Karnataka HC declines to quash criminal proceedings against builders

Bengaluru: The Karnataka High Court has declined to quash criminal proceedings initiated by homebuyers against the directors of Unishire Homes LLP and others.

Justice M Nagaprasanna remarked that the cases represent a "classic illustration of criminal breach of trust and cheating", as apartments were allegedly sold to third parties despite existing agreements with homebuyers, who had paid 90-95% of the sale price.

Unishire Homes LLP had entered a Joint Development Agreement with landowners to develop about three acres in Thanisandra, KR Puram hobli, Bengaluru South taluk, for a project named Unishire Terraza. The homebuyers claimed they deposited over 90% of the total sale amount for the project.

However, the project was later transferred to another firm, SA Enterprises. Earlier this year, after learning that their properties had been sold to third parties without their consent, the homebuyers lodged a complaint with the Sampigehalli police.

The homebuyers alleged that Unishire directors, Kirti K Mehta, and Pratik K Mehta, had collected 90% of the sale consideration from them 11 years ago. In response, the Mehtas, along with Abdul Latheef Jabbar, proprietor of SA Enterprises; his son Moin; Anoop Lobo, an authorised signatory of the company; and others, approached the high court seeking to dismiss the proceedings.

The Mehtas argued that they had resigned from the partnership in 2015, distancing themselves from the company, and claimed the issue was purely civil, challenging the basis for filing an FIR. However, the court noted that communications to the homebuyers originated from the Mehtas, not SA Enterprises, suggesting continued involvement. The court also ruled that SA Enterprises’ role warranted investigation, while no case was made against Khadar.

"The mails that are communicated to these complainants are only an eyewash, as no occupancy certificate was even in their hands when they asked these homebuyers to pay 5% or 10% of the remaining amount and get their sale deeds registered. The communications did not indicate that in the event the homebuyers do not come forward for registration of sale deeds, the apartment would be sold to third parties. What was communicated was holding charges would become applicable.

Therefore, prima facie, these accused have played fraud on the poor homebuyers, who are now left high and dry without the money that they have invested long ago and without the apartment with them, which they were hoping to have as a dream home,” Justice Nagaprasanna said.