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Now, ED turns gaze to GMADA’s flagship Purab apartments project
ED to seek probe records from Punjab Vigilance Bureau that had recommended an FIR into ‘financial losses’ detected by GMADA’s own inquiry in 2023
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Widening its probe into alleged irregularities in the dealings of the Greater Mohali Area Development Authority (GMADA), the Enforcement Directorate (ED) has turned its attention to the authority’s flagship Purab Premium Apartments project in Sector 88, Mohali, officials familiar with the probe said.
The agency’s scrutiny follows a 2023 internal inquiry by GMADA that flagged a suspected excess payment of ₹51.33 crore to the original contractor, Simplex Infrastructure Ltd, meant to deducted against defective work.
The GMADA probe had prompted the Punjab Vigilance Bureau (VB) to recommend registration of an FIR against certain senior officials in 2023.
“The ED will seek records from VB as it separately investigated the alleged financial losses arising from the project, and recommended action against officials involved in its execution and supervision,” an official said, requesting anonymity.
The agency is examining project records, including payment details, quality assessments and completion certificates, and the subsequent award of contracts for unfinished and defective work by Simplex, according to the official.
GMADA chief administrator Sandeep Rishi said he had joined office around two months back, but would obtain and examine the complete record.
Probing alleged irregularities in GMADA’s land dealings and the waiver of dues to private developers, ED had conducted a three-day search at the authority’s office last month and seized records.
As part of its ongoing money-laundering investigation, the agency also conducted searches at 26 premises across Delhi, Mohali, Chandigarh, Panchkula and Ludhiana, covering promoters, directors and associates of Tirupati Infraprojects, MB Infrabuild, Mera Baba Reality Associates, Mera Baba Infrastructure and Remigate Buildestates, whose promoter Jagmohan Garg was arrested on October 17.
Garg’s arrest followed the state housing and urban planning department’s withdrawal of concessions worth nearly ₹40 crore to Remigate for a prime commercial site in Sector 62, Mohali.
Earlier in August, the agency summoned three GMADA officials—chief engineer Ajay Garg, former chief engineer Sunil Kansal and then land acquisition officer Hardeep Singh—to furnish records and documentary evidence under the Prevention of Money Laundering Act (PMLA).
The money-laundering probe was initiated on the basis of a CBI FIR alleging bank fraud of ₹238 crore by promoters of Tirupati Infraprojects and diversion of funds for personal gain.
The agency has also alleged that manipulation of reserve prices for unsold land parcels could have caused a potential loss of nearly ₹10,000 crore to GMADA and the Punjab government.
An ambitious project dogged by delays, defects
The ED investigation has brought renewed focus on a project originally conceived as a landmark in high-rise housing. Conceived in 2011 and launched in 2013, the ambitious project envisaged 1,620 premium apartments across three categories in a total of 27 four-storey towers (60 flats each).
A construction contract worth ₹715.50 crore was scheduled for completion by August 2015. But it was marked by years of delays, successive cost revisions and questions over construction quality.
Awarded to Simplex on May 3, 2013, the project was granted five extensions, with the final deadline pushed to June 30, 2024.
The project cost was revised repeatedly — climbing to ₹725.60 crore in May 2015, ₹732.89 crore in April 2018 and ₹733.68 crore in March 2020.
According to GMADA’s subsequent internal assessment of project records, a committee valued the work executed by Simplex at ₹718.79 crore, of which work worth ₹65.44 crore was assessed as defective.
After deducting the value of the defective work, the assessment placed the payable amount at ₹653.35 crore.
But Simplex had already been paid ₹704.68 crore before leaving the project site on March 23, 2020, resulting in a suspected excess payment of ₹51.33 crore.
The contract was formally terminated only on December 27, 2021, nearly 21 months after the company left the site.
Another contractor, rising costs
The award of the balance and defective works contract to Deepak Builders has also drawn ED’s notice. GMADA issued an allotment letter to the firm on July 5, 2021, for ₹72.53 crore, with a six-month completion deadline.
The award preceded the formal termination of Simplex’s contract by nearly six months, raising questions about the approvals and contractual basis for engaging a second contractor while the original agreement remained in force.
The Deepak Builders contract was subsequently enhanced to ₹118.53 crore in March 2022, an increase of nearly ₹46 crore or around 63%. Five extensions followed, pushing the completion to June 30, 2024 — over nine years after the first deadline.
Records state that completion certificates were subsequently issued on October 18, 2024.
While the pre-final bill for civil works had been paid, the final bill remained pending over non-schedule rates. Final bills for electrical, public health and horticulture works were also to be obtained from the respective GMADA wings.
The ED is examining whether cost revisions were adequately justified, defective work was properly accounted for and public funds were protected through appropriate contractual safeguards.
Project on VB radar since 2020
The project has been under the scanner of the Punjab Vigilance Bureau since November 2020, when apartment residents filed a written complaint alleging the use of substandard construction material.
Taking note of the alleged financial losses detected through the GMADA internal inquiry, the bureau also recommended registration of an FIR against senior officials in 2023.
The VB had sought approval under Section 17A of the Prevention of Corruption Act to proceed against 1992-batch IAS officer Sarvjit Singh, who was GMADA’s chief administrator when the project was conceived, and other officials, including the then estate officer Mahesh Bansal.
The inquiry flagged the failure to conduct a mandatory market survey before undertaking the project, alleged lapses in the selection of a suitable senior architect and the absence of a cooperative society to oversee maintenance.
The VB had also flagged nearly ₹30 crore paid to allottees as compensation for delayed possession, resulting in direct financial loss, and around 500 unsold flats due to poor design and substandard construction. The alleged lapses in planning, construction and maintenance warranted further investigation into the roles of officials and other entities involved, the bureau had concluded then.
