A view of the High Court of Karnataka.
| Photo Credit: File photo
The High Court of Karnataka has refused to quash criminal cases and money-laundering proceedings against Ozone Urbana Infra Developers, a Bengaluru-based builder and developer, and its promoters on allegations of cheating homebuyers by collecting huge advances from them and diverting funds on a large scale for purposes alien to the construction of the promised apartments.
Justice M. Nagaprasanna passed the order while dismissing petitions filed by the company and its promoters, Vasudevan Sathyamoorthy, his wife Prua Vasudevan, and others. The petitioners had challenged FIRs registered on complaints filed by aggrieved homebuyers and two Enforcement Case Information Reports (ECIRs) registered by the Enforcement Directorate (ED) in 2022 and 2025, as well as the ED’s provisional attachment of assets worth ₹423.38 crore.
The court noted that the complaints disclosed a pattern in which homebuyers were induced through attractive subvention schemes, tripartite agreements and assurances of timely possession, only to be left without homes or refunds. In one case, a complainant discovered that a flat booked in 2017 had been sold to another person in 2021 without the buyer’s knowledge or consent.
“The money is received, the property is not delivered, the loan burden remains with the homebuyer, and the very property promised to him is allegedly sold to another,” the court said, adding that such allegations “travel far beyond the realm of a mere contractual default”.
ED proceedings
The company argued that the ED proceedings were illegal as the predicate offences, namely the FIRs filed by homebuyers, had either been stayed or quashed. However, the court rejected the contention, noting that the 2025 ECIR was based not only on the earlier FIRs but also on a CBI FIR registered pursuant to Supreme Court directions to probe an alleged collusive nexus between builders and financial institutions to cheat homebuyers.
The CBI FIR alleged that Ozone Urbana, in connivance with officials of Indiabulls Housing Finance (now Sammaan Capital), devised a subvention scheme promising “No Pre-EMI till delivery of possession” to lure homebuyers. Loans were allegedly disbursed directly to the builder without adequate due diligence, and the company subsequently defaulted on pre-EMI payments, leaving homebuyers burdened with EMIs for flats that were never delivered.
The ED’s provisional attachment order, issued on October 4, 2025, covered properties worth ₹423.38 crore, including unsold inventory and land parcels belonging to the company and its promoters. The ED alleged that of the approximately ₹927.22 crore collected from more than 1,351 homebuyers, a substantial portion was siphoned off to group companies and personal accounts.
The court also emphasised the gravity of economic offences, observing that they affect a large number of stakeholders, particularly homebuyers who invest their life savings in the hope of owning a home.
Published – September 22, 2026 08:56 pm IST
