The Supreme Court on Monday froze the bank accounts of Parsvnath Developers and its directors, and issued bailable warrants against the company's leadership after taking note of a 20-year struggle by senior citizens to secure possession of their homes. According to reports from Business Standard, a bench comprising Chief Justice of India Surya Kant and Justices Joymalya Bagchi and V Mohana expressed grave concern over the 'slumber' of regulatory authorities and suggested a 'collusion' between the Haryana state machinery and the builder. The court was informed that in one instance, a bailiff was physically prevented from entering the builder's premises while the local police failed to provide effective assistance. Describing the matter as highlighting the 'plight of homebuyers', the Court warned that if the directors fail to appear on the next date, Non-Bailable Warrants will be issued.
The case pertained to a petition filed by Rita Tikku, a cancer survivor, and Lokaish Tikku, who invested their life savings in the 'Parsvnath Exotica' project in Sector 53, Gurugram. As reported by Business Standard, the petitioners were provisionally allotted residential units in 2006, with a Flat Buyer Agreement signed in early 2007. Each flat was priced at over ₹1 crore, with possession contractually due in 2013. Despite paying the full sale consideration of approximately ₹1.78 crore, the possession, originally due in 2013, never materialised. The petitioners had previously secured favourable orders from the Haryana Real Estate Regulatory Authority (HRERA) in 2021, which ordered compensation, but the builder neither challenged the orders nor complied with them. When the builders failed to comply, the homebuyers initiated execution proceedings before HRERA in 2022.
'Execution proceedings have become an exercise in futility' the CJI said, adding that even when HRERA issued arrest warrants, they were never executed. According to Business Standard, the court was 'satisfied that collectors and local police have either colluded with builders or failed to discharge their responsibility'. The Court noted that despite repeated efforts, the Gurugram Collector could not recover 'a single penny' from the developers. The bench recorded that warrants had been issued against the directors of the respondent companies to secure their presence before HRERA, but noted serious lapses in enforcing those warrants. The Court made adverse prima facie observations against the State machinery, observing that the case exposed systemic deficiencies in the implementation of the Real Estate (Regulation and Development) Act, noting that the effectiveness of the statutory mechanism depended on enforcement of orders passed under it.
The bench has asked the chief secretary of Haryana, the DGP, all district collectors, and police commissioners to ensure strict compliance with these orders and submit affidavits. As reported by Business Standard, the court ordered the freezing of bank accounts with immediate effect of Parsvnath Hessa Developers Pvt Ltd, Parsvnath Developers Ltd, and the personal accounts of their managing directors and directors. The bench issued bailable warrants against the directors of the respondent companies, with the CJI warning that if they fail to appear on the next date, Non-Bailable Warrants will be issued. The Court further directed the Chief Secretary of Haryana, the Director General of Police, all Collectors, all Commissioners, and all banks concerned to ensure strict compliance with its directions and file compliance affidavits before the Court.
