Supreme Court Issues Notice On Plea Alleging Jaypee Used “Facade” Deals To Divert ₹13,833 Crore Homebuyer Funds

The Supreme Court on Tuesday issued notice on a writ petition alleging that Rs. 13,833 crore out of Rs. 14,599 crore collected from homebuyers by the Jaypee Group was diverted through transfers to group entities and undervalued land transactions.

The matter came up before a bench comprising the Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice Vipul M. Pancholi issued notice.

“Issue notice, returnable on 15.07.2026,” the court recorded.

Filed by a homebuyer in the 'KASABLANCA' project at Jaypee Wishtown in Noida, the petition states that despite paying for a residential unit more than a decade ago, the petitioner has received neither possession nor refund. The plea further states that the project's RERA registration expired in December 2021.

The dispute has arisen in the backdrop of insolvency proceedings involving Jaypee entities. According to the petition, “CIRP proceedings were admitted against JIL in 2017 and JAL in 2024.”

Calling the issue larger than an individual housing dispute, the petition states that the case "concerns the life savings of homebuyers, the right to shelter, regulatory accountability, statutory enforcement under RERA, PMLA and IBC, and protection of a class of homebuyers whose remedies have become ineffective due to prolonged delay and non-enforcement. "

The allegations rely heavily on the Enforcement Directorate's prosecution complaint dated January 8, 2026. Referring to the complaint, the plea states that “ that Manoj Gaur, Executive Chairman of JAL, diverted Rs. 13,833 crore of homebuyer funds (out of Rs. 14,599 crore in admitted claims) through a coordinated scheme involving group entity transfers and undervalued land transactions with �ive clusters of external developers. Of this, only Rs. 400 crore has been provisionally attached after over seven years."

According to the petition, the alleged diversion took place through multiple channels. The plea refers to “direct transfers of Rs. 125.25 crore to Jaypee Sewa Sansthan, managed by Manoj Gaur himself; Rs. 427.50 crore to Jaypee Healthcare Ltd., Rs. 433 crore to Jaypee Sports International Ltd.”

It also alleges “transfer of land and development rights to five clusters of external real estate developers at substantially undervalued consideration, using fictitious credit advices found by the ED to be 'merely a facade' and double sub-lease structures designed to defeat stamp duty obligations.”

The petition claims that recoveries so far have been negligible. It states that “after over seven years, only Rs. 400 crores have been provisionally attached, which amounts to approximately 2.9 paise in every rupee diverted.”

Questioning the pace of the investigation, the plea states that despite searches conducted at five external developer clusters on May 23, 2025, the ED “has filed no supplementary prosecution complain and issued no provisional attachment order against any of them in nine months.”

The petitioner has sought possession of the flat or a refund with interest. The plea also seeks court-supervised completion of the ED investigation and initiation of proceedings under the Insolvency and Bankruptcy Code against allegedly undervalued transfers.

It additionally seeks structural safeguards for homebuyers. Among the measures proposed are “ring-fenced escrow,” “pre-mortgage homebuyer consent,” and “mandatory transparent auction for developer-to-developer land transfers.”

Warning of wider consequences, the petition states that unless intervention comes now, “the stripped assets will be developed and sold by the external beneficiaries, rendering meaningful restitution to 25,000+ homebuyers impossible.”