 HR38T-2855 33,780 8/2/2015 15:43 15:48 5 Min

6227 HR74A-5331 29,290 9/2/2015 15:09 15:13 4 Min

6172 HR55T-5896 29,640 7/2/2015 16:56 17:00 4 Min

6210 HR74A-8194 29,560 7/2/2015 16:59 17:02 3 Min

6169 HR55T 5896 30,910 6/2/2015 15:32 15:36 4 Min

6170 HR55T 8339 31,270 6/2/2015 15:35 15:37 2 Min

6263 HR74A 1680 30,090 14/2/2015 19:09 19:13 4 Min

As these bills of Kanodia Cements are prima facie held to be bogus, the entire sum of INR 11.69 Crores booked as purchases from Kanodia Cements should be recovered from them or from the Management for inflating their purchase by debiting bogus invoices.

Bogus expense and cash surrendered in income tax search

Cash has been surrendered by the Amrapali group in the first Income Tax search conducted on 9th September, 2010. No source of this cash has been explained by the management.

According to the Balance sheet of Amrapali Sapphire Developers Private Limited examined by us, cash surrendered is shown as miscellaneous income in the profit and loss account during 2010-11 amounting to Rs.1.39 Crores.

It is further submitted that in the second search conducted by Income tax Authorities on 7th August, 2013, the Amrapali group had surrendered an additional income of Rs.125 crores.

Both these facts clearly depict that Amrapali group was having inflow of unaccounted cash collected from either the Home Buyers or collected cash from Bogus purchases made or by advancing money to various parties and taking cash from them.

While scrutinizing the Audited Financial Statements of the Companies

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for the Financial Year 2013-14, it is observed that no additional income has been shown. There is only jugglery of accounting transactions where sales have been shown by way of part completion method and the relevant cost is also debited to this part completion sale by changing the Accounting Method which was being followed by the Amrapali Group of companies in the earlier years. This method of accounting was changed for 2 financial years only i.e. for Financial Year 2012-13 and Financial Year 2013-14. This method was changed just to make adjustment in accordance with the letter of surrender. In fact, there is no surrender of additional income, it only amounts to preponement of sale being shown in these years instead of it in the later years.

Cash has also been surrendered in the first search conducted on 9th September, 2010 and no source of this cash has been explained by the

management. This clearly explains that there was flow of un-accounted cash from various sources to the Amrapali Group of Companies.

A note was also stated in the Audited Financial Statements for the financial year 2010-11 as follows: “Note 6 (A) During the F.Y. 2010-11 Income Tax Search & Seizure operation conducted by the Income Tax Department on the company and company has surrendered a total income of Rs. 13,893,500 i.e. Rs. 10,043,500 for the F.Y. 2009-10 and Rs. 3,850,000 for the F.Y. 2010-11. Accordingly, the total income includes the above said income.” Thus, it is can be easily inferred that the company has been regularly taking cash from its various home buyers but not recording these cash entries in the Books of Accounts. (Volume –I Page No. 205) It is unclear how the surrender of Rs.125 crore made during the Financial Year 2013-14 has been accepted by the Income Tax Authorities. In fact, no additional income has been shown on this search. Moreover, against the additions relating to Bogus Purchases made in the Assessment order for the Financial Year 2013-14, the Commissioner of Income Tax (Appeal), Central Circle has deleted all these additions. We are informed by the management that no further appeal has been preferred by the department before the Income tax Appellate Tribunal as they have no idea of the same so far.

The bills booked and payments made were just accommodation entries. Many of the parties are not traceable and when we requested the Amrapali Group Management to produce the persons/entities to ascertain the veracities of the claims, they didn’t co-operate. It appears Prima-Facie that the bogus invoices were booked and cash was taken from these parties. We are of the opinion that if we confront the recipient of the purported charges then last recipient would flatly deny. It is pertinent to note that Shri Ajay Kumar Aggarwal of BSBK Group in a statement recorded under section 132(4) of the Income Tax Act has admitted that he provided accommodation/bogus bills.

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Till the date of writing this report the amount so identified for bogus bills is Rs.837.2 crore. Further, the supplies by Jotindra Steel and Tubes and Mauria Udyog Ltd, having common directors with Amrapali Group Companies, are prima-facie bogus by nature and are under examination amounting to Rs.450 crore. (Refer Annexure No. S 4 Page no 2827 Supplementary report). Land Development Charges A sum of Rs.7.3 crore has been debited to this account on 31st March, 2013 for which the supporting relevant documents are not made available to us for our verification. This amount needs to be recovered from the Directors as there is no supporting evidence or voucher and it is just a book entry.

Total bogus expenses as on date of report have been ascertained to be Rs. 842.42 crore. Double booking of expense

It has been observed that brokerage amounting to Rs 0.25 crore was paid twice; once to HDFC Realty and again to Mr. Alok Ranjan c/o SSS Enterprises on account of same flat bookings in Amrapali Sapphire Developers Private Limited during the FY 2019-10. Mr. Sanjay Kumar, proprietor of SSS Enterprises has already conveyed to GM Finance of Amrapali Group by way of speed post that fake bill for brokerage has been raised under his name by Mr. Alok Ranjan. This amount of Rs.0.25 crore should be recovered from Alok Ranjan/ the Management for booking of double expense. (Volume 1 – Page no 213)

Unsupported Cash Payments

The Company has made unusual cash payments by transferring the cash to the site cash during the financial year 2016-17 by way of vouchers which are not supported/authenticated by the site cash in charge. It seems that all these entries have been manipulated to use the cash to decrease the balance as on 08/11/2016 being the date of demonetization. Some instances are as under:

Financial Year Particulars Amount

30/04/16 Wages Paid 2,754,350

31/05/16 Wages Paid 2,637,050

30/06/16 Wages Paid 2,655,900

31/07/16 Wages Paid 2,645,450

31/08/16 Wages Paid 2,643,950

30/09/16 Wages Paid 2,659,450

31/10/16 Wages Paid 2,683,350

30/11/16 Wages Paid 1,259,630

06/06/16 Transferred to site cash 3,000,0000

12/05/16 Transferred to site cash 4,100,000

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The above are only from one company which is tip of the iceberg and actual amounts may be much higher. Further cash payments are being made to number of parties amounting to Rs.20,000 or less which are not supported by payee’s receipts on daily basis. Thus, these payments are not genuine. (Volume I- Page 223) It is observed that the cash balance available on 8th November 2016 was partly deposited into bank and huge amounts were not deposited into bank and was used for payments to staff, suppliers, vendors etc. It is worthwhile to mention that it was not permitted to use Specified Bank Notes (SBN-500, 1000 denomination Notes) for making payments to these parties.

Further there has been an Income tax Survey on 17/11/2016. We understand Income Tax Authorities have recorded the statement of Directors and also taken the Inventory of Cash in hand as on that date. A copy of the statement recorded and detail of inventory of Cash in hand is not made available to us.

Gold bar purchased from Yashika Diamonds It has been observed that the Group Companies purchased Gold bar, other forms of gold worth Rs.5.88 crore. The same has been booked as festival expenses. This does not seem to be a normal business transaction but in the nature of personal expenses. Thus, this amount should be recovered from the management of the company. 5. Negligence and non- monitoring by bankers In view of our detailed report attached, we wish to submit here that the whole process of transfer of funds from one Company to another Company to a third Company and so on and so forth on the same dates would not have been possible without active support by the Bankers. The Bankers, in our opinion, turned a Blind Eye to the various transfer of funds from one account to another for reasons best known to them. They didn’t inquire the huge transfer of funds from various accounts which were being routed every day. Had they been slightly more vigilant to monitor and control transfer of funds, the Management would have not dared to launder the money from one Company to another according to their whims and fancies and the Bankers are solely responsible for the negligence on their part.

Banks did not do any monitoring that whether the funds disbursed were used for approved purposes or not. The loan sanctioned as term loan were diverted on the very same day of receipt. The land payment were not paid etc.

Bank of Maharashtra – Term Loan has been released by transferring the amount to the Current account during the financial year 2009-10 to 2012-13. There has been no monitoring by the bank to ensure the end use of utilization of the funds. This amount was paid from the Current account for other than business activities of this Company.

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It is observed that there was no monitoring done by the officials of Bank of Maharashtra, Andhra Bank and other banks by releasing of term loan to the Company. Even basic checks as required by the Bank were forgone and not ensured by the Bank Officials regarding the end utilization of the term loan funds for the purpose for which they were granted. It seems that the Bank officials overlooked all these important aspects and granted these loans to them without going into any technical requirements as relating to release of Term Loan facilities to a borrower. The banks acted as mute spectator to unapproved diversion which was almost happening evidently in all banking transactions. Optionally Convertible Debentures ICICI Prudential Asset Management Company Limited had given a sum

of INR 74 crores approximately on account of debentures issued by Amrapali Sapphire Developers Private Limited during the financial year 2011-12. These debentures carried interest rate @ 17% Per annum. There has been a gross non-compliance of Investors cum-shareholders agreement dated 16th Day of December, 2010 with respect to following: a. Non appointment of directors b. Non operation of bank account by joint signatory of investor c. Non utilization of funds as per clause no. 7.5 of Investment cum

Shareholders Agreement dated 16th December, 2010. d. Sale of flats at less than Rs 3,420 per square feet of saleable area

and many other clauses of this agreement neither followed nor ensured by the Investor.

It is very clear that a Debenture Subscription Agreement and Investment cum Shareholders Agreement both dated 16th day December, 2010 were merely sham documents which were never complied with and both i.e. Amrapali group of Companies and ICICI Prudential Asset Management Company Limited were in connivance with each other in diversion of funds for non-specified purposes.

Foreign investment The company has received the sum of Rs. 140 Crores during the financial year 2012-13 from IPFFI Singapore PTE Limited under Foreign Direct Investment Scheme. As per FEMA rules this amount was to be

invested in Real Estate construction projects only. The amount received in Axis Bank of Rs.85 Crores was transferred to Amrapali Centurian Park Pvt. Ltd. (ACPPL) as under:

On 7.8.2012 - Rs.5 Crores On 8.8.2012 - Rs.50 Crores On 18.8.2012 - Rs.30 Crores ------------------- Total = Rs. 85 Crores ------------------ ACPPL on receiving Rs.85 Crores, allotted Equity Shares worth Rs. 85 lakhs to ASCPL and balance Rs.84.15 Crores were treated as Share Premium Account. There is no Valuation Report available as to how

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this share premium of Rs. 84.15 Crores has been calculated. This transfer of fund by ASCPL to ACPPL is absolutely violative of FDI Rules and Agreement. The Second amount received in BOB Escrow Account was transferred from 8.8.2012 to 28.9.2012 on various dates in the Account of BOB, Sansad Marg Branch, and New Delhi and also used for payment of Term Loan Instalments of OBC and Bank of Maharashtra for repayment of their Term Loan instalments. It will therefore, be observed from the above, that the Company (ASCPL) did not use money for the project for which it was received from IPFII Singapore but transferred Rs.85 Crores to Amrapali Centurian Park Pvt. Ltd. and Rs.55 Crores to repay Bank Loan Instalments and Repay the outstanding creditors provided for in

the books and standing in the books. The said payments made by ASCPL are, therefore, in contravention of FDI norms and rules and for which the money was brought in India. Moreover, ASCPL has paid interest of Rs.58.81 Crores @ 17% (which is a highly abnormal rate) so far to IPFII, Singapore during the last 3 years. - Year 31.3.2013 Rs.14.41 Crores Paid - Year 31.3.2014 Rs.22.20 Crores Paid - Year 31.3.2015 Rs.22.20 Crores Paid ---------------- Total = Rs.58.81 Crores ----------------

a) It is very clear that all such violations are being made with the knowledge of the IPFII Singapore and they are in Connivance with the ASCPL.

b) As per Schedule 4 of the agreement CCD’s (Compulsory Convertible Debenture) were subject to the following terms and conditions.

1) On expiry of 5 years from the date of allotment, the CCD shell

be fully monetarily and compulsorily converted into class B shares of the company

2) The CCD’s shall be converted into such number of class B shares arrived that by dividing the aggregate face value of CCD’s by Rs.2,734.30.

But these CCD’s were not converted into class B shares as per agreement but entered into another agreement to extend the term of CCD’s from 5 years to 7 years. By this way , The fund has continued to be a creditor otherwise after conversion to equity, it will not be eligible for interest and principal. Current liabilities not payable

Security deposits from contractors and intercorporate deposits accepted from non group companies are in the nature of unsecured loans. There have been no business transactions with the company except movement of funds. The list of such liabilities is under preparation which are not payable.

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Inter-corporate deposits accepted by the Group are Non-Interest- bearing unsecured loans. There are no business transactions with these companies. It is not understood as to why a person will give interest free loans without any considerations. Thus, we are of the view that these are accommodation entry only in lieu of consideration given to them indirectly by the management.

Hence, we are of the view that all the aforesaid amounts are not payable.

In our opinion, this is a case of Money Laundering as the generic term of Money Laundering is defined to describe the process by which Criminals disguise the original ownership and control the proceeds of the criminal conduct by making such proceeds to have derived from a

legitimate source.

Money Laundering is the process of concealing the origin of money obtained illegally by passing it through a complex sequence of Banking transfers or commercial transactions. The main process is accounting for the proceeds without raising the suspicion of law enforcement agencies. In the instant case too, Amrapali Group of Companies have defied all laws to transfer small and big amounts from one account to another to a third and so on and so forth on a single day with the connivance of the Bank officials and financial institution officials and thereby Committed act of Money Laundering on a large scale.

6. Lands allotted to consortium and flats sold to homebuyers

Several companies were formed with consortium partners which were just dummy companies and were part and parcel of Amrapali group. To comply with the condition of minimum 3 partners, these companies were created in the names of office boys and peons. Technically the allotments at the initial stage itself were void ab-initio. In most of the companies, the amount received from homebuyers was sufficiently more than the amount spent on construction and for payment of land. Had the promoters paid amount received from homebuyers to the authorities on time there would not have been any liability of land dues. Further there was no need to avail any loan from banks, Private equity funds as well as from investors. The sole objective of taking loan was to divert the funds to other ventures to create assets in the name of family

members, make movies, to satisfy the ambitious desires of family members and to build hospital. Villas were bought at tourist destinations for fun at the expense of middle class and low income group peoples abodes. Many parties joined them in the looting of hard earned money of homebuyers to take their share of the cake in the form of unbelievable return on investment, profits, land, FSI and flats and facilities at throwaway prices. Bogus expenses were booked and the promoters were having no fear of the law of the land. They could execute many transactions of transfer of properties, booking of expenses, funds transfer, even when the petition was accepted and was pending for disposal before the Honourable Supreme Court. Companies in which land was allotted to consortium partners are as under:

• Amrapali Leisure Valley Pvt Ltd

• Amrapali Centurian Park Pvt Ltd

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• Amrapali Homes

• Amrapali Grand

• Amrapali Eden Park Developers Pvt Ltd - Iftikar Ahmed and Rakesh Mahajan jointly hold 49% in the said company

(i) There is no substance in the nature of transactions carried

on by the company. The funds are merely routed from one entity to another for hidden objective.

(ii) Banks were financing not the construction activity but loans and advances to third parties.

(iii) Mr. Rakesh Mahajan and Mr. Ifthikar Khan were grossly involved in the wrongdoings in the company’s project and equally conspired in the delay and diversion of home buyers funds and they being 49% shareholders and active directors in the company should be held responsible for the deficit in

completion of the project amounting to Rs.20 crore.

Further, Amrapali Infrastructure had given an advance of Rs.1.5 crore to Nirala Infracity Ajmer Pvt Ltd - a project controlled by Rakesh Mahajan and Iftikar Ahmed. This amount is recoverable from Nirala Infracity Ajmer Pvt Ltd.

7. Companies created solely for the purpose of routing funds

The intention of Amrapali Group was to divert funds to other projects/income sources in the name of family members of the promoter and the trusted employees, friends of the promoters as well of the executives, auditors and their relatives. For this purpose, several companies were incorporated for routing funds. These companies did not have any material transaction as per the main object for which they were incorporated and did not have business since their incorporation. These companies did not have any employees also. These companies are shell companies used only to route interest free funds from one company to another. List of such companies identified so far is as under:

a) Jhamb Finance & Leasing Private Limited - The company didn’t have any operations/income/expenses except for FY 2014-15 and had only movement of funds from one related party/interested party to the other. It means the company was used merely for routing the funds and not for doing any business. Since incorporation, loans (liability) and loans & advances (asset) increased as under, without booking of any expense/income:

As on Loans (liability) Amount (RS. )

Loans & advances (asset)

Amount (RS. )

1st April 2014 83,00,000 1,12,39,917

1st October 2014 35,33,00,000 34,67,39,917

31st March 2015 312,93,32,906 313,11,55,392

31st March 2016 859,77,32,906 863,58,50,776

31st March 2017 877,57,22,906 883,24,00,776

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It is pertinent to note that starting from the FY 2015-16, the loans given and taken increased three folds without having any corresponding increased on the income and assets side on account of interest. Whereas starting from FY 2015-16, the employees started leaving the organization and the construction at sites was at standstill. The directors in the company are having no knowledge or an iota of idea about the transactions carried out. The company’s operation were under the controlled and supervision of CFO Chander Wadhwa.

Further, it received Rs.18.95 crore from Suspense- unidentified persons/parties and paid Rs.24.41 crore to Suspense- unidentified persons/parties, leaving balance payable of Rs.5.46 crore to Suspense- unidentified persons/parties. The said transactions of Rs.18.95 crore

details were not made available to us.

b) Gaurisuta Infrastructure Private Limited – It lent and received funds from several parties without doing any business. Details of Rs.25 crore received from third parties are as under:

S.no. Name of party Amount Since date

1 Ams Powertonic Pvt Ltd 50,00,000 07-05-2012

2 Anuj Buildcon Pvt Ltd 50,00,000 10-05-2012

3 Asv Garments Pvt Ltd 50,00,000 07-05-2012

4 Bij Buildcon Pvt Ltd 50,00,000 10-05-2012

5 Carona Infra Projects Pvt. Ltd. 2,20,00,000 Received on various dates From 16-05- 2013 to 16-09- 2014

6 Charuvilla Apartment Behl 8,31,000 08-07-2011

7 Financial World Pvt. Ltd 57,00,000 11-07-2012

8 Function Distributors Pvt. Ltd. 50,00,000 03-08-2012

9 Green Value Agro Farm Pvt. Ltd

30,00,000 01-08-2012 & 03-08-2012

10 Infotech India Pvt Ltd 1,00,00,000 03-07-2012

11 Kabir Enterprises Pvt Ltd 50,00,000 06-06-2012

12 Ladli Ji Enterprises Pvt Ltd 2,00,00,000 15-05-2012

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The above companies were used for the purpose of money laundering and required a detailed investigation. Further the amount as shown above is not payable to the party as indicated against. None of the parties as above has lodged any claim so far therefore it strengthens our charge.

13 Leisure Buildcon Pvt Ltd 50,00,000 25-04-2012

14 M/S Naksha Properties Pvt.Ltd

84,00,000 19-04-2012

15 M/S Shravni Infrastructre 3,20,00,000 Received on various dates From 19-04- 2012 to 11-07- 2013

16 M/S Soulful Heart Solutions 22,00,000 Received on various dates From 19-04- 2012 to 17-07- 2013

17 Ram Rahim Trading Co. Limited

70,00,000 01-08-2012 & 02-08-2012

18 Randhir It Solutions Pvt Ltd 50,00,000 07-05-2012

19 Rayan Garments Pvt Ltd 1,40,00,000 26-04-2012 & 07-05-2012

20 R N Sangahi 24,37,480 11-04-2011 ; 02-07-2011 & 18-12-2012

21 S A Corrugators Pvt Ltd 20,00,000 01-08-2012

22 Sadbhavana Properties Pvt Ltd 4,00,00,000 08-06-2012

23 SpbPropcorn Pvt. Ltd. 50,00,000 25-04-2012

24 Technicare Biomed India Pvt Ltd

40,00,000 25-04-2012

25 Utkarsh Properties Solution 28,00,000 26-04-2012 ; 16-09-2014 & 17-09- 2014

26 Vendure Agents Pvt Ltd 50,00,000 01-08-2012

27 Zarf Infra. Development Pvt Ltd

1,45,00,000 Received on various dates From 26-04- 2012 to 04-08- 2012

28 Zoom Building Materials Pvt Ltd

1,00,00,000 10-05-2012 & 11-05-2012

TOTAL 25,08,68,480

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As on 31st March 2017, the company is having interest free loans and advances amounting to Rs.703 crore without any movement with a paid up share capital of merely Rs.0.01 crore and the directors are employees and junior employees of statutory auditors. The company is used as a conduit in diverting home buyer funds to Amrapali Healthcare (Noida Hospital) and buying shares in different group companies from the funds of home buyers. The entire shareholding should be attached and be made up for sale.

c) Neelkanth Buildcraft Private Limited - It was formed in the year 2013 having a capital of Rs.0.01 crore for the specific purpose of buying shares from JP Morgan. Mr Chandan Kumar, director of Neelkanth Buildcraft Private Limited is an office boy in the office of Statutory Auditor of Amrapali Group, Mr Anil Mittal and the other director Mr

Vivek Mittal is nephew of Statutory Auditor Mr Anil Mittal & does small time jobs. d) Stunning Construction Private Limited – The Company is holding 19.75 % shareholding in LA Residentia Developers Pvt. Ltd. is a consortium partner in the project since beginning. LA Residentia project has 3200 flats LA Residentia should surrender either 19.75% of land or 632 flats. It was formed only for payment of Statutory dues of Amrapali Group of Companies, its directors and their relatives including senior employees of the Amrapali Group of Companies. The company was under the direct control of CFO Chander Wadhwa and Company Secretary Pankaj Mehta. The amount of taxes paid by the company on behalf of promoters, directors, executives and their family members is Rs.17.43 crore (net) and gross up is Rs.24.9 crore is recoverable from promoters, directors, executives and their relatives. e) Kapila Buildhome Private Limited – The company did not undertake any business. A sum of Rs.392.68 Crores was advanced as loan or advances to the various group Companies. Further, it accepted non-interest bearing inter corporate deposits from non group companies with whom no other transactions were undertaken. We are of the view that these are accommodation book entries only in lieu of consideration given to them indirectly by the management. List is as stated hereunder:

Name Amount In Rs.

Date of Acceptance

Ample Hotels and Resorts 20,000,000 20/04/12

Justify Vanijya Private Limited 4,000,000 22/06/12

Ladli ji Enterprises Private Limited

5,900,000 25/04/12

Madhav Fincap Private Limited 15,000,000 24/04/12

Pan Realtors Private Limited 100,000,00 0

23/08/10

Total 144,900,00 0

The above companies were used for the purpose of money laundering and required a detailed investigation. Further the amount as shown above is not payable to the party as indicated against. None of the

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parties (except PAN Realtors that also when we requested them otherwise they were silent for last 8 Years) as above has lodged any claim so far therefore it strengthens our charge. f) Rudraksh Infracity Private Limited- Shri Chandan Kumar, an office boy and employee of CA Anil Mittal, Statutory Auditor and Shri Atul Mittal, relative of CA Anil Mittal were inducted in the board. The basic purpose of this Company was only for money laundering and was incorporated to receive Funds from Mannat Buildcraft Private Limited. After receiving money (Rs.25 Cr.) from Mannat Buildcraft Private Limited, the same was transferred to J.P. Morgan Investments for purchase of Equity Shares of Amrapali Zodiac Private Limited at an exorbitant price. There are no transactions before or after these transfers of money and the same have been camouflaged to make it look with business transactions on the basis of the Valuation Report.

It was also observed that there are no transactions at any date during the period but the bank account has only been used for diversion of funds.

g) Mannat Buildcraft Private Limited - Shri Pankaj Mehta is Company Secretary of Amrapali group of Companies and now Partner of Mr. Chander Wadhwa, CFO in Saffron Consultants LLP and Mr. Ashish Jain who is also Partner of Mr. Chander Wadhwa, CFO in Saffron Consultants LLP, were inducted in the board. The basic purpose of this Company was only for money laundering (Rs.120 Cr.) and was incorporated to receive Funds from Amrapali Zodiac Developers Private Limited.

The whole racket of money laundering and receiving money from these Companies i.e. Mannat Buildcraft Private Limited, Rudraksh Infracity Private Limited and Neelkanth Buildcraft private Limited are the brain child of Mr. Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor of Amrapali Group of Companies. Both these Companies are controlled by both of these persons and had been formed only for this Money Laundering Business. There are no transactions before or after these transfers of money and the same have been camouflaged to make it look with business transactions on the basis of the Valuation Report.

h) Amrapali Magadh Developers Pvt Ltd - The company has not

carried out principal business activities. There is no bank account. The purpose of creating the company is not clear. The shareholders paid the share application money in cash. The company is a dormant company & did not have any significant transaction.

i) Amrapali Mahi Developers Pvt Ltd - The company received share capital in cash and all the expenses were paid in cash only. Mr. Mahendra Singh Dhoni, husband of Ms. Sakshi Singh Dhoni (director of company) was the brand ambassador of Amrapali group and have carried out a number of transactions with respect to endorsement of Amrapali group’s projects. He entered in agreements with other group company.

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j) Amrapali Spring Valley Pvt Ltd- the company is created for diversion of funds and Rs.186 crore was diverted from Amrapali Smart City Pvt Ltd to buy shares of Ultra Home Construction Pvt Ltd and shareholders are promoter directors without doing any investments.

Most of the above companies will qualify to be NBFC, which was reported neither by the management nor by the statutory auditors (except Jhamb Finance & Leasing Pvt Ltd). It is recommended that RBI shall investigate the affairs and compliances of the above companies.

Amrapali Media Vision Pvt Ltd was also incorporated with a purpose to route funds for making movies to satisfy the ambitious desires of directors/family members. Most of the marketing and advertisement business of the group companies was given to the company with a profit

margin on the cost. The group could have done this advertisement directly. But because there was need to make movies, the funds were diverted to the company directly in the form of loan as well by availing the services indirectly from these companies. The Company was freely availing funds of homebuyers from other group Companies in the form of ICD and spent it on making movies.

Hawthrone Intellect Management Solutions Pvt Ltd –Company was providing Management Consultancy Services (Recruitment Services) and taking nominal professional fee. In turn, the Company has incurred more expenses in the last few years on account of Salary, Wages and other administrative expenses thereby resulting in net loss to the Company which has accumulated to INR 2.33 Crores as on 31.03.2015.

All these entries seem to be in nature of dubious entries and no voucher are available. This amount of loss of 2.33 Crores needs to be recovered from the Directors as they have wiped of the amount of the Home Buyers funds diverted as Home Buyers Money to the Company. Apart from the above companies, there were several companies which were incorporated by employees, auditors of Amrapali group. Shareholding as well as investment/assets of these companies shall be attached 8. Companies created for building assets

The following companies were created by the Group for building assets from homebuyer funds without contribution of any rupee by promoters and their relatives. The shareholding is held by the group companies and/or by shell companies and/or the trusted partners including individuals.

• Ultra Home Construction Pvt Ltd- Shareholders did not bring capital of their own, but used funds of home buyers in other entities/projects to pay for allotment of shares in UHCPL. Mr. Anil Kumar Sharma was allotted shares at premium for an amount of Rs.22,82,40,810 on 4th Nov 2010 and Rs.25,84,05,470 on 2nd March 2011 by adjusting receipts from Amrapali Infrastructure Ltd which

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further received from Amrapali Sapphire Developers Pvt Ltd, which received from homebuyers. Few instances are hereunder:

Received in Amrapali Sapphire Developers Pvt Ltd primarily from home buyers

Transferred to Amrapali Infrastructure Ltd

Transferred to Ultra Home Construction Pvt Ltd

INR 5.47 crore as on 4th March 2010

INR 2 crore on 5th March 2010

INR 1.90 crore on 5th and 6th March 2010

INR 2 crore on 8th March 2010

INR 1.13 crore on 8th March 2010

INR 2 crore on 9th March 2010

• Amrapali Homes Projects Private Limited –It has been observed that Mr. Prem Mishra was given INR 12.40 crore (under several ledgers) for purchase of land since 1st April 2008, out of which INR 10 crore are still receivable from him. The project was sold by Prem Mishra to various parties and received amount in his name. We are yet to complete the audit of Prem Mishra in Indore project. The company transferred funds to and fro with several parties which do not have any substance. It has several small and big debit balances as on date.

• Amrapali Biotech India Pvt Ltd – Land & Building, Plant & machinery, a factory at Rajgir (Bihar)

• Amrapali Healthcare Pvt Ltd – Hospital at Noida

• Noida Texfab Pvt Ltd – Amrapali International Institute of Hotel management, Noida

• Neelkanth Buildcraft Pvt Ltd – bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd.

• MVG Techno Consultants Pvt Ltd – Tower at Noida

• Amrapali Infrastructure Pvt Ltd – recast factory at Greater Noida

• Sangam Colonisers Pvt Ltd- The Company has received an amount of Rs.10.51 crore as advance against plots. However, despite repeated requests we have not been provided with the complete data base reflecting Number of Plots, Name of the buyers, Amount of Sale Consideration, Amount Received, Amount Outstanding, Unsold plots etc. Hence, we are not in the position to comment upon the same. As informed to us during the course of audit, the remaining portion of the land available with the Company has been attached by Hon’ble Supreme Court of India and put to auction by DRT.

• Navodaya Properties Pvt Ltd – Building corporate tower 2, Noida

• Amrapali Power & Cement Pvt Ltd – Land from Charu Rai yet to be identified, Land from UPSIDC yet to be identified.

• Amrapali Buddha Developers Private Limited – Shopping complex cum Mall at Gaya

• MSB Software Technology Private Limited – Tower 1, Noida

• Gaurisuta Infrasolution Private Limited –Flats in Amrapali Silicon City Private Limited, booking of bogus expenditure of Rs.1.07 crore.

• Amrapali Hospitality Services Private Limited- Hotel at Deogarh, Jharkhand

• Mums Mega Food Park Private Limited- FMCG Factory at Buxar, Bihar, Land Building and Plant & machinery RudrakshInfracity Private Limited - bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd.

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• MannatBuildcraft Private Limited - bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd.

Serious Observation Our investigation reveals that this company has been used to perpetuate a fraud enabling JP Morgan Investments to sell its shares of Amrapali Zodiac Pvt. Ltd. to other Group Companies of Amrapali group namely, RudrakshInfracity Pvt. Ltd. and Neelkanth Buildcraft Pvt. Ltd. at a valuation amounting to INR 140 crores which is not justified. This company has been used as a tool to transfer the money to other Amrapali Group companies. The following persons seems to be involved in this organized fraud:

i. Amrapali Zodiac Developers Pvt. Ltd. ii. RudrakshInfracity Pvt. Ltd. iii. Neelkanth Pvt. Ltd. iv. JP Morgan Investments v. MannatBuildcraft Private Limited vi. HDFC Bank

Chander Wadhwa, Adhikari dash and Anil Mittal incorporated 27 Additional companies identified so far, which may be many more, and became consortium partners from the funds of the home buyers. In the process, they appointed peons and junior employees of auditors office as directors who were totally unaware of the transactions. These companies were used for depositing cash during demonetisation. The companies were formed/acquired for routing funds and were not in any business. These were sham companies whose share capital was mostly subscribed in cash and the transfer of shares was also in cash leaving no audit trail.

9. Misuse of funds by directors involved in scam The directors and executives colluded with each other and diverted homebuyers funds. Directors received huge amount of money in the form of salary as well as professional fee, both together. A person could have been either in whole time employment of the company or render services as consultant. However, a person cannot enjoy salary income and earn professional income at the same time and also both cannot be earned at the same time from same company. But directors of Amrapali group withdrew sums using all possible ways, be it salary, professional fee, reimbursement of expenses, use of luxury cars or loans and

advances to self/relatives/self controlled entities/trusted partners or booking of bills of self controlled entities/trusted partners. Further professional fee was booked without any agreement or proof of service. It had no correlation with the amount of work done by the directors. Professional fee was booked as per wish and desire of directors and did not have any fair basis. There were standing instructions to transfer company funds to the individual directors bank accounts when the balance was reaching to the specified set minimum balance limit. The Professional fee paid to the directors, relatives of directors, and senior managers was a unique way of diverting money. Huge amounts were paid without any agreements at the whims and fancies of the

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directors and managers. Moreover it was tax free and the tax liability was discharged by another group company. The whole of professional fee received by the directors (as stated hereunder) is recoverable from them. (Volume –II, Page no 416-417).

Professional fee was under disclosed to the tune of is Rs.33.4 crore (Anil Kumar Sharma 8.75 cr + Shiv Priya 24.65 cr) in affidavits filed on 3rd Dec 2018 (Volume –II, Page no 414-415). The Difference was found of from the affidavit file and the tax returns. It shall be noted that directors did not share company wise receipts in the affidavit and also books of accounts of directors were not provided. Directors along with their trusted partners and relatives cheated and did criminal breach of trust with the home buyers. They transferred the funds from the projects to the companies which were closely held by the directors, their family members and/or by their trusted associates. The objective was to create assets in the closely held companies and leave the home buyers on the road. For example, Eklavya Building Solutions Pvt Ltd acquired property in Goa amounting to is Rs.2 crore through funds received from Amrapali group, 27 other companies further invested Amrapali funds in Amrapali projects (For example Many Flats in IT Park at Greater Noida); The directors spent homebuyers funds on wedding of daughter of

director, foreign travels, expensive watches, jewellery, purchasing luxury cars for use by directors. The homebuyers funds were also used for investment in mutual funds, creating personal properties , payment of housing loans, investment in shares & securities. The directors created discreet projects for personal income for example In the name of Amrapali Hospitality a hotel at Deogarh was constructed out of funds received from homebuyers without their knowledge of it. They used homebuyers funds in the form of construction of assets for other projects, examples constructed mall at Muzzafarpur, Bareilly etc, Hotel at Deogarh, Bareilly, Hospital at Noida etc. Few particulars of diversion of funds received from Amrapali group are as under:

Name of director Professional fee received

(as per affidavit)

Anil Kumar Sharma 29,13,23,580

Shiv Priya 26,43,64,571

Ajay Kumar 5,76,90,240

Suvash Chandra Kumar 5,11,21,752

Amresh Kumar 68,11,110

Total 67,13,11,253

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By Anil Kumar Sharma

Particulars Amount

Amount Paid for Housing Loan of Plot no 88, 2057/7 resi Magos Village, Goa

3,137,000

Amount Paid for Housing Loan of Jaypee Green E-11 Plot, Sector 128, Noida

3,796,452

Amount paid for purchasing shares 59,600,000

Purchased Jewellery 33,921,575

Purchased Car 5,613,572

Investment in LIC and Star Union Daichi – Insurance Policies

18,238,326

Expense done during wedding of Daughter

Swapnil Shikha

13,500,000

Transfer to Surabhee Advertising Maharani Bagh Property

38,500,000

Transfer to Quality Synthetic Industries Limited Surekha Group

30,000,000

Transfer to others (Chander Wadhwa, Shashank Manohar, etc)

18,600,000

transfers to family members 107,310,878

Payment by Stunning Construction Pvt Ltd of direct tax

44,510,320

Total 376,728,123

By Shiv Priya

Advance against property to Gaursons India Ltd 51,00,000

Bathroom products and Marble for home 38,92,668

Furniture 74,76,644

Helicopter services 6,20,000

Watches 19,45,500

Lights, art designing, Bed linen 38,26,290

Jewellery 33,44,475

Quality Synthetic Industries Ltd 1,50,00,000

Cozy Habitat Builders Pvt Ltd 15,00,000

SN Dubey 10,00,000

Stamp duty for registry of Jaypee Green Villa 32,50,000

Payment for LIC 3,49,96,654

Investment in mutual funds 8,86,50,409

Payment of loan for Pearl Gateway Towers 30,84,952

Payment of loan for Jaguar 23,13,800

Payment of loan from bank of Maharashtra 46,65,200

Total 18,06,66,592

By Ajay Kumar

Yogesh Chand 25,00,000

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Transferred to Sweep Account 1,33,00,000

Ozone GSP Infratech 50,00,000

Quality Synthetic Industries Ltd 40,00,000

Investment in mutual funds 2,25,00,000

Payment of housing loan for IRS Colony, Abhay Khand, Indirapuram 56,31,000

Payment of housing loan for Pelican Villa Jaypee Green 37,55,784

Payment for LIC 2,56,53,384

Total 8,23,40,168

Funds transferred from Amrapali group of companies was withdrawn in cash from personal accounts of directors and diverted to undisclosed people. In case of Anil Kumar Sharma, it is seen that an amount of is Rs.10.38 crore was withdrawn from June 2008 to May 2012 within a few days of transfer to bank account of Anil Kumar Sharma in Bank of Maharashtra. Several times, description of source of receipt or person to whom payment was made were not clear and such sources or application could not be identified. Several companies were incorporated to create assets or to hold investment in the group companies or outside the group companies having assets. The promoter directors or their family members became the shareholders in these companies without investing any paisa. Homebuyer funds were diverted to these companies and then these companies bought shares from the funds so diverted in the companies having assets for example Noida hospital in Amrapali Healthcare Pvt Ltd, 5 star hotel in Ultra Home Construction Pvt Ltd, Institute of hotel management in Noida Texfab Pvt Ltd etc. Investment from JP Morgan and other funds availed for the purpose of construction which were not required at all because the funds paid by homebuyer were in most of the cases were higher than the cost of construction and land payments, were diverted on the day of receipt itself to the closely held companies and to the companies created for the sole purpose for using them as a conduit for diversion and to the suppliers of bogus supplies. It is very surprising that when funds were borrowed a high rate of interest was paid ranging from 14 -18% to so called investors and the same investors were given loans to their group companies without charging any interest. In such a scenario, the

possibility of taking cash in the form of interest cannot be ruled out. Directors sold number of flats at low prices as compared to the prices existing on or near to those dates and on which rates sales were made to other home buyers. It is further submitted that some of the flats have been sold even at rates as low as is Rs.1,000 - is Rs.1,400 per square feet which is even lower than the cost of construction. Possibility of taking cash outside the books of accounts cannot be ruled out. Instances of misuse of funds are hereunder: Anil Kumar Sharma Mr. Anil Kumar Sharma received funds from Amrapali group of Companies which was used for acquiring personal properties, as stated

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hereunder:

a. Property located at Plot no 88, 2057/7 Resi magos village Goa- (Housing loan was paid for this property out of amount received from Group companies)

b. Property located at Jaypee Green E-11 Plot, Sector 128, Noida - (Housing loan was paid for this property out of amount received from Group companies)

1. Mr. Anil Kumar Sharma purchased shares and securities amounting to is Rs.5.96 crore out of moneys received from Amrapali group Companies.

2. Mr. Anil Kumar Sharma purchased following assets out of amount received from Amrapali group Companies:

a. Jewelries worth is Rs.3.39 crore b. Car through AMP Motors: is Rs.0.56 crore c. Life Insurance Policies: is Rs.1.82 crore (based on bank

statements available, although in total amount invested in insurance policies amounted to is Rs.4 crore)

3. Mr. Anil Kumar Sharma made following personal expenses of is Rs.1.35 crore for wedding of his daughter out of amounts received from Amrapali Group of Companies: a. Payment made to Event Management Companies: is Rs.0.90

crore b. Payment made to hotels: is Rs.0.45 crore

4. Mr. Anil Kumar Sharma made payment of is Rs.8.71 crore to following third parties out of amounts received from Amrapali Group of Companies: a. Chandan Homes Pvt Ltd: is Rs.10,00,000 b. Kalpana Kumari: is Rs.10,00,000 c. Sapphire Digital Printers: is Rs.25,00,000 d. Shashank Manohar: is Rs.36,00,000 e. Rajesh Malhotra : is Rs.20,00,000 f. Manas Nursing Home: is Rs.25,00,000 g. Amresh Kumar Anand: is Rs.27,00,000 h. Surbhaee Advertising Pvt Ltd: is Rs.3,85,00,000 i. Quality Synthetic Industries Limited: is Rs.3,00,00,000 j. Chander wadhwa: is Rs.25,00,000 k. Mrityunjay Kumar: is Rs.8,00,000

5. Mr. Anil Kumar Sharma made payments of is Rs.10.73 crore to his family members out of amounts received from Amrapali group of Companies: a. Deepshikha (Daughter): is Rs.93,50,000 b. Ritik Kumar Sinha (Son in Law): is Rs.1,40,00,000

c. Swapnil Sikha (Daughter): is Rs.8,39,60,878 6. Mr. Anil Kumar Sharma received RS. 6.55 crore in his bank account from Amrapali Hospitality during the month of June and July, 2018 for sale of Bareilley mall to Vaishnavi Vahini Mount Life Hospitality Pvt Ltd. The said amount was immediately disbursed to family members:

a. Self: Rs.4,77,00,000 b. Pallavi Mishra (Wife) Rs.60,00,000 c. Swapnil Shikha (Daughter) Rs.48,00,000 d. Raj Dulari devi (Mother) Rs.52,00,000 e. Ranjit Kumar Rs.9,90,000

7. Unexplained cash deposits of Rs.5.73 crore were received by Mr. Anil Kumar Sharma in his bank accounts from November to December, 2016 i.e during demonetization period.

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8. Mr. Madan Mohan Sharma (Father of Anil Kumar Sharma) received Rs.2 crore from Amrapali Grand during month November and December, 2007. 9. Unexplained cash deposits of Rs.0.13 crore were received by Mrs. Raj Dulari Devi (Mother of Anil Kumar Sharma) during from April to July, 2018. 10. Following are the details of lockers held by family members of Anil Kumar Sharma:

• Pallavi Mishra – a) in UCO bank account no 1557010000618 b) in HDFC Bank account no 50100162844761 locker no 9250500004564240

• Raj Dulari Devi in Yes Bank account no 8599300000716, Locker no 11606082018

11. There are substantial transactions with Amrapali Aadya Trading in his bank account of IndusInd Bank Account no.100028567700 as per details given below:

Date Particulars Receipts Payments

16/07/2014 Neft-Amapali Aadya Trading 2,500,000 -

14/08/2014 Neft-Amapali Aadya Trading 1,000,000 -

14/11/2014 Neft-Amapali Aadya Trading 2,500,000 -

21/01/2015 Neft-Amapali Aadya Trading 500,000 -

15/04/2015 RTGS- Amapali Aadya Trading - 1,000,000

15/04/2015 Neft- Amapali Aadya Trading - 1,000,000

24/04/2015 RTGS- Amapali Aadya Trading - 2,000,000

29/04/2015 RTGS- Amapali Aadya Trading - 1,000,000

06/05/2015 RTGS- Amapali Aadya Trading - 2,000,000

08/05/2015 RTGS- Amapali Aadya Trading - 2,000,000

13/05/2015 RTGS- Amapali Aadya Trading - 2,000,000

27/05/2015 RTGS- Amapali Aadya Trading - 2,000,000

19/05/2015 RTGS- Amapali Aadya Trading 18,500,000 -

23/06/2015 RTGS- Amapali Aadya Trading - 1,000,000

30/07/2015 RTGS- Amapali Aadya Trading - 1,500,000

21/08/2015 RTGS- Amapali Aadya Trading - 2,000,000

25/08/2015 RTGS- Amapali Aadya Trading - 2,500,000

27/08/2015 RTGS- Amapali Aadya Trading - 400,000

27/08/2015 RTGS- Amapali Aadya Trading - 3,600,000

09/09/2015 RTGS- Amapali Aadya Trading - 1,500,000

20/08/2016 RTGS- Amapali Aadya Trading 1,500,000 -

Total 26,500,000 25,500,000

• Note: He has not disclosed his association With Amrapali Aadya Trading in

94

his various affidavits furnished to the Hon’ble Supreme Court of India.

Shiv Priya 1. Mr. Shiv Priya received funds from Amrapali group of Companies which was used for acquiring personal properties, as stated hereunder:

a. Property located at L 801, Pearl Gateway Towers, Sector 44, Noida -(Housing loan was paid for this property out of amount received from Group companies) b. Vehicle- Jaguar XJ having registration number UP16BA2001- (Loan was paid out of amount received from Group companies)

2. Mrs. Sonali Suman (Wife of Shiv Priya) made investments in different mutual funds amounting to Rs.8.86 crore out of amounts received from Amrapali group of Companies. 3. Mr. Shiv Priya purchased following assets out of amounts received

from Amrapali group of companies: a. Jewelleries: Rs.33,44,475 b. Life Insurance Policies Rs.3,49,96,654 c. Watches Rs.19,45,500

4. Mr. Shiv Priya made following personal expenses of Rs.2.74 crore out of amounts received from Amrapali group of companies:

a. Expenditure made for Residential property (Marbles, bathroom products, lights etc) Rs.56,53,268 b. Helicopter services Rs.6,20,000 c. Art designing Rs.10,00,000 d. Bed Linen, Table linen and art designing Rs.20,36,290 e. Wooden doors and Furnitures: Rs.74,76,644 f. Payment made for clearing dues of American Express Credit Card: Rs.1,06,78,273

5. Mr. Shiv Priya made payment of Rs.1.75 crore to following third parties out of amounts received from Amrapali Group of companies:

a. Quality Synthetic Industries Limited Rs.1,50,00,000 b. Cozy Habitat Builders Pvt Ltd Rs.15,00,000 c. S N Dubey Rs.10,00,000

6. Unexplained cash deposits of Rs.6 crore were received by Mr. Shiv Priya in his bank accounts during December, 2016 i.e during demonetization period. 7. Mrs. Sonali Suman (Wife of Shiv Priya) re-paid loan from bank amounting to Rs.0.45 crore out of amount received from Amrapali group of Companies. It is to be seen what the purpose was for which the bank granted loan for 6 months for the said amount. 8. Shiv Priya is holding demat account no 1206420001934748 and

Sonali Suman is holding demat account no 1206420001936308 with HDFC bank, of which details have not been provided to us. 9. Mrs Sonali Suman holds mutual funds with HDFC mutual funds Folio no 11707520/73, which have market value amounting to Rs.0.65 crore as on 28th February 2019. 10. A sum of Rs.0.45 crore was paid by M/s Royal Golf Link City Projects Private Limited to Mr. Shiv Priya during the financial Year 2016-17 which was not declared by him in the various Affidavits filed in the Hon’ble Supreme Court. 11. There was an income tax search in the premises of Amrapali Group of Companies and the residence of the directors in the month of 7th and 8th August, 2013. During this search operation unaccounted cash was seized from the residence of directors namely Shri Shiv Priya amounting to Rs 1 Crores. Unexplained jewellery was also seized from

95

the residence of Mr. Shiv Priya amounting to Rs 0.58 Crores. Thus, it apparently shows that he has unaccounted cash. Ajay Kumar

1. Mr. Ajay Kumar received funds from Amrapali group of Companies which was used for acquiring personal properties, as stated hereunder:

a. Property located at Plot no: A-014 Savanna Villas, Jaypee Greens Sector-128, Noida; the property was not disclosed in affidavit submitted on 3rd December, 2018 -(Housing loans was paid for this property out of amount received from Group companies) b. Property located at IRS colony, Abhay Khand, Indirapuram, Ghaziabad- Rs.1.38 crore. c. Property located at Plot No: A-014, Pelican Villa Jaypee

Green Noida 201301- Rs.1.11 crore. 2. Mrs. Seema Kumari (Wife of Ajay Kumar) made investments in different mutual funds amounting to Rs.2.25 crore out of amounts received from Amrapali group of companies during August to September, 2018. 3. Mr. Ajay Kumar made investments in Life insurance Policies of Rs.2.59 crore out of amounts received from Amrapali group of companies. 4. Mr. Ajay Kumar made payment of Rs.1.25 crore to following third parties out of amounts received from Amrapali Group of Companies:

a. Yogesh Chand Rs.25,00,000 b. Ozone GSP Infratech Rs.50,00,000 c. Quality Synthetic Industries Ltd Rs.50,00,000

5. Mr. Ajay Kumar made investment of Rs.1.12 crore in Ultra Home Construction as Share Capital out of amounts received from Amrapali group of companies. 6. Mr. Ajay Kumar made payment of direct tax of Rs.0.11 crore out of amounts received from Amrapali group of companies. 7. Mrs Seema Kumari holds mutual funds with HDFC mutual funds Folio no 14756739/01, which have market value amounting to Rs.0.48 crore as on 28th February 2019. 8. Bank Statement of Anandi Singh of IndusInd Bank Account no.150019032006 A sum of Rs.1.73 crore has been transferred from Seema Kumari on 09/08/2018.

Further a sum Rs.2.25 crore has been invested in Mutual Funds as per details given below:

Date Particulars Amount

16/08/2018 Mirae Asset MF 5,000,000

16/08/2018 Aditya Birla Mutual Fund

5,000,000

18/08/2018 Kotak Mutual Fund 5,000,000

11/09/2018 HDFC Mutual Fund 5,000,000

12/09/2018 Tata Mutual Fund 2,500,000

Total 22,500,000

Note: This amount can be attached and recovered by encashment of these investments.

96

Sunil Kumar and Sunita Kumari (wife of Sunil Kumar) 1. While scrutinizing the Accounts of Gaurisuta Infrasolution Private Limited in which Mr. Sunil Kumar was the Director, it was observed by us that bogus commission of Rs.1.07 crore was booked. This amount of Rs.1.07 crore should be recovered from Mr. Sunil Kumar. 2. A sum of Rs.0.50 crore has also been paid as Salary to Mrs. Sunita Kumari in M/s Gaurisuta Infrasolution Private Limited which is not genuine as per detailed report given in the case of M/s Gaurisuta Infrasolution Private Limited. This Amount of Rs.0.50 crore should also be recovered from Mrs. Sunita Kumari. Mr. Sudhir Kumar Choudhary He is director in Amrapali Biotech India Private Limited & Gaurisuta

Infrasolution Private Limited. As per his statement recorded, he was forced to become the director in first week of august 2018 with effect from 06th July 2018. We are of the view that this planning has been done by the Amrapali Management after the order of the Hon’ble Supreme Court to accept the resignation of Mrs. Seema Kumari Wife of Sunil Kumar from the Directorship and to appoint Mr. Sudhir Kumar Choudhary as the director of the company. It was further explained by him that he was a mere employee only and by virtue of threat by the Amrapali Group of Companies, he was forced to become the Director of Amrapali Infrasolution Private Limited. Apart from above specific points, it shall be noted that we had got access to the email of the Accounts department of Amrapali Group of Companies with Id accounts@amrapali.in for a short period after interrogation from an Ex-employee. We could download few instances of Cash transactions which are enclosed as a sample in Annexure 26-B. The access to this mail was stopped immediately. We requested the management to give the access to this mail to enquire into the further such mails related to the cash and other accounting adjustments contained in this Email Account. But this access was not made available to us. However, the access had been made available after the orders of the Honorable Supreme Court dated 28th February, 2019. Now, all the

mails relating to receipt of cash from the various home buyers have been deleted. Thus, the management of the company has tempered with the evidence which were available earlier. (Page No. 205 Volume-I) Further an amount of Rs.113.5 crore paid by Amrapali Infrastructure Pvt Ltd to directors is recoverable as on 31st March 2018 and this amount is on account of shares allotted of Ultra Home Construction Private Limited to the directors without receiving any money from the directors during the Financial Year 2010-11. This seems to be a dubious transaction by the directors of the company in manipulating the accounts in this manner by allotting the shares without actual consideration. These amounts are not disclosed by the Directors in their Affidavits. Hence, the Affidavits filed by the directors are incorrect to this extent.

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10. Executives who colluded with directors

The executives of the Group colluded with the management to avoid proper recording of transactions in books of accounts. To avoid the traceability of the transactions, the executives recorded the financial transactions up to March 2015 in Accounting Package tally, then shifted to FARVISION from April 2015 and continued till March 2016, and thereafter partially recorded transaction in tally and a for a few companied in FARVISION. At the time of switchover, even the opening balances were not properly entered, thereby leading to a huge difference in the data provided to us. In November 2016, the Group left Farvision half way and started recording transactions for partial period in tally. The executives intentionally recorded transactions by switchover of

accounting package improperly so that complete trail could not be established. Subsequently, the companies of the group even stopped getting the annual accounts prepared and filing returns to ROC and Income tax The Sales and Marketing head Mohit Gupta, CFO Chandar Wadhwa, Accounts head Adhikari Das, Company Secretary Pankaj Mehta and the Architect Vaibhav Jain along with their immediate coterie extended helping hand to the management in planning and execution of the scam. Mr. Mohit Gupta – Marketing Director He was responsible for the whole marketing department, Customer Relationship Management of the Amrapali Group and he did not cooperate during the entire process of forensic audit. It is pertinent to note that till now a list of flat wise possession has not been provided to us. At first he did not submit us the customer data inspite of number of reminders. Subsequently, the customer data submitted was not correct. We found the following–

(i) The inventory of vacant flat submitted by him was incorrect. (ii) We found 401 flats (Refer Annexure S-5 page 2828-2836

Supplementary report) which were either lying vacant and were available in inventory because the flat buyers were shifted out of Amrapali Group to the other project of other

builders. Mr. Mohit Gupta also did not disclose the details of flats booked in the name of various parties without receipt of any amount from them just by passing journal entry.

(iii) From the above it is clear that it defies the order of Honorable Supreme Court and has violated the order and is responsible for the gross contempt of the Honorable Court.

Mr. Adhikari Debi Prasad Dash- GM/DGM Accounts It is found that Mr. Adhikari authorized (Refer Annexure S-6 page 2837-2841 Supplementary report) most of the payments regarding payment of professional charges, raw materials, contractor dues and other direct/indirect expenses. It is pertinent to note that he was also involved in diversion of funds from Amrapali group and equally responsible in the conspiracy of cheating with home buyers and

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diversion of funds.

He was responsible for the whole accounts department and he did not cooperate during the entire process of forensic audit. He was authorized to receive payments in cash and was submitting on day to day basis cash receipt status to Mr. Shiv Priya. After a clearance from him, a possession slip or no due certificate is issued. He continuously replied that he is not aware of anything and for everything there were Chartered Accountants for respective companies. This is not a correct statement and he contradicted his own statement many times. He was in possession of final accounts of group companies and did not share with us.

Adhikari Dash also did not disclose the details of flats booked in the name of various parties without receipt of any amount from them just by passing journal entry. From the above it is clear that it defies the order of Honorable Supreme Court and has violated the order and is responsible for the gross contempt of the Honorable Court.

He along with his brother exercised direct control over below companies:

(i) Teks Tech Inspection India Private Limited (ii) Teks Tech IT Services India Private Limited (iii) Vinayaka Square Private Limited (iv) Shri Vinayaka Buildspace Private Limited (v) Milestone Highrise Private Limited

Vinayaka Square Private Limited

• The company has a commercial project named “Beta Plaza” at Greater Noida which received funds from Teks Tech Inspection India Private Limited (controlled by Mr. Adhikari), APJ Finmart Private Limited, Opulent Inn Private Limited, Tasty Feast Private Limited, Opulent Holidays and Travels (P) Limited. The chairman of four companies CA Pankaj Mittal appeared before us and could not explained the reasons for giving loans @ 6% p.a. to a real estate project whereas the bank rate on FDR is 7% and more.

• The company has purchased this land for the project at Greater Noida in FY 2015-16 amounting to Rs.17.09 crore

• Vinayaka Square received Rs 1 crore from Amrapali funds routed through Teks Tech Inspection India Private Limited and received Rs.2.56 crore from Shri Vinayaka Buildspace Private Limited. This is a project funded by Amrapali’s Funds and shall be attached.

Mr. Chander Wadhwa CFO Amrapali Group of Companies It has also been observed that a sum of Rs.5 crores was transferred by M/s Amrapali Homes Project Private Limited to Mr. Amit Wadhwa, nephew of Mr. Chander Prakash Wadhwa. As per the affidavit filled by Mr. Chander Prakash Wadhwa the said sum was invested by him in M/s Three Platinum Softech Private Limited. The Heartbeat city projects is partly owned by three Platinum and Amrapali group has invested in the projects in the name of Chander Wadhwa.

99

As per Statement of Mr. Sanjeev Kumar Director of La Residentia Developers Private Limited recorded by us, he Informed that a sum of Rs.4 crores Approximately, was paid as fees for use of Amrapali Brand Name to Saffron Propmart Private Limited (This Company is controlled by Mr. Chander Wadhwa CFO). No Bills have been provided by him. Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFO were in connivance with each other and payments were made by Shri Anil Mittal to Chander Wadhwa CFO for sharing fees received from Amrapali group for the work awarded to Anil Mittal Chander Wadhwa is one of the masterminds along with the other promoters directors behind the whole scam. He facilitated movement of funds by creating a web of companies within and outside the group. His relatives were made partner investor in LA Residentia and Heart beat city projects. Funds

were invested in Patel Advance JV (Neo Town project Noida) and Euphoria Sports City. Furthermore, it is observed that the Company Management as well as Statutory Auditors and CFO have failed in their duty to follow the Accounting Standards relating to recording the valuation of Work in Progress as per ICAI guidelines applicable to Real Estate Companies. It is also pointed out that the CFO has not signed any Audited Financial Statements for reasons best known to them. But according to the statement recorded by us of various employees and suppliers as well as home buyers, we are informed that he was the main person handling Finance and every meeting was held with him only. (page no 209 Volume 1) Mr. Pankaj Mehta –Company Secretary He was responsible for the secretarial compliances of the companies. He incorporated more than 50 additional companies to create a cobweb. He was a director in many of these companies and was an important link in the transfer of funds through various group companies. He was also signatory to the bank account of Stunning Construction Private Limited. He resigned from the services of the Company in December, 2016. However even after his resignation, on the instructions of Mr. Chander Wadhwa, CFO, he continued to operate the Bank Accounts of Stunning Construction Private Limited. After his resignation in the Amrapali Group, he started working as a

partner of Saffron Consultants LLP with Mr. Chander Wadhwa. Also Mr. Anil Kumar is still working as an employee with Mr. Chander Wadhwa. On the instructions of Mr. Chander Wadhwa CFO manipulative entries were recorded for adjustment of payment dues of Mr. Pankaj Mehta against his Flat No. E-1502, Silicon City, Sector - 76, Noida.

11. Non compliance of statutory obligations

(i) The group companies have not filed annual returns and Audited Financial Statements after 31st March, 2015. The Registrar of Companies has already disqualified the Directors namely Mr. Anil Kumar Sharma, Mr. Amresh Kumar, Mr. Shiv Priya, Mr.Ajay Kumar

100

and Mr. Suvash Chandra Kumar for a period of 5 years from 1/11/2017 to 31/10/2022 u/s 164(2) of The Companies Act, 2013. (ii) The company has not been regular in payment of TDS and Service tax and has also not filled relevant returns of TDS/Service tax after 31st March, 2015. There is also no follow up available from the Concerned departments.

Latest information regarding status of default in respect of TDS/ Service tax is not made available to us. There may be huge demands outstanding against the company due to non-payment and non-filing of TDS/Service tax returns.

(iii) No Statutory records have been maintained by the Amrapali group

companies and produced before us relating to the following: i. Register of Directors and shareholders ii. Register of related party contracts iii. Minute book of Director and Shareholders iv. Fixed Assets Register v. Charges register in respect of loans taken from Banks and others

(iv) Transfer entries are recorded in Inter Corporate Deposit accounts by transferring the amount from one Amrapali group company to another Amrapali group company in contravention of section 269SS/269T of The Income Tax Act, 1961. (v) Depreciation has not been provided on the building in contravention of the provisions of the Companies Act, 1956, now Companies Act, 2013 in Navodaya Properties Private Limited. It is highly surprising that in spite of such glaring discrepancies regarding non-Compliance of statutory compliances, the Statutory Auditors have not pointed out any such discrepancies in their Statutory Audit Reports. There are many other glaring short comings in the Audited Balance Sheet & Financial Statements a) I – Page 214)

12. Anil Mittal - Statutory Auditor

While scrutinizing the affidavit submitted by Shri Anil Mittal Date 12/11/2018 before the Hon’ble court we have noted the following:

a) CA Anil Mittal was paid Rs.0.56 crore (Rs.0.66 crore less Rs.0.10 crore recovered) during the period 2011 to 2018. These payments have been shown in the nature of cheques given /credit card payments which have been never been recovered.

b) Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFO were in connivance with each other and these payments have been made by Shri Anil Mittal to Chander Wadhwa CFO for sharing fees received from Amrapali group for the work awarded to CA Anil Mittal. CA Anil Mittal blindly signed all the accounts and is grossly involved along with Mr. Chander Wadhwa in making various manipulation in the accounts.

c) Audit files handed over by Shri Anil Mittal Statutory Auditor are

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grossly deficient and they do not contain the documents which are normally required in the statutory audit files as per guidelines and directions issued by The Institute of Chartered Accountants of India.

d) Statutory Auditor CA Anil Mittal has received the payment on account of professional charges in the name of the companies in which his relatives are directors. This fact has not been disclosed in audited financial statements.

e) A sum of Rs.52.07 crore was adjusted against the payment due on account of Flat number P-1203 in Amrapali Princely Estate on account of professional fees due and to be paid on account of Audit fees.

f) Further a sum of Rs.16.36 crore was also adjusted against the flat number P-1104 in Amrapali Princely Estate on account of Professional fees due and to be paid on account of Audit fees.

13. Diversion of homebuyers funds Amrapali Group was engaged in diversion of home buyer funds from one project to another project, other group companies, directors and senior executives of the group. There is also a diversion of funds to various suppliers where advances were made without any further adjustment/ transactions. There is not only diversion of funds, there is siphoning of funds also by way of booking undervalued transactions in respect of sale of flats, by way of booking of expenses, and making purchases from the bogus suppliers/service providers. In addition to this they adopted fraudulent practices also by way of double booking of flats. There are also instances of adjustment of amounts payable to suppliers/brokers with the amount due from the home buyers such trade creditors have denied having any knowledge of such transactions. We have traces of receiving of Cash from the home buyers/ others as shown by the email of the accounts department of the Amrapali Group of Companies which is not accounted for in the books of accounts. There is also allotment of shares without inward movement of funds by making manipulative entries in the books of accounts. The homebuyers funds were diverted Rs. 5,619.47 crore to other

companies/directors: (i) through payment of professional fee to directors Rs.100.53

crore; (ii) by way of booking of bogus bills including commission

Rs.842.42 crore; (iii) by selling flats at undervalued prices in books and received

differential market value in cash Rs.321.21 crore; (it is a tip of iceberg)

(iv) by way of granting inter corporate deposits to related entities and unrelated entities / trusted partners for ultimately diverting funds to unapproved uses.

Summary of diversion of funds is as under:

102

Name of Company Details of amount diverted (Amount in crores)

First Diversion

Bogus Expense page no 2827 of supplementary

report

Advances recoverable from third

parties (Rs.234.21 crore plus

Rs.326 crore Volume IV,

page no 1015- 1019)

Undervalued flats

page no 2811 of

supplementar y report

Cash

ULTRA HOME CONSTRUCTION PRIVATE LIMITED -

333.00

87.68

30.87 0.22

AMRAPALI HOMES PROJECTS PRIVATE LIMITED -

4.41

55.01 - 0.23

AMRAPALI PRINCELY ESTATE PRIVATE LIMITED

186.99

56.78

-

6.70 5.02

AMRAPALI SAPPHIRE DEVELOPERS PRIVATELIMITED

113.98

85.45

73.06

76.02

0.11

AMRAPALI SILICON CITY PRIVATE LIMITED

391.57

97.87

50.41

73.05

3.58

AMRAPALI EDEN PARK DEVELOPERS PRIVATELIMITED -

12.67

3.02 - 2

AMRAPALI ZODIAC DEVELOPERS PRIVATELIMITED

286.00

70.60

28.07

6.75 3.84

AMRAPALI CENTURIAN PARK PRIVATE LIMITED

518.78

5.20

-

43.12 7.45

AMRAPALI DREAM VALLEY PRIVATE LIMITED

445.33

5.63

3.23

24.11

8.02

AMRAPALI LEISURE VALLEY DEVELOPERS PRIVATE LIMITED

237.53

26.45

19.67

5.88

0.23

AMRAPALI LEISURE VALLEY PRIVATE LIMITED

431.11

16.20

51.62

8.53 9.79

AMRAPALI SMART CITY DEVELOPERS PRIVATELIMITED

538.59

39.27

17.20

18.97

10.79

SANGAM COLONIZERS PRIVATE LIMITED - -

0.36 -

0.15

103

SHALIMAR COLONISERS PRIVATE LIMITED - -

- - -

HI-TECH CITY DEVELOPERS PRIVATE LIMITED

2.42

1.96

8.91 -

0.46

AMRAPALI HEALTHCARE PRIVATE LIMITED - -

0.22 - -

AMRAPALI HOSPITALITY SERVICES PRIVATE LIMITED -

0.02

13.55 -

0.01

AMRAPALI INFRASTRUCTUR E PRIVATE LIMITED -

65.61

40.24 -

3.16

MSB SOFTWARE TECHNOLOGY PRIVATE LIMITED. - -

- -

0.70

MUMS MEGA FOOD PARK PRIVATE LIMITED - --

1.29 -

MVG TECHNO CONSULTANTS PRIVATE LIMITED - -

- - 0.13

NAVODAYA PROPERTIES PRIVATE LIMITED - -

- -

0.24

NOIDA TEXFAB PRIVATE LIMITED - -

- - 0.13

AMRAPALI AEROCITY PRIVATE LIMITED - -

0.01 -

AMRAPALI BIOTECH INDIA PRIVATE LIMITED. - -

- - 1.5

AMRAPALI BUDDHA DEVELOPERS PRIVATELIMITED -

0.65

0.47 - -

AMRAPALI MAGADH DEVELOPERS PRIVATELIMITED - -

- - -

AMRAPALI MAHI DEVELOPERS PRIVATE LIMITED - -

- -

AMRAPALI MEDIA VISION PRIVATE LIMITED - -

4.96 - 9.67

AMRAPALI POWER AND CEMENTS PRIVATELIMITED - -

0.91 -

-

AMRAPALI SMART CITY PRIVATE -

8.02

0.95 - 0.5

104

LIMITED

AMRAPALI SPRING VALLEY PRIVATE LIMITED - -

- - -

HAWTHORNE INTELLECT MANAGEMENT SOLUTIONS PRIVATE LIMITED - -

0.17 -

0.01

NEELKANTH BUILDCRAFT PRIVATE LIMITED - -

- - -

GAURISUTA INFRASTRUCTUR E PRIVATE LIMITED - -

0.46 - 0.02

KAPILA BUILDHOME PRIVATE LIMITED - -

0.41 -

0.03

STUNNING CONSTRUCTIONS PRIVATE LIMITED - -

15.04 -

0.17

JHAMB FINANCE AND LEASING PRIVATELIMITED - -

5.93 - -

MANNAT BUILDCRAFT PRIVATE LIMITED - -

0.99 -

0.20

RUDRAKSH INFRACITY PRIVATE LIMITED - -

- - -

GAURISUTA INFRASOLUTION PRIVATE LIMITED - -

1.24 -

0.01

LA RESIDENTIA DEVELOPERS PRIVATE LIMITED - -

23.35 - 0.3

Amrapali Grand -

3.98

29.17 - 0.5

AHS Joint Venture -

0.08

15.81 -

Amrapali Homes -

2.86

21.41 - 0.19

Amrapali Patel Platinum - -

7.85

27.31 -

Hi Tech City Developer Pvt Ltd 7.30

Total

3,152.30

842.42

582.68

321.31

69.36

Particulars Amount in

crores

Grand Total 4,968.07

Further Gaurisuta Infrastructure Private Limited gave 25.00

105

Rs 25 crore advances to various parties as listed on page

no 92-93 Volume I

Further in Gaurisuta Infrastructure Private Limited,

inventory of Rs 89 crore unidentifiable page no 96

Volume I

89.00

FDR as on 31st March 2015 page no 175 Volume I 61.97

Professional Fees Paid to Directors 100.53

Taxes paid by Stunning Construction on behalf of

promoters and family

24.90

More than 700 flats given to so called suppliers 350.00

Total diversion identified 5,619.47

14. J P Morgan Amrapali Zodiac Developers Private Limited has financed this transaction by its own shares through Group Companies by incorporating new Companies. These transactions enable Amrapali Zodiac Developers Private Limited to avoid the provisions of The Companies Act, 1956 applicable for buying its own shares. It is also relevant to point out that Shri Anil Mittal at any stage of time has not reported his interest or disclosed about his relatives of Director and Junior Employee. Both the directors and shareholders of the company i.e Mr. Atul Mittal (Relative) and Mr. Chandan Kumar (Junior Employee), are relatives/employee of Anil Mittal, the Statutory Auditor of the company.

a) Rudraksh Infracity Private Limited- Shri Chandan Kumar, an employee of CA Anil Mittal, Statutory Auditor and Shri Atul Mittal, relative of CA Anil Mittal were inducted in the board. The basic purpose of this Company was only for money laundering and was incorporated to receive Funds from Mannat Buildcraft Private Limited which Company was incorporated by CFO Chander Wadhwa through his close associates. After receiving money from Mannat Buildcraft Private Limited, the same was transferred to J.P. Morgan Investments for purchase of Equity Shares of Amrapali Zodiac Private Limited at an exorbitant price. As per details furnished hereunder, the Valuation Report was also made to suit to the requirement of J.P. Morgan Investments as the M/s Sudit K. Parikh & Company, Chartered Accountants were appointed by J.P. Morgan officials for the said valuation. They have admitted that valuation work was done on the basis of information provided by J.P. Morgan Investments after applying some basic checks. The whole racket of money laundering and receiving money from these Companies i.e. Mannat Buildcraft Private Limited and Rudraksh Infracity Private Limited are the brain child of Mr. Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor of Amrapali Group of Companies. Both these Companies are controlled by both of these persons and had been formed only for this Money Laundering Business. There are no transactions before or after these transfers of money and

106

the same have been camouflaged to make it look with business transactions on the basis of the Valuation Report. JP Morgan invested Rs.85 crore in the year 2010 with an understanding to have a preferential claim on profits called distributable surplus in the ratio of 75% to JP Morgan and 25% to promoters namely Amrapali Homes Project Private Limited and Ultra Home Construction Private Limited with the following main condition in Shares Subscription Agreement dated 9th September, 2010 amongst Ultra Home Construction Private Limited, Amrapali Homes Project Private Limited, JP Morgan & Amrapali Zodiac Developers Private Limited The Company shall provide evidence of the aforesaid investment in the Investee Company to the Investor. (Rs. 60 Cr. in Leisure Valley Developers)

(A) There was a prescribed methodology and procedures defined of computation of Fair Market Value at the time of the exit to be worked out in the agreement on Page No 51, schedule 6 of Shareholder’s Agreement, which was not followed at the time of any of the exits. Clause 4.2 (iii) – The Company shall grant an interest free loan of Rs 85,000,000 (Rupees Eighty Five Million Only) to UHCPL. Clause 4.2(iv) – The Company shall remit Rs 600,000,000 (Rupees Six Hundred Million Only) to the Investee Company for subscribing to 0.01% compulsorily convertible Preference shares of the Investee Company (“Investee Company Shares”)

(B) Distribution of profit was agreed between the Investor i.e., JP Morgan & the Investee i.e., Amrapali Group to share the profits from the project in the agreed ratio as per clause 7.3 & Clause 7.5.1 Page No 19 of Shareholder’s Agreement. (C) Clause 7.1 - The Company agrees and undertakes that it shall, and the Investor and Developers agree that they shall cause the Company to first utilize the revenues (less the cost of construction of the project, provision for future consideration cost of the Project, payment of Project Land cost and interest thereon, annual lease rent payment to New Okhla Industrial Development Authority and one time land lease cost) towards payment of applicable taxes and payment of interest to the lenders, if any, in accordance with the provisions of Law. Clause 7.2 – Post the payment of taxes and interest to the lenders, as aforesaid, the Company shall make payments of all principal amounts accrued and payable to the lenders, if any, at applicable seniority. (D) In clause 2.12 of Page No 12 of Shareholder’s agreement it was agreed that the aggregate advances outstanding from the Amrapali Zodiac developers Private Limited to its affiliates will not exceed Rs 25 crores excluding Amrapali Infrastructure Private Limited. It was also in the knowledge of JP Morgan vide clause 2.14 of Page No 12 of Shareholder’s Agreement that advances to Amrapali Infrastructure Private Limited which was Rs 51 crore on 31st July, 2010 will be restricted to Rs 15 crore.

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(E) Clause No 10.4.3 in page No 21 of Shareholder’s Agreement mentions that no action can be taken without investor’s approval in relation to 10.4.3(xi) any payments made to related parties.

(F) It was also mentioned in the agreement that statutory auditor and internal auditor cannot be appointed and removed without the approval of JPMorgan.

(G) The following points indicate very clearly that JP Morgan was having full control on Amrapali Zodiac Developers Private Limited project and no material decision could have been taken without JP Morgan approval. On Page No 60 of Shareholder’s Agreement in Note 1 it was agreed & accepted that any surplus cash flow from the project will be first utilized for payment of land cost to Noida Authority. Documents to be submitted by Amrapali Zodiac Developers Private Limited to JP Morgan:

(i) Monthly progress report signed by director & CFO. (ii) No delay report in specified format.

JP Morgan insisted that the cost shall be restricted to Rs 425 crore and any additional cost over and above Rs 425 crore shall be brought in by Amrapali Group promoter. The additional cost considered was Rs 125 crore to be brought in by promoters.

(H) Zodiac has followed recognition of revenue on the basis of Project Completion Method – Accounting Standard - 7 (Construction Contracts). As per Project Completion Method as given in Accounting Standard – 7, the profit cannot be recognized until the project is completed and as per Clause No 7.3 of Shareholder’s Agreement the distributable amount is the balance amount representing the aggregate of all profits, after considering the payments referred to in clause 7.1 and 7.2 , including any amounts transferred to the reserves accounts of the Company shall for the purpose of this clause 7 are referred to as the “Distributable Amount”. (I) From the above it is clear that in absence of recognition of profit in the agreement there cannot be any distributable amount for

distribution. (J) It was accepted by Mr Suraj Chhabria of JP Morgan (Apollo) that the money invested by them in Amrapali Zodiac Developers Private Limited was not utilized in the project. He also accepted that it was in their knowledge that money invested by them was not going to be utilized in Amrapali Zodiac Developers Private Limited project and it is contracted that Rs 60 crores to Amrapali Leisure Valley Developers Private Limited, Rs 8.5 crores to Ultra Home Construction Private Limited be transferred.

(K) JP Morgan was in knowledge of that the Company Amrapali Zodiac Developers Private Limited has paid the money received from the Home buyers to tthe other Companies of Amrapali Group.

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(L) JP Morgan permitted a transfer of Rs 140 crore to Mannat Buildcraft Private Limited and from Mannat Buildcraft Private Limited to Neelkanth Buildcraft Private Limited and Rudraksh Infracity Private Limited for buying shares from JP Morgan of Amrapali Zodiac Developers Private Limited. There were always advances exceeded than the limits specified in Shareholder’s Agreement but JP Morgan did not ensure bringing back the money from the affiliates though it was having its board representation in the ratio3:2. JP Morgan did not ensure that the funds for additional cost were brought in and in valuation it was assumed that additional cost of Rs 125 crores will be brought in by the promoter for the last lag of the construction for its IRR (Internal Rate of Return) working. (M) JP Morgan was getting return at the rate of more than 20 %

on its investment of Rs 85 crore & was agreeing with Amrapali Zodiac Developers Private Limited to invest in Amrapali Leisure Valley Developers Private Limited a substantial part of its investment i.e., 60 crore out of Rs 85 crore at the rate 0.01%. It categorically demonstrates that JP Morgan invested Rs 60 crore in Amrapali Leisure Valley Developers Private Limited without complying FEMA (Foreign Exchange Management Act) for its investment of Rs 60 crore in Amrapali Leisure Valley Developers Private Limited. It is not out of place to mention that Amrapali Zodiac Developers Private Limited was a project where home buyers were required to pay on the basis of progress of the construction of the project. Meaning it was construction linked payment project. (N) We found that most of the time customers have paid more than what was spent in the project. The Amrapali Zodiac Developers Private Limited diverted home buyer’s money & there was no need of any investment from JP Morgan. It was accepted by Mr Suraj Chhabria that there was no restriction on the Company to invest the money in the project & it was in his knowledge & the knowledge of JP Morgan that the money has been diverted, Transferred

Valuation

(A) The valuation did not follow the correct methodology of DCF (Discounted Cash Flow). The valuation is without any sanctity &

validity. The valuation was carried out to cause wrongful loss to the homebuyers of Amrapali Zodiac Developers Private Limited and to give advantage to JPMorgan.

(B) Name of the firm – Sudit K. Parekh & Co.

Chartered Accountants

Name of the Partners–

I. Mr. Durgaprasad Khatri II. Mr. Tanwir Shirolka III. Mr. Srikant V Jilla IV. Ms. Deepti K.Ahuja

Ms Ahuja, then partner in SKP&Co.Chartered Accountants informed

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that JP Morgan, Mumbai office in Andheri/ Santacruise did not allow to take any of the details/ abstract from the share purchase agreement. It is to note that at the time of exit, it was predetermined that Zodiac Developers would not pay the lease rent as well as the installment due to Noida Authorities as clearly explained in the cash flow statement provided by the SKP&Co in 4 no. of valuation certificates from2010- 2015.

(C)

Source: Data from Form FC-TRS From the table above it is clear that valuation exercise was done backwardly. For instances first we paid Rs 100 crores, then Rs 25 crores, then Rs 10 crores and finally Rs. 5Cr.. EXTRACT from FEMA RULES;

FEM (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 “4. Restriction on an Indian entity to issue security to a person resident

outside India or to record a transfer of security from or to such a person in its books. Save as otherwise provided in the Act or Rules or Regulations made thereunder, an Indian entity shall not issue any security to a person resident outside India or shall not record in its books any transfer of security from or to such person: Provided that the Reserve Bank may, on an application made to it and for sufficient reasons, permit an entity to issue any security to a person resident outside India or to record in its books transfer of security from or to such person, subject to such conditions as may be considered necessary.

Transfer of shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] by a person resident

Valuation Report date

No of shares

Face Value

Value per share *

Total amount Date of FC- TRS

Sold to

9/09/2010 785715 10 1081.8172 85,00,00,00 20/10/2010 JP Morgan

23/10/201 3

436508 10 2290.9 99,99,99,26 30/12/2013 Neelkanth Buildcraft Private Limited

9/09/2014 97000 10 2577.25 24,99,93,20 30/09/2014 Rudraksh Infracity Private Limited

10/04/201 5

34365 10 2910 10,00,02,10 29/07/2015 Rudraksh Infracity Private Limited

10/04/201 5

17180 10 2910 4,99,93,800 6/10/2015 Rudraksh Infracity Private Limited

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outside India

(1) Subject to the provisions of sub-regulation (2), a person resident outside India holding the 2[shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] in accordance with these Regulations, may transfer the 3[shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] so held by him, in compliance with the conditions specified in the relevant Schedule of these regulations. Further, subject to minimum lock-in period of one year or minimum lock-in period as prescribed under Annex-B of Schedule 1 whichever is higher, a person resident outside India holding the shares or convertible debentures or warrants] of an Indian company containing an optionality clause in accordance with these Regulations and exercising the

option/right, may exit without any assured return, subject to the following conditions:

(i) In case of listed company, at the 6[market price prevailing on the floor of the recognized stock exchanges]

(ii) In case of equity shares, preference shares or debentures of unlisted company, at a price not exceeding that arrived at as per any internationally accepted pricing methodology for valuation of shares on arm's length basis, duly certified by a Chartered Accountant or a SEBI registered Merchant Banker. The guiding principle would be that the non-resident investor is not guaranteed any assured exit price at the time of making such investment/agreements and shall exit at the price prevailing at the time of exit, subject to lock-in-period requirement.

(2) (i) A person resident outside India, not being a non-resident Indian or an overseas corporate body, may transfer by way of sale or gift the shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] held by him or it to any person resident outside India;

(ii) A non-resident Indian may transfer by way of sale or gift, the shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] held by him or it to another non-resident Indian only;

(iii) A person resident outside India holding the 6[shares or convertible debentures or warrants of an Indian company or units of an Investment

Vehicle] in accordance with these Regulations,

(a) may transfer the same to a person resident in India by way of gift; (b) may sell the same on a recognized Stock Exchange in India through a register broker.”

In the valuation working, it is shown that all project cost was incurred by June, 2013. It is only additional cost of Rs 125 crore & marketing cost of Rs 6.85 crore shown as to be incurred after that.

(A) JP Morgan personnel have never met the buyer. Both the Companies Neelkanth Buildcraft Private Limited & Rudraksh Infracity Private Limited were formed in the year 2013 having a capital of Rs 0.01 crore each for the specific purpose of buying shares from JP Morgan.

(B) No person from Mauritius travelled to India and no person from

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India travelled to Mauritius. Indian people signed the contract in India and Mauritius people signed the contract in Mauritius. Buyer did not carried out any due diligence nor it appointed any valuer.

(C) The Sales agreement was drafted by JP Morgan team, buyers are not aware of it.

(D) We spoke to the director of Neelkanth Buildcraft Private Limited & Rudraksh Infracity Private Limited namely Vivek Mittal & Chandan Kumar. Both of them refused meeting with any person/entity from JP Morgan. They are not aware of that any time they have bought these shares.

No substantial fundswere used in the construction of the project. The address of the Company who purchased share from JP Morgan is the address of Group Statutory Auditor Mr. Anil Mittal.

(A) Mr Chandan Kumar, director in Neelkanth Buildcraft Private Limited & Rudraksh Infracity Private Limited is an office boy in the office of Statutory Auditor Mr Anil Mittal.

(B) Mr Vivek Mittal, another director in Neelkanth Buildcraft Private Limited is nephew of Statutory Auditor Mr Anil Mittal & does small timejobs

Facts Amrapali Zodiac Developers Pvt Ltd incorporated on 18th December 2009. As per the Share Subscription Agreement dated 9th September, 2010, JP Morgan invested 85 crore on 20th October 2010 with an understanding to have a preferential claim on profits called distributable surplus in the ratio of 75% to JP Morgan and 25% to promoters namely Amrapali Homes Project Private Limited and Ultra Home Construction Private Limited. The said investment was repatriated to JP Morgan as under:

• RS. 100 crore on 30th December 2013;

• RS. 25 crore on 30th September 2014;

• RS. 10 crore on 29th July 2015; and

• RS. 5 crore on 6th October 2015. FEMA

Extracts of Master Circular no.8/2010-11 dated July 01, 2010 on External Commercial Borrowings and Trade Credits External Commercial Borrowings (‘ECBs’) refer to commercial loans in the form of bank loans, buyers credit, suppliers credit, securitized instruments (eg floating rate notes and fixed rate bonds, non convertible, optionally convertible or partially convertible preference shares) availed of from non-resident lenders with a minimum average maturity of 3 years. ECB can be accessed under 2 routes a) Automatic route and b) Approval route. A) Under Automatic route

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• Eligible borrowers can be corporates, including those in the hotel, hospital, software sectors (registered under the Companies Act 1956) and Infrastructure Finance companies, Housing Finance companies and Non Banking Finance Companies.

• Recognised lenders can be international banks, suppliers of equipments, foreign collaborators and foreign equity holders

• All in cost ceilings for ECBs under automatic route are:

• Average maturity period 3 to 5 years- 300 basis points over 6 months London Interbank Offered Rate (‘LIBOR’)

• Average maturity period more than 5 years – 500 basis points over 6 months LIBOR

• ECBs are eligible for end use for investment for import of capital goods, industrial sector, infrastructure sector and specified service sectors. However, proceeds of ECBs should not be used

for acquisition of land in any of these permitted uses.

• ECBs are not permitted to be utilized for real estate sector.

B) Under Approval route

• Certain ECBs which are not under automatic route are under approval route. ECBs are not permitted to be utilized for real estate. However, the term real estate excludes development of integrated township as defined by the Ministry of Commerce and Industry, DIPP, SIA (FC Division), Press Note 3 (2002 Series) dated January 4, 2002. As per the said press note, development of integrated township includes housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges, mass rapid transit systems and manufacture of building materials. Development of land and providing allied infrastructure will form an integrated part of township’s development.

Hedging required: Minimum mandatory hedging is required @70% of principal plus interest (both) of ECB where Minimum Average Maturity Period is less than 5 years. Minimum tenor should be one (1) year thereafter to be rollover till expiry of ECB Compliance under FEMA

ECB Compliance Borrowers are required to submit a report about signing of loan agreement with the lender for obtaining Loan Registration Number (LRN) within 7 days of the signing it to RBI in form ECB. Borrowers are required to report monthly about actual ECB transactions through form ECB-2 to AD Category I bank within 7 days from close of the month.

Companies Act 1956 Amrapali Zodiac Developers Pvt Ltd could not have bought back its own shares from JP Morgan as a company cannot buy back its own shares as per the provisions of section 77 of the Companies Act 1956. Section 77 states “(1) No company limited by shares, and no company

113

limited by guarantee and having a share capital, shall have power to buy its own shares, unless the consequent reduction of capital is effected and sanctioned in pursuance of sections 100 to 104 or of section 402.”

Even otherwise, as per Section 77A, a company can purchase its own shares from (i) free reserves; Where a company purchases its own shares out of free reserves, then a sum equal to the nominal value of the share so purchased shall be transferred to the capital redemption reserve and details of such transfer shall be disclosed in the balance-sheet or (ii) securities premium account; or (iii) proceeds of any shares or other specified securities. A Company cannot buyback its shares or other specified securities out of the proceeds of an earlier issue of the same kind of shares or specified

securities.

Conditions of Buy Back (a) The buy-back is authorised by the Articles of association of the

Company; (b) A special resolution has been passed in the general meeting of the

company authorising the buy-back. In the case of a listed company, this approval is required by means of a postal ballot. Also, the shares for buy back should be free from lock in period/non transferability. The buy back can be made by a Board resolution If the quantity of buyback is or less than ten percent of the paid up capital and free reserves;

(c) The buy-back is of less than twenty-five per cent of the total paid- up capital and free reserves of the company and that the buy-back of equity shares in any financial year shall not exceed twenty-five per cent of its total paid-up equity capital in that financial year;

(d) The ratio of the debt owed by the company is not more than twice the capital and its free reserves after such buy-back;

(e) There has been no default in any of the following i. in repayment of deposit or interest payable thereon, ii. redemption of debentures, or preference shares or iii. payment of dividend, if declared, to all shareholders within the stipulated time of 30 days from the date of declaration of dividend or iv. repayment of any term loan or interest payable thereon to any financial institution or bank;

(f) There has been no default in complying with the provisions of filing of Annual Return, Payment of Dividend, and form and contents of Annual Accounts; (g) All the shares or other specified securities for buy-back are fully paid-up; (h) The buy-back of the shares or other specified securities listed on any recognised stock exchange shall be in accordance with the regulations made by the Securities and Exchange Board of India in this behalf; and (i) The buy-back in respect of shares or other specified securities of private and closely held companies is in accordance with the guidelines as may be prescribed.

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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 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 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. 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; 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 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 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 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.” “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 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 SEBI (Venture Capital Funds) Regulations, 1996.” SUMMARY- NET SURPLUS/DEFICIT

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1) Amount Realisable from the sale of the unsold inventory and from home buyers (Residential and commercial) in various projects and its extent.

Net surplus/deficit

S.No Name of company Total

Receivable from Buyers

Estimated Cost still to be incurred

Refund/ Shifitng

Cost to Complete by NBCC

Net Surplus/ (Deficit)

1 Amrapali Princely Estate Pvt.Ltd.

38 - -

44

(6)

2 Amrapali Eden Park Developers Pvt.Ltd.

12 - - 5

7

3 Amrapali Zodiac Developers Pvt.Ltd.

70 - -

61 10

4 Amrapali Leisure Valley Pvt.Ltd.

1,887 267 -

1,586

35

5 Amrapali Centuiran Park Pvt.Ltd.

575 - 2

769 (196)

6 Amrapali Grand 16 - -

-

16

7

Ultra Homes Construction Pvt.Ltd.

580 40 3

26 511

8 Amrapali Homes Project Pvt Ltd

7 - - -

7

9 Amrapali Dream Valley Pvt Ltd

1,435 - -

1,657

(222)

10 Amrapali Silicon City Pvt Ltd

558 - -

477

81

11

Amrapali Smart City Developers Pvt Ltd

489 - -

846 (357)

12

Amrapali Leisure Valley Developers Pvt.Ltd.

309 - -

322 (13)

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13 Amrapali Sapphire Developers Pvt Ltd

69 - -

90

(20)

Group Total 6,046

307

5

5,882

(148)

Refer ANNEXURE XXIII The unsold Inventory in the various schemes where forensic audit was carried out is to the tune of Rs 1,958.82crores spread-over in 5,229Flats. *Unsold inventory of Amrapali Centurian Park Private Limited comprises of three projects namely- Amrapali Tropical Garden, Amrapali Terrace Homes, O2 Valley. We have not been provided the inventory details of O2 Valley, the data mentioned here and included in calculation of surplus/deficit is agreed in discussion with CMD, Amrapali Group. Unsold units of O2 Valley is 223. The unsold Inventory in respect of the commercial shop space amounts to Rs.162 crores spread-over in 5schemes. *487 units are available in commercial project Tech Park which are yet to be examine. The detailed list of inventory is attached in ANNEXURE XXII.2. 15. Sale of Flats at lower prices (Under-Valued Transactions) While scrutinizing the record for sale of flats, we have observed that number of the flats were sold at low prices as compared to the prices existing on or near to those dates and on which rates sales were made to other home buyers. It is further submitted that some of the flats have been sold even at rates as low as RS. 1,000 - RS. 1,400 per square feet which is even lower than the cost of construction. No satisfactory explanation has been given to us for the same. Possibility of taking cash outside the books of accounts cannot be ruled out. Total Amount

involved in under-valued transaction is enclosed Annexure 26-A (Volume III Page no 584-586 ) & at Annexure S-7 (Supplementary Report page no 2842-2893). The amount shown below is the minimum and it may be in the range of 1,000 crore. Since the sample size is 5856 against the total number of more than 42,000 flats.

S.no. Name of the company Number of

Units

Amount (In

Crores)

Refer Page

Number

1 *Amrapali Sapphire

Developers Private

Limited

315 76.02 205 - Point No. 1

117

2 *Amrapali Leisure

Valley Developers

Private Limited

70

5.88

222 - Point No. 1

3 *Amrapali Smart City

Developers Private

Limited

261 18.97 232 - Point No. 1

4 *Amrapali Silicon City

Private Limited

468 73.05 257 - Point No. 1

5 *Amrapali Dream

Valley Private Limited

1,752 24.11 248 - Point No. 1

6 #Amrapali Leisure

Valley Private Limited

122 8.53 2811

(Supplementary

Audit Report)

7 #Ultra Home

Construction Private

Limited

524 30.87 2811

(Supplementary

Audit Report)

8 #Amrapali Centurian

Park Private

Limited

1,912 43.12 2811

(Supplementary

Audit Report)

9 #Amrapali Princely

Estate Private Limited

146 6.70 2811

(Supplementary

Audit Report)

10 #Amrapali Zodiac

Developers Private

Limited

107 6.75 2811

(Supplementary

Audit Report)

11 #Amrapali Patel

Platinum

179 27.31 2811

(Supplementary

Audit Report)

Total 5,856 321.31

Note: *These calculations are based upon the rates, where the sale consideration of the flat is less by more than 25% of the average sale price of the project. # These calculations are based upon the rate of Rs.2000/- per sq. ft. and where flats were sold lesser than the rate of Rs.2000/- per sq. ft.

16. Group investment in other projects

The group started demerging and delinking the good projects from the

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brand name “Amrapali” though these projects were initially launched as Amrapali projects. The said projects identified till the date of writing of the report are La Residentia, Vinayaka square, Heartbeat City, O2 Habitat. La Residentia A big project having more than 3,200 dwelling units was launched in 2010-11 having an equity shareholding of 19.75% in the name of Stunning Construction Pvt Ltd.

• Stunning Construction Private Limited (‘Stunning’), an Amrapali group company, holds 19.75% shares in the company. Stunning has been a consortium partner since beginning and land was allotted by Noida Authorities to the 5 members consortium including Stunning. The project was launched as an Amrapali group project and was marketed accordingly. As per the discussion with directors of La Residentia Developers Private Limited, they broke up with Amrapali group in 2017. 2017 is the year when writ petition was filed before the Honorable Supreme Court. It is informed to us that a marketing agreement was entered into between La Residentia Developers Private Limited and Amrapali group (name of the company not known) that Amrapali group would market its project for a consideration of Rs.16 crore. It was informed by Mr. Sanjeev Kumar (director of La Residentia Developers Private Limited and a very old friend of Mr. Shiv Priya, director, Amrapali group) that though the agreement was signed but Amrapali group didn’t provide a copy of the agreement. It proves that Amrapali director were having significant influence on La Residentia Developers Private Limited that they had an authority even not to give a copy of the agreement to a person/entity who has signed it.

• Out of Rs.16 crore, which were to be paid to Amrapali group as per the agreement, Rs 4 crore were paid to Saffron Propmart Consultancy Private Limited Owned and controlled by CFO Chander Wadhwa) under a verbal instruction of Mr. Adikhari, GM/DG accounts of Amrapali group. It is to be noted that directors of La Residentia Developers Private Limited were acting and working under the supervision of Mr. Adhikari who was a middle level management officer. It indicates that the project was conceived by Mr. Anil Kumar Sharma & Mr. Shiv Priya directors of Amrapali group and Mr. Sanjeev Kumar, Mr. Mukesh Kumar Roy and others were only a front.

• it is very clear that there was no contribution of funds from the consortium partners whatever funds contributed by the consortium partners were not only withdrawn within a very short period but over and above that extra funds were given to them in the name of interest free loans and advances.

• Amrapali group companies have transferred some of their buyers to the company. We found that the list of unsold inventory was sent to Mr. Anil Sharma and it was he who decided that the following buyers from Amrapali group companies be shifted to La Residentia this proves that La Residentia was under the direct control of Mr. Anil Sharma and Mr. Shiv Priya and is an entity of Amrapali group.

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• The company is also using the Brand name/trademark of Amrapali group on its letterheads.

• The website of the company is following www.amrapali- laresidentia.com.

• When we open the website of the company, advertisement page was hiding details and it is a project of Amrapali group.

17. Summary of amounts recoverable standing as debit balances in books of accounts Amrapali group of companies had several amounts lying in debit balances in the form of advances recoverable on account of long term loans to third parties, short term loans given to third parties, advances given for purchase of plots, advances given to creditors for materials/others etc. Amrapali group of companies were mostly diverting loan funds as well as home buyers funds to directors, key managerial personnel, relatives, group companies and third parties. They did construction activity only in part and created a circle for movements of funds vide bogus expenses or hollow transactions. Funds were given to several parties in the garb of advances against purchase of land or for purchasing material for construction and booked as sundry creditors with debit balances. However, in effect such amounts were neither returned nor any expense was booked against them. Such amounts are as old as 2006-07, which have not been returned or no expense has been booked till date. Total of such recoverable amounts to Rs.582 crore. Top 20 of such parties with their balances are stated hereunder:

Name of the Company/Entity Total

Jaura Infratech Private Limited 34,55,00,000

Mauria Udyog Limited 22,24,34,199

Anil Kumar Sharma 16,34,69,224

Shiv Priya 11,53,30,097

Prem Mishra 10,26,03,947

Vansh Consultants Private Limited 9,75,00,000

Apex Infraventure Private Limited 7,95,05,000

Rinku Computech Private Limited 6,69,59,467

Sapphire Digital Printers 4,46,83,088

Heart Beat City Developers Pvt Ltd 4,29,32,000

Rubi Creations Private Limited 4,26,27,790

Ajay Kumar 4,05,40,931

Star Land Craft Private Limited 4,01,85,888

Heartland City Developers Private Limited 4,01,22,762

Vidhya Shree Buildcon Private Limited 4,00,00,000

Sky Tech Buildcon Private Limited 3,88,53,775

Skyline Tele Media Services Limited 3,48,02,771

Shantinath Enterprises 3,24,71,100

120

Red Star Tradex P Ltd. 3,00,00,000

Mohabbat S/o Abbas 2,66,99,000

Total of top 20 companies/parties 1,64,72,21,039

It can be seen from records that the recoverable are due since long and there are mostly no movements subsequently either in the form of booking of expenses or receipts. Out of the amounts recoverable from parties in case of Ultra Home Construction Pvt Ltd, 20 parties having huge balances recoverable were called for personal interviews. 7 parties appeared and no satisfactory explanation was provided (Refer Annexure X.1, Volume IV page no 1015-1019)

18. Assets created out of diverted funds

Refer Page no 550 to 557 of Volume II 19. Cars The Company has bought many luxury cars and other cars out of the funds of the homebuyers. Many of the cars were transferred in the name of the relatives / employees without passing any entries in the books of accounts and receiving any money from the transferees. Moreover, the cars were transferred in the name of the persons who was not associated with the company which originally bought the cars. We have already reported the matter in the court hearings and the honourable court has ordered for the sale of the said luxury cars. Out of the above 15 cars only 9 were made available for physical verification.

20. HOMEBUYERS The group constructed and booked/sold residential and commercial units:

a) before launch of the projects; b) at the launch of the projects; and c) Continued to book till any inventory was left over in the projects.

The customers booked the flat for:

a) Abode; b) Investment; c) barter in advance; d) adjusting their amounts in respect of work done in same project

(creditors of same projects) e) adjusting their amounts in respect of work done in other projects

(creditors of other projects) f) booked in the name of unidentifiable/untraceable

persons/entities. During this procedure, we were informed that the data related to customers was maintained in the software FAR VISION as well as manually of some of the projects. The Data in such fashion is intentionally maintained to avoid findings in future the gaps.

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1) It is found that the promoters/directors/senior management of the company were treating the inventory of the projects as personal asset and started allotting the unsold inventory to various persons/entities by passing an accounting entry in the Accounting software tally. 2) We found that 14 flats were booked in the name of Mr. Rajesh Viz in the project Amrapali Centurion Park, Terrace Homes. The customer data in FAR Vision provided, shows only Rs 10,000/- received for each flat from him as a booking amount. We did not find his name in the tally data of books of accounts of Amrapali Centurion Park Pvt. Ltd. We sent Emails to him to confirm the same but did not get any satisfactory response from him. He did not come and avoided meeting us for last 5 months. 3) We found differences in amount shown as per the records i.e. amount received as per Customer data base sheet extracted from

software FAR VISION and the amount actually paid by the customer. We came to know about the differences in receivable after sending e mails/ speaking over the phone to the customers. A list of such differences is given on sample basis (Page No. 483) 4) We found the following 2 customers who had been handed over the possession but still appearing in the Customer database as undelivered. Both have paid less than 50% as per company records.

5) For amount received there is a mismatch in the tally records/ FV accounts and customer data in software Far Vision. Amount received from a customer with flat no. though shown in customer database but didn’t account for in the tally. List on sample basis is given (Page No. 486) 6) We found a mismatch that the name of customer is different in accounting package (tally& ERP FAR Vision) and customer data record in FAR VISION. We were not explained satisfactorily the reason for the same. (Page No. 489)

7) We found a no. of customers/buyers whose know your customer (KYC) is not available (N/A).For example PAN, e-mail, phone and address (Page No. 490) 8) The supplier of material and provider of services were unsecured creditors for the amount claimed by them. There are a number of flats booked against the amount claimed as due. All this was done in 2015-17. There are flats allotted to parties (unsecured creditors) in different projects irrespective of whether any service was provided/ material supplied to the same project or not. We propose the following order for allotment of flats to the persons/ entity who have booked the flats subject to the verification of their claim:

(a) For abode;

S. No.

PROJECT NAME CUSTOMER NAME

FLAT NO. POSSESSION (as per customer)

POSSESSION (as per details provided to us)

1 Amrapali Zodiac MR. SAMEER KR. SUNEJA

JP-03 Handed over Not handed over

2 Amrapali Princely Estate

MRS. MRIGANKA PRABHAT

FP-01 Handed over Not handed over

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(b) For investment without interest and payments made by bank; (c) For investment against barter in advance if services rendered/supplies made to the same project; (d) To the creditor if services rendered/supplies made to the same project; and (e) The last should be the person/ entities who have supplied and services rendered to the group companies

9) We checked the customer data on the basis of a selected criteria (customers having two or more than two units& customers not having KYC details) and found that no money is received against the sale of those units. The units are booked by just passing a JV. A few examples are shown below. The detailed list of units (project wise) which we checked is also attached. (ANNEXURE-XV.28 page 2646-2658 vol. VIII)

S. No. Project Name Customer Name Unit No Unit Cost

(ex ST)

1 Amrapali Grand MORPHEUS SECURITY

PVT. LTD

T-7-G2 74,16,700

2 Amrapali Grand SANJEEV KUMAR T-6-G4 94,76,511

3 Amrapali Grand MAHESH KUMAR T-6-G2 84,99,961

4 Amrapali Eden

Park

IshwarKhandelwal D-2102 84,28,450

5 Amrapali Eden

Park

AMRENDER KR JHA/

SUNITA JHA

C-G01 1,40,00,000

6 Amrapali Eden

Park

MAHESH KUMAR C-G02 70,75,000

7 Amrapali Eden

Park

SUSHMA RANI/ VIJAY NARAYAN

RAI

C-G03 96,75,859

8 IMT Manesar SAI Glazing 323 82,09,095

9 IMT Manesar NOPS Infrastructure 227 87,76,128

10 IMT Manesar NOPS Infrastructure 234 1,32,02,500

11 Amrapali village Mrs Pooja KM-1205 31,35,000

There have been instances of duplicate allotment of flats i.e. one flat is allotted to more than one person and money is received from both the home buyers. Sample details are given here under. The work relating to duplicate flats allotment is still in the process of being checked.

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Flat No.

Date of

Booking &

Allotment Name of Buyer Amount in Rs.Flat No.

Date of Booking

& Allotment Name of Buyer Amount in Rs.

1 Crystal Homes T3-2301 09-11-15 Sulochana Karwa 2,500,000 T3-2301 26-05-16 Aayush Soni 2,013,750

2 Amrapali Princely Estate M-P01 07-11-15 Nilesh Karwa (HUF) 5,000,000 M-P01 15-10-16 Sanjeev Kumar Goel 6,344,460

3 Amrapali Princely Estate C-P03 07-11-15 Pramod Karwa (HUF) 5,000,000 C-P03 15-10-16 Shalabh Mittal 3,105,635

4 Amrapali Patel Platenium A-2303 26-03-10 Pramod Karwa (HUF) 2,000,000 A-2303 20-04-12 Manjul Kumar Tyagi 4,826,991

5 Amrapali Patel Platenium J-2401 26-03-10 Rajeswari Karwa 1,500,000 J-2401 N/A Nissa Hussaini -

6 Crystal Homes T1-2401 09-11-15 Nilesh Karwa (HUF) 2,500,000 T1-2401 13-06-16 Manish Jain 2,030,400

7 Crystal Homes T2-2403 09-11-15 Nilesh Karwa (HUF) 2,500,000 T2-2403 28-07-16 Ajit Pal Singh 312,500

Silicon City G1-104 24-03-11 Nilesh Karwa & Seema Karwa 1,250,000

Silicon City G1-204 24-03-11 Nilesh Karwa & Seema Karwa 1,250,000

23,500,000 18,633,736 Total Amount Received

Tower has not been constructed and Fake allotment is been

made to Nilesh Karwa & Seema Karwa

First Buyer Second Buyer

S.no. Name oF Project

8

Ultra Home Construction Pvt Ltd allotted flats to buyers on false promises and forged documents. An instance being in the case of Mr. Mohammad Kaif where he was allotted 3 flats i.e G-2502, G 2501 and LG-1 vide agreements dated 22nd August 2012, 19th September 2012 and 9th January 2013, through their consortium- Amrapali Patel Platinum and UHCPL received INR 2 crore on assured return basis. However, subsequently, it came to the knowledge that flats mentioned in the buyer agreement never existed as 25th floor did not exist in the approved building plan. Further, as per details provided by Mr. Kaif, as on 31st March 2017, an amount of INR 1,40,00,000 was payable to him, however, as per books of accounts (in tally data), an amount of INR 1,70,00,000 was payable to him by UHCPL.

Hi Tech City Developers Pvt Ltd has huge amount of Trade Receivables of INR 1.64 crores Whereas , the project under this Company i.e. Amrapali Empire has been completed. Most of the flats have been handed over and registry has been done. We fail to understand as to why the aforesaid amount is still appearing as recoverable from various home buyers. This implies it was received in cash and not accounted for. The complete list of all such flat owners along with their sale amount and amount received is enclosed below:

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Sr No UNIT

NO. BUYER NAME Total Cost Total Received

Balance

Amount

1 A-1603 Son Pal Sharma/Shashi Sharma 3,135,000 2,380,028 754,972

2 A-1604 Sunil Kumar Jha 2,527,000 1,984,673 542,327

3 A-1803 Sahji Nambiar 3,160,000 3,027,520 132,480

4 A-1904 Himanshu Khurana 2,527,000 2,459,629 67,371

5 B-301 Suresh Chand Sharma 3,135,000 3,055,584 79,416

6 B-1604 Mrs. Niki Rani 2,460,500 1,974,973 485,527

7 B-1703 Rahul Ranjan 2,640,000 485,984 2,154,016

8 B-1803 Ravi Kant Tyagi (STAFF) 3,193,000 2,992,196 200,804

9 B-1903 Monika Thakur 3,696,000 2,000,000 1,696,000

10 B-1904 Neeraj Soni 2,527,000 1,903,967 623,033

11 C-604 Nirmala Devi 1,750,000 1,261,035 488,965

12 C-702 Manish Raj Sharma 1,913,625 1,302,510 611,115

13 C-905 M. A. Khan 2,004,750 1,603,951 400,799

14 C-1604 Bharat Lal Agrahari 1,900,000 1,624,794 275,206

15 C-1701 Sanjay Kumar 2,023,675 1,375,525 648,150

16 C-1705 Syed Sharique Ali 2,308,500 2,035,125 273,375

17 C-1901 Uday Shankar Rai 2,004,750 1,000,185 1,004,565

18 C-1902 Suresh Chandra Mandal 2,004,750 1,414,459 590,291

19 C-1904 Mrs. Annu (Gulshan Driver) 1,645,000 921,525 723,475

20 C-2001 Shailendra Kumar 2,357,800 2,308,500 49,300

21 C-2002 Mrs.Nivedita Singh 2,333,500 871,103 1,462,397

22 C-2003 Dheerendra Kumar/Shailendra kumar 1,111,500 663,834 447,666

23 C-2004 Manjari Smrita 1,148,200 1,111,500 36,700

24 D-102 Prasanna Kumar Das 1,900,000 1,861,637 38,363

25 D-1703 Sri Dhaneswar Dash 2,308,500 2,172,696 135,804

26 D-1903 Virendra Kumar 2,308,500 2,209,508 98,992

27 D-1904 Randhir Kumar 1,900,000 1,805,148 94,852

28 A-303 Manish Kumar 3,382,500 3,302,347 80,153

29 B-403 Anupama Tiwari 3,176,250 2,182,659 993,591

30 B-1902 Md. Merajul Hasan 2,527,000 2,191,025 335,975

31 B-1501 Rajesh Kumar 3,093,750 2,943,106 150,644

32 C-1806 Anand Shankar 1,900,000 1,504,737 395,263

33 C-1704 Sourabh Shandilya 2,100,000 1,702,175 397,825

78,103,050 61,633,638 16,469,412 Total

It is worth mentioning here that of the above 33 home buyers most of them are employees/ ex-employees of the Company. The management has done under-valued registry for all these cases. We are of the view that the management has under-valued these registries to evade the stamp duty to be paid to the government and has taken the money outside the books from these employees and these amounts outstanding in the books are only book entries and should be recovered from the management. 21. Misrepresentation of Facts As per the information provided and the records made available to us, Flat No C-704 in Amrapali Castle and Flat No D-702 in Amrapali Eden Park were shown as vacant flats and were provided to NBCC for the purpose of sale. However, we have received letters from Mr Manoj Kumar and Mr Maneesh Gaur in Amrapali Castle and Amrapali Eden Park respectively along with many Annexures. (Payment receipts, NOC, possession letter).that the flats have been booked by them 9) While scrutinizing the customer data, we found a case where the flat is sold at discount. The total value of the flat is booked as a discount. There may be many more such cases.

Project Customer Name Unit No Area Unit Cost Discount

Amrapali Leisure

M/S. AMCON BUILDCON PVT.

A-002 2525 80,38,484 80,38,484

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Valley LTD.

We are informed that Mr.Adhikari Debi Prasad Das (GM/DGM Accounts) and Mr. Mohit Gupta (Director Marketing) were directly responsible for accounting and collection of receivables and marketing of flats. We interviewed both the persons several times. Both kept on changing their stand/answers and did not cooperate in answering our queries. Their answer to every question was that they are not aware. They did not provide many documents and the laptops which are in their possession. In spite of repeated reminders, Mr. Mohit Gupta has not made available the complete data with respect to home buyers/flat owners. We found Mr Mohit Gupta and Mr Adhikari Devi Prasad Das directly responsible for all the wrongdoings in booking of receivables, marketing of the flats and in handing over the possession of the flats. Utilities like Milk booth, Nursery schools, Senior secondary schools, Nursing homes allotted to various parties should be cancelled. LIST OF FLATS (Residential & Commercial) ALLOTED TO BROKERS AND SUPPLIERS 833 Flats booked (identified till now) in the name of various vendors should be attached and be released at last till the last home buyers gets his/her flat.If there is a shortfall , then the flats should be treated as inventory and be sold . The following flats should be cancelled. These are the 353 flats booked in the name of various vendors parties without receipt of any sum. The flats has not been included in inventory and will be available for sale after giving a chance to the Flat buyer if he/she/it introduce any documents to substantiate the claim. Refer list below: It has further been observed that, 75 flats adjustments were made between M/s LA Residentia and Amrapali Group of Companies against the aforesaid Branding Income. These home buyers have already been allotted flats in M/s LA Residentia. Hence, the 75 Flats booked by Amrapali Group in various schemes should be treated as vacant. (Volume-I Page No. 200). The Complete List of all such flat has been enclosed as Annexure 25-A. (Volume III Page no 582-583)

22. Sureka group Amrapali and Sureka’s have a very long and intricate association starting officially with the partnership venture ‘Amrapali Homes’ in 2006 wherein Ultra Home Construction Private Limited and Mauria Udyog Limited is partner and developed project in name of Amrapali Homes in Indirapuram then Amrapali Grand wherein Ultra Home Construction Private Limited and Bihariji Ispat Udyog Limited were partners, though the land was allotted to Bihariji Ispat Udyog Limited. Initially Amrapali Group ventured like these types of association as he

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was independently not able to meet the net worth, turnover and other eligibility criteria for land allotment by Noida authorities. They then next associated in Sapphire Project wherein Sureka’s family participated as shareholders and directors in the Company. Every Joint Venture used to have an unexecuted profit sharing and investment arrangement. Since the company didn’t declared dividend ever, the profits were drawn by Sureka family in the nature of advances which has majorly been squared off against billing from Mauria Udyog Limited, Jotindra Steel and their other related companies. Some of the amount is still lying as advance in the books of accounts of Amrapali Group. In 2012 Amrapali Group invested in 25% stake in Sureka family’s three projects Heart Beat City, Pebbles Prolease, Three Platinum Softech. Apart from subscribing to share capital, the further investment was made directly as advance or billing from Amrapali Group to these companies and some through shell companies as well.

Further they did a project in Ultra Home Construction Private Limited with Mozambique. This project was planned, coordinated and managed by Mr Navneet Sureka in the name of Ultra Home Construction Private Limited and whatever advance was sanctioned and disbursed by the Government of Mozambique through EXIM bank to Ultra Home Construction Private Limited was eventually diverted to Sureka family through billing from Jotindra Steel and Tubes Limited, Mauria Udyog Limited, etc. A separate bank account of Ultra Home Construction Private Limited was opened in State Bank of Patiala, Faridabad branch where signatory was Mr Akhil Sureka who used to operate the account from there. The entire transactions of LC and EXIM bank was routed from that account. Navneet Sureka visited more in the period of contract finalization to Mozambique Partner in the following projects:

• Amrapali Sapphire Developers Pvt. Ltd. – 10.52% of shareholding BihariJi Ispat Udyog Limited

• Amrapali Smart City Pvt Ltd – 10% shareholding held by Mauria Udyog Ltd

• Amrapali Homes – 5% - Mauria Udyog Ltd (Rs.20 crore given as an advance before 2008 and is recoverable)

• Amrapali grand – 10% BihariJi Ispat Udyog Limited –We were informed that the land was allotted in the name of Bihariji Ispat Udyog Ltd and construction and development work was done by Amrapali group.

Directors in the following companies

• Amrapali Leisure Valley Pvt Ltd – Akhil Sureka Cheque signatories in the following companies

• Amrapali Leisure Valley Pvt Ltd

• Amrapali Dream Valley Pvt Ltd

• Amrapali Leisure Valley Developers pvt Ltd

• Amrapali centurian Park Pvt Ltd From the above, it is clear that Sureka group directors namely Vishnu Sureka, Navneet Sureka and Akhil sureka were promoters in amrapali group. They were in equal control of affairs with other promoters (Anil Sharma Shiv Priya, etc.). They not only invested as a promoter heavy

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amount but also provided the land allotted to Bihariji Ispat a sureka group company. But the amount invested was withdrawn in a very short period by other associate companies in the form of interest, supplies, provision of services etc. it was found out that there were many other suppliers who never interacted with any of the directors/staff but supplied material to Amrapali through Akhil and Navneet Sureka. In our opinion, this was nothing but accommodation bills and a form of withdrawing funds from the group. None of the employess/ directors of the sureka companies knew that Sureka group has supplied ,material to Amrapali group. Though sureka group has a policy and procedure wthat for any item above Rs,. 5,000/- a purchase order would be issued but it was not followed in the case of supplies to Amrapali. Surprising all the transactions worth more than 500 crore has been handled single handedly by Navneet and akhil sureka without involving any of the directors and employees. All the cheques were also

signed by Usreka family and not by any other directors. It is pertinent to note that the amount paid for FSI purchased by Suraka group companies was taken back on the same day by routing through a number of companies.All such cheques for money laundering were signed by Akhil Sureka Furthermore, it is found that the amount so paid ie Rs. 80 crore was also received from suppliers of the Amrapali group. Therefore in our opinion,not only FSi should be canceled but the amount os Rs. 80 crore is recovereable from them. They adopted the same methodoly. Formed various business entities, appointed small time employees the directors in these companies and routed fundsof 100s of crores and it may be in the range of 1000s crores.. None of the directors were knowing about any of the business transactions. Further more most of the directors never attended any board meetings,knew about nature of business the company does, name of other directors in the company and so on. We are not sure who was teacing the fraudlent practices to whom, whether Sureka to Amrapali or vice versa. It was observed Rs.13.44 crore paid to Sureka Public Charitable Trust were transferred to donation account subsequently. It is submitted that Sureka Public Charitable Trust is a group institution of Jotindra Steels & Tubes Limited, which is also under the forensic audit. This should be recovered from the Jotindra Steels & Tubes Limited. Sureka group used several companies to route funds from Amrapali

group to Sureka group, an example being in the case of Amrapali Infrastructure Pvt Ltd, where the company received Rs.3.23 crore from “Synergy Freightways Private Limited” from 26th March 2015 to 30th March 2015. On 31st March 2015 an amount to Rs.4.18 crore was paid to the said party through 16 separate transactions and thereby leading to a debit balance recoverable from the party amounting to Rs.0.9,5 crore as on 31st March 2015. This amount should be recovered from the Sureka Group. It is worthwhile to mention here that M/s Synergy Freightways Private Limited is an associate Company of M/s Jotindra Steel and Tubes Limited. Further, there are no business transactions with the said party except routing of funds.

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Another example being in the case of Shriv Buildmat Private Limited where one of the directors is common with MauriaUdyog Limited. On scrutiny of ledger accounts of Shriv Buildmat, it was observed that during FY 2014-15 and 2015-16, the said company had almost 100% sales to Amrapali group of companies. It was also observed that one flat was allotted to Mr. Atul Kumar, Director of ShrivBuildmat Private Limited in Verona Heights, against the amount due to the said company. This adjustment is not genuine and the relevant amount should be recovered from Mr. Atul Kumar or his flat may be attached. As per ledger account advance to Amrapali for flat, a sum of INR 34.05 lakhs has been shown as recoverable as on 31st March, 2015. There is no name of the Company to which such advance has been given in the books of the Amrapali Group of Companies. Thus, this amount of INR 34.05 Lakhs is shown as recoverable is not genuine.

A sum of INR 53.21 Lakhs has been debited to Labour Charges Contractors on account of bill no. SBPL/Noida/010 dated 13/3/2013 has been recorded in the books of Amrapali Infrastructure Private Limited on 16/03/2015. RN Traders During the financial year 2016-17 and 2017-18, a sum of INR 17.63 crores has been debited to this party and standing recoverable as per Raw Tally Data, till date as per details given below:

Date Particulars Amount in lakhs

Remarks

30-11-2016 Bank Payment 0.02 Payment made without any narration on the voucher

13-12-2016 Bank Payment 750 Payment made without any narration on the voucher

19-04-2017 Transfer entry through MauriaUdhyog Limited

1,004 Being Amount transfer as per letter signed by Mr. Anil Sharma

19-04-2017 Transfer entry through Sarvomme Infrastructure Private Limited

960 Being Amount transfer as per letter signed by Mr. Anil Sharma

Total 2,714.02

Further, there is no Name, Pan or Address available in the records of M/s RN Traders. It was further observed that there are no business transactions with M/s RN Traders. It is possible that this amount of INR 2,714.02 Lakhs has been withdrawn by the management for their own personal use and should be recovered from the management. BiharijiIspat Udyog Limited being one of the partners of Amrapali Grand always had negative capital. They withdrew much more than what they brought into the business. There is no substance in them being called as capital contributors to the business of Amrapali Grand. As on 1st April 2008 they had withdrawn INR 12 crore and invested a capital

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contribution of INR 1.5 crore. As on 31st July 2018, they have debit balance of INR 1.67 crore and negative capital of INR 30,380. They always withdrew homebuyers funds for misusing for their own agendas apart from the business. Out of INR 12 crore given to BihariJiIspat Udyog Limited, they returned INR 6.45 crore through bank and the balance amount was adjusted against receivables from Ultra Home Construction Pvt Ltd and against capital contribution by BiharijiIspat Udyog Ltd. Amrapali Grand gave loans and advances to below parties, which are recoverable as on 31st July 2018 amounting to INR 25.73 crore as per Tally data.

It has been observed that amounts paid to parties above were mostly routed to Quality Synthetics Pvt Ltd which primarily belongs Sureka family. For example:

S. No. Name of the Company/Person

Amount Date of transaction

1 Anil Kumar Sharma 10,03,55,900 20.11.2007 to 25.07.2018

2 Shiv Priya 7,10,50,000 20.04.2007 to 22.09.2010

3 Madan Mohan Sharma 2,01,00,000 20.11.2007 to 5.12.2007

4 Ajay Kumar 2,74,68,000 23.06.2007 to 31.03.2011

5 BiharijiIspat Udyog Limited 1,67,00,000 5.04.2006 to 31.07.2018

6 Amrapali Homes 54,01,519 15.09.2006 to 07.12.2013

7 SuvashChander Kumar 47,11,000 3.01.2008 to 01.12.2009

8 Shiv Priya –Imprest 35,70,480 1.04.2008 to 24.12.2009

9 Amrapali Zodiac Developers Private Limited

19,20,000 27.06.2017 to 13.07.2017

10 Jhamb Finance and Leasing Private Limited

19,00,000 5.11.2015

11 Amresh Kumar 16,86,000 1.04.2007 to 15.09.2008

12 GK International 10,00,000 21.01.2007

13 Pallavi Mishra 6,07,080 12.07.2018

14 Mohit Gupta 5,80,000 25.06.2007 to 11.04.2008

15 P K Choubey 1,50,000 2.08.2007

16 Amrapali Foundation 1,00,000 24.11.2015

17 Suraj pur Sales & Service 1,00,000 1.11.2010

Total 25,73,99,979

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a) Payment of Rs 2,74,68,000/- has been made to Mr Ajay Kumar

from 2007-08 to 2010-11 as advance recoverable. Out of this, Rs 77,00,000 was paid by him for purchase of property located at Jaypee Greens, Noida & Rs 50,00,000 was paid by him to Quality Synthetics Industries Limited.

b) Payment of Rs 10,03,55,900 has been made to Mr Anil Kumar Sharma from 2007-08 to July, 2018. Out of this, Rs 3,00,00,000 was paid to Quality Synthetics Industries Limited.

c) Payment of Rs 7,10,50,000 has been made to Mr Shiv Priya from 2007-08 to September 2010. Out of this, Rs 1,00,00,000 was paid to Quality Synthetics Industries Limited.

While reviewing the books of accounts of Amrapali Infrastructure Private Limited and M/s Jotindra Steel and Tubes Limited, it has been observed that Amrapali Infrastructure has made purchases from M/s

Jotindra Steel against Letter of Credit. The letter of credit has been discounted by M/s Jotindra Steel with the banks. The discounting charges of INR 1.30 Crores have been debited by M/s Jotindra Steel to M/s Amrapali Infrastructure. We fail to understand the reason for this treatment. In normal course of business, the supplier is the person who bears the discounting charges in respect of the transactions as the margin when sold on Letter of Credit are generally higher. This amount of INR 1.30 Crores on account of discounting charges of Letter of Credit Should be recovered from M/s Jotindra Steel and Tubes Limited.

i. It has also been observed that M/s Jotindra Steel and Tubes Limited has issued service invoices for erection, shifting and transportation charges amounting to INR 96 lakhs approximately during the financial year 2014-15 as per details given below:

Date Bill number Name of the Party

Gross Amount Tax Total

Nature of the Service

6/6/2014 JST/FBD/SG/000 1

Jotindra Steels & Tubes

5,000,00

0

618,00

0

5,618,000 Erection Charges

6/6/2014 JST/FBD/SG/000 2

Jotindra Steels & Tubes

2,532,00

0

78,239

2,610,239 Transportatio n Charges

12/1/201 4 Bill not available

Jotindra Steels & Tubes

247,500

7,648

255,148

Transportatio n Charges

12/1/201 4 Bill not available

Jotindra

Steels & Tubes

365,000

11,279

376,279

Transportatio n Charges

2/1/2015 Bill not available

Jotindra Steels & Tubes

221,400

6,841

228,241

Transportatio n Charges

2/1/2015 Bill not available

Jotindra Steels & Tubes

182,700

5,646

188,346

Transportatio n Charges

3/31/201 5 Bill not available

Jotindra Steels & Tubes

164,700

5,089

169,789

Transportatio n Charges

3/31/201 5 Bill not available

Jotindra Steels & Tubes

216,000

6,675

222,675

Transportatio n Charges

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Total 9,668,71

7

Further, on scrutiny of the invoices issued by the JSTB it appears that the invoices raised for the above services are completely different from the invoices issued regularly and are prima facie non-genuine. Hence, the same should be recovered from JSTB or the Company Management as both the parties have been partnering in various projects. ii. It is further observed that purchases amounting to INR 7.09 Crores,

INR 59.53 Crores and INR 47.04 Crores has been made from this party in M/s Amrapali Infrastructure Private Limited during the financial year 2013-14, 2014-15 and 2015-16 respectively. While sample checking of the purchase bills, it was noted that the goods consignment notes enclosed with the purchase bill are issued by M/s Synergy Freightways Private Limited which is also a group Company of Jotindra Steel and Tubes Limited. Goods consignment note enclosed with the purchase bills don’t seem to be genuine in view of the undermentioned observations: 1. We sent a letter to M/s Synergy Freightways Private Limited as

per address on record which has been received back as undelivered.

2. Statement of Mr. Akhil Sureka, Managing Director of M/s Jotindra Steel and Tubes Limited was recorded and it was confirmed by him that most of the purchase/ sales transactions are back to back i.e. all such consignments are sent directly from their supplier to Amrapali Group of Companies. In these circumstances it is not understood by us that how the consignment notes of M/s Synergy Freightways Private Limited have been enclosed with most of the purchase bills, if the transactions were back to back for their supplies.

3. On scrutiny of the tally data/documents of Amrapali Infrastructure Private Limited and JST, it has been observed that no freight has been paid to M/s Synergy Freightways Private Limited either by Amrapali Infrastructure Private Limited or by JST.

This clearly establishes that all the GRs issued by M/s Synergy Freightways Private Limited are not genuine. Further, most of the purchase invoices of JST have been shown as sale on the same date with similar particulars/ quantity by raising the invoice on Amrapali Infrastructure Private Limited. We are of the view that these sales invoices raised by JST are also not genuine and are mere accommodation entries only. Sample details of such transactions for 2 days are enclosed below:

Sr.

No.

Date of

the bill

Bill

No.

Amt. of

Bill (In

Rs.)

Date of

the GR GR No.

Time

In

Time

Out

1 07.02.2015 698 1,652,641 07.02.2015 698 15:48 18:12

132

2 07.02.2015 699 1,462,037 07.02.2015 699 16:22 17:31

3 07.02.2015 701 1,136,176 07.02.2015 701 15:52 17:49

4 07.02.2015 703 1,143,610 08.02.2015 703 16:02 12:19

5 07.02.2015 704 1,138,241 08.02.2015 704 10:09 11:57

6 07.02.2015 705 1,138,241 08.02.2015 705 10:54 14:58

7 07.02.2015 706 1,382,740 08.02.2015 706 14:43 18:04

8 08.02.2015 713 892,503 09.02.2015 713 9:20 14:29

9 08.02.2015 715 952,167 09.02.2015 715 14:28 17:23

1 08.02.2015 716 948,647 09.02.2015 716 14:23 17:22

11 08.02.2015 717 890,025 09.02.2015 717 9:45 14:40

12 08.02.2015 718 1,032,512 09.02.2015 718 9:52 14:43

13 08.02.2015 719 368,446 09.02.2015 718 9:52 14:43

14 08.02.2015 720 1,383,566 09.02.2015 720 10:27 16:08

15 08.02.2015 722 1,136,176 09.02.2015 722 10:09 17:11

16 08.02.2015 726 1,087,502 09.02.2015 - - -

17 08.02.2015 727 223,673 09.02.2015 726,727 11:47 17:13

18 08.02.2015 728 1,135,763 09.02.2015 728 14:15 18:50

4. It has been further observed that there have been unaccounted cash transactions between the Amrapali Group of Companies and JSTB group of Companies as per documents seized during Income Tax Search in the premises of JSTB Group of Companies which are not accounted for in the Amrapali Group of Companies. Complete Copy of the Order of CIT (Appeals) where the observations regarding unaccounted cash were discussed is enclosed herewith as Annexure 34-C.

II. M/s Mauria Udyog Limited Ghaziabad While scrutinizing the ledger of this party it was observed as follows:

a) During the month of December 2015 there were 7 purchase invoices from this party amounting to INR 0.65 Crores all dated 18/12/15.

b) While scrutinizing the data called from M/s Mauria Udyog Limited it was noted that they have purchased these goods vide 7 purchase invoices dated 17/12/15 for INR 0.63 Crores.

c) There is no other purchase/Sale by M/s Mauria Udyog Limited. d) Similarly, in other months also 100% of the sale is made to

Amrapali Group of Companies. Since M/s Mauria Udyog Limited is a group company of Jotindra Steels & Tubes Limited, there is very high possibility of accommodation bills being issued and all their purchases being Non-Genuine amounting to INR 5.28 Crores for financial year 2015-16.

e) It is further observed that all the payments against these purchases’ bills have been made by issuing letter of credit. It seems that the Company is getting the LC’s discounted from the bank against these non-genuine bills.

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When we questioned Mr. Navneet Sureka who approached Amrapali group from trust side and who was approached in Amrapali group. He answered “he is not able to recollect”. He didn’t cooperate otherwise how it is possible that such a huge amount donated by Amrapali group companies and he is not able to remember the basic question. We recommend the amount donated should be recovered from the Sureka group. We are of the opinion that the supplies and services provided by Jotindra Steel & Tubes Limited (Rs 321 crore) and Mauria Udyog Limited (Rs 128 crore) are prima facie bogus in nature. 1. The 2 directors namely Mr. Akhil Sureka and Mr. Navneet Sureka are

equally responsible for companies having shareholding/capital/profitsharing and should be held responsible for shortfall in cost of construction and land dues to Noida authorities. (Refer annexure S-11 page 2960 Supplementary report) 2. Mr. Akhil Sureka opened bank account in SBI, Patiala, Faridabad in the name of Amrapali group companies and became a signatory. Amrapali did not have any base at Faridabad but Akhil sureka operates from Faridabad. 3. Jotindra Steel and Tubes Limited agreed to buy used construction equipments from Amrapali Infrastructure Private Limited and paid Rs 8 crore on 13th December, 2016 and immediately transferred that funds to group companies of Sureka group namely Jotindra Steel and Tubes Limited and others by routing the funds from Amrapali Infrastructure Private Limited to Ultra Home Construction Private Limited. 4. The FSI’s bought by Sureka group (details given in Chart D) without making any payment. The modus operandi was funds were paid from one company and on the same day were transferred to other Sureka group company by routing in 2-3 Amrapali Group companies. This would not have been possible without active involvement of Mr. Akhil Sureka, who is bank signatory. We found on sample basis that the amount of Rs. 80 crore so routed was originally started from Amrapali. The amount so claimed of Rs 80 crore has been routed through various companies. this amount has been paid out of Amrapali group against purchases and payment made to various vendors namely Bhagirathi

Tubes (Prop Mr. SHiv Kumar)etc. It was confirmed by supplier that he did not have any knowledge of any of the transactions and stated that all transactions were carried out in good faith under the advice & instruction of Mr. Akhil Sureka. He further submitted that he never visited any of the Amrapali group office, he or his staff including employees has never visited any of the offices or site of Amrapali group. When questioned on supplies of scaffolding material and steel to and purchase sales reconciliation of supplies along with purchase orders and sales orders, he confirmed that it is not available. The amount so paid should be recovered from the SUREKA group companies. It was further confirmed that funds movement were also on behalf of Akhil Sureka carried out under good faith. 5. An amount of Rs 55 crore was received from EXIM bank under line of

134

credit for a project was to be done in Mozambique. The group submitted a bogus bank guarantee for the said advance to Mozambique client from a bank namely International Trade Bank Limited. Out of the funds of RS 55crore, major amount was transferred to Companies of Sureka group. On enquiry from the Amrapali Group we came to know that the bank guarantee was made available by Mr. Navneet Sureka, Managing Director of Mauria Udyog Limited and that no bank exist/existed by the name International Trade Bank Limited. It was also informed that the project was under direct control and supervision of Mr. Navneet Sureka. It shows active involvement of Mr. Navneet Sureka in the project. Mr. Prashant Kumar and Mr. Ram Kumar are the persons who were travelling to Mozambique and know about the project but we could not get the contact details of these 2 persons

6. Quality Synthetics (Sureka Group) had given a loan to Amrapali Sapphire of RS 3 crore in March, 2009 at the rate of interest of 14% p.a. The company kept on paying to Quality Synthetics when it was having no funds for construction. The Amrapali Group was giving advances to various vendors/parties interest free and taking loan from Quality Synthetics, at the rate of 14% p.a. It is pertinent to note that the said amount of RS 3 crore along with all interest due totaling to RS 3,86 crore was repaid in March, 2018 when there were no funds available for construction of flat and the case was pending before Honorable Supreme Court. The amount should be recovered immediately. It is pertinent to note that the company is not doing any business and are used just for the purpose of money laundering. 7. Sureka group was a promoter and was providing the net worth certificate at the time of allotment of land to Noida/ Greater Noida authorities. At the time of making payment to the authorities for land funds were arranged by them. 8. The directors other than the family have come and informed that they were not knowing about the operations of the company and not attended any board meeting and papers were send to their residence for signatures. 9. There are many other high value transactions which we are in process of examination. 10. Further to our supplementary report dated 30th April 2019. The

directors of four companies of Sureka Group appeared before us from 9th May 2019 to 18th May 2019, the directors gave their statement On the basis of interaction in the statement given by them. We found as follows. The four companies which bought FSI for the sham companies created for the purpose of money laundering. Neither the shareholders nor the directors of the companies were aware of any transactions carried out by these companies. It is worthwhile to note that Mr. Vishnu Sureka, Mr. Navneet Sureka and Mr. Akhil Sureka were neither the shareholders nor the directors as well didn’t attend any board meeting including AGM/EGM. However, out of three who were signatory to the bank in all the companies. Directors were not aware of who have been the signatories. When questioned . Vishnu, navneet and akhil Sureka

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could not reply why they were the signatories when they were neither shareholders, directors, employees. Mauria Udyog Limited It was submitted in affidavit of Mauria Udyog Limited that Mauria Udyog Limited is a manufacturer and traders. It is stated that in addition, to manufacturing of LPG Cylinders, MUL also manufactures world class “Terry Towel” and “Apparels”. Further MUL also trades internationally & domestically in Steel Products in addition to Ferrous & Non Ferrous metals. MUL also deals in agro commodities such as soya bean, refined oil & deoiled cake used as fodder for the cattle feed/poultry industry.(from affidavit of MUL para 5 page 2) We scrutinized the annual accounts of Mauria Udyog Limited and found that the product that is TMT bars are supplied only to Amrapali Group companies and a very minuscule quantity to other companies.

In the 2010-11, TMT bar supplied for Rs. 52.97 crore and the payment received Rs 29 crore and that is also a major part of the payment of Rs 16.5 crore was received in March. Similarly, in the year 2012-13, supplies were made of TMT bar and the payment was received in the month of March 2012 just before closing of the year. Suddenly in the year 2012-13, trend is changed and Ultra Home Construction Pvt Ltd gave an advance of Rs 33 crore on various dates which was returned subsequently in the month of February and March. The above transactions are dubious in nature because we scrutinized the supply bills of Mauria Udyog Limited and found that Mauria Udyog Limited has supplied TMT bars only to Amrapali group of companies. It is not an item in which Mauria Udyog Limited has dealt with any other party except a miniscule quantity of 2-3 customers who in turn has also supplied to Amrapali group. There was no purchase order from Amrapali group to Mauria Udyog Limited even the size of TMT bar was not mentioned on the invoice of Mauria Udyog Limited. The rate charged by Mauria Udyog Limited are higher in the range of 15-20% then the market rate for which no satisfactory explanation was provided to us. In year 2013-14, Ultra Home Construction Pvt Ltd gave Rs 2.45 crore to Mauria Udyog Ltd which was returned on 29th March. It is surprising to find out that in the year 2014-15 in the month of May and June, Ultra Home Construction Pvt Ltd has

accepted LCs from banks without booking of any purchase of material. The company’s bank account is used for accommodation bills and Mauria Udyog Ltd was paid an excess of Rs 1.16 crore over and above an accommodation bill. In the year 2015-16, in the month of May Amrapali group started supplying TMT bars to Mauria Udyog Ltd, the purpose of supplies of TMT bars by Ultra Home Construction Pvt Ltd was not explained to us. In the year 2015-16, total supplies are to the extent of Rs 15.79 crore and in the year 2016- 17 amounting to Rs 5.36 crore. In the year 2015-16, payments were made to Mauria Udyog Ltd on behalf of Shri Satguru Metalloys Pvt Ltd and Bhagirathi Tubes of Rs 8 crore and Rs 6.50 crore respectively. We were not explained any reasons for making such payments. It is pertinent to note that the company is not doing any business and

136

are used just for the purpose of money laundering. Shri Narayan Rajkumar Merchants Ltd A group company of Sureka group paid Rs 1 crore to Amrapali Sapphire Developers Pvt Ltd. The entire amount along with interest payment of Rs 1.11 crore was paid to Shri Narayan Rajkumar Merchants Ltd, surprisingly Amrapali group didn’t charge any interest on payments made to Sureka group of companies but it had paid without fail interest @ 13.45% to Shri Narayan Rajkumar Merchants Ltd. Further an amount of Rs 2 crore was paid to Shri Narayan Rajkumar Merchants Ltd on 31st March 2018, when the matter was pending before the Honourable Supreme Court. The amount of Rs 2 crore should immediately be recovered from Shri Narayan Rajkumar Merchants Ltd and Sureka family.

It is pertinent to note that the company is not doing any business and are used just for the purpose of money laundering. Conclusion We are of the opinion that this company floated/formed for the purpose of money laundering and FSI sold to these companies were merely accounting and adjustment entries done by them transferring funds from one account to another as reported earlier in our supplementary report. The modus operandi adopted by Sureka family was the same as adopted by Amrapali Group i.e. they formed the companies, their employees who were paid salaries in the range of Rs 20,000-Rs 60,000 the shareholders and directors in these companies. It is pertinent to note that their signatory to the bank are family members. Mr. Navneet Sureka and Mr. Akhil Sureka used these companies for the purpose of money laundering of funds of Amrapali Group. The bank guarantee was bogus and we couldn’t find the bank name which issued the bank guarantee, it appears that there was a criminal conspiracy and the bank was not in existence. Mr. Navneet Sureka was in full control of Amrapali group companies which is very clear and can be understood from the transactions of donation. On the instructions of Mr. Navneet Sureka, GM/DGM accounts Mr. Adhikari was transferring funds to the trust from various group companies of Amrapali as and when desired by him and instructed by him.

None of the directors ever attended a board meeting it was informed that the directors signed the paper under the instructions and directions of Mr. Akhil Sureka. The fact was accepted by Mr. Akhil Sureka. This proves that there was non compliances of holding board meetings and AGM as required u/s 174 of Companies Act, 2013. Further, the bank signatories to the bank are Mr. Vishnu Sureka and Mr. Navneet Sureka as an authorized signatory. In what capacity they were the signatory, they could not explain and it was told by Mr. Akhil Sureka and Mr. Vishnu Sureka that the directors were having full faith upon them therefore authorized them as bank signatory surprisingly, directors were not the signatory this is an unique case which is difficult to found in the corporate history.

137

When there was a transfer of shares from one shareholder to other in full or part of his/her shareholding there was no transactions for consideration through banking channels. 23. 27 Additional companies (i) Funds invested to become the consortium partners by these 27 companies were from the Amrapali group of companies and these 27 companies were just the face created to comply the conditions of partners and also keeping in mind to demerge a part of the plot in furtue to the consortium partners. The funds contributed by these 27 companies were originated and routed from the Amrapali group companies. (ii) These companies were managed by CFO Mr. Chander Wadhwa, Company Secretary Mr. Pankaj Mehta and CA Mr. Anil Mittal.

General: 1. The companies were formed for the purpose of acquiring the shares in the 47 group companies to gain the position of consortium partner, for villa in Goa, immovable property E/17 Surajkund Noida, D- 151 , Preet Vihar, NewDelhi, First Floor-E-57, Preet Vihar, New Delhi. for routing the cash during demonetization and booking flats in IT Park Greater Noida of Ultra Home Construction Private Limited. The cash on Hand of Rs. 1.98 crore. From these companies is not traceable and is misappropriated and be recovered from CA Anil Mittal The Directors in these companies are Junior employees of Anil Mittal Statutory Auditors namely

1. Pankaj Mehta Company Secretary of Amrapali group of Companies 2. Vivek Mittal Nephew of Anil Mittal 3. Chandan Kumar Office boy of Anil Mittal 4. Seema Mittal wife of Anil Mittal 5. Chandar Wadhwa CFO 6. Bushan Sharma 7. Ashish Jain employee of Anil Mittal 8. Amit Wadhwa Nephew of Chandar Wadhwa

List of companies are as under:

S.no Name of company Page no

1. Aptara Infrastructure Pvt Ltd

2. Bhavya Housing Projects Private Limited

3. Bushells Developers Private Limited

4. Chintapurni Estates Private Limited

5 DH Education Services Pvt Ltd

6. Earthwell Developers Pvt Ltd

7. Eklavya Building Solutions Pvt Ltd

8. Bushells Reality Solution Private Limited

9. Saffron Propmart Consultancy Private Limited

10. GaurisutaBuildhome Private Limited

11. Gaurisuta Real Estate and Developers Private Limited

12. Kamyani Realtors Private lImited

13. Kapila Building Solution Private Limited

14. MahamayaBuildcon Private Limited

138

15. Rinku Clothing Creation Private Limited

16. RRS Properties Private Limited

17. Spacewell Developers Private Limited

18. StatelinesBuildwell Private Limited

19. Mansarovar Textiles Private Limited

20. Rainbow Cotton Private Limited

21. Kamakshi Buildwell Private Limited

22. Golden Portfolio Consultant Private Limited

23. Double Esh Infrastructure Private Limited

24. Aashirwad Linens Private Limited

25. Aksh Real Estates Private Limited

26. AdhunikBuildtech Private Limited

27. Rinku Computech Private Limited

We recommend the forfeiture of the following investment in the group companies by these 27 companies because the funds invested to become the consortium partners were from the group companies and these companies were just the front created to comply the conditions of partners and also keeping in mind to demerge a part of the plot in future to the consortium partners. The funds contributed by these 27 companies were originated and routed from the Amrapali group companies.

139

Rs. 100 of Crores of home buyers funds in active connivance of CFO Chandar Wadhwa and Statutory Auditors Anill Mittal were routed through

1. Rinku Computech Private Limited

Paid-Up Capital

S.

No.

Name of the

Company

No. of

Shares

Investment in

which Amrapali Group Co.

Number of

Equity shares of respective co.

Number of

Preference Shares of respective co.

% of

Equity Shares

1 Aksh Real Estate Pvt Ltd

8,20,000

Amrapali Centurian Park Pvt Ltd 36,50,000 8,50,000 22.47%

2 DH Education Services Pvt Ltd

5,01,500

Amrapali Centurian Park Pvt Ltd 36,50,000 8,50,000 13.74%

3 Mansarovar Textiles Pvt Ltd

3,71,000

Amrapali Centurian Park Pvt Ltd 36,50,000 8,50,000 10.16%

4 Bhavya Housing Projects Pvt Ltd

1,000

Amrapali Leisure Valley Pvt Ltd 10,000 4,57,334 10.00%

5 Kamayani Realtors Pvt Ltd

1,000

Amrapali Leisure Valley Pvt Ltd 10,000 4,57,334 10.00%

6 Chintapurni Estates pvt Ltd

1,000

Amrapali Leisure Valley Developers Pvt Ltd 10,000 6,00,000 10.00%

7 Aashirwad Linens Pvt Ltd

1,500

Amrapali Dream Valley Pvt Ltd 10,10,000 - 0.15%

8 Rainbow Cotton Pvt Ltd

1,000

Amrapali Dream Valley Pvt Ltd 10,10,000 - 0.10%

9 Rinku Clothing Creation Pvt Ltd

1,429

Amrapali Silicon City Pvt Ltd 10,36,982 - 0.14%

10 Double Esh Infrastructure Pvt ltd

1,000

Amrapali Smart City Dev. Pvt Ltd 6,91,42,401 - 0.00%

11 Earthwell Developers Pvt Ltd

1,000

Amrapali Smart City Pvt Ltd 10,000 - 10.00%

1,000

Amrapali Smart City Dev. Pvt Ltd 6,91,42,401 - 0.00%

12 Sapcewell Developers Pvt ltd

1,000

Amrapali Smart City Pvt Ltd 10,000 - 10.00%

1,000

Amrapali Smart City Dev. Pvt Ltd 6,91,42,401 - 0.00%

13 GaurisutaBuildhome Pvt Ltd

200

Mums Megha Food Park Ltd 10000 2.00%

14 Rinku computech Pvt Ltd

23,94,000

Amrapali Biotech India Pvt Ltd 1,20,00,000 19.95%

15 Kamakshi Buildwell Private Limited

500

Mums Megha Food Park Ltd 10000 5.00%

140

Patel Advance JV 8,25,00,000

Case Enterprises Ltd 10,00,000

Manjeet Singh 16,00,000

MSB Software Technologies 2,40,000

Anil Kumar Sharma 9,85,000

Bhushan Sharma 34,00,000

Digital India 19,59,110

KK Shukla 9,00,000

RV Consultant Service 95,00,000

Sundry Advances 26,99,000

Sunita Bhagwani 20,00,000

Saffron Propmart Consultancy Pvt Ltd 7,10,00,000

TOTAL 17,77,83,110

Date Particulars Transaction Balance

28-03-2018

Balance as on 28/03/2018

4,06,50,815

29-05-2018

Less:

Payment to Saffron Propmart Consultancy Private Limited

3,90,00,000

Less:

Payment to Preeti Jaiswal

1,50,000

Less:

Other Payments

5,90,771

Balance before proceeds from FDR

9,10,044

Receipts From FDR

31-07-2018

Add:

Proceeds from FDR

9,86,19,983

Balance after proceeds from FDR

9,95,30,027

Payments made out of receipts from FDR

31-07-2018

Less:

Net Payment to Saffron Propmart Consultancy Private Limited

3,20,00,000

01-08-2018

Less:

Payment to Vandana Wadhwa

2,00,00,000

23-10-2018

Less:

Payment to Ample Hotels & Resorts

1,00,00,000

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24. Misuse of Bank Loan funds (Volume II Page No. 426-457) Diversion of loan funds for unapproved purposes Amrapali group of companies obtained funds primarily from following sources: a) Home buyers funds against construction linked progress; b) In the form of loans (term loan, working capital/cash credit limits) from banks against construction linked progress; and c) Homebuyers also availed housing loans from banks for purchasing flats in Amrapali projects Banks granted loans to Amrapali group under certain terms and conditions which included utilisation of loan funds for: a) Payment of cost of land and lease rental to Noida authorities; b) Payment of construction cost of projects.

Observation 1. The amounts disbursed were not utilised for payment of cost of land or for payment of lease rentals or for payment of construction cost. The banks did not monitor utilisation of funds granted by them. In fact, these funds were diverted as loans to related and/or unrelated entities which was ultimately utilised in building assets/purposes which were unapproved by the banks. The banks acted as mute spectator to unapproved diversion which was almost happening

evidently in all banking transactions. 2. While obtaining loan funds, Amrapali group hypothecated land on which project was being undertaken as well as building under construction as well as material lying at project, leaving nothing with home buyers for recovery of their payments. 3. It is also observed that the loan funds were routed through several bank accounts of the same company and thereafter routed to third parties whereby trying to misguide the flow of funds. It clearly means these transactions had no substance and were made only to mislead.

1. In the case of Amrapali Zodiac Developers Pvt Ltd: Bank of Baroda (Rs.75 crore), Union Bank of India (Rs.50 crore) and

23-10-2018

Less:

Payment to Moral Sales

1,00,00,000

23-10-2018

Less:

Payment to Mahalaxmi Enterprises

1,00,00,000

23-10-2018

Less:

Payment to Annex IT Distributors

70,00,000

23-10-2018

Less:

Payment to Anjali Buildcon

1,00,00,000

Other Payments

1,61,904

TOTAL

9,91,61,904

Balance as on 28-10-2018

3,68,123

142

Corporation Bank (Rs.25 crore) together approved term loan amounting to Rs.150 crore to develop a group housing project at Sector-126, Noida. These funds were granted against the aforesaid term loan, the banks secured first charge by way of assignment or creation of security interest of-

(i) All the rights, title, interest benefits, claims & demands whatsoever of the borrower in – (a) permits, approval, clearances, etc. in respect of project being financed. (b) any letter of credit, guarantee, performance bond, corporate guarantee, bank guarantee, provided by any party under the project.

(ii) All the receivables, reserves, book debts, bank accounts, including the Escrow account & all other incomes, present & future pertaining to the projects being financed.

(iii) All insurance contracts, insurance proceeds. (iv) Charge on the specific reserve to be created by Ultra Home

Construction Private Limited, the holding company by contributing 10% of their profits to address the contingent liabilities of their subsidiaries.

The banks also secured second charge over the land & buildings (First charge is with Noida Authority). Also hypothecated raw Material, work in progress (pari passu charge over the project assets). Immediately on receipt, these funds were diverted to several third parties as stated

S.No. Particulars Amount

1 U Tek Sales Corporation

6,97,39,500

2 Taneja Building material Suppliers

4,24,01,000

3 Devki Nandan Trading Co

3,00,00,000

4 Guru Kripa Traders-2

3,00,00,000

5 Shri Balaji Cement & Hardware

2,89,61,000

6 Investor Clinic Infratech Private Limited

2,00,00,000

7 Mauria Udyog Limited

3,00,00,000

8 Shiva Trders

2,00,00,000

9 Shiv Traders

1,75,00,000

10 Om Traders

1,35,00,000

11 Lakshmi Steel

1,20,81,351

12 Mahaveer Enterprises

1,00,00,000

13 Sidhivinayak Trading Company

1,00,00,000

14 Rama Trading Company

143

75,00,000

15 Uday Enterprises

69,50,500

16 Orient Trading Company

68,96,800

17 Kartikey Enterprises

68,72,600

18 Dayal Traders

68,42,300

19 R.K. Enterprises 67,50,500

20 MahaLuxmi Traders

67,32,500

21 Purnima Steel Syndicate

65,71,972

22 New Payal Traders

64,50,500

23 Shyam Sales Corporation

64,38,700

24 Kishan Steel Corporation

62,53,700

25 Shri Ganesh Trading Company

62,50,500

26 Arhaan Enterprises

62,17,570

27 Gayatri Traders

59,42,500

28 Lakshmi Steels

53,42,600

29 Guru Kripa Traders

50,00,000

30 Guru Nanak Trading Company

50,00,000

31 R R Enterprises

50,00,000

32 Rohit Steel

50,00,000

33 Shree Ji Trading Company

50,00,000

34 Shri Hari Trading Company

50,00,000

35 G.S. Enterprises

49,50,500

36 A.B Enterprises

48,16,654

37 Amit Steel

40,00,000

38 Barnala Steel Industries Ltd

36,72,008

39 S.R Steel

34,92,054

40 Kumar Trading Company

32,45,859

41 Quality Synthetics Private Limited

25,00,000

144

42 Shri Bankey Bihari Trading Company

25,00,000

43 Jayem Manufacturing Co Pvt Ltd

23,15,400

44 SBL Construction Private Limited

22,10,040

45 ANALCO ( INDIA ) PVT LTD

21,86,728

46 Kumar Trading CO

19,53,325

47 BUILD TECH INDUSTRIES

19,06,800

48 M. K TRADERS

16,20,370

49 Shree Ram Plywood

14,79,510

50 ARUNACHAL TIMBER TRADERS PVT LTD

13,98,400

51 Naveen Associates

13,60,217

52 Deepak Mehta & Associates

13,50,000

53 Raj Shree Ispat

10,92,584

54 DREAM INTERIORS & DEVELOPERS (P) LTD 10,00,790

55 Aryan Corporate Soloutions Pvt Ltd

10,00,000

56 Astech Marketing Private Limited

6,81,321

57 Jotindra Steel & Tubes Ltd

5,00,250

58 Amrapali Infrastructure Private Limited

2,94,829

TOTAL

51,37,23,732

Few examples of diversion of funds are as under: 1. Guru Kripa Traders-2 RS. 3 crore was paid as advance to them in October 2010 which remained as it is till January 2011, when expenses for purchase of steel were booked against the aforementioned advance. Below is the extract of relevant portion of ledger.

Date Particulars Vch Type Debit Credit Balance

05/10/2010 Bank of Baroda A/C No - 21580200000079

Payment 15000000.00 15000000.00 Dr

145

06/10/2010 Bank of Baroda

A/C No - 21580200000079

Payment 5000000.00 20000000.00 Dr

15/10/2010 Bank of Baroda A/C No - 21580200000079

Payment 5000000.00 25000000.00 Dr

16/10/2010 Bank of Baroda A/C No - 21580200000079

Payment 5000000.00 30000000.00 Dr

29/12/2010 STEEL Purchase U.P

1105440.00 28894560.00 Dr

01/01/2011 STEEL Purchase U.P

1137012.00 27757548.00 Dr

01/01/2011 STEEL Purchase U.P

1127296.00 26630252.00 Dr

01/01/2011 STEEL Purchase U.P

1081575.00 25548677.00 Dr

01/01/2011 STEEL Purchase U.P

1114169.00 24434508.00 Dr

02/01/2011 STEEL Purchase U.P

1096914.00 23337594.00 Dr

02/01/2011 STEEL Purchase U.P

1078802.00 22258792.00 Dr

03/01/2011 STEEL Purchase U.P

1091563.00 21167229.00 Dr

03/01/2011 STEEL Purchase U.P

858603.00 20308626.00 Dr

04/01/2011 STEEL Purchase U.P

1107007.00 19201619.00 Dr

04/01/2011 STEEL Purchase U.P

1084429.00 18117190.00 Dr

05/01/2011 STEEL Purchase U.P

1077003.00 17040187.00 Dr

05/01/2011 STEEL Purchase U.P

1062433.00 15977754.00 Dr

05/01/2011 STEEL Purchase U.P

1054560.00 14923194.00 Dr

06/01/2011 STEEL Purchase U.P

1112498.00 13810696.00 Dr

06/01/2011 STEEL Purchase U.P

1118674.00 12692022.00 Dr

07/01/2011 STEEL Purchase U.P

1034488.00 11657534.00 Dr

07/01/2011 STEEL Purchase U.P

1087996.00 10569538.00 Dr

08/01/2011 STEEL Purchase 1082110.00 9487428.00

146

U.P Dr

08/01/2011 STEEL Purchase U.P

1054092.00 8433336.00 Dr

09/01/2011 STEEL Purchase U.P

1116534.00 7316802.00 Dr

10/01/2011 STEEL Purchase U.P

1109399.00 6207403.00 Dr

10/01/2011 STEEL Purchase U.P

1073727.00 5133676.00 Dr

10/01/2011 STEEL Purchase U.P

1087996.00 4045680.00 Dr

11/01/2011 STEEL Purchase U.P

1062669.00 2983011.00 Dr

11/01/2011 STEEL Purchase

U.P

889730.00 2093281.00

Dr

12/01/2011 STEEL Purchase U.P

1023600.00 1069681.00 Dr

13/01/2011 STEEL Purchase U.P

1097561.00 27880.00 Cr

31/03/2012 REBETE & DISCOUNT

Journal 27880.00

30027880.00 30027880.00

2. Shri Balaji Cement & Hardware

RS. 2.08 crore was paid as advance to them towards the end of March 2011 against which expense was booked on 31st March 2011 and continued till 1st week of April 2011. It was noticed that the same person was selling steel, bricks, cement, rodi sand, badarpur, which itself is in unorganised sector and is questionable.

Date Particulars Vch Type Debit Credit Balance

19/03/2011 Bank of Baroda A/C No - 21580200000079

Payment 3949500.00 3949500.00 Dr

21/03/2011 Bank of Baroda A/C No - 21580200000079

Payment 3851500.00 7801000.00 Dr

26/03/2011 Bank of Baroda A/C No - 21580200000079

Payment 6450500.00 14251500.00 Dr

28/03/2011 Bank of Baroda A/C No - 21580200000079

Payment 6550800.00 20802300.00 Dr

31/03/2011 BADARPUR Purchase U.P

456225.00 20346075.00 Dr

31/03/2011 Cement Purchase U.P

490875.00 19855200.00 Dr

31/03/2011 STEEL Purchase U.P

495666.00 19359534.00 Dr

31/03/2011 BADARPUR Purchase U.P

471345.00 18888189.00 Dr

31/03/2011 Cement Purchase U.P

496650.00 18391539.00 Dr

147

31/03/2011 STEEL Purchase

U.P 483946.00 17907593.00

Dr

31/03/2011 Cement Purchase U.P

505313.00 17402280.00 Dr

31/03/2011 BADARPUR Purchase U.P

525945.00 16876335.00 Dr

31/03/2011 STEEL Purchase U.P

27300.00 16849035.00 Dr

31/03/2011 Cement Purchase U.P

493763.00 16355272.00 Dr

31/03/2011 BADARPUR Purchase U.P

476280.00 15878992.00 Dr

31/03/2011 STEEL Purchase U.P

470905.00 15408087.00 Dr

31/03/2011 Cement Purchase U.P

502425.00 14905662.00 Dr

31/03/2011 BADARPUR Purchase U.P

510678.00 14394984.00 Dr

31/03/2011 STEEL Purchase U.P

469124.00 13925860.00 Dr

31/03/2011 Cement Purchase U.P

501843.00 13424017.00 Dr

31/03/2011 BADARPUR Purchase U.P

438375.00 12985642.00 Dr

31/03/2011 Cement Purchase U.P

750750.00 12234892.00 Dr

31/03/2011 BADARPUR Purchase U.P

754950.00 11479942.00 Dr

31/03/2011 STEEL Purchase U.P

766725.00 10713217.00 Dr

31/03/2011 Cement Purchase U.P

782513.00 9930704.00 Dr

31/03/2011 BADARPUR Purchase U.P

754320.00 9176384.00 Dr

31/03/2011 STEEL Purchase U.P

767644.00 8408740.00 Dr

31/03/2011 Cement Purchase U.P

779625.00 7629115.00 Dr

31/03/2011 BADARPUR Purchase U.P

778260.00 6850855.00 Dr

31/03/2011 Cement Purchase U.P

788288.00 6062567.00 Dr

01/04/2011 Rodi Purchase U.P

884331.00 5178236.00 Dr

01/04/2011 Cement Purchase U.P

931392.00 4246844.00 Dr

01/04/2011 Rodi Purchase U.P

882872.00 3363972.00 Dr

01/04/2011 Bricks Purchase U.P

853965.00 2510007.00 Dr

01/04/2011 STEEL Purchase U.P

844356.00 1665651.00 Dr

02/04/2011 Bank of Baroda A/C No - 21580200000079

Payment 2310500.00 3976151.00 Dr

02/04/2011 Bank of Baroda A/C No -

Payment 5848200.00 9824351.00 Dr

148

21580200000079

02/04/2011 Cement Purchase U.P

935550.00 8888801.00 Dr

02/04/2011 Sand Purchase U.P

839969.00 8048832.00 Dr

04/04/2011 Bricks Purchase U.P

876120.00 7172712.00 Dr

04/04/2011 Sand Purchase U.P

831527.00 6341185.00 Dr

05/04/2011 STEEL Purchase U.P

841333.00 5499852.00 Dr

05/04/2011 STEEL Purchase U.P

849350.00 4650502.00 Dr

06/04/2011 Bricks Purchase U.P

884147.00 3766355.00 Dr

06/04/2011 Cement Purchase U.P

284130.00 3482225.00 Dr

07/04/2011 Rodi Purchase U.P

884321.00 2597904.00 Dr

07/04/2011 Cement Purchase U.P

931392.00 1666512.00 Dr

12/04/2011 Bricks Purchase U.P

872193.00 794319.00 Dr

12/04/2011 STEEL Purchase U.P

853780.00 59461.00 Cr

28961000.00 29020461.00

Closing Balance 59461.00

29020461.00 29020461.00

3. Investor Clinic Infratech Private Limited

It is evident from the books of accounts that loan funds were utilized for payment of RS. 2 crore who had invoiced the company for brokerage expense which is not construction linked payment. Brokerage is an indirect expense, incurred for the sale of flat. The banks had granted funds for construction activity and not for sale activity. This is clearly diversion of loan funds to unapproved means.

4. Shiva Traders

RS. 2 crore was paid as advance on 9th October 2010 against which

subsequently invoices for purchase of steel were booked in December 2010 only to adjust the balance.

Date Particulars Vch Type Debit Credit Balance

09/10/2010 Bank of Baroda A/C No - 21580200000079

Payment 2,00,00,000

2,00,00,000

11/12/2010 STEEL Purchase U.P

10,39,959

1,89,60,041

13/12/2010 STEEL Purchase U.P

10,39,964

1,79,20,077

14/12/2010 STEEL Purchase U.P

8,31,947

1,70,88,130

149

15/12/2010 STEEL Purchase

U.P

12,47,950 1,58,40,180

16/12/2010 STEEL Purchase U.P

12,47,945 1,45,92,235

17/12/2010 STEEL Purchase U.P

14,55,941

1,31,36,294

18/12/2010 STEEL Purchase U.P

12,47,958

1,18,88,336

20/12/2010 STEEL Purchase U.P

10,39,965

1,08,48,371

01/01/2011 STEEL Purchase U.P

8,47,103

1,00,01,268

03/01/2011 STEEL Purchase U.P

10,55,136

89,46,132

04/01/2011 STEEL Purchase

U.P

10,51,612

78,94,520

05/01/2011 STEEL Purchase U.P

10,63,874

68,30,646

06/01/2011 STEEL Purchase U.P

10,85,323

57,45,323

07/01/2011 STEEL Purchase U.P

10,48,579

46,96,744

08/01/2011 STEEL Purchase U.P

10,77,182

36,19,562

10/01/2011 STEEL Purchase U.P

10,73,193

25,46,369

11/01/2011 STEEL Purchase U.P

10,79,473

14,66,896

12/01/2011 STEEL Purchase U.P

8,08,790

6,58,106

13/01/2011 STEEL Purchase U.P

6,56,927

1,179

31/03/2011 Short & Excess A/c

Journal 1,179

20000000.00 2,00,00,000

5. Om Traders RS. 1.35 crore was paid in September 2010 against which subsequently

invoices for purchase of steel were booked in December 2010 only to adjust the balance.

Date Particulars Vch Type Debit Credit Balance

02/06/2010 BOM-SEC51 A/C No - 60036386553

Payment 50,00,000 50,00,000

03/06/2010 Hardware Item Purchase U.P

8,76,488 41,23,512

24/06/2010 Hardware Item Purchase U.P

9,20,241 32,03,271

03/07/2010 Hardware Item Purchase U.P

7,57,796 24,45,475

04/07/2010 Hardware Item Purchase U.P

7,56,000 16,89,475

150

05/07/2010 Hardware Item Purchase

U.P 7,20,421 9,69,054

10/08/2010 Steel Purchase Purchase U.P

9,77,734 8,680

14/09/2010 HDFC BANK(L.N) Payment 50,00,000 49,91,320

22/09/2010 BOM-SEC51 A/C No - 60036386553

Payment 60,00,000 1,09,91,320

27/09/2010 Bank of Baroda A/C No - 21580200000079

Payment 85,00,000 1,94,91,320

01/10/2010 Bank of Baroda A/C No - 21580200000079

Payment 50,00,000 2,44,91,320

22/10/2010 BOM-SEC51 A/C No - 60036386553

Payment 1,50,00,000 3,94,91,320

25/10/2010 HDFC BANK(C.P)- 14018640000045

Payment 1,00,00,000 4,94,91,320