Former CJI Sanjiv Khanna to head Greenopolis panel as Delhi High Court voids PMLA restitution order
Justice Anup Jairam Bhambhani set aside the Special Court's order restoring attached assets to the insolvency professional and appointed a monitoring committee to verify all 1,650 Greenopolis homebuyers.
Fourteen years after a housing project was launched on 47 acres in Sector 89, Gurgaon, and abandoned with two phases incomplete, the Delhi High Court has built a fresh mechanism for returning money to the people who paid for flats in it. Justice Anup Jairam Bhambhani set aside an order of the PMLA Special Court that had handed assets attached by the Enforcement Directorate to the interim resolution professional running insolvency proceedings against one of the two developers, holding that the order conflated two separate statutory regimes and rested on an application by an association that was not a claimant at all. In its place the Court appointed a Monitoring Committee chaired by Mr Justice Sanjiv Khanna, former Chief Justice of India, to verify every genuine homebuyer in the project.
A project split 65:35, and then abandoned
The dispute begins with a development agreement of 2 November 2011 between M/s Three C Shelters Pvt. Ltd., M/s Orris Infrastructure Pvt. Ltd., M/s Three C Universal Developers Pvt. Ltd. and certain landowners, for a residential project on about 47.218 acres in villages Hayatpur and Badha, Sector 89, Gurgaon. Rights to allot units were divided 65 per cent to Three C Shelters and 35 per cent to Orris, and Orris executed a power of attorney on 17 January 2012 allowing Three C Shelters to advertise, sell and collect money for units as its attorney.
Haryana Real Estate Regulatory Authority records as on 23 January 2019 put the project at 1,862 units, of which 1,650 had been allotted — 1,091 by Three C Shelters and 533 by Orris — leaving 212 unsold. Three C Shelters collected about Rs 776.60 crore and Orris about Rs 383.06 crore. Apartment buyers' agreements were signed by both companies with individual buyers.
The project was launched in 2012 and then abandoned. Phase I was completed and handed over to some Orris buyers and open-market purchasers; Phase II stood at about 60 per cent and Phase III at about 40 per cent. Buyers who had paid Three C Shelters complain that Phase I, which they say was built 90 per cent by Three C Shelters, went only to Orris allottees and others.
Complaints of siphoning followed. The Enforcement Directorate began investigating in 2016-17 and contends that about Rs 214.09 crore out of Rs 873.83 crore collected was diverted by Three C Shelters in collusion with group companies. Homebuyers complained to the Economic Offences Wing, leading to an FIR of 24 August 2017 under Sections 406, 420, 467, 468, 471 and 120B of the Indian Penal Code against both companies and their promoters, and a chargesheet on 27 September 2019. The ED recorded its ECIR on 12 April 2024, attached bank accounts and properties, and had the attachments confirmed by the adjudicating authority on 23 September 2025.
Two forums, two commitments, and a change of stand
Before the regulator, Orris filed affidavits on 20 July 2020 and 5 October 2020 undertaking to complete the project and hand over apartments to all allottees — those who had paid Orris and those who had paid Three C Shelters. HRERA held Orris to be the licence holder and a landowner, with primary responsibility for completing the project, appointed a project monitoring committee and directed Orris to place about Rs 52.50 crore in escrow.
In parallel, insolvency proceedings against Three C Shelters were initiated by the National Company Law Tribunal on 16 October 2020. Orris repeated its commitment there, recorded by the Tribunal on 29 March 2022. In November 2022 it changed position across forums, saying it would give units only to its own buyers and that those who had paid Three C Shelters must look to the insolvency process.
That process has been turbulent. Two resolution professionals were replaced before the present interim resolution professional was appointed on 14 December 2022. The insolvency was set aside by the appellate tribunal on 28 August 2023, status quo was ordered by the Supreme Court on 13 October 2023, and the process was restored on 19 November 2024, with judgment reserved in the pending appeals. A monitoring committee the Tribunal itself constituted on 17 December 2024 — a former Delhi High Court judge, a senior advocate and a former chief vigilance officer of a public sector bank — recorded grave concern in an interim report of 8 February 2025 that the professional had acted in a biased manner and had wrongly admitted Orris as a financial creditor of Three C Shelters for about Rs 920 crore.
How attached property came to be handed to an insolvency professional
On 17 November 2025 the resolution professional filed an undertaking before the PMLA Special Court of his own volition, based on a circular issued by the Insolvency and Bankruptcy Board of India on 4 November 2025. He offered assurances against misuse of restituted assets, periodic reporting, no restitution to any accused, and full cooperation with the ED, and asked that assets be restituted to genuine claimants of Three C Shelters through him. On 27 November 2025 the Special Court allowed an application by the Greenopolis Welfare Confederation and directed restoration of the attached properties to him, adding that they might be disposed of by the liquidator for restitution.
Justice Bhambhani found the order unsustainable on several grounds. The first was that the application should never have been entertained. Section 8(8) of the Prevention of Money-Laundering Act, 2002 allows restoration to a claimant with a legitimate interest in the property who has suffered quantifiable loss, acted in good faith, taken all reasonable precautions and is not involved in money laundering. The Confederation is a society registered under the Haryana Registration and Regulation of Societies Act, 2012, which neither claimed nor showed that it was itself a homebuyer. Those conditions, the Court held, can only be satisfied by individual homebuyers, not by an association. There was no material for the Special Court to record that the applicant was a bona fide purchaser who had invested in the project and been cheated. The Court also noted that on the same day the Special Court rejected a similar application by the other association, the Greenopolis Welfare Association, on the reasoning that impleadment as understood in civil law has no application in a criminal prosecution.
Why a circular could not merge two statutes
The second ground went to the substance. The Board's circular is premised on the ED attaching assets belonging to a corporate debtor undergoing insolvency, so that the two pools of assets overlap. It can apply only to assets of the corporate debtor that are attached; it cannot reach assets attached by the ED that do not belong to the corporate debtor. Here the ED's stand is that the attached properties are not assets of Three C Shelters, and the prosecution complaint names the entities in which they presently stand; some of those entities are themselves challenging the attachment on the footing that the properties belong neither to the corporate debtor nor to any accused.
Beyond that, the Court held that a circular could never override the PMLA or the Insolvency and Bankruptcy Code, 2016, and least of all conflate and merge the two, and that it was not binding on the court at all. The objects differ: the PMLA restitutes genuine claimants who suffered quantifiable loss from the offence, while the Code aims at a resolution plan to revive a company, failing which creditors share the proceeds of the company's assets — not assets that do not belong to it. The two pools are distinct, and the Special Court considered none of this before releasing the properties.
The Court added two further errors. Rule 3A of the Prevention of Money-laundering (Restoration of Confiscated Property) Rules, which governs restoration of attached property during trial, operates only after charges are framed under Section 4 — a stage not reached in this case. Reading the provision with the Supreme Court's exposition in Nav Nirman Builders, the Court recorded that a claimant under the second proviso to Section 8(8) must be a third party not arraigned as an accused, and that restoration during trial is conditioned on public notice, a bond of undertaking and a hearing to the owner of the property. And because the resolution professional has no statutory role in PMLA proceedings, the direction that he abide by his undertaking was, in the Court's words, meaningless, while the direction that the liquidator might dispose of the properties mixed up his role under the Code with the Special Court's own role under the PMLA.
The Court also corrected the reading of a Supreme Court order of 20 November 2025. That order was passed in an appeal by a single homebuyer against a consumer commission order, and recorded that his interest was protected by the undertaking filed before the Special Court. It could not be construed as an undertaking in rem covering every buyer in the project. Two interim orders of the predecessor Bench, of 3 January 2026 and 21 January 2026, had proceeded on that misunderstanding without hearing the buyers represented by the Association, and were held misconceived.
A committee chaired by a former Chief Justice of India
Having set the order aside, the Court turned to the ED's application for a monitoring committee, which the Supreme Court had left to the High Court to decide, with the terms of reference to be formulated by it. The ED relied on the Calcutta High Court's orders in the Rose Valley matter, where a committee was constituted under Article 226 and given powers to take possession of, auction and otherwise deal with properties, including properties attached under the PMLA, for restitution to defrauded depositors. Whether the constraints of Rule 3A bind a High Court exercising constitutional jurisdiction was a question the Court expressly left open, deferring detailed restitution directions until a comprehensive picture emerges.
The Committee will be chaired by Mr Justice Sanjiv Khanna, former Chief Justice of India, who has offered to serve pro bono, with travel and incidental expenses of Rs 25,000 a month. Two former officers of the Delhi Higher Judicial Service, Mr H. S. Sharma, former Principal District Judge, New Delhi District, and Mr Ajay Kumar Kuhar, former Additional District and Sessions Judge, will assist, at an honorarium of Rs 2.50 lakh a month each. The Chairperson may engage up to eight advocates as law clerks at Rs 50,000 a month, and may change any member or advocate at any stage. His decision prevails in the event of divergence.
Its remit is to verify and prepare a list of genuine homebuyers regardless of whether they paid Three C Shelters or Orris, and to maintain a list of the attached assets with their claimed owners, the status of each attachment, the forum and stage of any challenge, and a valuation. No further role over the attached assets is assigned at this stage. Homebuyers must submit claims with agreements, payment receipts and bank statements, and file a notarised affidavit deposing that they have no relationship or nexus with the promoters of either company or their group entities, and disclosing whether they are property dealers or brokers. Affidavits and information placed before the Committee will be treated as filed before the High Court. The Committee may requisition records and assistance from any public authority, including the State Police and the Real Estate Regulatory Authority, and all such bodies must act in its aid. It is to endeavour to finish within eight months of first convening and to report every three months.
The ED must assign two officers not below the rank of Assistant Director, one of them the investigating officer, provide office space, staff, records and website support, place all homebuyer data before the Committee, furnish a complete list of attached assets with ownership and litigation details, and conduct valuations when directed. It must open an account in a nationalised bank styled Account-Greenopolis Monitoring Committee, operated by those two officers as joint signatories on the Chairperson's written instructions, from which the honoraria and all expenses will be met.
The Court was careful about the boundary with the insolvency process. It cannot and does not interfere in the ongoing resolution proceedings; the resolution professional will have no role before the Committee; and nothing before the Committee or subsequently before the High Court will affect any rights or entitlements available to homebuyers in those proceedings.
Order
The order of 27 November 2025 passed by the PMLA Special Court was set aside, and the interim orders of 3 January 2026 and 21 January 2026 were recalled and vacated. The Court recorded that setting aside that order does not finally decide the attachment of the two properties claimed by Lotus Valley and White Lotus, who are at liberty to pursue their remedies under the PMLA, and that it does not propose to precipitate liquidation of any attached property at this stage.
The Monitoring Committee was appointed in the terms set out above. The ED was directed to transfer the money lying in a Three C Shelters account at Axis Bank and in the Greenopolis project escrow account at ICICI Bank to the new committee account within one week, and to move applications before the appellate forums where challenges to its attachment orders are pending, seeking their expeditious disposal. The two criminal revision petitions were disposed of, and the writ petition was re-notified as per the daily order.