PRIMEZONE DEVELOPERS PRIVATE LIMITED S. VENKATESHWAR (I vs THE STATE OF MAHARASHTRA AND ORS. Advocate - AVHAD AVINASH BHASKARRAO — APEAL/337/2026

CASE SUMMARY: APEAL/337/2026 Court: Bombay High Court Date: 8th May, 2026 Judges: Kamal Khata, J. & A.S. Gadkari, J. DECISION The Court SET ASIDE the Sale Certificate dated 31st August 2020 and the auction of properties attached under the MPID Act in connection with the NSEL scam, finding the entire process was riddled with fraud, gross undervaluation, and procedural irregularities designed to benefit a particular bidder. KEY FINDINGS 1. Gross Undervaluation: - Property initially valued at ₹60 crores (May 2018) was subsequently devalued to ₹10.41 crores (June 2020) - Court found this 6-fold reduction unjustifiable and fraudulent - Property deliberately misclassified from "residential" to "agricultural" to suppress value 2. Procedural Irregularities: - First auction notice published only in Chandigarh editions of newspapers (limited local circulation) - Hindi-speaking area received Punjabi-language notices - Subsequent auction notices advertised only on Quiker Realty's website with no publicly available viewership data - No evidence of wide publicity despite statutory requirement 3. Fraudulent Auction Process: - Common director (Rajan Goyal) in both competing bidders: Brij Gopal Construction (₹8 crores) and winning bidder Rudraveerya Developers (₹10 crores) - Auction conducted as sealed bid rather than open auction, limiting competitive bidding - Property location incorrectly described on Quiker website 4. License Issues: - Development license expired December 9, 2016, and was never renewed - First valuation (May 2018) assumed license validity without verification - Court rejected argument that expired license justified reclassification to agricultural land 5. Conflict of Interest: - Quiker Realty appointed as both valuer and auctioneer despite clear conflicts - Failed to conduct site inspection for 2020 valuation - Deliberately misrepresented property characteristics COURT'S REASONING The Court held that: 1. Fraud vitiates all acts – The entire process was "nothing short of a fraud played upon the Court" and 13,000 NSEL victims who lost ₹5,600 crores 2. Fiduciary duty breached – The Competent Authority, entrusted with protecting investors' interests, instead became complicit in undervaluing assets 3. "Scam within the scam" – While original NSEL scam defrauded investors, the subsequent auction process defrauded them again by selling their recovery assets at grossly depressed prices 4. Timing suspicious – Sale finalized during COVID-19 pandemic when land markets were at lowest values 5. Inadequate price is fatal – Even without fraud allegations, gross undervaluation of attached property is sufficient to set aside auction under settled law ORDERS PASSED The Court directed: (a) New Competent Authority to be appointed within 4 weeks (b) New Valuer to be appointed by the new Authority (replacing Quiker Realty) (c) Fresh Auction to be conducted with: - Wide publicity in local newspapers - Electronic media coverage - Open bidding process (d) Sale Certificate set aside (dated 31.8.2020), but attachment continues (e) Refund of ₹10.09 crores received from Rudraveerya Developers within 4 weeks (f) Investigation against Competent Authority members and Quiker Realty; compliance affidavit within 6 months (g) Quiker Realty disqualified for minimum 5 years from conducting valuations/auctions for Maharashtra Government (h) Appeal No.932/2022 (homebuyers) allowed (i) All interim applications disposed SIGNIFICANCE This landmark judgment protects interests of defrauded investors in NSEL scam and establishes that Government authorities cannot become complicit in perpetuating frauds through mala fide valuations and auction processes, even after sale completion. This case analysis is maintained by casestatus.in based on publicly available court records.