The Supreme Court on Friday asked the Centre if it was prepared to release an emergency loan of Rs 500 crore for funding stalled Amrapali group housing projects. The Centre said it would get back with a response by May 27, the next date of hearing in the case.
The Centre was also asked to consider a possible waiver of service tax chargeable on these projects.
Concern over funds drying up for construction came up before the apex court in a note prepared by Court-appointed receiver, senior advocate R Venkatraman, who suggested a slew of measures to ensure timely execution of the projects.
Among the measures he suggested in a five-page note was a direction to banks to release loans to homebuyers, even to non-performing asset (NPA) account holders, restructuring of existing loans by banks. Funds to complete the housing projects have to come from the sale of unsold housing inventories, sale of other Amrapali properties, and balance receivables on sold units from homebuyers who have taken loans, he said.
The bench of justices Arun Mishra and UU Lalit sought the response of the Centre on each suggestion in the note. Additional solicitor general (ASG) Vikramjeet Banerjee informed the bench that the finance ministry will be meeting over this issue in a day or two. He said that since this involves spending of public money, any exception in the rules to be made for Amrapali has to be accompanied with reasons.
The bench told ASG, “The homebuyers are suffering. [The] Government must take care of providing funds to the National Buildings Construction Corporation (NBCC) as there are no private players involved.”
NBCC informed the court that two projects undertaken by it were complete while tenders need to be issued on three projects. It was then that the court suggested ASG seek instructions from the government on issuing Rs 500 crore upfront to NBCC.
In addition, the court wished to know whether the Reserve Bank of India (RBI) guidelines will allow issuance of loans to NPA account holders based on the receiver’s suggestion. Venkatramani told the court that UCO Bank had in principle agreed to fund the unsold inventories, preferably through a consortium of banks.
Venkatramani told HT: “Some big players have expressed interest in completing the projects. But they require a strong assurance. The court’s tentative order is intended to provide strong support to NBCC before tenders for projects are issued in the coming months.”
The Goods and Services Tax payable by NBCC on construction and service tax deposited by home buyers, if waived, could save approximately Rs 1,000 crore, he added.
Advocate ML Lahoty, representing homebuyers, claimed that Rs 7881.60 crore was recoverable from sale of Amrapali Group’s properties and Rs 799 crore would accrue on behalf of the company’s erstwhile directors.