The Uttar Pradesh Real Estate Regulatory Authority (UP RERA) said it has issued show cause notices to Ansal Properties and Infrastructure over alleged fraud and diversion of funds.
In October 2018, the authority ordered forensic audit in registered projects with a view to investigate into the affairs, especially the accounts of Ansal API to find out the possible diversion of funds, and causes of inordinate delays, among others.
The authority had also appointed Currie and Brown (C&B) for conducting the forensic audit, it said in a statement.
"The show cause notices have been issued to the developer following a report submitted by forensic auditor that had investigated 91 projects of Ansal API over the last three months for financial misappropriation.
"The auditor had submitted its report where it has stated that under Ansal API, the projects have found to be in breach of RERA compliances, managing separate accounts, half yearly project account audit and a possible diversion of over Rs 600 crores from the projects to other purposes," the statement said.
Consequently, its four projects in Lucknow were finalised for notices.
These projects are EWS/LIG-PKT 2-Sec K-SGC, Bliss Delight, Block 1,2,3 & 4, GH-2,Sec, Pocket-2, Sector-J, Sushant Golf City and Pocket 3 Sector A, Sushant Golf City.
"A large number of complaints were filed against these projects before us in respect of non-delivery of units/plots, failure to refund money advanced by buyers, violation of various approvals etc.
"Further, some serious allegations of mismanagement, diversion of funds etc were also made by the complainants. Hence, this was needed to protect the interest of the Allottee(s) and to identify the ways and means to ensure the requisite fund flow for the completion of the projects," UP RERA Chairman Rajive Kumar said.
The first of its kind action by RERA has been taken under Section 35 along with Section 7 (2) for violation of Section 4, 7 and 11 of the Real Estate (Regulation and Development) Act, 2016, the authority said in a statement.
It would give the developer 30 days' time to reply and deposit the amount in the concerned separate account, UP RERA Member Balwinder Kumar said, adding "if the developer fails to respond, we might revoke the project registration with the authority, impose penalties and other necessary restrictions".
Abrar Ahmed, UP RERA Secretary, said the notices have been issued to Ansal API's full-time directors Sushil Ansal, Pranav Ansal and Managing Director Anil Kumar.