The Supreme Court has given Parsvnath Developers one week to pay homebuyers the full amount owed plus 12% interest or face jail time for its directors. This follows years of delays in delivering the 'Parsvnath Exotica' project in Gurugram, despite full payments from buyers.
The Supreme Court on Monday issued a final warning to the leadership of Parsvnath Developers, demanding the complete repayment of dues to homebuyers along with 12% annual interest. The bench, led by Chief Justice Surya Kant, stated that if the company fails to deposit the funds with the Supreme Court registry within seven days, its directors will face imprisonment. This directive comes after the court expressed significant dissatisfaction with the developer's failure to comply with previous orders and directives from the Haryana Real Estate Regulatory Authority (HRERA).
Legal Context and Court Directives
The court emphasized that the company’s inability to deliver housing units despite receiving full payments has undermined the legal process. In its remarks, the bench drew parallels between the current situation and the case of Unitech, where directors were also detained due to non-compliance with court orders. To ensure the availability of funds for repayment, the Supreme Court has maintained its earlier order to freeze all bank accounts and assets associated with Parsvnath Developers and its directors.
Furthermore, the court invoked its powers under Article 142 of the Constitution, which allows the apex court to pass necessary orders for achieving complete justice. This authority takes precedence over other ongoing legal proceedings, including those related to the Insolvency and Bankruptcy Code (IBC). The court noted that non-bailable warrants have already been issued against the concerned parties.
The Parsvnath Exotica Project Dispute
The legal battle centers on the 'Parsvnath Exotica' residential project located in Sector 53, Gurugram. According to court records, petitioners Rita and Lokaish Tikku invested Rs 1.78 crore in the project with an expected possession date of February 2013. Despite the passing of more than two decades, the project remains incomplete. Previous attempts to secure relief through HRERA were reportedly disregarded by the builder, forcing the homebuyers to seek intervention from the Supreme Court. The Haryana government has also submitted status reports regarding the matter, which the court has ordered to be processed immediately.
Financial and Operational Impact
For investors and stakeholders, this development highlights the significant risks associated with project delays and regulatory non-compliance in the real estate sector. The freezing of bank accounts and the threat of legal action against company leadership creates major uncertainty regarding the firm's operational stability and ability to manage ongoing project commitments. The company’s inability to fulfill its obligations to buyers has not only resulted in severe legal consequences but has also raised concerns about its liquidity and governance standards. The matter is next scheduled for hearing on July 27, when the court will evaluate the company's compliance with the one-week deadline.