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The Enforcement Directorate found that the Insolvency and Bankruptcy Code process was misused in the sale of land belonging to Universal Build Well Pvt. Ltd., a company undergoing insolvency. During searches in Delhi and Gurugram, the agency seized INR 50 lakh in unexplained cash from intermediaries, including a lawyer linked to NCLT proceedings. The investigation showed that the land was sold at a price far below its market value, and intermediaries, a secured creditor's official, and other parties allegedly colluded, keeping homebuyers uninformed and bypassing proper IBC procedures.
The Enforcement Directorate stated that the IBC framework was misused during the sale of assets belonging to Universal Build Well Pvt. Ltd., which had been placed under corporate insolvency resolution. As part of earlier proceedings, NCLT had directed that certain properties be handed over to homebuyers, while the remaining assets were to be sold under the approved resolution plan. ED's investigation has now found irregularities in how this sale was carried out. Advertisement
Searches were conducted across multiple locations in Delhi and Gurugram covering the company's promoters, middlemen who were not authorised participants in the insolvency process, the appointed resolution professional, advocates associated with NCLT, and the purchaser RDB Infrastructure and Power Ltd. During these operations, ED recovered INR 50 lakh in unexplained cash from two intermediaries, including an NCLT-practising lawyer who was involved in communications related to the sale.
According to ED, the land was sold at a price much lower than both the market value and government-determined rates. This raised concerns about deliberate undervaluation to enable illegal financial gains. Digital data retrieved from the phones of intermediaries contained draft invoices and records that indicated plans for unaccounted payments that were not part of the formal IBC sale process. These drafts, ED noted, appeared to show proposed transactions outside the knowledge of creditors or the successful resolution applicant.
The agency also found signs of manipulation in the bidding process. One of the intermediaries, who was also a practising lawyer at NCLT, had reportedly submitted a bid himself. The bids reviewed by the agency showed patterns suggesting that the price was intentionally kept low, with limited competition and coordinated communication among certain players.
Messages exchanged on online chat platforms indicated links between the intermediaries and an official of a private bank that was a secured creditor in the case. This official is suspected of facilitating undervaluation while the sale process was underway. ED highlighted that the bank took a haircut despite significant growth in the value of the assets over time, raising questions about why the sale was not aligned with the actual worth of the property.
Another finding was that homebuyers, who had a direct interest in protecting the value of the remaining land, were not kept informed about the sale process or the pricing. Material collected during the searches also pointed to lapses by the resolution professional, who was expected to ensure transparency and compliance during the sale.
Overall, the agency's findings indicate a coordinated effort to conduct the sale at a lower price, benefiting specific individuals at the cost of creditors and homebuyers. Further investigation is continuing to identify the full extent of involvement of each party.
Source PTI
5th Jun, 2025
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