New Delhi: Seven years after it launched a probe into the Faridabad-based SRS Group’s real estate projects, the Enforcement Directorate (ED) has begun the process of restoring around 2,300 flats and properties valued at Rs 650 crore to genuine buyers who were allegedly duped by the real estate firm and its promoters.
The restitution process kicked off after the agency submitted to a Special PMLA court in Gurugram a list of 2,312 genuine homebuyers who had paid for flats and properties but never got possession. Hundreds of these projects were left incomplete around 2017, when SRS Group’s promoters lost their real estate licenses.
The properties, all located in Faridabad in Haryana, were attached by the agency in 2020 as part of a money-laundering probe into the alleged siphoning of more than Rs 2,200 crore in funds pooled from homebuyers and banks.
Last Wednesday, the Gurugram court ordered the agency to appoint a nodal officer, not below the rank of assistant director, to oversee the restoration process.
Agency sources said the process has begun, with communications sent to tehsildars and revenue department officials to expedite the registry and other procedures required for the homebuyers to formally take over ownership.
The agency’s case stemmed from at least 81 FIRs registered by the Central Bureau of Investigation (CBI), the Delhi Police’s Economic Offences Wing (EOW), and Faridabad Police. The properties were built by SRS Group and managed by co-founder Praveen Kumar Kapoor, and promoter-directors Sunil Jindal, Jitender Kumar Garg, Anil Jindal, and others.
Facing an Interpol Red Corner Notice, Kapoor was held at a US airport and deported to India last November. Faridabad Police and the ED then took him into custody.
A Special Court in Gurugram declared Jindal and Garg fugitive economic offenders for failing to appear before the court. Sources within the agency said extradition requests have been sent to Georgia and Dubai, where Jindal and Garg are located.
According to the officials, the agency had set four broad criteria to identify genuine homebuyers from the list of applicants who submitted documents to claim ownership.
The first criterion was that individuals seeking ownership had to have paid either the full amount or at least 95 percent of the booking amount. However, the payments must have been made by cheque or another documented method, and not in cash in bulk.
Individuals who occupied the same flats or properties without ownership due to the ED’s case were verified and authenticated by submitting possession certificates, a sale agreement, and proof of monthly bill payments or common-area maintenance payments.
Documents related to the source of funds, such as loan documents and sources of income, were also considered when determining the genuine ownership of the homes.
However, individuals with any family or business relations to the SRS Group or its promoters and management were barred from the process.
Case against SRS Group
Founded in 2000 in Faridabad, the SRS Group quickly grew into a business house operating across multiple sectors, including real estate, jewellery, cinemas, hospitality, education, financial services, and sand mining. According to the investigation records, the group was founded by Anil Jindal, who served as its chairperson and managing director.
The group ran aggressive real estate schemes across Faridabad, launching several projects for the middle-class, such as SRS Pearl, SRS City, and SRS Prime Floor.
But the group started defaulting on payments by 2018.
As FIRs were filed against it and its management, the ED took charge in December 2018 to probe the money-laundering aspects of the case. The agency alleges that the group siphoned off nearly Rs 2,200 crore from the public. An ED investigation indicated that the group had allegedly incorporated hundreds of shell companies to siphon funds pooled from investors, promising exorbitant returns on investment in a short time.
The agency alleged that the shell companies were incorporated in the name of the group’s employees without their knowledge or involvement.
The SRS Group, said the agency, allegedly used to store its employees’ digital signatures and later fraudulently used them to incorporate companies, appointing or removing them from directorship when required, on the directions of Anil Jindal.
The agency further alleged that SRS Group booked properties such as flats, shops, apartments, and plots in real estate projects on the pretext of booking them in investors’ names. But these properties were acquired by SRS Group either with investor funds or with bank loans, the agency alleged. The funds received by SRS Group were never repaid, nor were the promised properties delivered to the investors, the agency alleged.
The agency also found that the SRS Group took loans from both government and private banks to purchase land plots and develop real estate projects. But according to it, those funds were allegedly diverted to shell companies disguised as billing and invoices for services rendered, the agency alleged in the prosecution complaint.
The Special PMLA court in Gurugram has framed charges against 13 individuals and six group companies under the SRS Group, and the trial is underway. The counsel for Anil Jindal argued before the court that ED’s case was devoid of any “verifiable evidence” and was largely based on “assumptions, exaggerated figures, and coerced statements”.
The SRS promoters also argued that they were just carrying out business activities and that “failure of projects or non-repayment to investors constitutes only a civil liability”.
The court, however, framed charges citing “allegations, supported by documentary material” which pointed to an “organised and systematic mechanism to defraud the public and launder the illicit proceeds through layering and integration in different companies of the SRS Group”.
A ray of hope
For software engineer Naveen Kumar, the ED’s attachment of the unfinished project, including his planned home, was a big setback.
He said that the SRS Group’s licenses had earlier been revoked by the Department of Town and Country Planning (DTCP), which issued newspaper advertisements stating that the unfinished projects would be taken up by the department.
“The DTCP did not respond positively to our requests and urgent calls for intervention, prompting us to approach the Punjab and Haryana High Court, which asked us to meet with the town and country planners and resolve the issue,” Kumar told ThePrint.
The matter was disposed of when the high court was informed that Haryana’s chief secretary would form a committee to look into aspects related to the completion of these projects. However, before work started, these properties were attached by the ED as part of the money-laundering probe. After years of legal battles in different courts, Kumar said that the ED’s steps to identify genuine homebuyers had revived their hopes.
“Much work is yet to be done, and we shall discuss with the DTCP on completion of 618 units restituted by the ED,” Kumar said.
Adding, “I have been paying Rs 10,000 rent for a long period of time, along with an EMI of Rs 9,300 per month for the last 13 years for a home that has not even been constructed.”
On the other hand, Gautam Bhattacharya, a retired engineer from an ancillary company of Maruti Suzuki, and his cohorts moved the Haryana Real Estate (Regulation and Development) Authority (RERA) after construction at the projects stopped in 2017.
“We bought the flat in 2011 for Rs 23 lakh and the house was not delivered. The RERA asked us if we wanted to complete the work by ourselves, for which we agreed, and the authority asked us to form an association of allottees,” he recalled.
A Resident’s Welfare Association was formed and registered under the Societies Act and several other steps were taken to finish the unfinished work, he said.
“The construction work started and finished by 2019. The paperwork for possession and registration started, but right before the registration, we were told that these projects were attached and that we required clearance from the ED,” he told ThePrint.
Then, agency officials explained the provisions of the law governing the attachment of such properties and provided guidance on how to resolve the issue, Bhattacharya added. “The ED assured us that no genuine homebuyers would be denied their rightful claim to their homes and asked us to submit documents related to all properties attached,” he said.
Adding, “Whatever delay happened, it happened at the court because the law on restitution requires at least framing of charges for restoring to the rightful owners. We shall get properties in our name, finally, after years of hard work and courtroom battles.”
(Edited by Sugita Katyal)
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