The Supreme Court has sent a very strong signal to all unscrupulous property developers and real estate companies by directing the police to take three directors of the controversial Amrapali Group into its custody immediately. The company’s CMD, Anil Kumar Sharma, and two directors — Shiv Priya and Ajay Kumar — were taken into police detention on the court premises itself. They will remain in custody until they provide all financial documents to forensic auditors. The court also restrained eight directors of Amrapali, including the three in police custody and three former directors, from leaving the country. Directors of another company, Unitech Ltd, have been in jail for over a year on allegations of duping thousands of homebuyers with false promises, even as the cheating case against them is pending in court.
The Amrapali-like crisis is criminal, hence unpardonable. Dishonest builders took money in advance from buyers and diverted the sum into unproductive filmmaking or election funding. Some lost because they ventured into a business they could not manage. Besides, they splurged buyers’ money in maintaining a lavish lifestyle. Such luxuries at the cost of other’s money are criminal.
These criminals had been encouraged mainly because of helplessness of the buyers until recent judicial interventions. While hearing a similar case against another crisis-ridden Jaypee group, the apex court recently observed that the desire to have a house for the family is a ‘basic human yearning’. Indeed, a home is a crucial part of an individual’s right to life; hence it is the duty of the state to protect aspiring homeowners from rogue developers. Even investors in the property market need protection. Making investment in the real estate comes naturally to most Indians because they are not attuned to the complexities and unpredictability of the stock market. Therefore, a SEBI-like strong regulator is required for the real estate sector too. Although several states now have their own Real Estate Regulatory Authority (RERA), they are unable to serve the purpose because their jurisdiction is limited to only registered projects.