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Informist, Wednesday, May 27, 2026

 

NEW DELHI – The Supreme Court Wednesday issued a notice to the Reserve Bank of India on a petition seeking a direction to conduct a supervisory review or comprehensive audit of all banks' exposure to real estate projects, including due diligence on security over project assets. The bench led by Chief Justice of India Surya Kant said that the petition filed by Vandana Sabharwal, alleging money collected by homebuyers were being diverted by real estate companies for non-construction purposes and siphoned off to related group entities, involves a complicated issue and needs to be examined. The apex court has also sought responses from the government, real estate regulatory bodies, land authorities, Jaiprakash Associates Ltd., Standard Chartered Bank, and others on the petition by Sabharwal, a homebuyer.

 

The petitioner has sought a direction to Adani Enterprises Ltd., the successful resolution applicant for Jaiprakash Associates, and Suraksha Realty, the successful resolution applicant for Jaypee Infratech, to file avoidance applications before the National Company Law Tribunal in respect of all identified undervalued external developer transactions. Upon any such avoidance application being allowed by the tribunal, the apex court should direct that the recovered land or development rights be returned to the respective resolution estate and subjected to a fresh, transparent, court-supervised open-market auction and the auction proceeds, to the extent they represent value over and above the consideration offered by the respective resolution applicants, said the petitioner. 

 

An avoidance application under the Insolvency and Bankruptcy Code, 2016 empowers resolution professionals or liquidators to "claw back" assets from unfair, pre-insolvency transactions. These are filed before the National Company Law Tribunal to reverse illegal asset stripping and maximise creditor recovery. 

 

The petitioner said that according to the Enforcement Directorate's prosecution complaint, INR 145.99 billion collected from homebuyers, Manoj Gaur, the executive chairman of Jaiprakash Associates, had diverted INR 138.33 billion to group entities, Yamuna Expressway infrastructure and through systematic non-compliance with RERAs escrow, disclosure, and registration requirements. 

 

The petitioner has sought directions to real estate regulatory authorities to carry out an audit in project-wise manner vis-a-vis escrow accounts, which shall be mandatory and continuously monitored by them. Further, the petitioner has sought completion of a probe by the Enforcement Directorate against various real estate developers on diversion of funds. In addition, the petitioners seeks a direction to the Reserve Bank of India to conduct a focused supervisory audit of Standard Chartered Bank and all consortium lenders to Jaiprakash Associates and Jaypee Infratech with specific reference to whether adequate end-use monitoring was conducted on funds lent against Jaypee project lands.  

At 1328 IST, the shares of Adani Enterprises Ltd. traded 0.6% lower at INR 2,952.70 on the National Stock Exchange.  End
 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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