Allahabad High Court Orders Reinvestigation into SDS Infracon Fraud Investigation
Nearly six years after the Yamuna Expressway Industrial Development Authority (YEIDA) lodged a complaint against SDS Infracon for allegedly misappropriating Rs 182 crore of homebuyers’ money, the Allahabad High Court has ordered a reinvestigation into the SDS Infracon fraud investigation. The funds, intended for the NRI Township project in Sector 26A, were reportedly diverted to other companies, leaving around 1,400 homebuyers still awaiting their plots.
In December 2017, an audit revealed that SDS Group had redirected the funds to three firms: SDS Infracon, SDS Infotech Pvt Ltd, and Arnava Techno Soft Pvt Ltd. Following this discovery, the developer was charged under the Companies Act and various sections of the Indian Penal Code (IPC) for fraud in June 2018. To safeguard the investors, YEIDA instructed SDS to open an escrow account and deposit the misappropriated amount. However, SDS neither opened the account nor cleared its dues of Rs 379.8 crore, intensifying the need for the SDS Infracon fraud investigation.
Despite a police closure report filed in 2020, YEIDA contested the report, arguing that crucial documents were not reviewed and the three implicated companies were not properly investigated. In response to YEIDA’s protest application, a local court ordered a reinvestigation on July 14, 2023. The SDS Group challenged this order at the Allahabad High Court, questioning the magistrate’s jurisdiction to reopen the SDS Infracon fraud investigation. However, their petition was rejected.
In a ruling dated May 6, Justice Vikram D Chauhan affirmed the magistrate’s authority to direct further investigation, noting that the protest by YEIDA was well-founded. The court highlighted that SDS Group had not been affected by the order for further investigation and therefore could not challenge the magistrate’s decision regarding the SDS Infracon fraud investigation.
YEIDA CEO Arun Vir Singh announced that the Authority plans to request the Uttar Pradesh government to transfer the investigation to another agency to ensure thorough scrutiny of the SDS Infracon fraud investigation.
This development brings renewed hope to the homebuyers who have been awaiting resolution and the completion of the NRI Township project for over a decade. The SDS Infracon fraud investigation is crucial in ensuring justice and the proper allocation of funds back to the rightful investors.
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