Delhi HC refuses homebuyers’ plea to restore ₹2.3k-crore from ED

The petitioners have booked flats in six WTC Group projects in Greater Noida, Chandigarh, and Gujarat.

The Delhi High Court on Tuesday refused to consider a petition filed by 81 homebuyers of WTC Group projects seeking directions to the Enforcement Directorate (ED) to restore funds and properties seized in connection with the real estate group’s fraud. The court noted that a petition was already pending in a special court and the applicants can rather seek impleadment (involving a third party) in an ongoing plea.

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The petitioners have booked flats in six WTC Group projects in Greater Noida, Chandigarh, and Gujarat.

On May 1 last year, the ED issued a provisional attachment order (POA) attaching funds and properties worth ₹2,348 crore linked to the WTC Group, headed by Ashish Bhalla.The law enforcement agency had observed that the money had been siphoned off instead of being used for real estate development and was illegally transferred to Singapore-based entities owned by Bhalla’s family members.

The POA was issued after the agency initiated an investigation based on the FIRs registered by other law enforcement agencies, including the Delhi Economic Offences Wing, for the offences of cheating, fraud, and criminal conspiracy against the WTC group and its promoters –- Ashish Bhalla, Suparna Bhalla, Abhijeet Bhalla, Bhutani Infra and others. The agency had arrested Ashish Bhalla in March last year in a money laundering case.

A bench of justice Purushaindra Kumar Kaurav observed that the homebuyers had already approached the special court under Section 8(8) of the Prevention of Money Laundering Act (PMLA) seeking restoration of properties and funds in Noida, Greater Noida, Chandigarh, Mohali, Gift City, and Faridabad in their favour. The bench therefore directed the special PMLA court to expedite the proceedings.

Section 8(8) of the PMLA empowers the special court to restore confiscated property, in whole or in part, to claimants with a legitimate interest who have suffered a quantifiable loss due to the offence of money laundering.

The court also said that the homebuyers have the liberty to file an application seeking impleadment in the pending petition filed by Bhalla, challenging the same order before the high court.

“The petitioners have any grievance, they are at liberty to file an appropriate application seeking their impleadment or liberty to intervene. If the prayer in the instant petition is perused, the same is to be exercised by the concerned court under section 8(8) of the Act of 2002. The petitioners seem to have approached the concerned court, and the matter is pending,” the court said in its order.

It added, “The court at this stage only observes that if the petitioners have taken recourse to section 8(8), let the petitioners’ request be expedited, and the matter be taken to its logical conclusion with expedition, considering the involvement of a large number of homebuyers. With the aforesaid observation, the petition stands disposed of.”

The order came after ED’s lawyer Zoheb Hossain stated that an identical petition was already pending before the special PMLA court. Hossain also pointed out that the fraud was of more than ₹4,250 crore.

While counsel for the homebuyers, M.L. Lahoty and Anchit Sripat, argued that they did move the special court, but repeated adjournments and absence of a final decision had compelled them to file the writ petition.