Noida Authority Seeks Recovery of Rs.1.9 Billion Dues from Hacienda Project Pvt Ltd
The Noida Authority has taken a significant step in its ongoing battle against the developers behind the Lotus 300 residential project in Sector 107. In an effort to ensure justice and recover funds owed, the Authority has formally approached the Enforcement Directorate (ED) to retrieve Rs.1.9 billion in dues from Hacienda Project Pvt Ltd (HPPL). This move follows a recent ruling by the Allahabad High Court and extensive searches conducted by the ED that unveiled a substantial amount of cash, gold, and diamonds believed to be linked to the developers and a former Noida CEO, amounting to Rs.420 million.
A Controversial Project with Financial Irregularities
The drama surrounding the Lotus 300 project began in 2010 when a 17-acre plot was leased to HPPL, promoted by Nirmal Singh, Surpreet Singh Suri, and Vidur Bhardwaj. Allegations surfaced that the promoters had secured the prime land without making any initial investment. They subsequently launched the project and collected a staggering amount of Rs.6.36 billion from homebuyers. However, reports suggest that approximately Rs.1.9 billion was unlawfully diverted, with the developers selling a portion of the land to a third company for nearly Rs.2.36 billion, all while neglecting their financial obligations to the Noida Authority.
Bankruptcy and Legal Battles
As a consequence of misappropriating funds, the three promoters resigned from HPPL in 2015, resulting in its insolvency and subsequent corporate resolution initiated by IndusInd Bank in 2022. In February, the Allahabad High Court directed the ED to investigate allegations of money laundering and fund diversion after the former promoters contested a recovery certificate of Rs.637 million. The court made it clear that the directors must cooperate with the ED unless they wish to face legal consequences.
ED Raids and Ongoing Investigations
The ED’s investigation reached a turning point on September 18-19 when raids were conducted at 18 different locations across Delhi, Noida, Meerut, Chandigarh, and Goa. These operations were part of the agency’s efforts to uncover a significant fraud amounting to Rs.4.26 billion that had affected homebuyers of the Lotus 300 project. Recent Supreme Court rulings have also lifted previous restrictions, allowing the investigation to proceed against two former directors involved in the case.
A Landscape of Financial Complexity
As the investigations unfold, it has become apparent that a convoluted web of financial irregularities exists, including the diversion of homebuyer funds to various entities and the creation of shell companies. Furthermore, the discovery of a misappropriated Rs.650 million loan from IndusInd Bank has added a layer of complexity to the already tangled financial situation. This ongoing case highlights the urgent need for accountability within the real estate sector, particularly considering the staggering sums of money at stake.
The Noida Authority’s formal request to the Enforcement Directorate marks a crucial step forward in the pursuit of justice for the victimized homebuyers and an opportunity to hold those responsible for financial wrongdoing accountable. As the case continues to unfold, it will undoubtedly serve as a poignant reminder of the pressing need to improve transparency and reshape the real estate industry for the better.
