Supreme Court Seeks Response from Centre, ED, and Others on Alleged ₹14,559 Crore Scam in Noida and Yamuna Expressway Projects
The Supreme Court has issued notices to the Centre, Directorate of Enforcement (ED), Reserve Bank of India (RBI), and others, including real estate firms, on a plea alleging that thousands of crores collected from homebuyers in Noida and Yamuna Expressway projects were siphoned off.
Background of the Case:
A Bench comprising Chief Justice of India Surya Kant and justices Joymalya Bagchi and Vipul M. Pancholi took note of the submissions of lawyer Prashant Bhushan, appearing for petitioner Vandana Sabharwal, and issued notices to respondents for July 15.
List of Respondents:
- Union Ministries of housing and Urban Affairs and Corporate Affairs
- Directorate of Enforcement (ED)
- Reserve Bank of India (RBI)
- Uttar Pradesh RERA (Real Estate Regulation and Development Authority)
- Noida Authority
- Yamuna Expressway Industrial Development Authority (YEIDA)
- Jacirprakash Associates Ltd. (JAL)
- Jacirprakash Infratech Ltd. (JIL)
- Standard Chartered Bank
- Developers including CRC Homes, CRC Greens, Gaursons, Gulshan Homz, Mahagun, and Investors Clinic
Details of the Allegations:
- Ms. Sabharwal alleged that the case reflected a larger systemic pattern in the real estate sector where developers allegedly divert homebuyers' funds, transfer land and development rights to related entities, and eventually push projects into insolvency, leaving buyers stranded.
- The ED had found that out of nearly ₹14,559 crore collected by JAL and JIL from over 25,000 homebuyers, "substantial amounts" were diverted for non-construction purposes and siphoned off to related group entities, including Jaypee group companies.
- Mr. Bhushan referred to findings of the ED, which is investigating the matter under the Prevention of Money Laundering Act (PMLA).
- He said that developers routinely transfer land and other assets to affiliated companies, frustrating recovery efforts even after investigations reveal diversion of funds.
- Mr. Bhushan urged the bench to direct the ED to complete its investigation expeditiously and issue provisional attachment orders wherever proceeds of crime or diverted funds were found invested in land or development rights.
- He also sought directions to the RBI to conduct audits of banks that financed such stalled housing projects, arguing that banks too were suffering substantial losses.
Orders of the Supreme Court:
The Supreme Court bench asked all respondents to file their replies by July 15. The bench also directed the ED to place a status report on record regarding the progress of its investigation.