Homebuyers' association not a 'claimant' under PMLA Sec 8(8) | Delhi HC sets aside restitution order : Delhi HC

The Delhi High Court set aside an order passed by the Special Court under PMLA that had permitted a homebuyers' association to intervene in proceedings and seek restitution of attached properties, holding the association lacked locus to file such application and the proceedings were premature as charges had not been framed.

Background & Facts

The Dispute

The genesis of the dispute is a Development Agreement dated 02.11.2011 entered into between M/s Three C Shelters Pvt. Ltd. (‘3C Shelters’), M/s Orris Infrastructure Pvt. Ltd. (‘Orris’), M/s Three C Universal Developers Pvt. Ltd. and certain landowners for construction and development of a residential project on a parcel of land admeasuring about 47.218 acres situated in villages Hayatpur and Badha, forming part of Sector 89, Gurgaon, Haryana (‘Greenopolis project’). Under the development agreement, Orris executed a Power of Attorney dated 17.01.2012 in favour of 3C Shelters, giving rights to 3C Shelters to inter-alia advertise, sell and collect monies towards the units in the Greenopolis project as an attorney of Orris. The project was stated to have been launched sometime in 2012. Subsequently, however, the project was abandoned by 3C Shelters and Orris. Phase-I of the project was completed and the units were handed over to some of the Orris homebuyers and to purchasers in the open market; Phase-II was about 60% complete and Phase-III was about 40% complete. As per the records of Haryana Real Estate Regulatory Authority, Gurugram (‘HRERA’) as on 23.01.2019, the position in relation to the units in the Greenopolis project was: total number of units 1862, total number of units allotted 1650, number of units allotted by Orris 533, units allotted by Orris for which no sale transactions have taken place 26, total number of units disposed of by Orris 559, number of units allotted by 3C Shelters 1091, unsold units in the share of Orris 93, unsold units in the share of 3C Shelters 119, total number of unsold units 212. As per the above referred arrangement, 65% of homebuyers were issued allotment letters by 3C Shelters and 35% were issued allotment letters by Orris, against which 3C Shelters collected Rs 776.60 crore and Orris collected about Rs 383.06 crore.

Key Facts

• Arising from abandonment of the project, complaints were made inter-alia against 3C Shelters and Orris alleging that they had siphoned-off money in the Greenopolis project
• In 2016-2017 ED commenced investigation in the matter, which they claim has shown that both 3C Shelters and Orris had diverted and siphoned-off significant sums of money to entities that were related to them, instead of applying those funds on the project
• It is contended that a sum of about Rs 214.09 crore out of the Rs. 873.83 crore collected, was siphoned-off by 3C Shelters in collusion with its group companies
• Parallelly, several homebuyers also filed complaints with the Economic Offences Wing of the Delhi Police (‘EOW’), which culminated in registration of FIR No. 137 of 2017 dated 24.08.2017 under sections 406/420/467/468/471/120B of the Indian Penal Code, 1860 at P.S.: EOW against 3C Shelters, Orris as well as their promoters/directors
• Arising from the said FIR a chargesheet is stated to have been filed on 27.09.2019
• An association of homebuyers, GWA, also filed a complaint bearing No. 225/2018 dated 04.05.2018 before the HRERA seeking a direction to both 3C Shelters and Orris to complete the project and hand-over possession of the units in a time-bound manner
• Considering the ambiguities involved in the matter, with consent of all concerned parties, HRERA appointed an agency, M/s Curie & Brown India Pvt. Ltd., inter-alia for compiling a comprehensive list of the homebuyers involved in the project
• In the initial proceedings before HRERA, Orris filed affidavit dated 20.07.2020 and supplementary affidavit dated 05.10.2020, committing that they would develop and complete the project, and hand-over apartments to all homebuyers
• Taking into account the affidavits filed by Orris, HRERA ruled that Orris was the license holder for the project as well as one of the landowners, and therefore had the primary responsibility for development, construction and completion of the project, and for handing over of units to homebuyers
• However, while handing-over the project to Orris to complete the same, in view of certain orders made by the Haryana Real Estate Appellate Tribunal (‘HREAT’), by way of Suo Motu Complaint No. 2206/2020 HRERA also appointed a project monitoring committee and directed Orris to place in an escrow account the sum of about ₹52.50 crore to be applied for construction of the project
• At the same time, it is relevant to point out that an entity called M/s Straight Edge Contracts Pvt. Ltd. filed an application bearing No. IB-2721/ND/2019 under section 7 of the Insolvency & Bankruptcy Code, 2016 (‘IBC’) before the learned National Company Law Tribunal, New Delhi (‘NCLT’) on 20.07.2020, claiming to be an operational creditor of 3C Shelters, and seeking action against 3C Shelters under the IBC
• Pursuant to the said application, by order dated 16.10.2020 the NCLT initiated CIRP against 3C Shelters
• In further proceedings before the NCLT, Orris filed an application bearing No. I.A. 2902/ND/2021, in which they again committed that they would complete the project and hand-over units to all homebuyers, namely to 3C Shelters and Orris homebuyers
• In a subsequent volte-face, however, it is stated that in November 2022, Orris changed its stand before various judicial and quasi-judicial forums, to say that it would only give units to homebuyers who had paid money to Orris
• Much has happened in the proceedings before the NCLT in the meantime. Inter-alia the 1st Interim Resolution Professional (‘IRP’) was replaced by a 2nd Resolution Professional (‘RP’), who (latter) was suspended by the Insolvency & Bankruptcy Board of India (‘IBBI’), which led to the NCLT to appointing a 3rd IRP on 14.12.2022, who is presently in seisin of the affairs of 3C Shelters
• The CIRP proceedings in relation to 3C Shelters were set-aside by the National Company Law Appellate Tribunal (‘NCLAT’) vide order dated 28.08.2023, against which appeals were filed before the Supreme Court
• By its order dated 13.10.2023 passed in Civil Appeal bearing Diary No. 36252/2023 and connected matters, the Supreme Court directed all parties to maintain status quo inter-alia as regards the assets that are subject matter of the proceedings before the NCLT and NCLAT, namely the assets of 3C Shelters
• Subsequently, vide order dated 19.11.2024 the Supreme Court restored the CIRP process in respect of 3C Shelters
• The Supreme Court has now reserved judgement on the said batch of appeals
• Premised on FIR No. 137/2017 referred to above, ED has recorded an ECIR bearing No. ECIR GNZO/11/2024 dated 12.04.2024 and is now investigating offences under the Prevention of Money Laundering Act, 2002 (‘PMLA’) against 3C Shelters, Orris and their former promoters/directors
• As part of its investigation, ED has attached various bank accounts and properties belonging to the accused persons, which attachments stand confirmed by the adjudicating authority under the PMLA vide Final Attachment Order dated 23.09.2025 (‘FAO’)
• It may also be noted that, on an application filed by GWC in W.P.(C) No. 1567/2024 titled Suresh Kumari vs. Registrar of Companies & Ors, vide order dated 25.03.2025 a learned Single Judge of this court had directed Orris to hand-over possession of units in Phase-I of the Greenopolis project to the eligible homebuyers who had made payments to Orris
• This order was challenged in an LPA bearing No. 227/2025 titled Greenopolis Welfare Association vs. Registrar of Companies & Ors. in which an interim order dated 28.03.2025 has been passed by a Division Bench of this court directing that any allotment of units made in the meantime shall abide by the final outcome of the LPA, and that parties to the LPA proceedings shall not claim any equities. The LPA is still stated to be pending
• On 31.07.2025, ED filed a prosecution complaint before the learned Special Judge, PMLA (Saket), New Delhi, against 3C Shelters, Orris and their former promoters/directors
• However it transpires that subsequently the PMLA Court has dropped charges against Orris by its orders dated 25.10.2025 and 22.11.2025
• In the course of the proceedings two associations claiming to represent the homebuyers of the project have been in the picture:
  • The Greenopolis Welfare Association, which was registered on 23.05.2013 under the Societies Registration Act, 1860 with the object of furthering the interests of the members/owners/allottees of the project
  • The Greenopolis Welfare Confederation, which has come to be registered much later on 04.12.2022 under the Haryana Registration & Regulation of Societies Act 2012, purportedly for the same purpose
• In the proceedings before the PMLA Court, GWC moved an application dated 14.10.2025 under section 8(8) of the PMLA seeking leave to intervene in those proceedings and praying for restitution of the assets that were attached by ED and for other reliefs
• By way of the impugned order the PMLA Court has allowed that application, thereby directing ED to release the assets attached vide Provisional Attachment Order (‘PAO’) dated 28.03.2025 (corrected vide corrigendum order dated 29.03.2025) as per rules; further directing the IRP to abide by the undertaking submitted before the PMLA Court and also permitting the IRP to liquidate the assets for purposes of restitution
• It is important to point out that there is also a second PAO dated 08.07.2025, which was also referred to in the impugned order, but the direction in the concluding para of the impugned order is only in relation to PAO dated 28/29.03.2025
• For completeness it may also be recorded that vide order dated 23.12.2025 in CRL.REV.P. No. 539/2025 titled Richa Bharadwaj & Anr. vs. ED & Anr. a Co-ordinate Bench of this court has set-aside order dated 27.11.2025, which is also the order impugned in the present proceedings, but limited only to the property of Richa Bharadwaj who had filed the said revision petition
• By order dated 23.12.2025 the Co-ordinate Bench remanded the matter to the PMLA Court for fresh consideration limited to the asset of the said party
• At the first hearing of W.P.(CRL) No. 2 of 2026 filed by GWC before the learned Vacation Bench on 03.01.2026, GWC had asserted that the undertaking furnished by the IRP as recorded by the Supreme Court in its order dated 20.11.2025 in proceedings filed by Vivek Suri, is final and enforceable in law not only in relation to Vivek Suri but also in relation to all stakeholders of 3C Shelters
• GWC had sought from the Vacation Bench consequential orders for enforcement and implementation of the IRP’s undertaking, including a direction that no proceedings be continued that are in derogation of or inconsistent with or overreaching the said undertaking
• GWC had pressed for immediate steps to be taken towards restoration/restitution of the assets to the creditors/claimants of 3C Shelters
• It may be noted that the IRP had offered the undertaking before the Supreme Court in an appeal filed by Vivek Suri arising from an order made by the National Consumer Disputes Redressal Commission (‘NCDRC’) in his consumer complaint
• The parties have pointed out with emphasis that W.P.(CRL) No. 2 of 2026 filed by GWC was listed, heard, and order dated 03.01.2026 was also passed on the same day, with the learned Vacation Bench observing as follows:
  • Upon considering the submissions advanced by the learned counsel for the parties and the various orders placed reliance upon, this Court is of the considered view that, in order to curtail multiplicity of proceedings and to obviate any further complications in the matter, it is necessary to direct that all parties to the present writ petition, as well as any third parties, shall refrain from taking any action in contravention of or in derogation of the order dated 20 November 2025 passed by the Hon’ble Supreme Court and the order dated 27 November 2025 passed by the learned Special Judge, PMLA, till the next date of hearing
• Subsequently, GWC moved an application seeking clarification of order dated 03.01.2026, which was listed before the same Bench that had passed the said order; and vide order dated 21.01.2026 the learned Bench issued the following clarification:
  • The order dated 03rd January, 2026, is clarified to the extent that any party, related to “Greenopolis Project” would be bound by the order dated 20th November, 2026 [sic, 2025], of Hon’ble Supreme Court and the order dated 27th November, 2025, of ld. Special Judge till the next date of hearing
  • As regards the submissions of the learned Counsel for the Applicant/Petitioner seeking an interpretation of the expression ‘third parties’ to include statutory authorities and other adjudicatory fora, including, but not limited to the NCLT, it is evident that, as a matter of settled law, all judicial and quasi-judicial bodies subordinate to the Hon’ble Supreme Court are bound by its orders and cannot, nor ought to, act in derogation thereof in any manner
  • In view of the aforesaid submissions and upon due consideration thereof, all parties connected with or related to the Greenopolis Project (supra), in any capacity whatsoever, including but not limited to promoters, financiers and homebuyers, shall remain bound by this order. It is further clarified that no opinion is being expressed herein, in respect to the other judicial and quasi-judicial fora, including the NCLT or any other forum, as these in any event, are bound by the orders of the Hon’ble Supreme Court in accordance with the settled principles of judicial propriety as is evident from Article 141 of the Constitution of India. No separate order or expression of opinion in this regard is required
• In the meantime, despite the fact that the constitution of the Committee of Creditors (‘CoC’) was being examined by the NCLT, and in disregard of orders dated 13.02.2025 and 17.02.2025 passed by the NCLT by which the resolution professional was expected to await the proceedings before the Supreme Court, the IRP issued notice dated 10.01.2026 to convene a meeting of the CoC on 11.01.2026
• Various resolutions came to be passed at the meeting held on 11.01.2026 inter-alia for sale, disposal and liquidation of the assets that had been attached by ED, purportedly for purposes of satisfying the claims of financial creditors of 3C Shelters
• On 25.01.2026 the IRP proceeded to issue an auction notice for one of the properties that had been attached by ED without awaiting any orders from the NCLT
• In this backdrop, by the way of the present judgment, apart from deciding the fate of the order dated 27.11.2025 passed by the PMLA Court, this court would also consider the desirability of appointing a monitoring committee and its remit in view of the observations of the Supreme Court in orders dated 10.04.2026 and 10.08.2026
• To this end, the court has heard ED, GWA, GWC, IRP, Mamta Jain, Lavender, Lotus Valley and White Lotus, as detailed below in this judgment
• Though several other parties had also filed impleadment/intervention applications seeking to be heard in the matter, this court has heard Lavender, Lotus Valley and White Lotus since the said applicants have claimed ownership rights in the properties attached by ED
• Also, insofar as parties claiming to be homebuyers are concerned, this court has not individually heard such parties since their stand-point has been represented by the associations and their individual pleas would be considered by the monitoring committee that this court proposes to appoint in the matter
• It may be observed at this point that, though the parties had made certain prayers in their respective petitions, in the course of the present proceedings all parties have said that they seek holistic resolution of their grievances in relation to the project, and to that end, the parties have deviated somewhat from the restrictive ambit of the prayers they had made in their respective petitions

Procedural History

• 24.08.2017: FIR No. 137 of 2017 registered at EOW, Delhi under IPC sections 406/420/467/468/471/120B
• 27.09.2019: Chargesheet filed in the EOW case
• 04.05.2018: GWA filed complaint No. 225/2018 before HRERA
• 20.07.2020 & 05.10.2020: Orris filed affidavits before HRERA
• 20.07.2020: Straight Edge Contracts Pvt. Ltd. filed IB-2721/ND/2019 under IBC section 7 before NCLT
• 16.10.2020: NCLT initiated CIRP against 3C Shelters
• 14.12.2022: NCLT appointed 3rd IRP for 3C Shelters
• 28.08.2023: NCLAT set aside CIRP proceedings against 3C Shelters
• 13.10.2023: Supreme Court directed status quo maintenance of assets of 3C Shelters
• 19.11.2024: Supreme Court restored CIRP process in respect of 3C Shelters
• 12.04.2024: ED recorded ECIR GNZO/11/2024 for PMLA investigation
• 23.09.2025: FAO passed under PMLA confirming attachments
• 25.03.2025: Single Judge directed Orris to hand-over Phase-I units to homebuyers who paid Orris
• 28.03.2025: Division Bench passed interim order in LPA regarding allotment of units
• 31.07.2025: ED filed prosecution complaint before Special Judge, PMLA (Saket)
• 25.10.2025 & 22.11.2025: PMLA Court dropped charges against Orris
• 14.10.2025: GWC filed application under section 8(8) PMLA seeking intervention and restitution
• 27.11.2025: PMLA Court passed impugned order allowing GWC's application and directing restoration to IRP
• 03.01.2026: Vacation Bench passed order directing parties to refrain from acting in derogation of Supreme Court order dt. 20.11.2025 and PMLA Court order dt. 27.11.2025
• 21.01.2026: Predecessor Bench issued clarification on order dated 03.01.2026
• 10.04.2026: Supreme Court passed order in SLP (Crl) Nos. 6525-6526/2026
• 10.08.2026: Supreme Court disposed of clarification applications vide order in Miscellaneous Application Diary No. 46223/2026
• 29.09.2026: Judgment pronounced in the present matter

Relief Sought

• ED sought setting aside of the impugned order dated 27.11.2025 passed by the PMLA Court
• GWA sought setting aside of the impugned order dated 27.11.2025 passed by the PMLA Court
• GWC sought enforcement of the directions issued by the Hon’ble Supreme Court vide order dated 20.11.2025 and the operative directions contained in the order passed by the ld. Special Judge dated 27.11.2025, along with the undertaking furnished by the IRP
• Mamta Jain sought to oppose GWC's application as not maintainable
• Lavender sought to challenge the attachment of its property as wrongful
• Lotus Valley & White Lotus sought to challenge the attachment of their properties as wrongful

The Legal Issue

The central question was whether the Greenopolis Welfare Confederation (GWC), as a homebuyers' association, qualified as a 'claimant' under section 8(8) of the Prevention of Money Laundering Act, 2002 read with Rule 2(b) of the PML Rules, 2016 to maintain an application for restitution of attached properties before the framing of charges in the PMLA proceedings, and whether the Interim Resolution Professional (IRP) had locus to participate in such PMLA proceedings based on an undertaking furnished pursuant to the IBBI Circular.