"Bulk Of Investment Has Come From Amrapali Group Towards Purchase Of Properties": SC Rejects Prayer For Release Of Attachment Of Assets

The Supreme Court while dealing with an interlocutory application being filed by Mr. Prem Mishra challenging the proceedings/ order passed by the Presiding Officer, Debt Recovery Tribunal (DRT)-III, New Delhi, and directions issued in respect of 12 lakh square feet offered in the affidavit of Mr. Anil Kumar Sharma, Chairman and Managing Director of Amrapali Group of Companies stated that bulk of investment has come from the Amrapali Group towards the purchase of the properties and rejected the prayer for the release of attachment of the assets.

The Bench of CJI Uday Umesh Lalit and Justice Bela M. Trivedi observed –

"There is thus no concrete and final determination with regard to the rights of Mr. Prem Mishra to the property which was subject matter of arrangements between the parties. Even at this stage, going by the prima facie view, at least Rs.21 crores were invested by Amrapali Group of Companies for purchase of these lands. By any standard, even without expressing any opinion on merits of the matter, the bulk of the investment has come from Amrapali Group of Companies towards purchase of these properties. Merely because the extent of money which was siphoned off has been put at the level of Rs.4.79 crores would not mean that lands beyond this value ought to be released in favour of Mr. Prem Mishra. His entitlement is yet to be pronounced upon."

The Bench further held –

"In the circumstances, the prayer made by Mr. Prem Mishra for releasing attachment of all the assets in question, cannot be granted at this stage. In essence, the matter has to be considered along with I.A. Nos. 8259 of 2019 and 74385 of 2020. We, therefore, reject the prayer for release of attachment as mentioned above and direct that these two Interlocutory Applications be listed and considered at an early date."

Advocate Himanshu Shekhar represented the applicant while Advocate Rakhi Ray represented the Amrapali Group.

Advocate Mukesh Kumar Maroria represented the respondent i.e., Union of India.

The Supreme Court recalled its June 10, 2020 order while hearing the Amrapali case that led to the setback for the builders in Noida and Greater Noida. That order capped the rate of interest at 8% on the dues for land given on lease to different builders. The Bench of Chief Justice UU Lalit and Justice Ajay Rastogi allowed the application of Noida and Greater Noida seeking recall of the 2020 order on the ground that both authorities have been suffering huge losses. A Writ Petition (C) No. 940 of 2017 was filed raising the grievances on behalf of the purchasers of flats in projects promoted by the Amrapali Group of Companies. The Noida and Greater Noida authorities were directed to calculate the amount due in respect of builders other than Amrapali Group after taking into its consideration the 2020 order issued by the State Government.

Facts of the Case –

Mr. Anil Kumar Sharma met the applicant in the year 2006 and a business plan was proposed for developing a colony on a partnership basis as an Amrapali Group project with its brand name. The applicant was to invest his time, resources, experience, and contacts apart from providing other services and expertise necessary for undertaking the development of the land. The work to be undertaken by the applicant essentially was: securing land from local farmers, getting titles searched, getting the layout of the colony made, getting user changed from agricultural to residential, obtaining requisite information including No Objection Certificates from the concerned departments, making necessary advertisement(s) and in the nature of aggregating the land bank for the purposes of development by Amrapali Group of Companies.

The Amrapali Group had no footprint in the city of Indore and hence was trying to expand the business in the same. In terms of the agreement dated January 18, 2017, an entitlement of 40% share in favour of the applicant in the inventory was agreed. In terms of this understanding, he was able to aggregate an extent of about 160 acres of land but actual development in terms of construction was never undertaken. And, as per the applicant, the land shown in yellow colour in the agreement would come to the share of the applicant while the one marked in orange colour was booked by the customers. After the matters pertaining to Amrapali Group of Companies were being considered by the Supreme Court in Writ Petitions (Civil) No. 940 of 2017 and other connected matters, attempts were made to locate and get the details of the projects undertaken by the Amrapali Group of Companies throughout the country.

The applicant was therefore informed by Mr. Anil Kumar Sharma that his presence was required before the DRT-III, New Delhi to explain the details with regard to the project. Hence, the applicant appeared and presented his viewpoint. Thereafter, the proceedings dated December 11, 2018, with regard to the principal prayer made took place before the DRT-III. In pursuance of the concluding part of such proceedings, the matter was before the Supreme Court. The concluding part was read as:

"In this regard, necessary permission has to be sought from the Hon'ble Supreme Court of India to sell the said area as well. Accordingly, a request letter be placed before the Hon'ble Supreme Court, for granting permission to sell the said area. Registry is directed to issue letters accordingly. Mere MOU does not create any substantive right in favour of Prem Mishra to be the owner with respect to the said property shown in 'Yellow' colour in the site map."

The Supreme Court in this regard noted–

"After perusal of the note and considering submissions made on behalf of Mr. Prem Mishra, this Court by its order dated 2.11.2020, directed the ED to file an appropriate response since by that time the investigation had commenced against Mr. Prem Mishra. Accordingly, status report dated 18.11.2020 was submitted by the ED stating inter alia; that initial investment in the Indore project made by Mr. Prem Mishra was to the tune of Rs.3.5 crores while Rs.21 crores were invested by Amrapali Group of Companies for purchase of lands and that total money received from the homebuyers for Indore project was in the sum of Rs.18.95 crores."

The Court further noted that "On 22.2.2021, a provisional attachment order under Section 5(1) of the Prevention of Money Laundering Act, 2002 was passed by the ED holding that Mr. Prem Mishra and his brother had siphoned of an amount of Rs.4,79,76,180 out of which Rs.79,52,500 pertained to his brothers and Mr. Indra Bhushan Mishra and Mr. Arvind Mishra while remaining Rs.4,00,23,680 pertained to Mr. Prem Mishra. On or about 28.8.2021, cognizance was taken by the Special Judge in the matter."

The Court thereafter observed –

"The adjudicating authority passed final order on 28.12.2021 confirming the provisional attachment order dated 22.2.2021 and observed that the extent of funds siphoned of were to the tune of Rs.4,79,76,180. In these circumstances, what is presently submitted on behalf of Mr. Prem Mishra is that his liability stands confirmed only to the extent of Rs.4.79 crores and as such, there would be no justification to continue with the attachment of all the assets of Mr. Prem Mishra and his brothers."

The question before the Court was whether Mr. Prem Mishra has any claim or title with respect to the property which is subject matter of the attachment. Hence, while considering this question, the Court concluded and stated –

"The documents on which reliance has been placed in I.A. Nos. 8259 of 2019 and 74385 of 2020 are not registered documents nor have these I.As. been finally disposed of. Going by the tenor of I.A. No. 8259 of 2019, it is directed against the proceedings dated 11.12.2018, where the matter was not gone into by the DRT-III, New Delhi because of pendency of proceedings in this Court."

Accordingly, the Apex Court rejected the prayer for the purpose of releasing the attachment of assets made by the applicant.

Cause Title – Bikram Chatterji & Ors. v. Union of India & Ors.

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