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• The Supreme Court has issued notices to the Centre, Enforcement Directorate, RBI and multiple real estate companies over allegations of diversion of homebuyers’ funds in Noida and Yamuna Expressway projects.
• The plea alleges that developers siphoned off thousands of crores collected from over 25,000 buyers and diverted funds to related entities instead of completing housing projects.
• The matter involves Jaiprakash Associates, Jaiprakash Infratech and several other developers operating in the Noida and Greater Noida region.
• The Enforcement Directorate has reportedly attached assets worth around INR 400 crore while the alleged fund diversion is estimated at over INR 14,000 crore.
• The apex court has sought replies from all respondents by July 15 as it examines allegations linked to project insolvency, delayed delivery and financial irregularities.
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 petition alleging large-scale diversion of homebuyers’ funds collected for residential projects in Noida and along the Yamuna Expressway corridor. Advertisement
A bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and Vipul M Pancholi issued notices during proceedings held in the past week after hearing submissions made by advocate Prashant Bhushan on behalf of petitioner Vandana Sabharwal. The court directed the respondents to file their replies by July 15.
Apart from the Union ministries of housing and urban affairs and corporate affairs, the notices were issued to the ED, RBI, Uttar Pradesh Real Estate Regulatory Authority (UP RERA), Noida Authority and the Yamuna Expressway Industrial Development Authority (YEIDA). The apex court also sought responses from Jaiprakash Associates Ltd (JAL), Jaiprakash Infratech Ltd (JIL), Standard Chartered Bank and developers including CRC Homes, CRC Greens, Gaursons, Gulshan Homz, Mahagun and Investors Clinic.
According to the petition, the matter reflects a wider pattern within the real estate sector in which developers allegedly collect funds from homebuyers, transfer land parcels and development rights to affiliated entities and subsequently push projects into insolvency proceedings, leaving purchasers without possession of homes or recovery of invested capital.
During the hearing, Bhushan referred to findings from the ED’s ongoing investigation under the Prevention of Money Laundering Act (PMLA). He informed the bench that nearly INR 14,559 crore collected by JAL and JIL from more than 25,000 homebuyers had allegedly been diverted towards non-construction purposes and transferred to related group companies within the Jaypee Group.
The petition further stated that despite the scale of the alleged diversion, the ED had so far provisionally attached assets worth around INR 400 crore. The petitioner argued that recovery mechanisms often fail because land assets and development rights are shifted to related entities before investigations are completed, making it difficult for homebuyers to recover funds.
The matter forms part of the continuing legal and regulatory scrutiny surrounding stalled housing projects in Noida and Greater Noida, particularly those linked to the Jaypee Group. Several projects across the Yamuna Expressway and Noida-Greater Noida corridor have faced prolonged delays over the past decade following financial stress, insolvency proceedings and allegations of fund diversion.
The Supreme Court noted during the proceedings that while similar matters had previously been transferred to the Central Bureau of Investigation, the ED was already conducting active proceedings in the present case through an Enforcement Case Information Report based on FIRs registered earlier by the Economic Offences Wings of Delhi Police and Uttar Pradesh Police.
Source - PTI
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