Delhi Court To Decide If Errant Builders Can Be Prosecuted Under MCOCA

As hundreds of home-buyers continue to reel under the failed or delayed real-estate projects, a Delhi court is to decide if errant real-estate developers can be prosecuted under the stringent Maharashtra Control of Organised Crime Act for cheating hundreds of home-buyers of thousands of crores of Rupees in an organised manner.

The issue of whether MCOCA can be used against real-estate developers has come before the court as an association of hundreds of aggrieved home buyers has moved a Delhi court seeking prosecution of officials of a real estate company under the stringent Maharashtra Control of Organised Crime Act (MCOCA) to curb "organised crime" in real-estate sector.

Unific Techone Patrons Independent Association, a registered association of aggrieved real estate buyers, has moved a the court of Additional Sessions Judge Ashish Aggarwal through advocate Amit Kumar seeking directions to the Economic Offences Wing (EOW) to prosecute Directors of M/s Earth Infrastructure and their spouses under MCOCA for cheating hundreds of investors of thousands of crores of Rupees by committing organised crime.

The EOW, however, has told the court that the provisions of MCOCA cannot be invoked.

Besides, Kumar also submitted that FIR invoking the provisions of MCOCA against all builders like accused persons are required since the existing legal framework has proved to be inadequate to curb or control the menace of Organized Crime in Real-Estate sector.

With regard to the failed projects of Earth Infrastructure, the complainant requested for initiation of proceedings to prosecute four directors of Earth Infrastructure and their wives under section 3(1)(ii), 3(2), 3(4) and 3(5) of MCOCA.

It is to be noted that the directors of M/s Earth Infrastructure – Avdhesh Kumar, Rajneesh Mittal, Atul Gupta and Vikas Gupta – are accused of cheating large number of investors on the pretext of allotment of flats, shops, commercial spaces in its proposed projects at Noida, Greater Noida, Gurgaon etc.

Accordingly, several project-wise cases were registered against Earth Infrastructure Ltd and its directors. All are in judicial custody and facing trial for offences of cheating, criminal conspiracy and criminal breach of trust.

The complainants, however, want them to be prosecuted under MCOCA for cheating thousands of investors in an organised manner.

Since the Association had also made a similar complaint before the EOW before moving the court, the judge sought a status report from the police.

The EOW, however, in its report said, "…as per various judgements of Hon'ble Supreme Court of India including State of Maharashtra & Ors vs Lalit Nagpal & Anr, it is settled law that to apply the provisions of MCOCA something more in the nature of coercive acts and violence is required whereas in the cases charge sheeted by the EOW against the directors of M/s Earth Infrastructure Ltd there are no allegations that violence or threat was used by the accused persons.

"Therefore, the provisions of MCOCA were not found attracted against the directors of M/s Earth Infrastructure Ltd. Accordingly, the instant complaint of the association was closed".

In its complaint, the Association has submitted that, "in the year 2010, the accused persons formed a gang and hatched a conspiracy with their common criminal intent to cheat the hard-earned money of general public on the pretext of allotment of office spaces, shops / commercial spaces, residential apartments, etc. through Accused No. 9 [M/s Earth Infrastructure Ltd.] and its associates/subsidiaries companies/Sister Concerns".

"In furtherance of said conspiracy, the Accused No. 1 to 8, being directors/shareholders of their company, misrepresented / made false promises and received thousands of crores from the innocent buyers, under the pretext of allotment of proposed office spaces / commercial spaces / residential apartments, etc. under the various projects namely Earth-Towne, Earth-Techone, Earth- Sapphire Court, Earth-Titanium, Earth-Gracia, Earth-Iconic, Earth-Copia, Earth-Elacasa & Earth-Skygate at different locations of National Capital Region, Delhi. However, till date, despite receiving thousands of crores from the innocent buyers/victims, they have not handed over any of the said projects and misappropriated the funds received from the innocent buyers, for their own use.

"It is pertinent to apprise here that their intention had been bad from the very beginning and they have been able to cheat thousands of innocent buyers to the tune of thousands of crores by committing "Organized Crime" for the purpose of Section 2(d), 2(e) and 2(f) of Maharashtra Control of Organised Crime Act, in the capacity of being leading members of the "Organized Crime Syndicate" formed by them, with sole intent to cause wrongful gain to themselves and wrongful loss to the general public by unlawful means," says the complaint.