Delhi High Court refuses to quash criminal proceedings against Supertech directors in the Hill Town project case, citing prima facie material supporting allegations of cheating, breach of trust and criminal conspiracy.
The Delhi High Court has declined to interfere with criminal proceedings against directors and executives of Supertech Limited in connection with allegations arising from the company’s Hill Town residential project at Sector 2, Sohna, Haryana. The Court held that the material collected during the investigation disclosed sufficient grounds for the criminal proceedings to continue at this stage.
Justice Madhu Jain was dealing with three connected petitions filed under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). The petitioners had challenged the trial court’s order taking cognizance of alleged offences under Sections 406, 420 and 120B of the Indian Penal Code (IPC) and summoning the accused.
Background of the Dispute
The criminal proceedings originated from a complaint filed by homebuyer Ajay Kumar Gupta before the Economic Offences Wing (EOW). The complaint concerned the alleged non-delivery of flats booked in Supertech’s Hill Town project.
According to the allegations, the project was marketed under a subvention scheme. Under this arrangement, homebuyers were required to initially pay approximately 10% of the sale consideration, while the developer was expected to bear the pre-EMI liability payable to the lending institution for the agreed period until possession of the flat.
The buyers alleged that possession was not delivered within the promised period. They further alleged that Supertech subsequently stopped making the pre-EMI payments, leaving purchasers responsible for the outstanding loan obligations.
During the investigation, several other homebuyers reportedly came forward with similar allegations. The investigation identified 38 complaints, involving an alleged financial loss of approximately ₹22.80 crore. The prosecution also alleged that funds collected from purchasers were diverted or utilised in circumstances requiring examination through criminal proceedings.
Allegations Against the Directors
The accused directors approached the High Court contending that the dispute was essentially a civil dispute arising from delay in construction and possession and therefore should not have been converted into a criminal prosecution.
It was also argued that individual directors could not be prosecuted merely because they held positions on the company’s board. One of the petitioners, Sangita Arora, specifically claimed that she was only a nominal director and had no active involvement in the day-to-day management of the company or the Hill Town project.
The prosecution, however, relied upon investigation material indicating her association with the company’s affairs, including her directorship, shareholding, participation in board meetings, filing of financial statements and status as an authorised bank signatory.
Delhi High Court’s Observations
The High Court acknowledged an important legal principle: a person cannot be subjected to criminal prosecution merely because he or she happens to be a director of a company. There must be material connecting the individual with the alleged offence.
However, the Court found that, in the present matter, it could not be concluded that there was no material whatsoever connecting the petitioners with the affairs relevant to the allegations.
The Court also rejected the argument that the matter was purely civil in nature. According to the Court, the prosecution case went beyond a simple allegation of delayed possession. It involved the manner in which the transactions were structured, representations allegedly made to homebuyers, continued collection of payments and the alleged failure to honour commitments under the subvention arrangement.
The Court observed that whether these circumstances ultimately establish dishonest intention from the beginning is a matter that must be determined after evidence is led during trial. At the stage of considering a petition for quashing, the High Court was not required to conduct a detailed evaluation of the evidence.
Criminal Conspiracy Can Be Inferred From Circumstances
The Court further declined to accept the argument that there was insufficient direct evidence of criminal conspiracy under Section 120B IPC.
It noted that conspiracy is generally established through the conduct of the parties and surrounding circumstances. Direct evidence of an agreement to commit an illegal act may not ordinarily be available. Whether the evidence ultimately establishes a meeting of minds between the accused persons is a matter to be considered during the trial.
The Court therefore found no jurisdictional error, patent illegality or manifest perversity in the orders passed by the lower courts that would justify exercise of its quashing jurisdiction.
Court Dismisses Petitions
The Delhi High Court accordingly dismissed the petitions seeking termination of the criminal proceedings against the Supertech directors and executives. The Court, however, clarified that its observations at this preliminary stage would not prejudice the accused persons’ defence on the merits before the trial court.
Key Legal Takeaway
The decision highlights that delay in delivery of a real estate project may ordinarily give rise to civil remedies, but criminal proceedings cannot automatically be termed impermissible where the allegations and investigation material indicate possible cheating, breach of trust, dishonest representations or conspiracy.
At the same time, the judgment reinforces that directors cannot be criminally prosecuted merely because of their designation. There must be prima facie material demonstrating their connection with the alleged wrongdoing.
Case: Sangita Arora v. State of NCT Delhi & Anr.
Case No.: Crl.M.C. No. 4722 of 2026
Court: Delhi High Court
Judge: Justice Madhu Jain
Decision: 8 September 2026
Reported Citation: 2026 LLBiz HC(DEL) 948