The complainants, through their counsels advocate Ashwarya Sinha and Priyanka Sinha are demanding investigation by the Economic Offence Wing (EOW) for matters involving cheating, criminal misappropriation, embezzlement, multi-level- marketing frauds, foreign trade related frauds.
According to the complaint, in 2011, certain landowners entered into a Joint Development Agreement (JDA) with FUPL, for sale and development of Fortuna Lake Tower project situated in plot number 25/2 25/3 26 Venkata village, Yelahanka Hobli, Bengaluru.
FUPL paid Rs 20.59 crore to landowners as deposits towards the JDA. It also settled a land dispute with another company by paying Rs 6.54 crore. Other expenses worth Rs 17.17 crore were also incurred by the builder, according to the complaint.
The buyers booked properties in 2015 and the project was to be completed in 48 months with an extended period of 12 months from the date of sanction on plan. Complainants claim to have paid Rs 7.14 crore to the builder and have not received any refund.
However, in June 2019, the builder cancelled the JDA with respondents and land owners, claims home buyers. They allege JDA was cancelled while an insolvency proceeding was underway of which FUPL was a party and while cancelling, landowners were aware of the insolvency proceedings against Fortuna Urbanscape.
Reliance Capital AIF Trustee Company, a SEBI registered Alternate Investment Fund, had filed a corporate insolvency resolution process (CIRP) against Fortuna Buildcon India (FBIPL) for Fortuna Viva project. It had lent Rs 46.05 crore and claimed FBIPL defaulted on payment of Rs 59.42 crore (including interest).
According to their plea, Fortuna Urbanscape (FUPL), Fortuna Projects (India) and Fortuna Buildcon are group companies. And as per board resolution in 2014, FUPL and FPIPL gave security towards repayment of the lent amount on behalf of FBIPL and would mortgage all rights in their respective projects being developed towards Reliance Capital AIF.
FBIPL was unable to pay the debt and the financial creditor invoked the corporate guarantee. FUPL in its plea said that they are a corporate guarantor for the said project loan and not a primary borrower and the amount claimed by financial creditor is not tenable.
It also said that the properties given as security which includes apartments proposed to be built as well as two plots constructed in its project Casa Bona would be sufficient to clear the debt. FPIPL in its plea said that they are not the guarantor of the said project.
NCLT Bengaluru however initiated the insolvency proceedings against Fortuna Urbanscape and Fortuna Projects (India) and appointed Shivadutt Bannanje as the Interim Resolution Professional (IRP) in August 2019. He was appointed as Resolution Professional (RP) in October 2019.
Bannanje declined to comment saying the matter is sub-judice.
Meanwhile in June 2019, according to home buyers, the same landowners entered into another JDA with Embassy Construction, an Embassy Group company.
Advocate Sammith S. of Sanctum Law, who is representing few Lake Town home buyers in NCLT Bengaluru said, “While the resolution process against Fortuna Urbanscape was still underway, on 12 June 2019, Fortuna Urbanscape cancelled its JDA with the land owners of the Lake Tower project which was entered into in 2011. Thereafter, at the insistence of Fortuna Urbanscape, the landowners entered into a new JDA with Embassy Construction on 14 June 2019, just two days after the cancellation deed.
These transactions were spearheaded by Fortuna Urbanscape deliberately to keep its assets beyond the reach of the creditor-homebuyers, and adversely affect their interests. Even in the JDA with Embassy, the land owners received Rs 10 crore specifically to clear ‘encumbrances’ and make out good title, which means that these funds were indirectly passed on to Fortuna.”
RP and few buyers moved interlocutory applications (IA) in NCLT Bengaluru regarding the new JDA. The court dismissed the IAs moved by home buyers while reserved its order on IA filed by RP.
Embassy Group’s spokesperson in its reply said, “We have no knowledge of Fortuna Urban Landscape’s involvement and activities. We do not have any further comments on this matter.”
Embassy Construction in July 2019 submitted the proposal for environment clearance (EC) for the Embassy Business Hub situated in plot number 25/2 25/3 26 Venkata village, Yelahanka Hobli, Bengaluru with State Environment Impact Assessment Authority (SEIAA).
SEIAA accepted the proposal on September 2019 and forwarded it to State Expert Appraisal Committee (SEAC). It is yet to be granted EC.