GUJRERA Issues Notice to Privilon Group for Unauthorised Bookings and Investor Concerns

The Gujarat Real Estate Regulatory Authority (GUJRERA) has taken firm action against the promoters of Privilon Group, Jaydeep Kotak and Hiren Karia, for launching unregistered residential and commercial projects in Ghuma, Ahmedabad, without necessary legal approvals. The promoters are accused of accepting unauthorised bookings for their proposed projects, which include the 14-storey “Celestial” and 22-storey “Richmond” buildings, without adhering to the required regulations. As many as 240 investors are believed to have been impacted, with approximately ₹40 crore involved.

Legal Action and Arrests

The Bopal police have filed two First Information Reports (FIRs) against Kotak and Karia for their involvement in unauthorised activities. Kotak has been arrested and is currently in police custody for questioning, while Karia remains absconding. GUJRERA has received 183 applications from individuals who had paid for flats or offices in the aforementioned projects, which have yet to be legally registered.

Notice Under RERA Act

Under Section 3 of the Real Estate (Regulation and Development) Act, 2016 (RERA Act), the promoters have been issued a notice. This section prohibits the advertising, marketing, or selling of real estate properties in a project that has not been registered with the Real Estate Regulatory Authority. Violations of this provision may lead to penalties, which can be up to 10% of the project’s estimated cost. However, the absence of project registration complicates the process of determining penalties, as no official project details are available.

Unapproved Practices and Investor Complaints

Reports suggest that Kotak and Karia attracted investors by offering high returns and low prices on the projects, which were launched on agricultural land without proper approvals or RERA registration. They used a mix of social media and traditional advertising methods to promote the projects, promising returns of up to 36% on investments through Memorandums of Understanding (MoUs). Buyers were assured that sale agreements would be executed once the projects were legally compliant. Investors made payments under the assumption that the MoUs were legally binding, with some paying via cheques or cash, the latter of which was allegedly recorded at lower amounts to hide the actual transaction value.

As the projects showed no progress, investors began to request refunds and updates. Complaints were filed by several investors, including Niyati Thakkar, whose father had invested ₹25 lakh for a flat in the Celestial project. Despite signing an MoU in May 2024, there was no visible progress. Investors, including Thakkar’s family and others, lodged complaints with the police, revealing significant investments in the unregistered projects.

GUJRERA officials have stated that the promoters are expected to respond to the notice. The authority will assess the response and decide on appropriate penalties, taking into account the lack of project registration and the unavailability of detailed project information.