NEW DELHI: The Supreme Court has sought responses from the Centre, the Enforcement Directorate (ED), the Reserve Bank of India (RBI) and several real estate firms on a plea alleging that thousands of crores collected from homebuyers in Noida and Yamuna Expressway projects were siphoned off.
A bench headed by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and Vipul M Pancholi, issued notices to the respondents and sought their replies by July 15 after hearing submissions made by advocate Prashant Bhushan, appearing for petitioner Vandana Sabharwal.
The bench sought responses from the Union ministries of housing and urban affairs and corporate affairs, the ED, RBI, Uttar Pradesh RERA, Noida Authority and the Yamuna Expressway Industrial Development Authority (YEIDA). Notices were also issued to firms including Jaiprakash Associates Limited, Jaiprakash Infratech Limited, Standard Chartered Bank, CRC Homes, Gaursons, Gulshan Homz, Mahagun and Investors Clinic.
In the plea, Sabharwal alleged that the case reflected a broader pattern in the real estate sector where developers divert homebuyers’ funds, transfer land and development rights to related entities, and later push projects into insolvency, leaving buyers stranded.
Bhushan referred to findings of the ED, which is probing the matter under the Prevention of Money Laundering Act. He submitted that nearly Rs 14,559 crore collected by Jaiprakash Associates Ltd and Jaiprakash Infratech Ltd from over 25,000 homebuyers was allegedly diverted for non-construction purposes and siphoned off to related group entities.
“This issue keeps recurring project after project. Funds are collected from homebuyers, diverted elsewhere, and the companies eventually go bankrupt,” Bhushan told the court.
He also argued that although the ED had provisionally attached assets worth around Rs 400 crore, the alleged diversion exceeded `14,000 crore. He urged the court to direct the ED to expedite its investigation and attach properties wherever diverted funds were found invested. The court noted that the matter involved “complex” issues and directed the ED to place a status report on record regarding the progress of its investigation.
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