Criminal Case Proceeding against Sobha Ltd Know Everything Here

On October 4, Sobha Ltd, a realty firm, experienced a significant drop of nearly 8% in its share price after a Bengaluru court permitted criminal proceedings against the company. The allegations revolve around forgery in a residential project. This decline marked the second consecutive session of losses, with the stock plummeting by 7.79% to reach a low of Rs 642.70 per share on the BSE. Trading volume surged, exceeding two times the usual on the bourse. The previous day, on October 3, the company’s shares had closed more than 1% lower due to an adverse order issued by Karnataka RERA (Real Estate Regulatory Authority).

Sobha Ltd Criminal Case Proceeding Explained Here!

The Bengaluru court’s ruling stemmed from allegations that Sobha Ltd mortgaged a project called Sobha City in north Bengaluru. A homebuyer, who purchased a flat in this project in 2017, claimed that the company increased the number of units by 450 without obtaining consent from the homebuyers. It was alleged that Sobha Ltd secured an amended project development plan and building plan using forged no-objection certificates issued by Karnataka State Fire and Emergency Services in May 2013.

Separately, Karnataka RERA directed Sobha Ltd to refund the entire purchase amount of a flat along with 9% interest to a homebuyer in the Sobha Valley View project in south Bengaluru. This directive came as the project land was reportedly attached by the Income Tax Department under the Prohibition of Benami Property Transactions Act, even though the flat was delivered on time by the developer.

Sobha Ltd responded by stating that they had not received any complaint or notice from any court regarding these matters. They explained that the construction of additional units took place before the existence of RERA and was in line with the revised sanction plan approved by authorities. They also clarified that the Deed of declaration relates to property description and not property title transfer, and the fire NOC issue had already been resolved in accordance with regulations. As of 2:37 PM on October 4, Sobha Ltd shares were trading 5.24% lower at Rs 660.55 apiece on the BSE.