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The Telangana High Court has issued notices to companies affiliated with the Hyderabad-based Spectra Group in connection with an alleged real estate fraud exceeding 5,000 crore rupees that has impacted more than 10,000 investors and homebuyers. A bench comprising Acting Chief Justice P. Sam Koshy and Justice Suddala Chalapathi Rao issued the direction while hearing a public interest litigation petition filed by A. Venkateswara Reddy, president of the Hyderabad-based non-governmental organization The Right Society. The plea alleges widespread financial irregularities, unfulfilled development commitments, and diversion of funds raised from the public since 2015 under the pretext of residential ventures.
Scale of Collections and Unfinished Projects
Senior counsel B. Rachna Reddy, appearing for the petitioner, submitted to the court that firms including Spectra India Eco Projects Private Limited, Spectra India Housing Private Limited, Spectra India Mega Projects Private Limited, and other associated entities collected significant sums from buyers by promising developed residential plots, approved layouts, and completed housing schemes. The operations were allegedly executed through a widespread network of nearly 10,000 marketing agents who mobilized retail investments across different regions.
The petitioner contended that the group promoted around 15 real estate ventures across more than 2,000 acres, located largely within a radius of 70 to 80 kilometers around Hyderabad. The ventures included Spectra Galaxy Divine at Kolanupaka, Spectra Yashovan and Galaxy Gold at Yadagirigutta, Spectra Diamond at Yadadri, and Highway City at Narketpally. Promoted ventures in Shadnagar included Viceroy Residency, Fortune, Fortune Residency, Peripheral City, Spectra City, and multiple phases of Viceroy. Gateway City at Balanagar and Spectra Tech Towers in the Injapur-Uppal area were also marketed to investors. The plea stated that despite receiving substantial payments, the promoters failed to execute ground-level development, abandoned ventures, and did not execute registered sale deeds in favor of property buyers, leaving investors without legal ownership of their holdings.
Regulatory Lapses and Financial Irregularities
The petition raised questions regarding non-compliance with statutory norms under the Real Estate Regulatory Authority. According to the petitioner, only six of the approximately 15 advertised ventures held valid RERA registrations, while the remaining projects were actively marketed without requisite statutory approvals. The plea highlighted a failure to maintain mandatory escrow accounts, a statutory requirement designed to ring-fence investor funds and ensure expenditure strictly on designated project construction, thereby raising serious concerns regarding the diversion of capital.
The court was also informed about dishonored post-dated cheques issued by the group to investors and misleading assurances regarding official clearances. The petition stated that prospective buyers were induced to invest through false claims that the layouts had obtained formal approvals from the Hyderabad Metropolitan Development Authority and the Directorate of Town and Country Planning. Discrepancies between these representations and actual statutory permissions eventually led to major losses for property buyers.
Demands for SIT Probe and Asset Attachment
The petitioner argued that despite multiple complaints submitted to regulatory and enforcement agencies, including RERA, the police, the Enforcement Directorate, the Economic Offences Wing, the Serious Fraud Investigation Office, and the Securities and Exchange Board of India, no coordinated investigation had been initiated. Consequently, the plea sought directions for the constitution of a court-monitored Special Investigation Team and the registration of criminal cases under the Telangana Protection of Depositors of Financial Establishments Act and the Bharatiya Nyaya Sanhita.
The petition also urged the court to order a comprehensive forensic audit of the respondent companies, safeguard the funds of affected purchasers, take measures to complete pending ventures, and direct the provisional attachment and freezing of assets held by the entities and their directors. The High Court directed the respondent companies to file their counter-affidavits addressing the allegations, with further consideration scheduled for the next hearing date.
