The Enforcement Directorate (ED) has restored flats, commercial units, and plots valued at ₹175 crore to over 200 bona fide homebuyers who had been waiting for possession of their properties for more than 12 years, the agency announced. The restored inventory comprises 354 flats, 17 commercial units, and two plots belonging to the Royal Rajvilas (RRV) project in Udaipur, Rajasthan. The properties' current market value stands at approximately ₹175 crore, the ED confirmed in a statement on Tuesday.
The case stems from a money laundering investigation against Bharat Bomb and other individuals, who allegedly defrauded the Syndicate Bank (now Canara Bank) of ₹1,267.79 crore between 2011 and 2016.
The ED had attached properties worth ₹535 crore in this case in April, 2019 including assets of ₹83.51 crore in the form of unsold/unregistered inventory of a company named Udaipur Entertainment World Private Limited (UEWPL).
Multiple cases were filed against this attachment order and the company (UEWPL) was later admitted for insolvency before the National Company Law Tribunal (NCLT).
The resolution plan of the UEWPL was approved by the NCLT, Mumbai in February, 2022 as it also vacated the ED attachment order of April, 2019 (in respect of the attachment of properties of UEWPL).
"It is pertinent to mention that ED was not made a party in the proceedings before the NCLT," the agency said.
The matter escalated to the Rajasthan High Court, which ruled that the ED had "suffered" as it was not impleaded in the NCLT proceedings. The new management of UEWPL then challenged the High Court’s order in the Supreme Court.
The apex court directed both parties to reach a consensus to "protect the interest of the bona-fide homebuyers" who had invested their money but could not take possession due to the protracted legal disputes.
Following the Supreme Court's direction, the ED adopted a "proactive approach," scrutinising the details of all homebuyers whose claims were admitted before the NCLT. The agency then submitted a 'No Objection Certificate' before the Supreme Court for the restitution (restoration) of the attached properties, specifically for the benefit of genuine homebuyers.
The ED stated that it sought a "harmonious" solution to avoid compromising the objectives of the Prevention of Money Laundering Act (PMLA) while protecting the interests of the 213 homebuyers who had suffered for over a decade.
In view of the ED's affidavit, the Supreme Court issued an order on October 10th. The order restored the attached properties, valued at approximately ₹175 crore, under Section 8 (8) of the PMLA to the Successful Resolution Applicant of UEWPL "for the sole benefit of the genuine and innocent homebuyers."
This ruling finally brings an end to the plight of 213 innocent purchasers who had been suffering for over 12 years after putting down their hard-earned money.
The SC lauded the role of the ED saying "...we place on record our appreciation for the efforts made by the learned counsel for the parties and the DoE (Directorate of Enforcement or ED) in restoring the attached properties to secure the interests of genuine and innocent home buyers."
The court, however, clarified that its order was based solely on the "peculiar facts of the case" and should not be treated as a precedent, leaving the underlying questions of law open for future decisions.
Also read: ED attaches ₹133-cr property in Concast Steel case
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