Supreme Court sought responses from Centre, ED, RBI and others on a plea alleging diversion of thousands of crores collected from Noida and Yamuna Expressway homebuyers. The case involves Jaiprakash group firms, with ED probing alleged fund siphoning under PMLA
Published Date – 28 May 2026, 04:11 PM
New Delhi: The Supreme Court has sought responses from the Centre, ED, RBI and others, including a few real estate firms, on a plea alleging that thousands of crores collected from homebuyers in Noida and Yamuna Expressway projects were siphoned off.
A bench comprising Chief Justice of India Surya Kant and justices Joymalya Bagchi and Vipul M Pancholi on Wednesday took note of the submissions of lawyer Prashant Bhushan, appearing for petitioner Vandana Sabharwal, and issued notices to respondents for July 15.
Besides Union ministries of housing and urban affairs and corporate affairs, ED and the RBI, the bench also sought responses of the Uttar Pradesh RERA (Real Estate Regulation and Development Authority), Noida Authority, Yamuna Expressway Industrial Development Authority (YEIDA), Jaiprakash Associates Ltd (JAL), Jaiprakash Infratech Ltd (JIL), Standard Chartered Bank, and developers including CRC Homes, CRC Greens, Gaursons, Gulshan Homz, Mahagun and Investors Clinic.
Sabharwal, in her plea, said that the case reflected a larger systemic pattern in the real estate sector where developers allegedly divert homebuyers’ funds, transfer land and development rights to related entities, and eventually push projects into insolvency, leaving buyers stranded.
Bhushan referred to findings of the ED, which is investigating the matter under the Prevention of Money Laundering Act (PMLA). He told the bench that the ED had found that out of nearly Rs 14,559 crore collected by JAL and JIL from over 25,000 homebuyers, “substantial amounts” were diverted for non-construction purposes and siphoned off to related group entities, including Jaypee group companies.
“This issue keeps recurring project after project,” Bhushan said. “Funds are collected from homebuyers, diverted elsewhere, and the companies eventually go into bankruptcy. Homeowners are left in a serious situation because the diverted funds are either never identified, or not identified and brought back in time,” he said.
Bhushan also said that developers routinely transfer land and other assets to affiliated companies, frustrating recovery efforts even after investigations reveal diversion of funds.
He said although the ED had provisionally attached assets worth around Rs 400 crore, the alleged diversion involved assets exceeding Rs 14,000 crore. He urged the bench to direct the ED to complete its investigation expeditiously and issue provisional attachment orders wherever proceeds of crime or diverted funds were found invested in land or development rights.
“What has been happening is that these assets are usually never recovered. Investigations reveal diversion to related companies, but if recovery does not happen, the benefit never reaches the homebuyers,” he said.
He also sought directions to the RBI to conduct audits of banks that financed such stalled housing projects, arguing that banks too were suffering substantial losses.
“One of the things the RBI should do is issue directions because this is happening across the board and many banks are losing money in such projects,” Bhushan said.
Referring to proceedings before the National Company Law Tribunal (NCLT), he submitted that homebuyers opting for refunds were being offered only the principal amounts paid over a decade ago, without interest, despite a sharp rise in property prices.
“If we want a refund today, we are being offered what was paid 12 years ago without any interest. Today, the same flat would cost three times more,” he said.
The CJI said that the matter involved “complex” issues and noted that while in another matter involving similar allegations, the court had handed over the probe to the CBI, the ED had already registered a case in the present case.”
Let us see what they have to say,” the bench said and asked the ED to place a status report on record regarding the progress of its investigation.
Bhushan said the ED had registered an enforcement case information report (ECIR) on the basis of multiple FIRs lodged by the Economic Offences Wing of Delhi Police and Uttar Pradesh Police. The bench asked all respondents to file their replies by July 15.