Delhi High Court Refuses To Quash Criminal Case Against Supertech Directors Over Hill Town Project
The Delhi High Court has refused to quash criminal proceedings against directors of real estate company Supertech Limited over allegations of cheating, criminal breach of trust and criminal conspiracy linked to its Hill Town project in Sohna, Haryana.
Justice Madhu Jain was dealing with three connected petitions arising from an FIR registered by the Economic Offences Wing over alleged non-delivery of flats, discontinuation of pre-EMI payments and alleged diversion and utilisation of funds received from homebuyers.
The case began with a complaint by homebuyer Ajay Kumar Gupta. Several other homebuyers later made similar allegations during the investigation. The project was launched under a subvention scheme under which, according to the allegations, buyers were required to make an initial payment of 10% of the sale consideration, while the company undertook to bear the pre-EMI liability for the agreed period until possession.
The complainants alleged that possession was not delivered within the stipulated period and that the company later stopped servicing the pre-EMIs.
They also alleged that substantial amounts had been collected even though the project remained incomplete, along with diversion and utilisation of funds received in connection with the project. During investigation, 38 complaints were received, with the approximate total loss alleged at Rs.22.80 crore.
A chargesheet alleged offences under Sections 406, 420 and 120B of the Indian Penal Code. Section 406 concerns criminal breach of trust, Section 420 deals with cheating involving dishonest inducement, while Section 120B concerns criminal conspiracy.
The Trial Court took cognizance and summoned the accused on March 22, 2025. The Sessions Court later dismissed their criminal revision petitions challenging that order.
The directors then approached the High Court under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking quashing of the proceedings.
The directors argued that the dispute was essentially civil and that there was no material establishing their individual involvement. Sangita Arora claimed she was a nominal director with no active role in the company's day-to-day affairs. The prosecution relied on material showing that she had been a director until September 2018, held approximately 34% shareholding, attended Board meetings, filed balance sheets and was an authorised bank signatory.
The court accepted that directors cannot be prosecuted merely because of their designation.
However, it held that this principle did not require quashing where investigation material indicated an individual's participation in the relevant affairs. In Arora's case, the court observed that it could not be said there was “absolutely no material” connecting her with the company's affairs.
The court also rejected the argument that the dispute was purely civil. It noted that the prosecution case went beyond delayed possession and involved the structure of the transactions, representations to homebuyers, continued collection of amounts and alleged failure to fulfill the subvention commitments.
Whether these circumstances established dishonest intention from the beginning was left for trial.
It further held that invoking Sections 406 and 420 together was not, by itself, a ground for quashing. The absence of direct material showing an agreement to commit an illegal act was also insufficient at this stage, since conspiracy can ordinarily be inferred from the conduct of the parties and surrounding circumstances.
The court found no jurisdictional defect, patent illegality or manifest perversity warranting interference and dismissed the petitions. It clarified that its observations would not prejudice the directors' case on merits before the Trial Court.
For Petitioners: Senior Advocate Tanveer Ahmed, Advocates Yash Datt and Chandra Shekhar
For Respondents: Advocate Manoj Pant, APP