Supreme Court says stay only on ED probe, not on legal actions against Lotus 300 developers
SC had stayed the Allahabad HC’s directive for an ED probe into the firm's directors but the stay order does not prevent other legal actions related to the case
The Supreme Court has modified its June 11 order pertaining to an Enforcement Directorate (ED) investigation into the directors of Hacienda Project Private Limited (HPPL), the developers of the Lotus 300 housing project in Noida’s Sector 107.
In its August 30 order, the top court said it has stayed the Allahabad high court’s directive for an ED probe into the company directors but the stay order does not prevent other legal actions related to the case.
The bench of justice Sanjeev Khanna and Sanjay Kumar said the stay does not bar or prohibit any authority from proceeding in accordance with law.
This is what the order said
“We have, vide order dated 11.06.2024, stayed the operation of paragraph 114 of the impugned judgment. The stay, however, does not bar or prohibit any authority from proceeding in accordance with law,” said the modified order from the bench.
“It is submitted that there is non-compliance with the direction given by this Court in the order dated 11.06.2014 with specific reference to paragraph 117 of the impugned judgment. New Okhla Industrial Development Authority (NOIDA) shall file an affidavit in this Court within four weeks from the date of service of this order, stating as to whether it has complied with the direction given in paragraph 117 of the impugned judgment (Allahabad HC February judgment). In case it has not complied with the same, the reason therefore will be indicated. Interim order, subject to the modifications made today, will 2 SLP(C) Nos. 12784-12786/2024 continue to operate, till the next date of hearing,” said the order.
The SC re-listed the matter in the week commencing 09.12.2024.
Noida Authority's take
The Noida authority chief executive officer Lokesh M said, “We will file the reply in this case within the given time frame as per the court directive.”
Following the Allahabad high court’s February 2024 order, both the Noida authority and developers filed review petitions in the high court, which were rejected. The authority cited the developer’s unpaid dues exceeding ₹166 crore as the reason for its inability to execute registries in Lotus 300 project.
Meanwhile, the ED filed an application seeking to implead itself in the case being heard by the Supreme Court, saying that it had undertaken an investigation based on the high court’s February order. The ED said the preliminary investigation has shown that the developer company diverted homebuyers’ money and that the promoters/directors have cheated many homebuyers in several projects using the same modus operandi.
The developers were unavailable for comment on the issue despite repeated attempts to reach them.