Supreme Court Praises ED for Protecting Homebuyers in ₹175-Crore Real Estate Fraud
The Supreme Court has commended the Directorate of Enforcement (ED) for its efforts in restoring properties to protect innocent homebuyers in a significant real estate scam in Udaipur, Rajasthan.
Real Estate FraudSupreme CourtDirectorate Of EnforcementHomebuyersPmlaReal EstateOct 15, 2025
A Bench of Justice Sanjay Kumar and Justice Alok Aradhe observed that the agency’s initiative ensured justice for investors caught in the financial mismanagement of the corporate debtor.
“We record our appreciation for the efforts made by the Directorate of Enforcement in restoring the attached assets so as to protect the rights of genuine and innocent homebuyers,” the Court remarked.
The case stemmed from the insolvency of the Royal Rajvilas housing project, which is undergoing a Corporate Insolvency Resolution Process (CIRP). During the probe under the PMLA, several flats were provisionally attached by the ED. To secure relief for the affected buyers, the agency agreed to restore the attached properties to M/s Udaipur Entertainment World Pvt. Ltd., the successful resolution applicant under the Insolvency and Bankruptcy Code (IBC).
In its order passed under the second proviso to Section 8(8) of the PMLA, the Court partially set aside the Provisional Attachment Order (PAO) No. 05/2019, directing that the restored assets be handed over to Udaipur Entertainment World Pvt. Ltd., which had taken over the corporate debtor solely to protect homebuyers’ interests. The ED estimated the current market value of these restored properties at approximately ₹175 crore.
However, attachment will continue for 11 specific units in the project — valued at around ₹8.65 crore — which were allegedly purchased using proceeds of crime, as identified in the ED’s additional affidavit dated October 7, 2025. The Court clarified that the restitution was being granted without adjudicating on the merits of the parties’ claims.
Invoking Section 32A of the IBC, the Court directed that the corporate debtor’s name be removed from the list of accused in the third supplementary prosecution complaint filed by the ED in February 2025. It emphasized that criminal proceedings and confiscation actions would continue against the former directors, conspirators, and abettors of the offence.
The Bench further clarified that Section 32A immunity would apply only if the resolution applicant is not connected in any manner with the former promoters or beneficiaries of the laundered funds. Should any such link surface during the ongoing investigation into the Syndicate Bank fraud, the ED will retain the right to challenge the approved resolution plan.
The ruling effectively closed the ED’s challenge to the National Company Law Tribunal (NCLT), Mumbai order approving the resolution plan. The agency was directed to withdraw its pending appeal before the PMLA Appellate Tribunal (FPA-PMLA-3275/JP/2019) and immediately inform authorities to expedite the registration of sale deeds for the restored properties.
The Bench made it clear that these directions were limited to the facts of this case and should not be treated as a precedent. It also disposed of a connected writ petition pending before the Rajasthan High Court (Jaipur Bench).
Concluding the matter, the Court reiterated:
“We place on record our appreciation for the efforts made by the learned counsel for the parties and the Directorate of Enforcement in restoring the attached properties to secure the interests of genuine and innocent homebuyers.”
Case Title: Udaipur Entertainment World Private Ltd. v. Union of India & Others
SLP (C) No. 10734/2025
Frequently Asked Questions
What is the main issue in the Royal Rajvilas housing project case?
The main issue is a real estate fraud involving the insolvency of the Royal Rajvilas housing project in Udaipur, Rajasthan, where the Directorate of Enforcement (ED) had provisionally attached several flats to protect defrauded homebuyers.
What did the Supreme Court appreciate about the ED's actions?
The Supreme Court appreciated the ED's efforts in restoring the attached assets to protect the rights of genuine and innocent homebuyers.
What is the estimated value of the restored properties?
The estimated market value of the restored properties is approximately ₹175 crore.
What will happen to the 11 specific units still under attachment?
The 11 specific units, valued at around ₹8.65 crore, will remain under attachment as they were allegedly purchased using proceeds of crime.
What is the significance of the Court's ruling for future cases?
The Court's ruling is specific to this case and should not be treated as a precedent. It emphasizes that the resolution applicant must not be connected to the former promoters or beneficiaries of the laundered funds.
Related News Articles
Transforming India's Real Estate Sector: A Path to Growth
India's real estate sector is at a crossroads, awaiting policy reforms from the new government to boost growth and transparency.
Revitalizing Affordable Housing: Developers' Plea to Finance Minister
Real estate developers urge the Finance Minister to implement key budget reforms to enhance affordable housing prospects, including reinstating CLSS and revising the definition of affordable housing
Indian Markets Take a Breather After Recent Rally
Energy, healthcare, and pharma sectors led the gains, while media, real estate, and private banks lagged. The market's overall upward momentum remains strong, supported by ample domestic liquidity.
The Importance of Data Protection Laws in the Real Estate Industry
With the Digital Personal Data Protection Act (DPDPA) on the horizon, the real estate sector must adapt to stringent data protection requirements to ensure privacy and security of personal information.
2024: A Year of Transformation in Residential and Commercial Real Estate
2024 has been a landmark year for the real estate sector, with luxury homes and premium commercial properties dominating the market. The rise of REITs (Real Estate Investment Trusts) has further democratized investments, making the sector more accessible
Maharashtra's Record-Breaking FDI Influx in 2024: A Political Milestone?
Maharashtra Chief Minister Devendra Fadnavis announced that the state received a significant Rs 1.13 lakh crore in FDI within the first six months of 2024-25, matching the state's annual average over the past four years.