On Friday, the Supreme Court allowed Enforcement Directorate (ED) to attach properties of JP Morgan and its directors to the extent of amounts allegedly diverted and engaged in transactions with the now-defunct Amrapali Group to allegedly siphon off home buyer’s money in violation of the Foreign Exchange Management Act (FEMA) and FDI norms.
The bench comprising of Justices Arun Mishra and U U Lalit while hearing the proceedings through video conferencing has granted permission to the Enforcement Directorate to attach the properties of the US-based multi-national firm. The said decision was taken based on the submissions made by Additional Solicitor General Sanjay Jain appearing for ED who stated that the ED has prima facie identified Rs 187 Crores in the accounts of JP Morgan as proceeds of crime under the Prevention of Money Laundering Act (PMLA).
“We lift the embargo created vide order dated 2nd December 2019, not to attach the property of JP Morgan and its Directors. We permit the Enforcement Directorate to attach the bank accounts of JP Morgan as well as any other property belonging to JP Morgan and its Directors to the extent required,” stated the SC bench.
“The money of the home buyers has been diverted. The directors diverted the money by the creation of dummy companies, realizing professional fees, creating bogus bills, selling flats at an undervalued price, payment of excessive brokerage etc. They obtained investment from JP Morgan in violation of FEMA and FDI norms,” the top court had said.
Meanwhile, the top court asked Additional Solicitor General Vikramjeet Banerjee to seek instructions on providing Rs 500 crore as loan to NBCC for completing the stalled projects of the embattled real estate firm Amrapali, as there is no private player involved in it. The court also directed the DRT to transmit the rent which they have received from property that has been attached to the Amrapali account maintained by the SC Registry.
On the other hand, Banerjee told the court that a meeting is scheduled in finance ministry on the issue and he would inform the concerned authorities of the views expressed by the court. Further, he said that the suggestions given by court-appointed receiver, senior advocate R Venkataramani, are being looked into by the State Bank of India for relaxing the guidelines for the disbursing of loans.
As per sources, Senior Advocate R Venkatramani, the court-appointed receiver in the case, suggested that GST should be waived by the Government of India considering the dispute in the matter and additionally submitted that GST dues may be kept in abeyance. It was also pointed out by the receiver that sale of FAR may be directed so as to fetch the amount for the purpose of construction.
The apex court said that the equity shares of the group were purchased at an exorbitant price to suit the requirements of JP Morgan and the Amrapali Zodiac Developers Pvt Ltd had diverted homebuyers’ funds. It had also noted that the shares of Amrapali Zodiac from JP Morgan were ultimately purchased for Rs 140 crore by M/s Neelkanth and M/s Rudraksha, shell companies owned by a peon and an office boy respectively. Thus, the court directed the ED that the investigation should be carried out impartially, properly, and expeditiously within a period of three months.
Earlier on 23rd July 2019, while hearing the pleas filed by several homebuyers seeking possession of around 42,000 flats booked in Amrapali Group projects, the apex court has ordered the cancellation of Amrapali Group’s registration under RERA and ordered a probe by the ED into the allegations of money laundering.