Page 93 - History of Canopy Classic Buyers

https://timesofindia.indiatimes.com/business/india-business/company-diverting-homebuyers-
money-to-other-project-is-criminal-misappropriation-sc/articleshow/65232024.cms?from=mdr

Builders diverting homebuyers' money is criminal
misappropriation, this 'nonsense' must stop: SC

NEW DELHI: Disapproving the practice followed by real estate companies of diverting money

deposited by flat buyers of a project for construction of another project, the Supreme Court said

that it amounted to criminal misappropriation and the companies should be prosecuted for it.

While hearing a batch of petitions filed by thousands of homebuyers who invested their money in
Amrapali’s various housing projects but are not getting possession of flats, a bench of Justices Arun

Mishra and U U Lalit said that the companies cannot divert the money of depositors for any other
purpose including construction of other projects.

The court noted that Amrapali group had diverted Rs 2765 crore of homebuyers' money for other
purposes and slammed it for diversion of funds.

“This is criminal misappropriation. You hold the homebuyers money in trust. It cannot be used for

other purposes.

Depositors gave you the money in good faith and how can you divert the money for other purposes

other than construction of projects for which money was given,” the bench asked beleaguered group
who faced the ire of the court for not complying with its order for completing the projects as per

the timeline fixed by it.

“This is the malady which is prevalent in the sector and we want to stop this nonsense. You use
depositors money to spread your tenterhook and expand your business. You cannot stand on the

shoulder of homebuyers to expand your business. It is not acceptable. These issues are burning in

our hearts but we gave you chance to mend your ways but you did not change,” the bench said
while attaching the properties and bank account of all 40 companies of Amrapali and their promoter

and directors.

The court said that it would ensure that every single paisa of the depositors is invested in the
projects for which they had paid and made it clear that all promoters, directors and Chartered

Accountant of the company would be under suspicion till then.

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