BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS.

A We have spotted out further certain non-genuine supplies as per details given below: (i) M/s B S Promotors There have been sales to M/s B S Promoters amounting to Rs. 21.¹⁵ Crores during the period 2013-16 from one Company of B Amrapali Group and the same goods were re-purchased into another Company of Amrapali Group at a margin of 5% approximately. These transactions seem to be mere accommodation entries, where all purchase/ sales are recorded on a single day only. Further, it C was also explained that M/s B S Promotors have made the sales against Bank Letter of Credit which has been discounted by them from their bankers. This seems to be a case of manipulation with the banks also since there is no movement of goods but entries within the Amrapali Group only. D Further, it is observed the balance outstanding of INR 5.11 Crores due to the B S Promotors as on 31st March, 2016, has been adjusted against payment made by home buyers directly to the B S Promotors and by allotting a flat to M/s B S Promotors. However, the authorized representative of the B S Promotor has refuted this fact vehemently and asserted that it has not received any payment from the home buyers of the Amrapali Group, nor it has received any flat. Thus, the flat allotted to B S Promoters on paper needs to be attached and put to sale. Moreover, a sum of INR 1.⁶ crores as 5% of the margin earned by M/s B S Promoters needs to be recovered from him as they have neither received goods nor supplied any good and only acted as Billing agent for which they need not be claiming INR 1.⁶ crores as their margin. (ii) Kanodia Cements While scrutinizing the purchase bills of this supplier it was noted that the slips of Weigh Bridge in the case of purchase of Bajri G trucks show time interval of 4-5 Minutes only. This doesn’t seem to be possible that a full truck of Bajri takes only 4-5 minutes to enter into the site and come back on the weigh bridge again with empty truck in 4-5 minutes. No satisfactory explanation has been furnished by the management regarding this issue. Sample of such H instances have been enclosed below:

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 385 [ARUN MISHRA, J.]

Challan Net Time of Time of Time A Truck No. weight Date Gross tare No. taken in Kg Weight weight 6524 HR74A-5331 30,720 2/3/2015 18:31 18:36 5 Min 6477 HR74A-3499 32,120 2/3/2015 18:34 18:39 5 Min 6437 HR74A-5331 29,230 23/2/2015 18:08 18:12 4 Min 6435 HR74A-8194 31,020 23/2/2015 17:55 18:00 5 Min B 6429 HR74A-8194 30,640 22/2/2015 15:50 15:55 5 Min 6289 HR74A/5331 29,150 17/2/2015 15:08 15:13 5 Min 6291 HR74A/8194 30,240 17/2/2015 15:00 15:05 5 Min 6250 HR74-9144 30,710 12/2/2015 18:25 18:30 5 Min C 6176 HR55T/5754 30,090 15/2/2015 15:54 15:58 4 Min 6265 HR74A-8194 29,490 15/2/2015 15:52 15:56 4 Min 6179 HR74A-1620 28,270 8/2/2015 16:39 16:43 4 Min 6261 HR74A-8194 30,930 14/2/2015 17:32 17:36 4 Min 6220 HR38T-2855 33,780 8/2/2015 15:43 15:48 5 Min D 6227 HR74A-5331 29,290 9/2/2015 15:09 15:13 4 Min 6172 HR55T-5896 29,640 7/2/2015 16:56 17:00 4 Min 6210 HR74A-8194 29,560 7/2/2015 16:59 17:02 3 Min 6169 HR55T 5896 30,910 6/2/2015 15:32 15:36 4 Min 6170 HR55T 8339 31,270 6/2/2015 15:35 15:37 2 Min E 6263 HR74A 1680 30,090 14/2/2015 19:09 19:13 4 Min

As these bills of Kanodia Cements are prima facie held to be bogus, the entire sum of INR 11.69 Crores booked as purchases from Kanodia Cements should be recovered from them or from the Management for inflating their purchase by debiting bogus invoices. Bogus expense and cash surrendered in income tax search Cash has been surrendered by the Amrapali group in the first Income Tax search conducted on 9th September, 2010. No source of this cash has been explained by the management. According to the Balance sheet of Amrapali Sapphire Developers Private Limited examined by us, cash surrendered is shown as miscellaneous income in the profit and loss account during 2010- 11 amounting to Rs.1.39 Crores. H

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A It is further submitted that in the second search conducted by Income tax Authorities on 7th August, 2013, the Amrapali group had surrendered an additional income of Rs.125 crores. Both these facts clearly depict that Amrapali group was having inflow of unaccounted cash collected from either the Home Buyers B or collected cash from Bogus purchases made or by advancing money to various parties and taking cash from them. While scrutinizing the Audited Financial Statements of the Companies for the Financial Year 2013-14, it is observed that no additional income has been shown. There is only jugglery of C accounting transactions where sales have been shown by way of part completion method and the relevant cost is also debited to this part completion sale by changing the Accounting Method which was being followed by the Amrapali Group of companies in the earlier years. This method of accounting was changed for 2 financial years only i.e. for Financial Year 2012-13 and Financial D Year 2013-14. This method was changed just to make adjustment in accordance with the letter of surrender. In fact, there is no surrender of additional income, it only amounts to preponement of sale being shown in these years instead of it in the later years. Cash has also been surrendered in the first search conducted on E 9th September, 2010 and no source of this cash has been explained by the management. This clearly explains that there was flow of un-accounted cash from various sources to the Amrapali Group of Companies. A note was also stated in the Audited Financial Statements for F the financial year 2010-11 as follows: “Note 6 (A) During the F.Y. 2010-11 Income Tax Search & Seizure operation conducted by the Income Tax Department on the company and company has surrendered a total income of Rs. 13,893,500 i.e. Rs. 10,043,500 for the F.Y. 2009-10 G and Rs. 3,850,000 for the F.Y. 2010-11. Accordingly, the total income includes the above said income.” Thus, it is can be easily inferred that the company has been regularly taking cash from its various home buyers but not recording these cash entries in the Books of Accounts. (Volume –I Page H No. 205)

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 387 [ARUN MISHRA, J.]

It is unclear how the surrender of Rs.125 crore made during the A Financial Year 2013-14 has been accepted by the Income Tax Authorities. In fact, no additional income has been shown on this search. Moreover, against the additions relating to Bogus Purchases made in the Assessment order for the Financial Year 2013-14, the B Commissioner of Income Tax (Appeal), Central Circle has deleted all these additions. We are informed by the management that no further appeal has been preferred by the department before the Income tax Appellate Tribunal as they have no idea of the same so far. C The bills booked and payments made were just accommodation entries. Many of the parties are not traceable and when we requested the Amrapali Group Management to produce the persons/entities to ascertain the veracities of the claims, they didn’t co-operate. D It appears Prima-Facie that the bogus invoices were booked and cash was taken from these parties. We are of the opinion that if we confront the recipient of the purported charges then last recipient would flatly deny. It is pertinent to note that Shri Ajay Kumar Aggarwal of BSBK E Group in a statement recorded under section 132(4) of the Income Tax Act has admitted that he provided accommodation/bogus bills. Till the date of writing this report the amount so identified for bogus bills is Rs.837.² crore. Further, the supplies by Jotindra Steel and Tubes and Mauria Udyog Ltd, having common directors F with Amrapali Group Companies, are prima-facie bogus by nature and are under examination amounting to Rs.450 crore. (Refer Annexure No. S 4 Page no 2827 Supplementary report). Land Development Charges A sum of Rs.⁷.³ crore has been debited to this account on 31st G March, 2013 for which the supporting relevant documents are not made available to us for our verification. This amount needs to be recovered from the Directors as there is no supporting evidence or voucher and it is just a book entry. H

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A Total bogus expenses as on date of report have been ascertained to be Rs. 842.42 crore. Double booking of expense It has been observed that brokerage amounting to Rs 0.²⁵ crore was paid twice; once to HDFC Realty and again to Mr. Alok B Ranjan c/o SSS Enterprises on account of same flat bookings in Amrapali Sapphire Developers Private Limited during the FY 2019-

10. Mr. Sanjay Kumar, proprietor of SSS Enterprises has already conveyed to GM Finance of Amrapali Group by way of speed post that fake bill for brokerage has been raised under his name by Mr. Alok Ranjan. This amount of Rs.0.²⁵ crore should be recovered from Alok Ranjan/ the Management for booking of double expense. (Volume 1 – Page no 213) Unsupported Cash Payments The Company has made unusual cash payments by transferring the cash to the site cash during the financial year 2016-17 by way of vouchers which are not supported/authenticated by the site cash in charge. It seems that all these entries have been manipulated to use the cash to decrease the balance as on 08/11/ 2016 being the date of demonetization. Some instances are as under: Financial Year Particulars Amount 30/04/16 Wages Paid 2,754,350 31/05/16 Wages Paid 2,637,050 30/06/16 Wages Paid 2,655,900 F 31/07/16 Wages Paid 2,645,450 31/08/16 Wages Paid 2,643,950 30/09/16 Wages Paid 2,659,450 31/10/16 Wages Paid 2,683,350 30/11/16 Wages Paid 1,259,630 G 06/06/16 Transferred to site cash 3,000,0000 12/05/16 Transferred to site cash 4,100,000

The above are only from one company which is tip of the iceberg and actual amounts may be much higher. H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 389 [ARUN MISHRA, J.]

Further cash payments are being made to number of parties amounting to Rs.²⁰,000 or less which are not supported by payee’s receipts on daily basis. Thus, these payments are not genuine. (Volume I- Page 223) It is observed that the cash balance available on 8th November 2016 was partly deposited into bank and huge amounts were not deposited into bank and was used for payments to staff, suppliers, vendors etc. It is worthwhile to mention that it was not permitted to use Specified Bank Notes (SBN-500, 1000 denomination Notes) for making payments to these parties. Further there has been an Income tax Survey on 17/11/2016. We C understand Income Tax Authorities have recorded the statement of Directors and also taken the Inventory of Cash in hand as on that date. A copy of the statement recorded and detail of inventory of Cash in hand is not made available to us. Gold bar purchased from Yashika Diamonds D It has been observed that the Group Companies purchased Gold bar, other forms of gold worth Rs.⁵.88 crore. The same has been booked as festival expenses. This does not seem to be a normal business transaction but in the nature of personal expenses. Thus, this amount should be recovered from the management of the company.

5. Negligence and non- monitoring by bankers In view of our detailed report attached, we wish to submit here that the whole process of transfer of funds from one Company to another Company to a third Company and so on and so forth on the same dates would not have been possible without active support by the Bankers. The Bankers, in our opinion, turned a Blind Eye to the various transfer of funds from one account to another for reasons best known to them. They didn’t inquire the huge transfer of funds from various accounts which were being routed every day. Had they been slightly more vigilant to monitor and control transfer of funds, the Management would have not dared to launder the money from one Company to another according to their whims and fancies and the Bankers are solely responsible for the negligence on their part. H

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A Banks did not do any monitoring that whether the funds disbursed were used for approved purposes or not. The loan sanctioned as term loan were diverted on the very same day of receipt. The land payment were not paid etc. Bank of Maharashtra – Term Loan has been released by B transferring the amount to the Current account during the financial year 2009-10 to 2012-13. There has been no monitoring by the bank to ensure the end use of utilization of the funds. This amount was paid from the Current account for other than business activities of this Company. C It is observed that there was no monitoring done by the officials of Bank of Maharashtra, Andhra Bank and other banks by releasing of term loan to the Company. Even basic checks as required by the Bank were forgone and not ensured by the Bank Officials regarding the end utilization of the term loan funds for the purpose for which they were granted. It seems that the Bank officials overlooked all these important aspects and granted these loans to them without going into any technical requirements as relating to release of Term Loan facilities to a borrower. The banks acted as mute spectator to unapproved diversion which was almost happening evidently in all banking transactions. Optionally Convertible Debentures ICICI Prudential Asset Management Company Limited had given a sum of INR 74 crores approximately on account of debentures issued by Amrapali Sapphire Developers Private Limited during the financial year 2011-12. These debentures carried interest rate @ 17% Per annum. There has been a gross non-compliance of Investors cum- shareholders agreement dated 16th Day of December, 2010 with respect to following: G a. Non appointment of directors b. Non operation of bank account by joint signatory of investor c. Non utilization of funds as per clause no. 7.⁵ of Investment cum Shareholders Agreement dated 16th December, 2010.

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 391 [ARUN MISHRA, J.]

d. Sale of flats at less than Rs 3,420 per square feet of saleable area and many other clauses of this agreement neither followed nor ensured by the Investor. It is very clear that a Debenture Subscription Agreement and Investment cum Shareholders Agreement both dated 16 th day December, 2010 were merely sham documents which were never complied with and both i.e. Amrapali group of Companies and ICICI Prudential Asset Management Company Limited were in connivance with each other in diversion of funds for non-specified purposes. Foreign investment C The company has received the sum of Rs. 140 Crores during the financial year 2012-13 from IPFFI Singapore PTE Limited under Foreign Direct Investment Scheme. As per FEMA rules this amount was to be invested in Real Estate construction projects only. D The amount received in Axis Bank of Rs.85 Crores was transferred to Amrapali Centurian Park Pvt. Ltd. (ACPPL) as under: On 7.⁸.2012 - Rs.⁵ Crores On 8.⁸.2012 - Rs.50 Crores E On 18.⁸.2012 - Rs.30 Crores ————————— Total = Rs. 85 Crores ———————— ACPPL on receiving Rs.85 Crores, allotted Equity Shares worth F Rs. 85 lakhs to ASCPL and balance Rs.84.¹⁵ Crores were treated as Share Premium Account. There is no Valuation Report available as to how this share premium of Rs. 84.¹⁵ Crores has been calculated. This transfer of fund by ASCPL to ACPPL is absolutely violative of FDI Rules and Agreement. G The Second amount received in BOB Escrow Account was transferred from 8.⁸.2012 to 28.⁹.2012 on various dates in the Account of BOB, Sansad Marg Branch, and New Delhi and also used for payment of Term Loan Instalments of OBC and Bank of Maharashtra for repayment of their Term Loan instalments. H

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A It will therefore, be observed from the above, that the Company (ASCPL) did not use money for the project for which it was received from IPFII Singapore but transferred Rs.85 Crores to Amrapali Centurian Park Pvt. Ltd. and Rs.55 Crores to repay Bank Loan Instalments and Repay the outstanding creditors provided for in the books and standing in the B books. The said payments made by ASCPL are, therefore, in contravention of FDI norms and rules and for which the money was brought in India. Moreover, ASCPL has paid interest of Rs.58.81 Crores @ 17% (which is a highly abnormal rate) so far to IPFII, C Singapore during the last 3 years. - Year 31.³.2013 Rs.¹⁴.41 Crores Paid - Year 31.³.2014 Rs.²².²⁰ Crores Paid - Year 31.³.2015 Rs.²².²⁰ Crores Paid ———————— D Total = Rs.58.81 Crores ———————— a) It is very clear that all such violations are being made with the knowledge of the IPFII Singapore and they are in E Connivance with the ASCPL. b) As per Schedule 4 of the agreement CCD’s (Compulsory Convertible Debenture) were subject to the following terms and conditions. 1) On expiry of 5 years from the date of allotment, the F CCD shell be fully monetarily and compulsorily converted into class B shares of the company 2) The CCD’s shall be converted into such number of class B shares arrived that by dividing the aggregate face value of CCD’s by Rs.²,734.30. G But these CCD’s were not converted into class B shares as per agreement but entered into another agreement to extend the term of CCD’s from 5 years to 7 years. By this way , The fund has continued to be a creditor otherwise

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 393 [ARUN MISHRA, J.]

after conversion to equity, it will not be eligible for interest and principal. Current liabilities not payable Security deposits from contractors and intercorporate deposits accepted from non group companies are in the nature of unsecured loans. There have been no business transactions with the company except movement of funds. The list of such liabilities is under preparation which are not payable. Inter-corporate deposits accepted by the Group are Non-Interest- bearing unsecured loans. There are no business transactions with these companies. It is not understood as to why a person will give interest free loans without any considerations. Thus, we are of the view that these are accommodation entry only in lieu of consideration given to them indirectly by the management. Hence, we are of the view that all the aforesaid amounts are not payable. D In our opinion, this is a case of Money Laundering as the generic term of Money Laundering is defined to describe the process by which Criminals disguise the original ownership and control the proceeds of the criminal conduct by making such proceeds to have derived from a legitimate source. E Money Laundering is the process of concealing the origin of money obtained illegally by passing it through a complex sequence of Banking transfers or commercial transactions. The main process is accounting for the proceeds without raising the suspicion of law enforcement agencies. In the instant case too, Amrapali Group F of Companies have defied all laws to transfer small and big amounts from one account to another to a third and so on and so forth on a single day with the connivance of the Bank officials and financial institution officials and thereby Committed act of Money Laundering on a large scale. G

6. Lands allotted to consortium and flats sold to homebuyers Several companies were formed with consortium partners which were just dummy companies and were part and parcel of Amrapali group. To comply with the condition of minimum 3 partners, these companies were created in the names of office boys and peons. H

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A Technically the allotments at the initial stage itself were void ab- initio. In most of the companies, the amount received from homebuyers was sufficiently more than the amount spent on construction and for payment of land. Had the promoters paid amount received from homebuyers to the authorities on time there would not have been any liability of land dues. Further there was no need to avail any loan from banks, Private equity funds as well as from investors. The sole objective of taking loan was to divert the funds to other ventures to create assets in the name of family members, make movies, to satisfy the ambitious desires of family members and to build hospital. Villas were bought at tourist destinations for fun at the expense of middle class and low income group peoples abodes. Many parties joined them in the looting of hard earned money of homebuyers to take their share of the cake in the form of unbelievable return on investment, profits, land, FSI and flats and facilities at throwaway prices. Bogus expenses were booked and the promoters were having no fear of the law of the land. They could execute many transactions of transfer of properties, booking of expenses, funds transfer, even when the petition was accepted and was pending for disposal before the Honourable Supreme Court. Companies in which land was allotted to consortium partners are as under: E Amrapali Leisure Valley Pvt Ltd Amrapali Centurian Park Pvt Ltd Amrapali Homes Amrapali Grand F Amrapali Eden Park Developers Pvt Ltd -Iftikar Ahmed and Rakesh Mahajan jointly hold 49% in the said company (i) There is no substance in the nature of transactions carried on by the company. The funds are merely routed from one entity to another for hidden objective. G (ii) Banks were financing not the construction activity but loans and advances to third parties. (iii) Mr. Rakesh Mahajan and Mr. Ifthikar Khan were grossly involved in the wrongdoings in the company’s project and

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 395 [ARUN MISHRA, J.]

equally conspired in the delay and diversion of home A buyers funds and they being 49% shareholders and active directors in the company should be held responsible for the deficit in completion of the project amounting to Rs.²⁰ crore. Further, Amrapali Infrastructure had given an advance of Rs.1.⁵ B crore to Nirala Infracity Ajmer Pvt Ltd - a project controlled by Rakesh Mahajan and Iftikar Ahmed. This amount is recoverable from Nirala Infracity Ajmer Pvt Ltd.

7. Companies created solely for the purpose of routing funds The intention of Amrapali Group was to divert funds to other projects/income sources in the name of family members of the promoter and the trusted employees, friends of the promoters as well of the executives, auditors and their relatives. For this purpose, several companies were incorporated for routing funds. These companies did not have any material transaction as per the main object for which they were incorporated and did not have business since their incorporation. These companies did not have any employees also. These companies are shell companies used only to route interest free funds from one company to another. List of such companies identified so far is as under: E a) Jhamb Finance & Leasing Private Limited - The company didn’t have any operations/income/expenses except for FY 2014- 15 and had only movement of funds from one related party/ interested party to the other. It means the company was used merely for routing the funds and not for doing any business. F Since incorporation, loans (liability) and loans & advances (asset) increased as under, without booking of any expense/income:

As on Loans (liability) Loans & advances (asset) Amount (RS. ) Amount (RS. ) 1st April 2014 83,00,000 1,12,39,917 G 1st October 2014 35,33,00,000 34,67,39,917 31st March 2015 312,93,32,906 313,11,55,392 31st March 2016 859,77,32,906 863,58,50,776 31st March 2017 877,57,22,906 883,24,00,776 H

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A It is pertinent to note that starting from the FY 2015-16, the loans given and taken increased three folds without having any corresponding increased on the income and assets side on account of interest. Whereas starting from FY 2015-16, the employees started leaving the organization and the construction at sites was at standstill. The directors in the company are having no knowledge or an iota of idea about the transactions carried out. The company’s operation were under the controlled and supervision of CFO Chander Wadhwa. Further, it received Rs.¹⁸.95 crore from Suspense- unidentified persons/parties and paid Rs.²⁴.41 crore to Suspense- unidentified persons/parties, leaving balance payable of Rs.⁵.46 crore to Suspense- unidentified persons/parties. The said transactions of Rs.¹⁸.95 crore details were not made available to us. b) Gaurisuta Infrastructure Private Limited – It lent and received funds from several parties without doing any business. D Details of Rs.²⁵ crore received from third parties are as under: S.no. Name of party Amount Since date

1 Ams Powertonic Pvt Ltd 50,00,000 07-05-2012

4 Bij Buildcon Pvt Ltd 50,00,000 10-05-2012

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 397 [ARUN MISHRA, J.]

A 11 Kabir Enterprises Pvt Ltd 50,00,000 06-06-2012

12 Ladli Ji Enterprises Pvt Ltd 2,00,00,000 15-05-2012

13 Leisure Buildcon Pvt Ltd 50,00,000 25-04-2012

23 SpbPropcorn Pvt. Ltd. 50,00,000 25-04-2012

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A The above companies were used for the purpose of money laundering and required a detailed investigation. Further the amount as shown above is not payable to the party as indicated against. None of the parties as above has lodged any claim so far therefore it strengthens our charge. B As on 31st March 2017, the company is having interest free loans and advances amounting to Rs.703 crore without any movement with a paid up share capital of merely Rs.0.01 crore and the directors are employees and junior employees of statutory auditors. The company is used as a conduit in diverting home buyer funds to Amrapali Healthcare (Noida Hospital) and buying shares in C different group companies from the funds of home buyers. The entire shareholding should be attached and be made up for sale. c) Neelkanth Buildcraft Private Limited - It was formed in the year 2013 having a capital of Rs.0.01 crore for the specific purpose of buying shares from JP Morgan. Mr Chandan Kumar, D director of Neelkanth Buildcraft Private Limited is an office boy in the office of Statutory Auditor of Amrapali Group, Mr Anil Mittal and the other director Mr Vivek Mittal is nephew of Statutory Auditor Mr Anil Mittal & does small time jobs. d) Stunning Construction Private Limited – The Company is holding 19.75 % shareholding in LA Residentia Developers Pvt. Ltd. is a consortium partner in the project since beginning. LA Residentia project has 3200 flats LA Residentia should surrender either 19.75% of land or 632 flats. It was formed only for payment of Statutory dues of Amrapali Group of Companies, its directors and their relatives including senior employees of the Amrapali Group of Companies. The company was under the direct control of CFO Chander Wadhwa and Company Secretary Pankaj Mehta. The amount of taxes paid by the company on behalf of promoters, directors, executives and their family members is Rs.¹⁷.43 crore (net) and gross up is Rs.²⁴.⁹ crore is recoverable from promoters, directors, executives and their relatives. e) Kapila Buildhome Private Limited – The company did not undertake any business. A sum of Rs.392.68 Crores was advanced as loan or advances to the various group Companies. Further, it accepted non-interest bearing inter corporate deposits from H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 399 [ARUN MISHRA, J.]

non group companies with whom no other transactions were A undertaken. We are of the view that these are accommodation book entries only in lieu of consideration given to them indirectly by the management. List is as stated hereunder:

Name Amount In Date of Acceptance Rs. B Ample Hotels and Resorts 20,000,000 20/04/12 Justify Vanijya Private Limited 4,000,000 22/06/12 Ladli ji Enterprises Private 5,900,000 25/04/12 Limited Madhav Fincap Private Limited 15,000,000 24/04/12 Pan Realtors Private Limited 100,000,00 23/08/10 0 C Total 144,900,00 0

The above companies were used for the purpose of money laundering and required a detailed investigation. Further the amount as shown above is not payable to the party as indicated against. D None of the parties (except PAN Realtors that also when we requested them otherwise they were silent for last 8 Years) as above has lodged any claim so far therefore it strengthens our charge. f) Rudraksh Infracity Private Limited- Shri Chandan Kumar, E an office boy and employee of CA Anil Mittal, Statutory Auditor and Shri Atul Mittal, relative of CA Anil Mittal were inducted in the board. The basic purpose of this Company was only for money laundering and was incorporated to receive Funds from Mannat Buildcraft Private Limited. After receiving money (Rs.²⁵ Cr.) from Mannat Buildcraft Private Limited, the same was transferred F to J.P. Morgan Investments for purchase of Equity Shares of Amrapali Zodiac Private Limited at an exorbitant price. There are no transactions before or after these transfers of money and the same have been camouflaged to make it look with business transactions on the basis of the Valuation Report. G It was also observed that there are no transactions at any date during the period but the bank account has only been used for diversion of funds.

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A g) Mannat Buildcraft Private Limited - Shri Pankaj Mehta is Company Secretary of Amrapali group of Companies and now Partner of Mr. Chander Wadhwa, CFO in Saffron Consultants LLP and Mr. Ashish Jain who is also Partner of Mr. Chander Wadhwa, CFO in Saffron Consultants LLP, were inducted in the board. The basic purpose of this Company was only for money B laundering (Rs.120 Cr.) and was incorporated to receive Funds from Amrapali Zodiac Developers Private Limited. The whole racket of money laundering and receiving money from these Companies i.e. Mannat Buildcraft Private Limited, Rudraksh Infracity Private Limited and Neelkanth Buildcraft private Limited C are the brain child of Mr. Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor of Amrapali Group of Companies. Both these Companies are controlled by both of these persons and had been formed only for this Money Laundering Business. There are no transactions before or after these transfers of money and the D same have been camouflaged to make it look with business transactions on the basis of the Valuation Report. h) Amrapali Magadh Developers Pvt Ltd - The company has not carried out principal business activities. There is no bank account. The purpose of creating the company is not clear. E The shareholders paid the share application money in cash. The company is a dormant company & did not have any significant transaction. i) Amrapali Mahi Developers Pvt Ltd - The company received share capital in cash and all the expenses were paid in cash only. F Mr. Mahendra Singh Dhoni, husband of Ms. Sakshi Singh Dhoni (director of company) was the brand ambassador of Amrapali group and have carried out a number of transactions with respect to endorsement of Amrapali group’s projects. He entered in agreements with other group company.

G j) Amrapali Spring Valley Pvt Ltd- the company is created for diversion of funds and Rs.186 crore was diverted from Amrapali Smart City Pvt Ltd to buy shares of Ultra Home Construction Pvt Ltd and shareholders are promoter directors without doing any investments.

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 401 [ARUN MISHRA, J.]

Most of the above companies will qualify to be NBFC, which A was reported neither by the management nor by the statutory auditors (except Jhamb Finance & Leasing Pvt Ltd). It is recommended that RBI shall investigate the affairs and compliances of the above companies. Amrapali Media Vision Pvt Ltd was also incorporated with a B purpose to route funds for making movies to satisfy the ambitious desires of directors/family members. Most of the marketing and advertisement business of the group companies was given to the company with a profit margin on the cost. The group could have done this advertisement directly. But because there was need to make movies, the funds were diverted to the company directly in C the form of loan as well by availing the services indirectly from these companies. The Company was freely availing funds of homebuyers from other group Companies in the form of ICD and spent it on making movies. Hawthrone Intellect Management Solutions Pvt Ltd – D Company was providing Management Consultancy Services (Recruitment Services) and taking nominal professional fee. In turn, the Company has incurred more expenses in the last few years on account of Salary, Wages and other administrative expenses thereby resulting in net loss to the Company which has E accumulated to INR 2.33 Crores as on 31.³.2015. All these entries seem to be in nature of dubious entries and no voucher are available. This amount of loss of 2.33 Crores needs to be recovered from the Directors as they have wiped of the amount of the Home Buyers funds diverted as Home Buyers F Money to the Company. Apart from the above companies, there were several companies which were incorporated by employees, auditors of Amrapali group. Shareholding as well as investment/assets of these companies shall be attached G

8. Companies created for building assets The following companies were created by the Group for building assets from homebuyer funds without contribution of any rupee by promoters and their relatives. The shareholding is held by the H

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A group companies and/or by shell companies and/or the trusted partners including individuals. Ultra Home Construction Pvt Ltd- Shareholders did not bring capital of their own, but used funds of home buyers in other entities/ projects to pay for allotment of shares in UHCPL. Mr. Anil Kumar B Sharma was allotted shares at premium for an amount of Rs.²²,82,40,810 on 4th Nov 2010 and Rs.²⁵,84,05,470 on 2nd March 2011 by adjusting receipts from Amrapali Infrastructure Ltd which further received from Amrapali Sapphire Developers Pvt Ltd, which received from homebuyers. Few instances are hereunder: C Received in Amrapali Transferred to Transferred to Ultra Sapphire Developers Pvt Amrapali Home Construction Ltd primarily from home Infrastructure Ltd Pvt Ltd buyers INR 5.47 crore as on 4th INR 2 crore on 5th INR 2 crore on 5th March 2010 March 2010 March 2010 D INR 1.90 crore on 5th INR 2 crore on 8th INR 2 crore on 8th and 6th March 2010 March 2010 March 2010 INR 1.13 crore on 8th INR 2 crore on 9th INR 2 crore on 9th March 2010 March 2010 March 2010

Amrapali Homes Projects Private Limited –It has been observed that Mr. Prem Mishra was given INR 12.40 crore (under several ledgers) for purchase of land since 1st April 2008, out of which INR 10 crore are still receivable from him. The project was sold by Prem Mishra to various parties and received amount in his name. We are yet to complete the audit of Prem Mishra in Indore project. The company transferred funds to and fro with several parties which do not have any substance. It has several small and big debit balances as on date. Amrapali Biotech India Pvt Ltd – Land & Building, Plant & machinery, a factory at Rajgir (Bihar) Amrapali Healthcare Pvt Ltd – Hospital at Noida G Noida Texfab Pvt Ltd – Amrapali International Institute of Hotel management, Noida Neelkanth Buildcraft Pvt Ltd – bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd. H MVG Techno Consultants Pvt Ltd – Tower at Noida

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 403 [ARUN MISHRA, J.]

Amrapali Infrastructure Pvt Ltd – recast factory at Greater A Noida Sangam Colonisers Pvt Ltd- The Company has received an amount of Rs.¹⁰.51 crore as advance against plots. However, despite repeated requests we have not been provided with the complete data base reflecting Number of Plots, Name of the buyers, B Amount of Sale Consideration, Amount Received, Amount Outstanding, Unsold plots etc. Hence, we are not in the position to comment upon the same. As informed to us during the course of audit, the remaining portion of the land available with the Company has been attached by Hon’ble Supreme Court of India and put to auction by DRT. C

Navodaya Properties Pvt Ltd – Building corporate tower 2, Noida Amrapali Power & Cement Pvt Ltd – Land from Charu Rai yet to be identified, Land from UPSIDC yet to be identified. D Amrapali Buddha Developers Private Limited – Shopping complex cum Mall at Gaya MSB Software Technology Private Limited – Tower 1, Noida Gaurisuta Infrasolution Private Limited –Flats in Amrapali E Silicon City Private Limited, booking of bogus expenditure of Rs.1.⁷ crore. Amrapali Hospitality Services Private Limited- Hotel at Deogarh, Jharkhand Mums Mega Food Park Private Limited- FMCG Factory at F Buxar, Bihar, Land Building and Plant & machinery RudrakshInfracity Private Limited - bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd. MannatBuildcraft Private Limited - bought shareholding from JP Morgan in Amrapali Zodiac developers Pvt Ltd. G Serious Observation Our investigation reveals that this company has been used to perpetuate a fraud enabling JP Morgan Investments to sell its shares of Amrapali Zodiac Pvt. Ltd. to other Group Companies H

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A of Amrapali group namely, RudrakshInfracity Pvt. Ltd. and Neelkanth Buildcraft Pvt. Ltd. at a valuation amounting to INR 140 crores which is not justified. This company has been used as a tool to transfer the money to other Amrapali Group companies. The following persons seems to be involved in this organized fraud: B i. Amrapali Zodiac Developers Pvt. Ltd. ii. RudrakshInfracity Pvt. Ltd. iii. Neelkanth Pvt. Ltd. iv. JP Morgan Investments v. MannatBuildcraft Private Limited vi HDFC Bank C Chander Wadhwa, Adhikari dash and Anil Mittal incorporated 27 Additional companies identified so far, which may be many more, and became consortium partners from the funds of the home buyers. In the process, they appointed peons and junior employees of auditors office as directors who were totally unaware of the D transactions. These companies were used for depositing cash during demonetisation. The companies were formed/acquired for routing funds and were not in any business. These were sham companies whose share capital was mostly subscribed in cash and the transfer of shares was also in cash leaving no audit trail.

E 9. Misuse of funds by directors involved in scam The directors and executives colluded with each other and diverted homebuyers funds. Directors received huge amount of money in the form of salary as well as professional fee, both together. A person could have been either in whole time employment of the company or render services as consultant. However, a person F cannot enjoy salary income and earn professional income at the same time and also both cannot be earned at the same time from same company. But directors of Amrapali group withdrew sums using all possible ways, be it salary, professional fee, reimbursement of expenses, use of luxury cars or loans and advances to self/ G relatives/self controlled entities/trusted partners or booking of bills of self controlled entities/trusted partners. Further professional fee was booked without any agreement or proof of service. It had no correlation with the amount of work

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 405 [ARUN MISHRA, J.]

done by the directors. Professional fee was booked as per wish and desire of directors and did not have any fair basis. There were standing instructions to transfer company funds to the individual directors bank accounts when the balance was reaching to the specified set minimum balance limit. The Professional fee paid to the directors, relatives of directors, and senior managers was a unique way of diverting money. Huge amounts were paid without any agreements at the whims and fancies of the directors and managers. Moreover it was tax free and the tax liability was discharged by another group company. The whole of professional fee received by the directors (as stated hereunder) is recoverable from them. (Volume –II, Page C no 416-417). Name of director Professional fee received (as per affidavit)

Anil Kumar Sharma 29,13,23,580 D Shiv Priya 26,43,64,571

Ajay Kumar 5,76,90,240

Suvash Chandra Kumar 5,11,21,752

Amresh Kumar 68,11,110 E Total 67,13,11,253

Professional fee was under disclosed to the tune of is Rs.33.4 crore (Anil Kumar Sharma 8.75 cr + Shiv Priya 24.65 cr) in affidavits filed on 3rd Dec 2018 (Volume –II, Page no 414-415). F The Difference was found of from the affidavit file and the tax returns. It shall be noted that directors did not share company wise receipts in the affidavit and also books of accounts of directors were not provided. G Directors along with their trusted partners and relatives cheated and did criminal breach of trust with the home buyers. They transferred the funds from the projects to the companies which were closely held by the directors, their family members and/or by their trusted associates. The objective was to create assets in H

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A the closely held companies and leave the home buyers on the road. For example, Eklavya Building Solutions Pvt Ltd acquired property in Goa amounting to is Rs.² crore through funds received from Amrapali group, 27 other companies further invested Amrapali funds in Amrapali projects (For example Many Flats in IT Park at Greater Noida); B The directors spent homebuyers funds on wedding of daughter of director, foreign travels, expensive watches, jewellery, purchasing luxury cars for use by directors. The homebuyers funds were also used for investment in mutual funds, creating personal properties , payment of housing loans, investment in shares & C securities. The directors created discreet projects for personal income for example In the name of Amrapali Hospitality a hotel at Deogarh was constructed out of funds received from homebuyers without their knowledge of it. They used homebuyers funds in the form of construction of assets for other projects, D examples constructed mall at Muzzafarpur, Bareilly etc, Hotel at Deogarh, Bareilly, Hospital at Noida etc. Few particulars of diversion of funds received from Amrapali group are as under: By Anil Kumar Sharma E Pa rticulars A mou nt

Amo unt Paid fo r Housin g Loan of Plo t no 88, 3,1 37,000 2057/7 resi Mago s Villa ge, G o a Amo unt Paid fo r Housin g Loan of Jaypee 3,796, 452 Green E-11 Plot , S ector 128, No ida Amo unt paid fo r purchasin g sha res 59,60 0,000 F Pu rchased Jew ellery 33,92 1,575 Pu rchased Car 5,613 ,572 In vestment in L IC an d Sta r U nio n D aich i – 18,2 38,326 In su rance P olicies Expen se do ne durin g w eddin g of D au ghter 13,5 00,000 Sw apnil Sh ikha Tran sfer to Su rabhee A dvertising Mah arani 3 8,500, 000 Bagh P roperty G Tran sfer to Q ua lit y Synt hetic Indu st ries 30,000,0 00 Limited S urekha Grou p Tran sfer to oth ers (Chan der Wa dh wa , 18,6 00,000 Sha sh ank Manoh ar, etc) transfers t o family m embers 107,31 0,878 Pa yment by Stu nn ing C ons tructio n P vt Ltd of 44,510,320 direct tax To tal 376,72 8,123 H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 407 [ARUN MISHRA, J.]

By Shiv Priya A

Advance against property to Gaursons India Ltd 51,00,000 Bathroom products and Marble for home 38,92,668 Furniture 74,76,644 Helicopter services 6,20,000 B Watches 19,45,500 Lights, art designing, Bed linen 38,26,290 Jewellery 33,44,475 Quality Synthetic Industries Ltd 1,50,00,000 Cozy Habitat Builders Pvt Ltd 15,00,000 SN Dubey 10,00,000 Stamp duty for registry of Jaypee Green Villa 32,50,000 C Payment for LIC 3,49,96,654 Investment in mutual funds 8,86,50,409 Payment of loan for Pearl Gateway Towers 30,84,952 Payment of loan for Jaguar 23,13,800 Payment of loan from bank of Maharashtra 46,65,200 Total 18,06,66,592 D

By Ajay Kumar Yogesh Chand 25,00,000 Transferred to Sweep Account 1,33,00,000 Ozone GSP Infratech 50,00,000 E Quality Synthetic Industries Ltd 40,00,000 Investment in mutual funds 2,25,00,000 Payment of housing loan for IRS Colony, Abhay Khand, Indirapuram 56,31,000 Payment of housing loan for Pelican Villa Jaypee Green 37,55,784 Payment for LIC 2,56,53,384 F Total 8,23,40,168

Funds transferred from Amrapali group of companies was withdrawn in cash from personal accounts of directors and diverted to undisclosed people. In case of Anil Kumar Sharma, it is seen that an amount of is Rs.¹⁰.38 crore was withdrawn from G June 2008 to May 2012 within a few days of transfer to bank account of Anil Kumar Sharma in Bank of Maharashtra. Several times, description of source of receipt or person to whom payment was made were not clear and such sources or application could not be identified. H

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A Several companies were incorporated to create assets or to hold investment in the group companies or outside the group companies having assets. The promoter directors or their family members became the shareholders in these companies without investing any paisa. Homebuyer funds were diverted to these companies and then these companies bought shares from the funds so diverted in the companies having assets for example Noida hospital in Amrapali Healthcare Pvt Ltd, 5 star hotel in Ultra Home Construction Pvt Ltd, Institute of hotel management in Noida Texfab Pvt Ltd etc. Investment from JP Morgan and other funds availed for the purpose of construction which were not required at all because the funds paid by homebuyer were in most of the cases were higher than the cost of construction and land payments, were diverted on the day of receipt itself to the closely held companies and to the companies created for the sole purpose for using them as a conduit for diversion and to the suppliers of bogus supplies. It is very surprising that when funds were borrowed a high rate of interest was paid ranging from 14 -18% to so called investors and the same investors were given loans to their group companies without charging any interest. In such a scenario, the possibility of taking cash in the form of interest cannot be ruled out. E Directors sold number of flats at low prices as compared to the prices existing on or near to those dates and on which rates sales were made to other home buyers. It is further submitted that some of the flats have been sold even at rates as low as is Rs.1,000 - is Rs.1,400 per square feet which is even lower than the cost of F construction. Possibility of taking cash outside the books of accounts cannot be ruled out. Instances of misuse of funds are hereunder: Anil Kumar Sharma G Mr. Anil Kumar Sharma received funds from Amrapali group of Companies which was used for acquiring personal properties, as stated hereunder: a. Property located at Plot no 88, 2057/7 Resi magos village Goa-(Housing loan was paid for this property out of amount H received from Group companies)

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 409 [ARUN MISHRA, J.]

b. Property located at Jaypee Green E-11 Plot, Sector 128, A Noida -(Housing loan was paid for this property out of amount received from Group companies)

1. Mr. Anil Kumar Sharma purchased shares and securities amounting to is Rs.⁵.96 crore out of moneys received from Amrapali group Companies. B

2. Mr. Anil Kumar Sharma purchased following assets out of amount received from Amrapali group Companies: a. Jewelries worth is Rs.³.39 crore b. Car through AMP Motors: is Rs.0.56 crore C c. Life Insurance Policies: is Rs.1.82 crore (based on bank statements available, although in total amount invested in insurance policies amounted to is Rs.4 crore)

3. Mr. Anil Kumar Sharma made following personal expenses of is Rs.1.35 crore for wedding of his daughter out of amounts D received from Amrapali Group of Companies: a. Payment made to Event Management Companies: is Rs.0.90 crore b. Payment made to hotels: is Rs.0.45 crore E

4. Mr. Anil Kumar Sharma made payment of is Rs.⁸.71 crore to following third parties out of amounts received from Amrapali Group of Companies: a. Chandan Homes Pvt Ltd: is Rs.¹⁰,00,000 b. Kalpana Kumari: is Rs.¹⁰,00,000 F c. Sapphire Digital Printers: is Rs.²⁵,00,000 d. Shashank Manohar: is Rs.36,00,000 e. Rajesh Malhotra : is Rs.²⁰,00,000 f. Manas Nursing Home: is Rs.²⁵,00,000 G

g. Amresh Kumar Anand: is Rs.²⁷,00,000 h. Surbhaee Advertising Pvt Ltd: is Rs.³,85,00,000 i. Quality Synthetic Industries Limited: is Rs.³,00,00,000 H

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A j. Chander wadhwa: is Rs.²⁵,00,000 k. Mrityunjay Kumar: is Rs.⁸,00,000

5. Mr. Anil Kumar Sharma made payments of is Rs.¹⁰.73 crore to his family members out of amounts received from Amrapali group of Companies: B a. Deepshikha (Daughter): is Rs.93,50,000 b. Ritik Kumar Sinha (Son in Law): is Rs.1,40,00,000 c. Swapnil Sikha (Daughter): is Rs.⁸,39,60,878

6. Mr. Anil Kumar Sharma received RS. 6.55 crore in his bank C account from Amrapali Hospitality during the month of June and July, 2018 for sale of Bareilley mall to Vaishnavi Vahini Mount Life Hospitality Pvt Ltd. The said amount was immediately disbursed to family members: a. Self: Rs.4,77,00,000 D b. Pallavi Mishra (Wife) Rs.60,00,000 c. Swapnil Shikha (Daughter) Rs.48,00,000 d. Raj Dulari devi (Mother) Rs.52,00,000

E e. Ranjit Kumar Rs.⁹,90,000

7. Unexplained cash deposits of Rs.⁵.73 crore were received by Mr. Anil Kumar Sharma in his bank accounts from November to December, 2016 i.e during demonetization period.

8. Mr. Madan Mohan Sharma (Father of Anil Kumar Sharma) F received Rs.² crore from Amrapali Grand during month November and December, 2007.

9. Unexplained cash deposits of Rs.0.13 crore were received by Mrs. Raj Dulari Devi (Mother of Anil Kumar Sharma) during from April to July, 2018.

G 10. Following are the details of lockers held by family members of Anil Kumar Sharma: Pallavi Mishra – a) in UCO bank account no 1557010000618 H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 411 [ARUN MISHRA, J.]

b) in HDFC Bank account no 50100162844761 locker no A 9250500004564240 Raj Dulari Devi in Yes Bank account no 8599300000716, Locker no 11606082018

11. There are substantial transactions with Amrapali Aadya Trading in his bank account of IndusInd Bank Account B no.100028567700 as per details given below:

Date Particulars Receipts Payments 16/07/2014 Neft-Amapali Aadya Trading 2,500,000 - 14/08/2014 Neft-Amapali Aadya Trading 1,000,000 - C 14/11/2014 Neft-Amapali Aadya Trading 2,500,000 - 21/01/2015 Neft-Amapali Aadya Trading 500,000 - 15/04/2015 RTGS- Amapali Aadya Trading - 1,000,000 15/04/2015 Neft- Amapali Aadya Trading - 1,000,000 24/04/2015 RTGS- Amapali Aadya Trading - 2,000,000 D 29/04/2015 RTGS- Amapali Aadya Trading - 1,000,000 06/05/2015 RTGS- Amapali Aadya Trading - 2,000,000 08/05/2015 RTGS- Amapali Aadya Trading - 2,000,000 13/05/2015 RTGS- Amapali Aadya Trading - 2,000,000 27/05/2015 RTGS- Amapali Aadya Trading - 2,000,000 E 19/05/2015 RTGS- Amapali Aadya Trading 18,500,000 - 23/06/2015 RTGS- Amapali Aadya Trading - 1,000,000 30/07/2015 RTGS- Amapali Aadya Trading - 1,500,000 21/08/2015 RTGS- Amapali Aadya Trading - 2,000,000 25/08/2015 RTGS- Amapali Aadya Trading - 2,500,000 F 27/08/2015 RTGS- Amapali Aadya Trading - 400,000 27/08/2015 RTGS- Amapali Aadya Trading - 3,600,000 09/09/2015 RTGS- Amapali Aadya Trading - 1,500,000 20/08/2016 RTGS- Amapali Aadya Trading 1,500,000 - Total 26,500,000 25,500,000 G

Note: He has not disclosed his association With Amrapali Aadya Trading in his various affidavits furnished to the Hon’ble Supreme Court of India. H

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A Shiv Priya

1. Mr. Shiv Priya received funds from Amrapali group of Companies which was used for acquiring personal properties, as stated hereunder: a. Property located at L 801, Pearl Gateway Towers, Sector B 44, Noida -(Housing loan was paid for this property out of amount received from Group companies) b. Vehicle- Jaguar XJ having registration number UP16BA2001- (Loan was paid out of amount received from Group companies)

C 2. Mrs. Sonali Suman (Wife of Shiv Priya) made investments in different mutual funds amounting to Rs.⁸.86 crore out of amounts received from Amrapali group of Companies.

3. Mr. Shiv Priya purchased following assets out of amounts received from Amrapali group of companies: D a. Jewelleries: Rs.33,44,475 b. Life Insurance Policies Rs.³,49,96,654 c. Watches Rs.¹⁹,45,500

4. Mr. Shiv Priya made following personal expenses of Rs.².74 E crore out of amounts received from Amrapali group of companies: a. Expenditure made for Residential property (Marbles, bathroom products, lights etc) Rs.56,53,268 b. Helicopter services Rs.⁶,20,000

F c. Art designing Rs.¹⁰,00,000 d. Bed Linen, Table linen and art designing Rs.²⁰,36,290 e. Wooden doors and Furnitures: Rs.74,76,644 f. Payment made for clearing dues of American Express Credit Card: Rs.1,06,78,273 G

5. Mr. Shiv Priya made payment of Rs.1.75 crore to following third parties out of amounts received from Amrapali Group of companies: a. Quality Synthetic Industries Limited Rs.1,50,00,000 H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 413 [ARUN MISHRA, J.]

b. Cozy Habitat Builders Pvt Ltd Rs.¹⁵,00,000 A c. S N Dubey Rs.¹⁰,00,000

6. Unexplained cash deposits of Rs.⁶ crore were received by Mr. Shiv Priya in his bank accounts during December, 2016 i.e during demonetization period. B

7. Mrs. Sonali Suman (Wife of Shiv Priya) re-paid loan from bank amounting to Rs.0.45 crore out of amount received from Amrapali group of Companies. It is to be seen what the purpose was for which the bank granted loan for 6 months for the said amount.

8. Shiv Priya is holding demat account no 1206420001934748 and C Sonali Suman is holding demat account no 1206420001936308 with HDFC bank, of which details have not been provided to us.

9. Mrs Sonali Suman holds mutual funds with HDFC mutual funds Folio no 11707520/73, which have market value amounting to Rs.0.65 crore as on 28th February 2019. D

10. A sum of Rs.0.45 crore was paid by M/s Royal Golf Link City Projects Private Limited to Mr. Shiv Priya during the financial Year 2016-17 which was not declared by him in the various Affidavits filed in the Hon’ble Supreme Court.

11. There was an income tax search in the premises of Amrapali E Group of Companies and the residence of the directors in the month of 7th and 8th August, 2013. During this search operation unaccounted cash was seized from the residence of directors namely Shri Shiv Priya amounting to Rs 1 Crores. Unexplained jewellery was also seized from the residence of Mr. Shiv Priya F amounting to Rs 0.58 Crores. Thus, it apparently shows that he has unaccounted cash. Ajay Kumar

1. Mr. Ajay Kumar received funds from Amrapali group of Companies which was used for acquiring personal properties, as G stated hereunder: a. Property located at Plot no: A-014 Savanna Villas, Jaypee Greens Sector-128, Noida; the property was not disclosed in affidavit submitted on 3rd December, 2018 -(Housing loans was H

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A paid for this property out of amount received from Group companies) b. Property located at IRS colony, Abhay Khand, Indirapuram, Ghaziabad- Rs.1.38 crore. c. Property located at Plot No: A-014, Pelican Villa Jaypee B Green Noida 201301- Rs.1.11 crore.

2. Mrs. Seema Kumari (Wife of Ajay Kumar) made investments in different mutual funds amounting to Rs.².²⁵ crore out of amounts received from Amrapali group of companies during August to September, 2018. C

3. Mr. Ajay Kumar made investments in Life insurance Policies of Rs.².59 crore out of amounts received from Amrapali group of companies.

4. Mr. Ajay Kumar made payment of Rs.1.²⁵ crore to following D third parties out of amounts received from Amrapali Group of Companies: a. Yogesh Chand Rs.²⁵,00,000 b. Ozone GSP Infratech Rs.50,00,000 c. Quality Synthetic Industries Ltd Rs.50,00,000 E

5. Mr. Ajay Kumar made investment of Rs.1.12 crore in Ultra Home Construction as Share Capital out of amounts received from Amrapali group of companies.

6. Mr. Ajay Kumar made payment of direct tax of Rs.0.11 crore out of amounts received from Amrapali group of companies.

7. Mrs Seema Kumari holds mutual funds with HDFC mutual funds Folio no 14756739/01, which have market value amounting to Rs.0.48 crore as on 28th February 2019.

8. Bank Statement of Anandi Singh of IndusInd Bank G Account no.150019032006 A sum of Rs.1.73 crore has been transferred from Seema Kumari on 09/08/2018. Further a sum Rs.².²⁵ crore has been invested in Mutual Funds as per details given below: H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 415 [ARUN MISHRA, J.]

Date Particulars Amount A 16/08/2018 Mirae Asset MF 5,000,000 16/08/2018 Aditya Birla Mutual 5,000,000 Fund 18/08/2018 Kotak Mutual Fund 5,000,000 11/09/2018 HDFC Mutual Fund 5,000,000 12/09/2018 Tata Mutual Fund 2,500,000 Total 22,500,000 B Note: This amount can be attached and recovered by encashment of these investments. Sunil Kumar and Sunita Kumari (wife of Sunil Kumar)

1. While scrutinizing the Accounts of Gaurisuta Infrasolution C Private Limited in which Mr. Sunil Kumar was the Director, it was observed by us that bogus commission of Rs.1.⁷ crore was booked. This amount of Rs.1.⁷ crore should be recovered from Mr. Sunil Kumar.

2. A sum of Rs.0.50 crore has also been paid as Salary to Mrs. D Sunita Kumari in M/s Gaurisuta Infrasolution Private Limited which is not genuine as per detailed report given in the case of M/s Gaurisuta Infrasolution Private Limited. This Amount of Rs.0.50 crore should also be recovered from Mrs. Sunita Kumari. Mr. Sudhir Kumar Choudhary E He is director in Amrapali Biotech India Private Limited & Gaurisuta Infrasolution Private Limited. As per his statement recorded, he was forced to become the director in first week of august 2018 with effect from 06th July 2018. We are of the view that this planning has been done by the Amrapali F Management after the order of the Hon’ble Supreme Court to accept the resignation of Mrs. Seema Kumari Wife of Sunil Kumar from the Directorship and to appoint Mr. Sudhir Kumar Choudhary as the director of the company. It was further explained by him that he was a mere employee only and by virtue of threat by the Amrapali Group of Companies, he was forced to become the Director of Amrapali Infrasolution Private Limited. Apart from above specific points, it shall be noted that we had got access to the email of the Accounts department of Amrapali Group H

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A of Companies with Id accounts@amrapali.in for a short period after interrogation from an Ex-employee. We could download few instances of Cash transactions which are enclosed as a sample in Annexure 26-B. The access to this mail was stopped immediately. We requested the management to give the access to this mail to enquire into the further such mails related to the cash and other accounting adjustments contained in this Email Account. But this access was not made available to us. However, the access had been made available after the orders of the Honorable Supreme Court dated 28th February, 2019. Now, all the mails relating to receipt of cash from the various home buyers have been deleted. Thus, the management of the company has tempered with the evidence which were available earlier. (Page No. 205 Volume-I) Further an amount of Rs.113.⁵ crore paid by Amrapali Infrastructure Pvt Ltd to directors is recoverable as on 31st March D 2018 and this amount is on account of shares allotted of Ultra Home Construction Private Limited to the directors without receiving any money from the directors during the Financial Year 2010-11. This seems to be a dubious transaction by the directors of the company in manipulating the accounts in this manner by allotting the shares without actual consideration. These amounts are not disclosed by the Directors in their Affidavits. Hence, the Affidavits filed by the directors are incorrect to this extent.

10. Executives who colluded with directors The executives of the Group colluded with the management to avoid proper recording of transactions in books of accounts. To avoid the traceability of the transactions, the executives recorded the financial transactions up to March 2015 in Accounting Package tally, then shifted to FARVISION from April 2015 and continued till March 2016, and thereafter partially recorded transaction in tally and a for a few companied in FARVISION. At the time of switchover, even the opening balances were not properly entered, thereby leading to a huge difference in the data provided to us. In November 2016, the Group left Farvision half way and started recording transactions for partial period in tally.

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 417 [ARUN MISHRA, J.]

The executives intentionally recorded transactions by switchover A of accounting package improperly so that complete trail could not be established. Subsequently, the companies of the group even stopped getting the annual accounts prepared and filing returns to ROC and Income tax The Sales and Marketing head Mohit Gupta, CFO Chandar B Wadhwa, Accounts head Adhikari Das, Company Secretary Pankaj Mehta and the Architect Vaibhav Jain along with their immediate coterie extended helping hand to the management in planning and execution of the scam. Mr. Mohit Gupta – Marketing Director C He was responsible for the whole marketing department, Customer Relationship Management of the Amrapali Group and he did not cooperate during the entire process of forensic audit. It is pertinent to note that till now a list of flat wise possession has not been provided to us. D At first he did not submit us the customer data inspite of number of reminders. Subsequently, the customer data submitted was not correct. We found the following– (i) The inventory of vacant flat submitted by him was incorrect. (ii) We found 401 flats (Refer Annexure S-5 page 2828 E 2836 Supplementary report) which were either lying vacant and were available in inventory because the flat buyers were shifted out of Amrapali Group to the other project of other builders. Mr. Mohit Gupta also did not disclose the details of flats booked in the name of various F parties without receipt of any amount from them just by passing journal entry. (iii) From the above it is clear that it defies the order of Honorable Supreme Court and has violated the order and is responsible for the gross contempt of the Honorable G Court. Mr. Adhikari Debi Prasad Dash- GM/DGM Accounts It is found that Mr. Adhikari authorized (Refer Annexure S-6 page 2837-2841 Supplementary report) most of the payments regarding payment of professional charges, raw materials, H

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A contractor dues and other direct/indirect expenses. It is pertinent to note that he was also involved in diversion of funds from Amrapali group and equally responsible in the conspiracy of cheating with home buyers and diversion of funds. He was responsible for the whole accounts department and he did not cooperate during the entire process of forensic audit. He was authorized to receive payments in cash and was submitting on day to day basis cash receipt status to Mr. Shiv Priya. After a clearance from him, a possession slip or no due certificate is issued. He continuously replied that he is not aware of anything and for everything there were Chartered Accountants for respective companies. This is not a correct statement and he contradicted his own statement many times. He was in possession of final accounts of group companies and did not share with us. Adhikari Dash also did not disclose the details of flats booked in the name of various parties without receipt of any amount from them just by passing journal entry. From the above it is clear that it defies the order of Honorable Supreme Court and has violated the order and is responsible for the gross contempt of the Honorable Court. E He along with his brother exercised direct control over below companies: (i) Teks Tech Inspection India Private Limited (ii) Teks Tech IT Services India Private Limited F (iii) Vinayaka Square Private Limited (iv) Shri Vinayaka Buildspace Private Limited (v) Milestone Highrise Private Limited Vinayaka Square Private Limited G The company has a commercial project named “Beta Plaza” at Greater Noida which received funds from Teks Tech Inspection India Private Limited (controlled by Mr. Adhikari), APJ Finmart Private Limited, Opulent Inn Private Limited, Tasty Feast Private Limited, Opulent Holidays and Travels (P) H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 419 [ARUN MISHRA, J.]

Limited. The chairman of four companies CA Pankaj Mittal A appeared before us and could not explained the reasons for giving loans @ 6% p.a. to a real estate project whereas the bank rate on FDR is 7% and more. The company has purchased this land for the project at Greater Noida in FY 2015-16 amounting to Rs.¹⁷.⁹ crore B Vinayaka Square received Rs 1 crore from Amrapali funds routed through Teks Tech Inspection India Private Limited and received Rs.².56 crore from Shri Vinayaka Buildspace Private Limited. This is a project funded by Amrapali’s Funds and shall be attached. C Mr. Chander Wadhwa CFO Amrapali Group of Companies It has also been observed that a sum of Rs.⁵ crores was transferred by M/s Amrapali Homes Project Private Limited to Mr. Amit Wadhwa, nephew of Mr. Chander Prakash Wadhwa. As per the affidavit filled by Mr. Chander Prakash Wadhwa the D said sum was invested by him in M/s Three Platinum Softech Private Limited. The Heartbeat city projects is partly owned by three Platinum and Amrapali group has invested in the projects in the name of Chander Wadhwa. As per Statement of Mr. Sanjeev Kumar Director of La Residentia E Developers Private Limited recorded by us, he Informed that a sum of Rs.4 crores Approximately, was paid as fees for use of Amrapali Brand Name to Saffron Propmart Private Limited (This Company is controlled by Mr. Chander Wadhwa CFO). No Bills have been provided by him. F Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFO were in connivance with each other and payments were made by Shri Anil Mittal to Chander Wadhwa CFO for sharing fees received from Amrapali group for the work awarded to Anil Mittal Chander Wadhwa is one of the masterminds along with the other promoters G directors behind the whole scam. He facilitated movement of funds by creating a web of companies within and outside the group. His relatives were made partner investor in LA Residentia and Heart beat city projects. Funds were invested in Patel Advance JV (Neo Town project Noida) and Euphoria Sports City. H

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A Furthermore, it is observed that the Company Management as well as Statutory Auditors and CFO have failed in their duty to follow the Accounting Standards relating to recording the valuation of Work in Progress as per ICAI guidelines applicable to Real Estate Companies. It is also pointed out that the CFO has not signed any Audited Financial Statements for reasons best known B to them. But according to the statement recorded by us of various employees and suppliers as well as home buyers, we are informed that he was the main person handling Finance and every meeting was held with him only. (page no 209 Volume 1) Mr. Pankaj Mehta –Company Secretary C He was responsible for the secretarial compliances of the companies. He incorporated more than 50 additional companies to create a cobweb. He was a director in many of these companies and was an important link in the transfer of funds through various group companies. D He was also signatory to the bank account of Stunning Construction Private Limited. He resigned from the services of the Company in December, 2016. However even after his resignation, on the instructions of Mr. Chander Wadhwa, CFO, he continued to operate the Bank Accounts of Stunning Construction Private E Limited. After his resignation in the Amrapali Group, he started working as a partner of Saffron Consultants LLP with Mr. Chander Wadhwa. Also Mr. Anil Kumar is still working as an employee with Mr. Chander Wadhwa. F On the instructions of Mr. Chander Wadhwa CFO manipulative entries were recorded for adjustment of payment dues of Mr. Pankaj Mehta against his Flat No. E-1502, Silicon City, Sector - 76, Noida.

11. Non compliance of statutory obligations G (i) The group companies have not filed annual returns and Audited Financial Statements after 31st March, 2015. The Registrar of Companies has already disqualified the Directors namely Mr. Anil Kumar Sharma, Mr. Amresh Kumar, Mr. Shiv Priya, Mr.Ajay H

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Kumar and Mr. Suvash Chandra Kumar for a period of 5 years from 1/11/2017 to 31/10/2022 u/s 164(2) of The Companies Act, 2013. (ii) The company has not been regular in payment of TDS and Service tax and has also not filled relevant returns of TDS/Service tax after 31st March, 2015. There is also no follow up available from the Concerned departments. Latest information regarding status of default in respect of TDS/ Service tax is not made available to us. There may be huge demands outstanding against the company due to non-payment and non- filing of TDS/Service tax returns. C (iii) No Statutory records have been maintained by the Amrapali group companies and produced before us relating to the following: i. Register of Directors and shareholders ii. Register of related party contracts D iii. Minute book of Director and Shareholders iv. Fixed Assets Register v. Charges register in respect of loans taken from Banks and others (iv) Transfer entries are recorded in Inter Corporate Deposit E accounts by transferring the amount from one Amrapali group company to another Amrapali group company in contravention of section 269SS/269T of The Income Tax Act, 1961. (v) Depreciation has not been provided on the building in contravention of the provisions of the Companies Act, 1956, now F Companies Act, 2013 in Navodaya Properties Private Limited. It is highly surprising that in spite of such glaring discrepancies regarding non-Compliance of statutory compliances, the Statutory Auditors have not pointed out any such discrepancies in their Statutory Audit Reports. G There are many other glaring short comings in the Audited Balance Sheet & Financial Statements a) I – Page 214)

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A 12. Anil Mittal - Statutory Auditor While scrutinizing the affidavit submitted by Shri Anil Mittal Date 12/11/2018 before the Hon’ble court we have noted the following: a) CA Anil Mittal was paid Rs.0.56 crore (Rs.0.66 crore less Rs.0.¹⁰ crore recovered) during the period 2011 to 2018. B These payments have been shown in the nature of cheques given /credit card payments which have been never been recovered. b) Statutory Auditor CA Anil Mittal and Shri Chander Wadhwa CFO were in connivance with each other and these payments have been made by Shri Anil Mittal to Chander Wadhwa CFO for sharing fees received from Amrapali group for the work awarded to CA Anil Mittal. CA Anil Mittal blindly signed all the accounts and is grossly involved along with Mr. Chander Wadhwa in making various manipulation in the accounts. c) Audit files handed over by Shri Anil Mittal Statutory Auditor are grossly deficient and they do not contain the documents which are normally required in the statutory audit files as per guidelines and directions issued by The Institute of E Chartered Accountants of India. d) Statutory Auditor CA Anil Mittal has received the payment on account of professional charges in the name of the companies in which his relatives are directors. This fact has not been disclosed in audited financial statements. F e) A sum of Rs.52.⁷ crore was adjusted against the payment due on account of Flat number P-1203 in Amrapali Princely Estate on account of professional fees due and to be paid on account of Audit fees. f) Further a sum of Rs.¹⁶.36 crore was also adjusted against G the flat number P-1104 in Amrapali Princely Estate on account of Professional fees due and to be paid on account of Audit fees.

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 423 [ARUN MISHRA, J.]

13. Diversion of homebuyers funds A Amrapali Group was engaged in diversion of home buyer funds from one project to another project, other group companies, directors and senior executives of the group. There is also a diversion of funds to various suppliers where advances were made without any further adjustment/ transactions. B There is not only diversion of funds, there is siphoning of funds also by way of booking undervalued transactions in respect of sale of flats, by way of booking of expenses, and making purchases from the bogus suppliers/service providers. In addition to this they adopted fraudulent practices also by way of double booking of flats. There are also instances of adjustment of amounts payable to suppliers/brokers with the amount due from the home buyers such trade creditors have denied having any knowledge of such transactions. We have traces of receiving of Cash from the home buyers/ others as shown by the email of the accounts department of the Amrapali Group of Companies which is not accounted for in the books of accounts. There is also allotment of shares without inward movement of funds by making manipulative entries in the books of accounts. E The homebuyers funds were diverted Rs. 5,619.47 crore to other companies/directors: (i) through payment of professional fee to directors Rs.100.53 crore; F (ii) by way of booking of bogus bills including commission Rs.842.42 crore; (iii) by selling flats at undervalued prices in books and received differential market value in cash Rs.321.²¹ crore; (it is a tip of iceberg) G (iv) by way of granting inter corporate deposits to related entities and unrelated entities / trusted partners for ultimately diverting funds to unapproved uses. Summary of diversion of funds is as under: H

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BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 425 [ARUN MISHRA, J.]

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Particulars Amount in crores Grand Total 4,968.⁷ Further Gaurisuta Infrast ructure Private Limited gave 25.00 F Rs 25 crore advances to various parties as listed on page no 92-93 Volume I Further in Gauri suta Infrastructure Private Limited, 89.00 inventory of Rs 89 cro re unidentifiable page no 96 Volume I G FDR as on 31st March 2015 page no 175 Volume I 61.97 Professional Fees Paid to Directors 100.53 Tax es paid by Stunning Const ruction on behalf of 24.90 promoters and family Mo re than 700 flat s given to so called suppliers 350.00 Total diversion identified 5,619.47 H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 427 [ARUN MISHRA, J.]

14. J P Morgan A Amrapali Zodiac Developers Private Limited has financed this transaction by its own shares through Group Companies by incorporating new Companies. These transactions enable Amrapali Zodiac Developers Private Limited to avoid the provisions of The Companies Act, 1956 applicable for buying its own shares. B It is also relevant to point out that Shri Anil Mittal at any stage of time has not reported his interest or disclosed about his relatives of Director and Junior Employee. Both the directors and shareholders of the company i.e Mr. Atul Mittal (Relative) and Mr. Chandan Kumar (Junior Employee), are relatives/employee of Anil Mittal, the Statutory Auditor of the company. a) Rudraksh Infracity Private Limited- Shri Chandan Kumar, an employee of CA Anil Mittal, Statutory Auditor and Shri Atul Mittal, relative of CA Anil Mittal were inducted in the board. The basic purpose of this Company was only for money laundering and was incorporated to receive Funds from Mannat Buildcraft Private Limited which Company was incorporated by CFO Chander Wadhwa through his close associates. After receiving money from Mannat Buildcraft Private Limited, the same was transferred to J.P. Morgan Investments for purchase of Equity Shares of Amrapali Zodiac Private Limited at an exorbitant price. As per details furnished hereunder, the Valuation Report was also made to suit to the requirement of J.P. Morgan Investments as the M/s Sudit K. Parikh & Company, Chartered Accountants were appointed by J.P. Morgan officials for the said valuation. They have admitted that valuation work was done on the basis of information provided by J.P. Morgan Investments after applying some basic checks. The whole racket of money laundering and receiving money from these Companies i.e. Mannat Buildcraft Private Limited and Rudraksh Infracity Private Limited are the brain child of Mr. G Chander Wadhwa, CFO and Anil Mittal, Statutory Auditor of Amrapali Group of Companies. Both these Companies are controlled by both of these persons and had been formed only for this Money Laundering Business. There are no transactions before or after these transfers of money and the same have been H

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A camouflaged to make it look with business transactions on the basis of the Valuation Report. JP Morgan invested Rs.85 crore in the year 2010 with an understanding to have a preferential claim on profits called distributable surplus in the ratio of 75% to JP Morgan and 25% to B promoters namely Amrapali Homes Project Private Limited and Ultra Home Construction Private Limited with the following main condition in Shares Subscription Agreement dated 9th September, 2010 amongst Ultra Home Construction Private Limited, Amrapali Homes Project Private Limited, JP Morgan & Amrapali Zodiac Developers Private Limited C The Company shall provide evidence of the aforesaid investment in the Investee Company to the Investor. (Rs. 60 Cr. in Leisure Valley Developers) (A) There was a prescribed methodology and procedures defined D of computation of Fair Market Value at the time of the exit to be worked out in the agreement on Page No 51, schedule 6 of Shareholder’s Agreement, which was not followed at the time of any of the exits. Clause 4.² (iii) – The Company shall grant an interest free loan of E Rs 85,000,000 (Rupees Eighty Five Million Only) to UHCPL. Clause 4.2(iv) – The Company shall remit Rs 600,000,000 (Rupees Six Hundred Million Only) to the Investee Company for subscribing to 0.01% compulsorily convertible Preference shares of the Investee Company F (“Investee Company Shares”) (B) Distribution of profit was agreed between the Investor i.e., JP Morgan & the Investee i.e., Amrapali Group to share the profits from the project in the agreed ratio as per clause 7.³ & Clause 7.⁵.1 Page No 19 of Shareholder’s Agreement. G (C) Clause 7.1 - The Company agrees and undertakes that it shall, and the Investor and Developers agree that they shall cause the Company to first utilize the revenues (less the cost of construction of the project, provision for future consideration cost of the Project, payment of Project Land cost and interest thereon, annual lease rent payment to New H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 429 [ARUN MISHRA, J.]

Okhla Industrial Development Authority and one time land lease cost) towards payment of applicable taxes and payment of interest to the lenders, if any, in accordance with the provisions of Law. Clause 7.² – Post the payment of taxes and interest to the lenders, as aforesaid, the Company shall make payments of all principal amounts accrued and payable to the lenders, if any, at applicable seniority. (D) In clause 2.12 of Page No 12 of Shareholder’s agreement it was agreed that the aggregate advances outstanding from the Amrapali Zodiac developers Private Limited to its affiliates will not exceed Rs 25 crores excluding Amrapali Infrastructure Private Limited. It was also in the knowledge of JP Morgan vide clause 2.¹⁴ of Page No 12 of Shareholder’s Agreement that advances to Amrapali Infrastructure Private Limited which was Rs 51 crore on 31 st July, 2010 will be restricted to Rs 15 crore. D

(E) Clause No 10.4.³ in page No 21 of Shareholder’s Agreement mentions that no action can be taken without investor’s approval in relation to 10.4.3(xi) any payments made to related parties. (F) It was also mentioned in the agreement that statutory auditor and internal auditor cannot be appointed and removed without the approval of JPMorgan. (G) The following points indicate very clearly that JP Morgan was having full control on Amrapali Zodiac Developers Private Limited project and no material decision could have been taken without JP Morgan approval. On Page No 60 of Shareholder’s Agreement in Note 1 it was agreed & accepted that any surplus cash flow from the project will be first utilized for payment of land cost to Noida Authority. G Documents to be submitted by Amrapali Zodiac Developers Private Limited to JP Morgan: (i) Monthly progress report signed by director & CFO. (ii) No delay report in specified format. H

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A JP Morgan insisted that the cost shall be restricted to Rs 425 crore and any additional cost over and above Rs 425 crore shall be brought in by Amrapali Group promoter. The additional cost considered was Rs 125 crore to be brought in by promoters. (H) Zodiac has followed recognition of revenue on the basis of Project Completion Method – Accounting Standard - 7 (Construction Contracts). As per Project Completion Method as given in Accounting Standard – 7, the profit cannot be recognized until the project is completed and as per Clause No 7.³ of Shareholder’s Agreement the distributable amount is the balance amount representing the aggregate of all profits, after considering the payments referred to in clause 7.1 and 7.² , including any amounts transferred to the reserves accounts of the Company shall for the purpose of this clause 7 are referred to as the “Distributable Amount”. (I) From the above it is clear that in absence of recognition of profit in the agreement there cannot be any distributable amount for distribution. (J) It was accepted by Mr Suraj Chhabria of JP Morgan (Apollo) that the money invested by them in Amrapali Zodiac Developers Private Limited was not utilized in the project. E He also accepted that it was in their knowledge that money invested by them was not going to be utilized in Amrapali Zodiac Developers Private Limited project and it is contracted that Rs 60 crores to Amrapali Leisure Valley Developers Private Limited, Rs 8.⁵ crores to Ultra Home F Construction Private Limited be transferred. (K) JP Morgan was in knowledge of that the Company Amrapali Zodiac Developers Private Limited has paid the money received from the Home buyers to tthe other Companies of Amrapali Group. G (L)JP Morgan permitted a transfer of Rs 140 crore to Mannat Buildcraft Private Limited and from Mannat Buildcraft Private Limited to Neelkanth Buildcraft Private Limited and Rudraksh Infracity Private Limited for buying shares from JP Morgan of Amrapali Zodiac Developers Private Limited. There were always advances exceeded than the limits specified in H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 431 [ARUN MISHRA, J.]

Shareholder’s Agreement but JP Morgan did not ensure bringing back the money from the affiliates though it was having its board representation in the ratio³:2. JP Morgan did not ensure that the funds for additional cost were brought in and in valuation it was assumed that additional cost of Rs 125 crores will be brought in by the promoter for the last lag of the construction for its IRR (Internal Rate of Return) working. (M) JP Morgan was getting return at the rate of more than 20 % on its investment of Rs 85 crore & was agreeing with Amrapali Zodiac Developers Private Limited to invest in C Amrapali Leisure Valley Developers Private Limited a substantial part of its investment i.e., 60 crore out of Rs 85 crore at the rate 0.01%. It categorically demonstrates that JP Morgan invested Rs 60 crore in Amrapali Leisure Valley Developers Private Limited without complying FEMA (Foreign Exchange Management Act) for its investment of D Rs 60 crore in Amrapali Leisure Valley Developers Private Limited. It is not out of place to mention that Amrapali Zodiac Developers Private Limited was a project where home buyers were required to pay on the basis of progress of the construction of the project. Meaning it was E construction linked payment project. (N) We found that most of the time customers have paid more than what was spent in the project. The Amrapali Zodiac Developers Private Limited diverted home buyer’s money & there was no need of any investment from JP Morgan. It F was accepted by Mr Suraj Chhabria that there was no restriction on the Company to invest the money in the project & it was in his knowledge & the knowledge of JP Morgan that the money has been diverted, Transferred Valuation G (A) The valuation did not follow the correct methodology of DCF (Discounted Cash Flow). The valuation is without any sanctity & validity. The valuation was carried out to cause wrongful loss to the homebuyers of Amrapali Zodiac Developers Private Limited and to give advantage to JPMorgan. H

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A (B) Name of the firm – Sudit K. Parekh & Co. Chartered Accountants Name of the Partners– I. Mr. Durgaprasad Khatri B II. Mr. Tanwir Shirolka III. Mr. Srikant V Jilla IV. Ms. Deepti K.Ahuja Ms Ahuja, then partner in SKP&Co.Chartered Accountants C informed that JP Morgan, Mumbai office in Andheri/ Santacruise did not allow to take any of the details/ abstract from the share purchase agreement. It is to note that at the time of exit, it was predetermined that Zodiac Developers would not pay the lease rent as well as the installment due to Noida Authorities as clearly explained in the cash flow statement provided by the SKP&Co in D 4 no. of valuation certificates from2010-2015.

Valuation No of Face Value per Total amount Date of FC- Sold to Report date shares Value share * TRS 9/09/2010 785715 10 1081.8172 85,00,00,00 20/10/2010 JP Morgan E 23/10/201 436508 10 2290.⁹ 99,99,99,26 30/12/2013 Neelkanth 3 Buildcraft Private Limited 9/09/2014 97000 10 2577.²⁵ 24,99,93,20 30/09/2014 Rudraksh Infracity Private Limited F 10/04/201 34365 10 2910 10,00,02,10 29/07/2015 Rudraksh 5 Infracity Private Limited 10/04/201 17180 10 2910 4,99,93,800 6/10/2015 Rudraksh 5 Infracity Private G Limited (C) Source: Data from Form FC-TRS From the table above it is clear that valuation exercise was done backwardly. For instances first we paid Rs 100 crores, then Rs 25 crores, then Rs 10 crores and finally Rs. 5Cr.. H EXTRACT from FEMA RULES;

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 433 [ARUN MISHRA, J.]

FEM (Transfer or Issue of Security by a Person Resident Outside A India) Regulations, 2000 “4. Restriction on an Indian entity to issue security to a person resident outside India or to record a transfer of security from or to such a person in its books. Save as otherwise provided in the Act or Rules or Regulations B made thereunder, an Indian entity shall not issue any security to a person resident outside India or shall not record in its books any transfer of security from or to such person: Provided that the Reserve Bank may, on an application made to it and for sufficient reasons, permit an entity to issue any security to a person resident outside India or to record in its books transfer of security from or to such person, subject to such conditions as may be considered necessary. Transfer of shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] by a person resident outside India (1) Subject to the provisions of sub-regulation (2), a person resident outside India holding the 2[shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] in accordance with these Regulations, may transfer the 3[shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] so held by him, in compliance with the conditions specified in the relevant Schedule of these regulations. Further, subject to minimum lock-in period of one year or minimum lock-in period as prescribed under Annex-B of Schedule 1 whichever is higher, a person resident outside India holding the shares or convertible debentures or warrants] of an Indian company containing an optionality clause in accordance with these Regulations and exercising the option/right, may exit without any assured return, subject to the following conditions: G (i) In case of listed company, at the 6[market price prevailing on the floor of the recognized stock exchanges] (ii) In case of equity shares, preference shares or debentures of unlisted company, at a price not exceeding that arrived at as H

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A per any internationally accepted pricing methodology for valuation of shares on arm’s length basis, duly certified by a Chartered Accountant or a SEBI registered Merchant Banker. The guiding principle would be that the non-resident investor is not guaranteed any assured exit price at the time of making such investment/agreements and shall exit at the price B prevailing at the time of exit, subject to lock-in-period requirement. (2) (i) A person resident outside India, not being a non-resident Indian or an overseas corporate body, may transfer by way of sale or gift the shares or convertible debentures or warrants of an C Indian company or units of an Investment Vehicle] held by him or it to any person resident outside India; (ii) A non-resident Indian may transfer by way of sale or gift, the shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] held by him or it to another D non-resident Indian only; (iii) A person resident outside India holding the 6[shares or convertible debentures or warrants of an Indian company or units of an Investment Vehicle] in accordance with these Regulations,

E (a) may transfer the same to a person resident in India by way of gift; (b) may sell the same on a recognized Stock Exchange in India through a register broker.” In the valuation working, it is shown that all project cost was F incurred by June, 2013. It is only additional cost of Rs 125 crore & marketing cost of Rs 6.85 crore shown as to be incurred after that. (A) JP Morgan personnel have never met the buyer. Both the Companies Neelkanth Buildcraft Private Limited & Rudraksh G Infracity Private Limited were formed in the year 2013 having a capital of Rs 0.01 crore each for the specific purpose of buying shares from JP Morgan. (B) No person from Mauritius travelled to India and no person from India travelled to Mauritius. Indian people signed the contract H

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 435 [ARUN MISHRA, J.]

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A FEMA Extracts of Master Circular no.8/2010-11 dated July 01, 2010 on External Commercial Borrowings and Trade Credits External Commercial Borrowings (‘ECBs’) refer to commercial B loans in the form of bank loans, buyers credit, suppliers credit, securitized instruments (eg floating rate notes and fixed rate bonds, non convertible, optionally convertible or partially convertible preference shares) availed of from non-resident lenders with a minimum average maturity of 3 years. C ECB can be accessed under 2 routes a) Automatic route and b) Approval route. A) Under Automatic route Eligible borrowers can be corporates, including those in the hotel, hospital, software sectors (registered under the Companies Act 1956) and Infrastructure Finance companies, Housing Finance companies and Non Banking Finance Companies. Recognised lenders can be international banks, suppliers of equipments, foreign collaborators and foreign equity holders All in cost ceilings for ECBs under automatic route are: Average maturity period 3 to 5 years- 300 basis points over 6 months London Interbank Offered Rate (‘LIBOR’) F Average maturity period more than 5 years – 500 basis points over 6 months LIBOR ECBs are eligible for end use for investment for import of capital goods, industrial sector, infrastructure sector and specified service sectors. However, proceeds of ECBs should G not be used for acquisition of land in any of these permitted uses. ECBs are not permitted to be utilized for real estate sector.

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B) Under Approval route A Certain ECBs which are not under automatic route are under approval route. ECBs are not permitted to be utilized for real estate. However, the term real estate excludes development of integrated township as defined by the Ministry of Commerce B and Industry, DIPP, SIA (FC Division), Press Note 3 (2002 Series) dated January 4, 2002. As per the said press note, development of integrated township includes housing, commercial premises, hotels, resorts, city and regional level urban infrastructure facilities such as roads and bridges, mass rapid transit systems and manufacture of building materials. Development of land and providing allied infrastructure will form an integrated part of township’s development. Hedging required: Minimum mandatory hedging is required @70% of principal plus interest (both) of ECB where Minimum Average Maturity Period is less than 5 years. Minimum tenor should be one (1) year thereafter to be rollover till expiry of ECB Compliance under FEMA ECB Compliance Borrowers are required to submit a report about signing of loan agreement with the lender for obtaining Loan Registration Number (LRN) within 7 days of the signing it to RBI in form ECB. Borrowers are required to report monthly about actual ECB transactions through form ECB-2 to AD Category I bank within 7 days from close of the month. F Companies Act 1956 Amrapali Zodiac Developers Pvt Ltd could not have bought back its own shares from JP Morgan as a company cannot buy back its own shares as per the provisions of section 77 of the Companies Act 1956. G Section 77 states “(1) No company limited by shares, and no company limited by guarantee and having a share capital,

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A shall have power to buy its own shares, unless the consequent reduction of capital is effected and sanctioned in pursuance of sections 100 to 104 or of section 402.” Even otherwise, as per Section 77A, a company can purchase its own shares from (i) free reserves; Where a company purchases its own shares out B of free reserves, then a sum equal to the nominal value of the share so purchased shall be transferred to the capital redemption reserve and details of such transfer shall be disclosed in the balance-sheet or (ii) securities premium account; or C (iii) proceeds of any shares or other specified securities. A Company cannot buyback its shares or other specified securities out of the proceeds of an earlier issue of the same kind of shares or specified securities. Conditions of Buy Back D (a) The buy-back is authorised by the Articles of association of the Company; (b) A special resolution has been passed in the general meeting of the company authorising the buy-back. In the case of a listed company, this approval is required by means of a postal ballot. Also, the shares for buy back should be free from lock in period/non transferability. The buy back can be made by a Board resolution If the quantity of buyback is or less than ten percent of the paid up capital and free reserves; (c) The buy-back is of less than twenty-five per cent of the total paid-up capital and free reserves of the company and that the buy-back of equity shares in any financial year shall not exceed twenty-five per cent of its total paid-up equity capital in that financial year; (d) The ratio of the debt owed by the company is not more than twice the capital and its free reserves after such buy-back; (e) There has been no default in any of the following i. in repayment of deposit or interest payable thereon,

BIKRAM CHATTERJI & ORS. v. UNION OF INDIA & ORS. 439 [ARUN MISHRA, J.]

ii. redemption of debentures, or preference shares or A iii. payment of dividend, if declared, to all shareholders within the stipulated time of 30 days from the date of declaration of dividend or iv. repayment of any term loan or interest payable thereon to any financial institution or bank; B (f) There has been no default in complying with the provisions of filing of Annual Return, Payment of Dividend, and form and contents of Annual Accounts; (g) All the shares or other specified securities for buy-back are fully paid-up; C (h) The buy-back of the shares or other specified securities listed on any recognised stock exchange shall be in accordance with the regulations made by the Securities and Exchange Board of India in this behalf; and (i) The buy-back in respect of shares or other specified securities of private and closely held companies is in accordance with the guidelines as may be prescribed. Misrepresentation of facts by investing the funds in the form of private equity in the project namely Zodiac and then diverting it from there to promoters and the promoters associated companies As ECBs were not permitted in real estate sector under automatic route, JP Morgan gave the said borrowings, the nomenclature of equity shares having different return on investment as compared to other equity shareholders. In fact JP Morgan remitted F Rs.60 crore to Amrapali Leisure Valley Developers Pvt Ltd as ECB without obtaining approval from competent authority. Immediately on receipt of funds by Amrapali Leisure Valley Developers Pvt Ltd, the funds were transferred to promoters and associate companies of the group. G Had JP Morgan invested in the form of ECB, following would have been the compliances to be fulfilled by recipient: a) obtaining Loan Registration Number from RBI; b) file ECB-2 returns every month to the RBI; H