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New Delhi, April 23 (IANS) Noida’s Supertech Twin Towers which are set to be decimated next month are representative of the downfall of real estate czars in the recent past, particularly in Delhi-NCR.
The area’s real estate landscape has suffered multiple blows as big names in the business have been mired in scandals in the recent past and some have even landed in jail.
This is the story of how the real estate barons played with the system, betrayed people’s trust and created multiple crises.
Ashutosh Kashyap, Director of Advisory Services, Colliers India prior to 2012, said NCR’s residential real estate momentum was characterized by double-digit capital value appreciation coupled with robust absorption.
On the one hand, potential buyers were in a rush to buy, fearing higher prices, while on the other, strong uptake motivated developers to embark on a frenzy of project launches.
In the absence of an appropriate regulatory regime (such as the RERA, which came later), the financial ring-fencing of projects was not appropriate, allowing developers to use money from the reservation of a project to acquire more land, which was based solely on the underlying premise that robust absorption will continue.
“The reason most of them happened in Noida was because the city offered the option of installment payment for allocated land. This allowed builders to accumulate and launch more projects in anticipation. of robust demand The residential real estate segment has seen an extended period of silence (until 2020-21), especially for the primary market Most developers who have built their pipelines based on demand anticipated struggled to sustain this phase and what we see today is the result,” Kashyap added.
A number of real estate czars faced enforcement action and some even went bankrupt. This in turn has caused immense desperation and hardship for homebuyers stuck with incomplete projects having poured out their savings.
Members of the Chandra family of the Unitech group are in prison. On Wednesday, the Supreme Court instructed the Enforcement Directorate (ED) to come up with measures to bring home buyers the Rs 5,000 crore money diverted to tax havens, which has come to light during a forensic audit.
At the start of the hearing, Additional Solicitor General N. Venkataraman, representing the Board of Trustees appointed by Unitech Center, submitted before a bench headed by Judge DY Chandrachud that more than a thousand crores stood were outside the country and that money should come back, which could be used for building purposes, and the court should ask ED what progress has been made so far.
In April last year, the ED seized movable and immovable property worth more than Rs 300 crore in 10 separate cases of money laundering.
The agency had said that the Unitech Group had diverted the proceeds of crime, which amount to more than Rs 300 crore, to the Carnoustie Group and, in turn, the Carnoustie Group entities purchased several real estate properties from of these funds.
In December 2019, the High Court had ordered the Center to take over the management of Unitech by appointing independent administrators after a forensic audit revealed that home buyers’ money worth more than Rs 5,000 crore had been diverted to tax havens such as Cyprus. The embezzlement has hindered the completion of at least 74 projects and harmed the interests of nearly 12,000 buyers.
Ambience Group owner Raj Singh Gehlot is also in jail. An investigation (ED) has revealed that the group failed to make the obligatory contribution of Rs 462 crore for the construction of a luxury hotel project Rs 1,272 crore at Shahdara in the national capital, breaching the loan conditions of a consortium of banks, led by Jammu & Kashmir Bank.
The sighting came to light during the recent bail plea hearing of Gehlot, who was arrested by the ED for allegedly defrauding the banks which provided Rs. 810 crore loan.
Denying bail from the promoter of Ambience Group, the court also noted that the loan amount disbursed by the bank had been misappropriated by certain entities, which were found to exist only on paper.
In a recent case, Rohtas Goel of Omaxe Group allegedly had unrecorded cash transactions of Rs 3,000 crore, according to the Income Tax Department.
The Central Board of Direct Taxes (CBDT) said in a statement that it raided the premises of a leading real estate group active in northern India on March 14. The search action covered over 45 premises in Delhi-NCR, Chandigarh, Ludhiana, Lucknow and Indore.
“A large amount of incriminating evidence, including paper documents and digital data, was found and seized during the search. The evidence seized contains the group’s unaccounted ‘money’ cash receipt data from various clients for more than 10 years,” the statement said.
In March, property developer Supertech Ltd, which has several projects underway in Noida, Greater Noida, Gurugram and Ghaziabad, was declared bankrupt by the National Company Law Tribunal (NCLT).
The NCLT order will likely affect more than 25,000 buyers who have reserved their homes with the company for several years.
A company of the ATS group is also in difficulty. The Delhi Bench of the National Company Law Tribunal has initiated bankruptcy proceedings against Anand Divine Developers, an ATS Group company for dues of Rs 25 crore. According to the NCLT order, ICICI Prudential Venture moved the court after the developer failed to pay.
Real estate barons Ansal Brothers are fighting a jail sentence. The Delhi High Court had previously rejected motions by Sushil and Gopal Ansal to suspend their seven-year prison sentences for tampering with evidence related to a fire at Delhi’s Uphaar cinema in 1997 that killed 59 people.
Earlier this year, income tax officers raided properties linked to Ajay Chaudhary, CMD of Noida-based property company Ace Group. The raids took place at 40 sites in Noida, Agra and Delhi.
Chaudhary is said to be close to Samajwadi party chairman and former chief minister of Uttar Pradesh, Akhilesh Yadav.
Another former top leader, Anil Kumar Sharma, an imprisoned former CMD of the Amrapali group, is seeking compensation on medical grounds.
The Supreme Court followed up on the case linked to the real estate company after scores of homebuyers approached over allegations of malpractice and non-delivery of homes or apartments.
In June 2019, Monty Chadha, who is part of the promoters of the Wave Group and son of murdered businessman Ponty Chadha, was arrested at Delhi airport while allegedly trying to flee India while he was facing charges of deceiving people of around Rs 100 crore into offering flats at cheaper rates, according to media reports.
Another Mumbai builder Laxman Bhagtani who fled the country after being convicted in nine cases of cheating for failing to deliver apartments after raising money was detained in the United Arab Emirates by Interpol in 2020.
Bhagtani, director of JVPD Properties Ltd, had collected Rs 427 crore from around 2,500 people pledging apartments in his nine projects in the suburbs and on Mira Road, police said.
A red formal notice was issued against him in November 2018.
Kabul Chawla who founded the BPTP groups is said to have fled India.
Updated: April 23, 2022