New Delhi: As NBCC faces a cash crunch by completing the construction of unfinished housing projects in Amrapali, the Supreme Court on Wednesday asked SBI Capital, which manages the Centre's real estate pressure fund, to ease the norms for releasing funds for the projects.
The bench said it was the court that took on the task of completing projects that excluded any possibility of embezzlement. He said that the guidelines could be relaxed in Amrapali's case because the construction work is "court-sponsored" and being monitored by it.
The court's directions will provide relief to 46,000 home buyers who have invested in various Amrapali’s projects for more than a decade. Most of them were not given the possession of the flats as the projects were not completed due to the alleged transfer of funds by the real estate company and its managers.
Additional solicitor general Vikramajit Banerjee, who represented the center, told a bench of Justices Arun Mishra and U Lalit that Finance Ministry officials discussed the issue with SBI Capital and that the bank should make a decision on releasing the funds in accordance with the guidelines. However, the bank stressed that the guidelines do not need to strictly adhere to the Amrapali case as there was no private builder involved and the construction should be carried out by the state-owned NBCC (India) Limited. On the last date of the hearing, the court requested the Center to consider releasing Rs. 500 million for the projects.
Banerjee said that banks can free up money because of homebuyers, as they were given the flexibility to restructure mortgage loans. Referring to the banks that declare mortgage loans as NPA, the Assistant Secretary-General said that the banks have the freedom to dispose of the funds because the NPA is not obligated.
Senior advocate, Harish Salve, appearing for SBI Capital, assured the court that he would "do everything possible to persuade" the bank to release the amount and asked the court not to agree to any order. Salve said she would take the instructions and notify the court of the next hearing on June 3. Money can be released in installments. "It will be a safe investment, and the amount will not go into unsafe hands as there are no private construction companies involved in the projects," the bank said. The estimated cost of building all housing projects is Rs 8,500 crore
Source: Economic Times
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