Bengaluru court initiates criminal proceedings against Sobha Ltd for forgery in residential project

After looking at all shreds of evidence, the court said that there were prima facie materials to initiate a criminal case against the developer.

A Bengaluru court has initiated criminal proceedings against listed real estate developer Sobha Ltd for mortgaging project Sobha City in north Bengaluru.

The company clarified that only Rs 645 crore and Rs 50 crore were taken from the bank, which it paid back fully before the transfer of property to customers. However, the homebuyers claim to the tune of Rs 1,040 crore, as per submissions made to the court.

"The developer, without the consent of the homebuyers, increased the number of units by another 450 units in addition to the earlier sanctioned number of units in the sanctioned plan," the order from the Bengaluru magistrate court dated September 19 added.

The court also noted that the developer had obtained a revised development plan and building plan by falsely producing a forged and fraudulent copy of the No Objection Certificate issued by the Director General, Karnataka State Fire and Emergency Services dated May 2013.

Thus, after looking at all shreds of evidence, the court said that there were prima facie materials to initiate a criminal case against the developer.

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Officials at Sobha Ltd have however said: "We are not in receipt of a copy of any complaint/notice from any court on the referred matter, hence, we can’t offer any detailed comment. Regarding the construction of additional units, we revised the building plan and obtained all clearances to build 450 apartments instead of the row houses that were planned earlier. We wish to clarify that since the RERA was not in existence at the time of construction, the question of taking homebuyers' approvals does not arise. The said construction was in line with the revised sanction plan approved by all the concerned authorities [SIC.]."

Further, the company clarified that only Rs 645 crore and Rs 50 crore were taken from the bank, which it paid back fully before the transfer of property to customers. "The fire NOC did have some technical defects, which we corrected and resubmitted all documents as per regulations," it added.

The case

The complainant, Srinivasa Talla, had purchased an apartment in the project in 2017 for Rs 72 lakh.

Talla had filed a Right to Information (RTI) appeal to the Karnataka fire department in January 2022.

"During that time, the fire department clearly noted that the NOCs (No-Objection Certificates) and certificates collected from the local municipal bodies were not issued by the department," he added.

After having received the initial building plan, homebuyers claim that Sobha builders decided to increase the number of flats by 450 units without obtaining the consent of the homebuyers and it required a revised development plan.

"To procure the revised plan, the builder had to provide a fresh NOC and fire clearance from the fire department. However, the builder conveniently forged the NOC and Fire clearances and got sanctioned the revised development plan and OC," Advocate Vittal BR, who represented the homebuyers said.

In January 2023, the local municipality body, Bruhat Bengaluru Mahanagara Palike (BBMP), scrapped all partial occupancy certificates (OC) issued to the Sobha City project for the alleged fabrication of documents, Moneycontrol reported.

Talla initially approached the jurisdictional police station to file a complaint. However, the jurisdictional police closed the case stating that it is civil in nature. Hence, he approached the magistrate court for relief.

Court findings

In a submission to the court, the complainants said that the developer had mortgaged the land on which the project was built for Rs 1,040 crores between 2009 to 2018, without the knowledge of the homebuyers.

"The Encumbrance Certificate (EC) received from the Sub-registrar revealed that Sobha Ltd had taken a loan to the extent of Rs 990 crores and repaid Rs 645 crores after the sale of apartments and further. Additionally, it obtained a fresh loan to the extent of Rs 50 crore," Talla said.

The builder has cheated the homebuyers by mentioning in the deed of declaration registered in 2016 that the property is free of all encumbrance, but had mortgaged the same, he added.

Noting the same, the court found that there are sufficient materials to take cognizance against the developer for the offences punishable under Sections 107, 120B, 285, 383, 384, 405, 406, 415, 417, 418, 420, 423, 463, 464, 465, 466 and 470 read with Section 34 of Indian Penal Code.

"The office is directed to register a calendar case in the Register No III maintained for criminal cases as against accused for the offences punishable," the order added.

The story has been updated with the developer's comments.