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Informist, Tuesday, Aug. 5, 2025

 

NEW DELHI – The Delhi High Court has rejected petitions by L&T Finance Ltd. and Edelweiss Asset Reconstruction Co. Ltd against a lower court order to register a first information report against them on a complaint by some landowners for cheating, criminal breach of trust and criminal conspiracy. 

 

"In the present case, when the allegations prima facie disclose elements of criminality, this court is of the view that the matter is yet to be investigated, and it is for the police/investigating agency to ascertain, on the basis of the material collected during investigation, whether any offence is actually made out against the petitioners," Justice Swarna Kanta Sharma said.

 

If, upon investigation, no case is found to be made out, the investigating agency will be bound to file an appropriate report, Justice Sharma said. The mere fact that a first information report has been directed to be registered against the petitioners, or that their names are mentioned in the order, does not imply that a chargesheet will necessarily be filed against them, she said.

 

The case revolved around a 24.16-acre land owned by complainants Gurmeet Kaur Gill, Jesleen Kaur Papneja, Ajit Kaur Gill, and Mohinder Pal Singh Gill in Gurugram in Haryana. Raheja Developers had signed agreements with the complainants under which the former was to set up a residential group housing project over 10.11 acres of land and a housing project, Raheja Vanya, on 2.38 acres. These agreements were superseded by a memorandum of understanding in 2016, which pertained to financing the development of the projects. The memorandum stated that the financing and any mortgage created over the licensed land shall not be used for any purpose other than the construction and development of the projects.

However, the complainants alleged that Raheja Developers, in connivance with L&T Finance, used the licensed land as cross-collateral to avail a loan facility of INR 4.50 billion from L&T Finance for purposes other than construction and development of Raheja Vanya. L&T Finance allegedly approved the loan facility without consent from the complainants, in violation of the agreements, the complainants said.

 

It was further alleged by the complainants that Raheja Developers obtained consent from them on the basis of false assurances and executed a backup security agreement, which allowed a second charge of the complainants over all securities included in the loan facility. While the complainants later agreed to keep the licensed land as security for Raheja Vanya, on a stand-alone basis, towards the loan facility of INR 4.50 billion, they subsequently discovered that L&T Finance had enhanced the loan to INR 6.20 billion without informing them, said the complainants. The loan was later assigned to Edelweiss Asset Reconstruction.

 

The complainants also alleged that Raheja Developers failed to make the agreed revenue share payments to them, and that such defaults were persistent and continuing. Therefore, the approval and enhancement of the loan facility, allegedly in violation of guidelines and procedures governing high-value loans, was unjustified, said complainants. It was further alleged that L&T Finance illegally issued a no-objection certificate to Raheja Developers to enable them to sell units to third parties, despite knowing that this would be in breach of the agreement. 

 

In January, a magistrate allowed the application by the petitioners and directed the registration of a first information report against the companies. Challenging this, L&T Finance and Edelweiss Asset Reconstruction moved the high court.

 

On Tuesday, shares of L&T Finance ended 0.1% higher at INR 204.27 on the National Stock Exchange.  End

 

Reported by Surya Tripathi

Edited by Saji George Titus

 

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