Hyderabad: Actor K Ram Charan Tej and former Andhra Pradesh cricket captain V Chamundeswaranath have failed to secure the immediate release of villa plots that were attached in the Emaar-APIIC money laundering case, with an appellate tribunal holding on Thursday, August 6, that their claim of being genuine purchasers must be examined by a special court.
The Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act (SAFEMA) declined to order the release of four Boulder Hills villa plots in Hyderabad valued at Rs 14.1 crore, which are claimed by Ram Charan, Chamundeswaranath, Bijay Kumar Mandhani and K Lalitha. However, it permitted them to prove before the special court handling money laundering cases that they had bought the properties using accounted funds and with no connection to the alleged offence.
The order was passed by Rajesh Malhotra, the sole member of the tribunal’s single bench in Delhi. The four had appealed against a 2013 order that had confirmed a provisional attachment issued by the Enforcement Directorate (ED) in September 2012.
The case and its origins
The matter traces back to a 2011 CBI complaint relating to a 535-acre integrated residential and commercial project at Manikonda, Hyderabad. Investigators alleged that the developer, Emaar Hills Township Private Ltd, sold villa plots directly to buyers, rather than completed villas as the project envisaged, and that while transactions were officially recorded at Rs 5,000 per square yard, an additional Rs 102.87 crore was collected over and above the declared price, which was neither accounted for nor shared with the Andhra Pradesh Industrial Infrastructure Corporation (APIIC), the state agency that was the developer’s partner in the project.
The four plots in dispute are Plot B-44, measuring 1,458 square yards and valued at Rs 3.64 crore, claimed by Chamundeswaranath, who currently serves as a member of the BCCI Apex Council; Plot B-46, measuring 1,486 sq yards and valued at Rs 3.71 crore, claimed by Mandhani; Plot A-11, measuring 1,192 square yards and valued at Rs 2.98 crore, claimed by Lalitha, and Plot B-30, measuring 1,545 square yards and valued at Rs 3.86 crore, claimed by Ram Charan.
Buyers say they paid 95 pc of the property price
The four appellants argued that they had responded to public advertisements and paid 95 per cent of the agreed purchase price through accounted funds. They said that registration of sale deeds, which is the formal legal transfer of ownership, became impossible after the then Andhra Pradesh government banned registrations in the project in October 2010. They alleged that cancellation letters relied upon by the developer to show the plots as unsold had been backdated and fabricated.
The tribunal noted differences in the evidence produced by each buyer. Chamundeswaranath and Lalitha submitted agreements and payment records, while Mandhani did not furnish payment details and Ram Charan did not file an agreement of sale, though his payment was reflected in an IDBI Bank statement and was not disputed by the ED.
The ED maintained that the plots remained in the possession of the developer at the time of attachment and argued that unregistered sale agreements do not confer ownership rights under Indian law. It relied on company officials’ statements and cancellation letters dated October 4, 2010, to argue that the plots were unsold, and said physical possession had been formally taken in September 2013.
What the tribunal ruled
The tribunal observed that the appellants’ case appeared “convincing” if their agreements, supporting documents and payment claims were found to be genuine. It noted that any misdeclaration by the developer, such as showing plots already allotted to buyers as unsold, could amount to fraud on both the purchasers and the investigating agencies. At the same time, it said it could not conclusively determine whether the buyers were genuine or acting in collusion with the accused, a question it said required a full examination of prosecution and defence evidence at trial.
It permitted the ED to re-verify the buyers’ claims and said if the agency finds they were misled by the developer, it may submit a report before the trial court recommending the release of the properties. If the ED does not act within a reasonable period, the buyers may pursue their claims directly before the special court.
Refusing to lift the attachment, the tribunal added that if the trial court ultimately accepts them as genuine purchasers, it may allow the execution of sale deeds on deposit of the remaining consideration through fixed deposit receipts before the court. It clarified that its observations would not prejudice the rights of any party in the proceedings before the special court.
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