Supreme Court Seeks Centre, ED Response on Plea for Time-Bound Probe Into Alleged Jaypee Money Laundering

New Delhi: The Supreme Court on Wednesday sought responses from the Centre and the Enforcement Directorate (ED) on a petition demanding a time-bound investigation into the alleged money laundering involving the Jaypee group and requesting that any proceeds of crime recovered be used to complete stalled housing projects.

A bench led by Chief Justice of India (CJI) Surya Kant issued notice on a petition filed by Vandana Sabharwal, a homebuyer in one of the Jaypee projects. The plea also requested directions to the Reserve Bank of India to carry out an audit of banks that had extended credit facilities to Jaypee group projects.

The bench, which also included justices Joymalya Bagchi and Vipul M Pancholi, issued notice in the matter and scheduled the next hearing for July.

The proceedings come shortly after the Jaypee group’s takeover by the Adani Group during insolvency proceedings involving ₹14,535 crore.

Advocate Prashant Bhushan, appearing in support of the petition, argued that the ED itself had acknowledged in its prosecution complaint filed in January 2026 that, out of ₹14,599 crore collected from homebuyers by the Jaypee group, ₹13,833 crore had allegedly been diverted by Manoj Gaur, executive chairperson of Jaiprakash Associates Limited (JAL). Gaur was arrested on November 13, 2025, and continues to remain in judicial custody.

Bhushan informed the court that, so far, the ED had succeeded in attaching assets worth only ₹400 crore. According to the petitioner, the ED investigation had identified several external developer clusters that received payments. “These include transactions involving Gaursons India Pvt. Ltd., Gulshan Homz Pvt. Ltd., CRC Group / CRC Greens Pvt. Ltd., Mahagun Real Estate Pvt. Ltd., and Honey Katiyal / Sunny Katiyal / Investor’s Clinic Infratech Pvt. Ltd,” the petition stated, adding that investigation in these aspects requires “time-bound investigation” by the ED and other statutory authorities.

As Bhushan urged the bench to seek a status report from the ED, the court observed, “It is better we issue notice at this stage. At the next hearing, we will see if some kind of coordinated mechanism may be brought out.”

One of the key directions sought in the petition asked the court to instruct the ED that all proceeds generated from attachments and confiscations in the Jaypee matter, along with recoveries from any other identified recipients of proceeds of crime, should be deposited into a “court-monitored escrow account”. The plea stated that the funds should be used exclusively for the “completion of homebuyers’ projects” and for providing restitution to buyers who have waited for more than a decade either to receive possession of their homes or full refunds.

The petition, filed through advocate Abha Zaidi, also requested directions for the ED to complete its investigation into the five developers allegedly involved in transactions connected to Jaypee projects in Noida and Greater Noida.

The petitioner stated that she had booked a residential unit in Jaypee Wishtown, Sector 128, Noida, over a decade ago and had invested all her life savings into the property. However, she claimed that she had neither received possession of the unit nor any refund of the money paid.

Framing the matter as one of broader public interest rather than merely an individual grievance, the petitioner argued that the case revealed a larger pattern involving diversion of homebuyers’ funds, transfer of development rights, stalled real estate projects, regulatory failure, and ineffective enforcement of remedies available under the Real Estate Regulatory Authority (RERA), the Insolvency and Bankruptcy Code (IBC), and the Prevention of Money Laundering Act (PMLA).

Bhushan also argued that homebuyers would not receive fair compensation under the insolvency process before the National Company Law Tribunal (NCLT). “Under NCLT. Homebuyers will only receive their principal amount. They will not get any interest on their money invested over 12 years ago. Purchasing a property now will cost ten times the cost they invested,” he said.

By fLEXI tEAM