Investors duped by builders cannot be left high and dry: Court
Making scathing observations, the court denied bail to the director of real estate firm accused of duping 200 investorsnoida Updated: Sep 06, 2017 16:30 IST
Investors, who have been duped by unscrupulous builders, cannot be left high and dry, a special court has said while denying bail to a director of a real estate firm accused of duping 200 investors of crores of rupees.
Developers cannot be permitted to arm-twist investors into falling in line, it said.
Special Judge Kamini Lau made the scathing observations in an order dismissing the bail plea of one of the arrested directors of the real estate firm AMR Infrastructure Limited.
“Any builder/developer who dupes by inducing, alluring, painting false pictures, selling and diverting offers and then arm-twist the investors, has to face tough legal consequences and the rights of common man cannot be compromised only because those in dominant positions have the best legal advice vis-a-vis the common man who fights a lonely battle (sic),” the court said.
It also said that the builders often allured investors into depositing the amount in cash only to escape tax liabilities and once the investors fall into the trap, they are silenced through the fear of prosecution by tax authorities.
“Keeping in view the nature and seriousness of the offence involved, magnitude of the contravention, role attributed to the accused and the possibility that the release of the accused may cause obstacles to further investigation and also since the investigations are at the initial stages and the amount siphoned off is likely to rise further, no ground for bail is made out. The application (of Director Ram Chander Soni) for grant of bail is hereby dismissed (sic),” the special judge said.
According to the complainants, they were induced in 2006 to invest in the project located in Greater Noida and the firm had also assured returns on investments. The project in dispute included a mall and a residential area.
Advocate Ajay Verma, appearing for accused, sought bail saying it was purely a civil dispute and he was willing to settle the issue and ensure that the entire project is delivered to the buyers.
However, the judge said that the fight of individual investors against the “mighty builder” was not an easy task and was very unnerving for consumers and investors.
“Merely because some of the investors had initiated insolvency proceedings or approached the civil courts or Consumers’ Forum, does not absolve the developer/builder of criminal liability. Homebuyers are now protected against unscrupulous builders after the passing of Real Estate (Regulations and Development) Act, 2016,” the court said.
It also said that food, clothing and shelter were the basic needs of humanity and any deprivation by the use of unscrupulous means is required to be dealt with by strong judicial interventions.
Verma, who also represented the company, said that “a small chunk of customers are trying to derail the entire project”, adding that the firm has to protect the interests of the majority of investors.
While denying bail to Soni, the court noted that being the director and the agent of the company, the accused had all the responsibility during his tenure in the company and all the activities starting from floating of brochures to the receipt of money were within his knowledge.
The investigating officer (IO), in a report, said that till 2008, there was no construction activity at the site and when the complainants confronted the company officials, they were informed that possession would be given by the end of 2010. However, they have not got possession so far.
The report has said, according to documents supplied by the firm, it had received investments of over ₹540 crore from investors on the pretext of setting up a mall and a valley, among others.
The IO also said that till date, the police had received 200 complaints and fresh pleas of investors were pouring in against the company and its directors.
The officer submitted that the company or the directors had not completed the project in 10 years and there was a remote possibility of it in the near future.