Supreme Court Praises ED for Protecting Homebuyers in Udaipur Real Estate Scam
The Supreme Court has commended the Directorate of Enforcement (ED) for its proactive steps in restoring attached properties to safeguard the interests of innocent homebuyers affected by a real estate scam linked to the Royal Rajvilas housing project in Udaipur, Rajasthan.
Real EstateSupreme CourtEdHomebuyersFraudReal EstateOct 15, 2025
We record our appreciation for the efforts made by the Directorate of Enforcement in restoring the attached assets to protect the rights of genuine and innocent homebuyers, the Court noted. The project was undergoing the Corporate Insolvency Resolution Process (CIRP) when a case under the Prevention of Money Laundering Act (PMLA) was registered.
The ED had provisionally attached several flats; however, to protect homebuyers, it agreed to restore these to M/s Udaipur Entertainment World Pvt. Ltd., the successful resolution applicant. Accordingly, the Court partially set aside the Provisional Attachment Order and directed that the properties be handed over to the resolution applicant, emphasising that this move was solely to protect the interests of homebuyers. The restored properties are valued at approximately Rs. 175 crore.
The Bench clarified that the restoration was made under the second provision to Section 8(8) of the PMLA without going into the merits of the parties’ contentions. However, the attachment will remain in force for 11 specific units worth approximately Rs. 8.65 crore, allegedly purchased using the proceeds of crime, as identified in the ED’s affidavit dated October 7, 2025.
Further, invoking Section 32A of the Insolvency and Bankruptcy Code (IBC), the Court ordered that the corporate debtor’s name be deleted from the list of accused in the ED’s third supplementary prosecution complaint filed in February 2025. It clarified that prosecution and confiscation proceedings would continue against the erstwhile directors, conspirators, and abettors involved in the offences. The Court also left open the ED’s right to act if any other homebuyer-linked units are later found to be purchased with tainted money, stressing that the benefit of Section 32A applies only when the resolution applicant is unconnected with the former promoters or beneficiaries of the alleged crime.
With this, the Supreme Court formally closed the ED’s challenge to the approval of the resolution plan by the NCLT, Mumbai, and directed the agency to withdraw its pending appeal before the PMLA Appellate Tribunal. The ED was also instructed to inform authorities to enable the registration of sale deeds for the restored properties. The Bench clarified that its order is confined to the specific facts of this case and shall not be treated as a precedent. It also disposed of the connected writ petition before the Rajasthan High Court, Jaipur Bench, while recording appreciation for the cooperation of all counsel involved.
We place on record our appreciation for the efforts made by the counsel for the parties and the Directorate of Enforcement in restoring the attached properties to secure the interests of genuine and innocent homebuyers, the Court concluded.
Frequently Asked Questions
What is the Royal Rajvilas housing project?
The Royal Rajvilas housing project is a real estate development in Udaipur, Rajasthan, which was involved in a significant real estate scam affecting numerous homebuyers.
What actions did the ED take to protect homebuyers?
The ED provisionally attached several flats and later restored them to M/s Udaipur Entertainment World Pvt. Ltd., the successful resolution applicant, to protect the interests of genuine and innocent homebuyers.
What is the value of the restored properties?
The restored properties are valued at approximately Rs. 175 crore.
What is the Corporate Insolvency Resolution Process (CIRP)?
The Corporate Insolvency Resolution Process (CIRP) is a mechanism under the Insolvency and Bankruptcy Code (IBC) to resolve insolvency issues of corporate entities.
What is the Prevention of Money Laundering Act (PMLA)?
The Prevention of Money Laundering Act (PMLA) is a law in India aimed at preventing money laundering and to provide for the confiscation of property derived from, or involved in, money laundering.
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