The Allahabad High Court recently lifted the corporate veil to hold the Promoters and Directors of Hacienda Projects Private Limited and Three C Universal Developers Pvt. who are in default, liable for defrauding flat-buyers of the Lotus 300 project in Sector 107, Noida.
The bench of Justice Mahesh Chandra Tripathi and Justice Prashant Kumar has directed the Enforcement Directorate under the Prevention of Money Laundering Act, 2002 to proceed against all the directors/promoters/designated promoter/officer who are in default, companies/other entities in which money from Hacienda Projects is syphoned or parked.
The Allahabad High Court further expressed surprise as to how the directors had been let go freely by the state and neither the state nor the NOIDA Authority involved are able to recover the defaulted amount due to insolvency.
The High Court explained that this is a classic case of conning, as to how the promoters without investing any amount gets huge tracts of prime land allotted, initiates a project and collects Rs.636 crores from the home buyers, out of which they again syphon off almost Rs.190 crores and then sell off a portion of land to a 3rd company and then syphon the entire sale proceeds (Rs.236 crores), and pay a pittance to Noida Authority, towards the cost of land/premium for land and lease rent, which they were supposed to pay, and defrauds the home buyers, Noida Authority, Banks and other creditors.
The Allahabad High Court added that the promoters defrauded hundreds of home buyers in various projects by collecting money and diverting it in different schemes. It pointed out that after diverting funds, the directors resigned from the companies pushing them into insolvency to escape criminal and civil liabilities.
The Court remarked that the NOIDA authorities had failed to discharge its burden by not cancelling the lease in accordance with the conditions of the lease agreement. The Court observed that the NOIDA authority at present cannot recover any money from the company as it is already under insolvency.