The Enforcement Directorate (ED) has arrested Manoj Gaur, Managing Director of Jaypee Infratech Ltd (JIL), in connection with a major money laundering and fraud investigation tied to thousands of cheated homebuyers. The arrest marks a fresh turn in one of India’s largest real estate controversies involving the Jaypee Group, once among the country’s most prominent infrastructure and housing developers.
According to officials, Gaur was taken into custody under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The probe is linked to allegations that funds collected from homebuyers for projects such as Jaypee Wish Town and Jaypee Greens were diverted, leaving buyers without homes even years after making payments.
From promise to crisis
The roots of the controversy trace back to the early 2010s, when Jaypee Infratech launched several ambitious housing projects in Noida and Greater Noida, attracting thousands of buyers with the promise of modern townships, golf-course living, and top-class infrastructure.
However, by 2017, many of these projects had stalled. Homebuyers who had invested their life savings began alleging that the company had diverted their funds to other group entities instead of completing construction. Protests broke out, and multiple FIRs were filed by the Economic Offences Wings (EOW) of the Delhi and Uttar Pradesh Police, accusing the company and its promoters of cheating, fraud, and criminal conspiracy.
ED’s action and earlier searches
Gaur’s arrest comes months after the ED conducted search operations in May at 15 locations across Delhi-NCR and Mumbai, including premises linked to Jaypee Infratech, Jaiprakash Associates Ltd (JAL), and associated entities. During these searches, officials seized financial records, digital devices, documents linked to properties owned by promoters and their families, and cash worth Rs. 1.70 crore.
The ED’s investigation is based on the premise that the companies collected large sums from homebuyers, estimated to be part of a Rs. 12,000-crore fraud but diverted the funds to other businesses within the Jaypee Group. The agency believes these transactions were designed to conceal the flow of money and constitute money laundering under PMLA provisions.
A tale of insolvency and unfinished homes
The Jaypee saga has long symbolized the stress within India’s real estate sector, where aggressive expansion and funding mismatches left developers struggling to deliver projects. Jaypee Infratech Ltd (JIL) was among the first major builders to be dragged into insolvency.
In August 2017, the National Company Law Tribunal (NCLT) admitted IDBI Bank’s application under the Insolvency and Bankruptcy Code (IBC) after JIL defaulted on its loans and failed to deliver thousands of homes. Since then, multiple rounds of corporate insolvency resolution processes (CIRP) have taken place, with homebuyers joining financial creditors in the long wait for resolution.
Meanwhile, the parent company, Jaiprakash Associates Ltd (JAL), also entered insolvency proceedings in 2024, with creditors claiming over Rs. 57,000 crore. The group, which once straddled sectors such as cement, construction, power, and hospitality, has seen its fortunes collapse amid debt pressure and regulatory scrutiny.
Impact on homebuyers
For homebuyers, the ED’s action offers a sense of progress but also revives painful memories. Many of them have spent over a decade waiting for possession, paying both rent and EMIs on undelivered flats. While insolvency proceedings have paved the way for new bidders to take over and complete the projects, the legal and financial complexities continue to delay final resolution.
Industry observers say the Jaypee case highlights the urgent need for accountability and transparency in real estate financing.
