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Amrapali Case: Unfinished business

A foray into the real estate business with a modest 140 flats, a swift rise to becoming the industry frontrunner, and a swift fall that left 46,000 home buyers in the lurch — Amrapali’s fortunes have seen quite the turnaround. The Indian Express reports on the troubled group and the man behind it

Written by Amil Bhatnagar | New Delhi | Published: January 7, 2019 2:27:34 am
Amrapali Case: Unfinished Business The Amrapali Dream Valley project in Noida Extension lies unfinished. (Express Photo: Gajendra Yadav)

Three guards stand outside the Amrapali corporate office in Noida’s Sector 62, watching over the empty building. Many dreams were once sold here. But over the last one year, the only visitors have been officials of the Debts Recovery Tribunal, putting up notices of pending payments to customers who have been denied homes and due compensation.

This is a far cry from the Amrapali Group of 10 years ago, a juggernaut in housing riding on a real estate boom and expansion of the National Capital Region. Today, it has defaulted on delivery of over 46,000 homes at 28 properties, including in Noida and Greater Noida, with an estimated debt of crores. Just last month, the Supreme Court, while ordering attachment of some of its properties, called the group “the worst kind of cheater” and “a perfect liar”.

The brand man

The story of Amrapali began with the story of Anil Sharma (55), the company’s chairman. Born in Patna’s Pandarak tehsil, he studied in a village school before going to Patna Science College. He then gravitated towards engineering and obtained a BTech degree from NIT Calicut and an MTech from IIT-Kharagpur. He also obtained a law degree from Patna later.

Sharma served in various positions at the National Thermal Power Corporation (NTPC) and the National Project s Construction Company (NPCC), and worked briefly in the Hajipur municipality. He also appeared for the Bihar Civil Services, but did not clear the exam.

In 2003, Sharma turned his attention to the national capital and embarked on his first Amrapali project, called Amrapali Exotica, under which he delivered 140 flats.

Amrapali Case: Unfinished Business At a protest by homebuyers against the realty firm. (Express Photo: Gajendra Yadav)

In an interview, Sharma said he decided to stick with ‘Amrapali’ as it was a “historical name which signifies beauty and patriotism”, and it reciprocated the company’s “pure and unadulterated endeavours to develop India”.

In the years that followed, the real estate sector saw rapid growth and Amrapali was at the centre of it.

“After 2000, a sense of formalisation was brought into the real estate sector, especially in Noida and Greater Noida. Many buyers, including Amrapali, began taking exposures. Inflow of cash from buyers and other sources prompted builders to acquire more land and expand business. Amrapali’s focus was the same — to acquire more avenues instead of completing projects at hand,” said Akash Bansal, national head, consulting and valuations in Liases Foras.

Between 2005 and 2009, Sharma announced various housing projects in NCR and a few other cities. In Noida and Greater Noida alone, Amrapali announced 170 housing towers, with project names like Dream Valley, La Regencia, Princely State, meant to draw everyone from first-time home buyers to working-class men and women looking for an upgrade.

Between 2009 and 2013, Amrapali had announced more than 50 projects across 24 cities. Delivery, though, was a different issue.

Sharma’s clout was evident when, in 2013, he was elected president of the Confederation of Real Estate Developers Association of India (CREDAI) NCR. “For customers, we will continue to be committed towards transparency and certainly be proactive in addressing their grievances and expectations,” he proclaimed at the office-bearers election conference.

Amrapali also forayed into different business verticals. Sharma inaugurated the Deoghar Clarks Inn Hotel near the Baidyanath pilgrimage site in 2013. Another three-star hotel of the same chain came up in Bareilly. Amrapali also began selling FMCG products under the name ‘Amrapali Mums’. The entertainment industry wasn’t left untouched either, with Amrapali Media Vision producing two movies — Gandhi to Hitler and I Don’t Love You — which Sharma credited to his wife.

Amrapali Case: Unfinished Business Amrapali dream valley project in Noida Extension. (Express Photo: Gajendra Yadav)

Sharma also had an unsuccessful fling with politics when, in the 2014 Lok Sabha polls, he was given a JD(U) ticket from Jehanabad in Bihar. At the time, he was JDU’s richest candidate, with Rs 849 crore in declared assets. A self-proclaimed Donald Trump supporter, he eventually lost to the Rashtriya Samta Party candidate by a hefty margin.

Unkept promises

Seema Saini, a resident of Delhi, purchased a 1BHK flat in Noida’s Amrapali Dream Valley Project in 2009, paying over Rs 1 lakh as the 10% booking amount. She was promised the flat in 36 months.

Just before booking the flat, Seema’s daughter had suffered an accident that drained the family’s finances. Shortly after, her husband died. Working as a PRO in a private company, she used her husband’s provident fund money and took a loan to pay 80% of the amount. Ten years later, as her daughter awaits two more surgeries, Seema is doing rounds of the Supreme Court since the house was never delivered, nor was the compensation.

Seema is one of 46,000-odd home buyers who became victims of Amrapali’s strategy of prioritising expansion over completion of projects. In April 2013, when raids were conducted at various Amrapali offices, documents showed that from 2009 to 2015, Amrapali had completed “nil” projects.

According to Bansal, “diversion of funds” was one of the main factors that halted Amrapali’s dream run. “Post the economic depression in 2008, the slowdown could be felt in the real-estate sector as well. Amrapali, among other builders, had already taken a lot of exposure from banks and housing finance companies. Most of the money was invested in buying more land and setting up more projects, instead of finishing the ones at hand. Since Amrapali did not have a robust base capital to begin with, they began defaulting on their promised projects,” he said.

K K Kaushal, one of the petitioners in the land property case, claimed Amrapali received Rs 11,365 crore from homebuyers. Amrapali, in an affidavit submitted in court, said that a substantial amount had been diverted to financing other projects even as houses in Noida and Greater Noida remained unfinished.

Amrapali Case: Unfinished Business The top court began hearing the case in November 2017, and asked the company’s directors not to leave the country. (Express Photo: Gajendra Yadav)

Amrapali’s image took another hit when, in August 2014, Sharma was named in an FIR in connection with the murder of Sharad Chandra Kumar, the former secretary of Balika Vidyapeeth, in Bihar. Sharma applied for, and was granted, anticipatory bail.

Amrapali faced its first major protest in 2015, when 900 families that had shifted to its Sapphire housing project in Noida complained of lack of utilities like electricity and water.

Also read: Supreme court slams Amrapali Group: Fraud and dirty games

In August 2016, cricketer MS Dhoni quit from his role as brand ambassador, with Sharma calling it a “mutual decision”. But two years later, Dhoni sued the group for Rs 150 crore, claiming he had not been paid for his role.

In September 2017, a bench of the National Company Law Tribunal initiated insolvency proceedings at the behest of Bank of Baroda against Amrapali Infrastructure for dues over Rs 50 crore.

Following protest after protest in 2016-17, homebuyers of Amrapali’s Dream Valley project, comprising 11,000 unfinished flats, moved the Supreme Court against the decision, saying their interests wouldn’t be protected if insolvency proceedings are initiated. The top court began hearing the case in November 2017, and asked the company’s directors not to leave the country.

Bad to worse

In February 2018, Amrapali claimed it will begin work on 19 towers of Leisure Park, and was asked by the court to sign an undertaking that the project would be wrapped up in 15 months.

In August, the Supreme Court attached properties and accounts of 41 companies under the parent Amrapali Group. A month later, the apex court directed the debts recovery tribunal to begin the process of selling 16 of its properties. The court also sought that balance sheets of 46 companies be handed over to forensic auditors.

In October, the court sent three Amrapali directors — Sharma, Shiv Priya and Ajay Kumar — to police custody for not furnishing details of the 46 companies. “You are playing hide and seek. You are trying to mislead the court,” the bench said.

The court also refused bail petitions of Amrapali directors to visit home during Diwali. “What about Diwali for 46,000 homebuyers who gave you their life savings and hard-earned money for getting homes, but are suffering?” it said.

In December, the court directed the Debts Recovery Tribunal to auction all attached properties, and ordered attachment of a fleet of 15 luxury cars bought by the company using home buyers’ money.

Read: Supreme Court orders attachment of Amrapali properties

BJP MP and party national spokesperson Gaurav Bhatia, who is a part of the legal team representing Amrapali, said, “I represent the company in my personal capacity. Since the matter is sub-judice, nothing can be addressed on behalf of the builder group.”

Under the radar

A former senior official with the Greater Noida Authority explained how Amrapali, and others, managed to procure so much land: “There was a change in the authority’s policy, where builders were required to pay just 20% of the land allotment money initially. This allowed them to branch out to 4-5 projects at the same time. It risked such companies to massive exposure — and eventually proved to be financially detrimental.”

Amrapali Case: Unfinished Business Amrapali faced its first major protest in 2015, when 900 families that had shifted to its Sapphire housing project in Noida complained of lack of utilities like electricity and water. (Express Photo: Gajendra Yadav)

Officials in Noida and Greater Noida claimed that the group could not have reached the heights it did without help from authorities. A senior official in the Uttar Pradesh Real Estate Regulatory Authority claimed: “Many influential people had invested in the company, not just as buyers. Needless to say, this helped fast-track some things.”

CREDAI office-bearer Jaxay Shah said he still believes things will get better for buyers. “Ever since the Real Estate (Regulation and Development) Act 2016 was implemented, the real estate ecosystem has largely become consumer-centric, with enhanced levels of transparency and accountability. There are some gaps that need to be addressed. For instance, setting up RERA conciliation forums/tribunals in every state is key to seamless implementation of the Act.”

He said the organisation has resolved 3,405 of the 3,533 complaints it received from home buyers. While Sharma is currently under police monitoring, it is of little comfort to the thousands left in the lurch.

Kuldeep Munshi, a businessman in his late 50s who purchased a 1BHK in Amrapali Dream Valley in 2009 for Rs 15 lakh, said, “Construction has stopped, and loans and EMIs keep piling up. It’s not like those flats need just finishing touches; they need to be completed in the first place.”

Hailing an autorickshaw to return home from the court, Seema said, “I have to spend money for my daughter’s wedding, and I want to give her this house. My husband is no longer alive to see it, but perhaps a future generation will be able to. This hope is all we have.”

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