Nearly six years after Yamuna Authority submitted a complaint against SDS Infracon for allegedly diverting Rs 182 crore of homebuyers’ money and investing it in other companies, the realty firm is set to face a reinvestigation following a recent Allahabad High Court order.
A police closure report was filed in the case in 2020 but was challenged by the Authority.Around 1,400 homebuyers invested in the SDS group’s integrated NRI Township project, spread across 125 acres of land in YEIDA’s Sector 26A, in 2010 and are still waiting for the plots.
An audit of the developer’s financial dealings in Dec 2017 showed that SDS Group had diverted the homebuyers’ money to three firms — SDS Infracon, SDS Infotech Pvt Ltd and Arnava Techno Soft Pvt Ltd.
The builder was booked under the Companies Act and other sections of IPC for fraud on a complaint submitted by the Authority in June 2018. To protect investors’ interest, the Authority also directed the developer to open an escrow account and deposit the sum that was diverted. The Authority said the developer did not open the escrow account or clear its Rs 379.8 crore dues.
In Feb last year, the Yamuna Authority filed a protest application — a petition filed by a complainant to present additional evidence or arguments to support their case after a police report is submitted to the court — against the closure report submitted by the police in the case in 2020.
The Authority had contended that the investigating officer had not taken documents from it nor did the police investigate the three companies into whose account the investors’ money was illegally diverted by the developer.
On July 14 last year, a local court upheld the Authority’s protest petition and asked the police to reinvestigate the case. The SDS Group, however, approached the Allahabad High Court against the lower court’s order last Dec challenging the jurisdiction of the magistrate to reopen the probe, but its petition was rejected.
In its May 6 order, the HC bench of Justice Vikram D Chauhan said, “The applicants (SDS Group) have not shown before this court that the objection raised to the investigation/final report by the opposite party No. 2 (Yamuna Authority) was without foundation. The magistrate concerned has jurisdiction to direct for further investigation where a final report/closure report is filed after investigation.”
It further said, “Since the impugned order is within the jurisdiction of the court concerned directing for further investigation, the applicants, who are at this stage not affected by the impugned order, cannot raise an objection to the power exercised by the Magistrate for further investigation, more particularly, when no criminal proceedings have been initiated against the applicants by the court concerned nor any finding has been recorded against the applicants in the impugned order.”
Yamuna Authority CEO Arun Vir Singh told TOI the Authority will soon write to UP govt to transfer the investigation from the police to another agency.
