Smaller flats, bigger fraud: Prateek Group under fire for Rs 190 crore scam

Homebuyers of Prateek Edifice in Noida allege that 423 flats sold were 10-12% smaller than charged and that construction exceeded the sanctioned plan without their consent

The Economic Offences Wing (EOW) of the Delhi Police has filed a First Information Report (FIR) against the owners and senior management of Prateek Group following allegations from 20 homebuyers of Prateek Edifice in Sector 107, Noida. The accusations point to a fraud involving over Rs 190 crore, reported The Times of India.

The complaint, detailed by Aditya Dev, names Prashant and Prateek Tiwari, along with senior managers Sunil Kumar Mittal and Anshuman Sharma, as the key figures behind the alleged fraud. Homebuyers claim the 423 flats sold were 10-12 per cent smaller than what they had been charged for, and that construction was carried out beyond the sanctioned plan without their consent.

Rajeev Goyal, one of the complainants, told The Times of India, “The flats delivered to us were significantly smaller in size than what was promised to us. An architect was appointed to survey after we approached the National Consumer Disputes Redressal Commission (NCDRC) against the developer. They did not just give us smaller flats, but also carried out construction beyond the sanctioned plan without taking any consent from us.”

Buyers accuse developer of fraud

The buyers allege that Prateek Group collected Rs 12.8 crore as one-time lease rent from flat owners, while the payable amount to the Noida Authority was only Rs 6.4 crore. It is alleged that this amount was not paid to the authority.

The developer is also accused of delaying the handover of flats. The complainant mentioned that the flat he booked in April 2012, promised for December 2015, was only handed over in February 2019, despite having paid 95 per cent of the total cost by May 2016. 

“Eventually, we were handed possession after National Consumer Disputes Redressal Commission [NCDRC] asked the developer to hand over flats within three weeks. Many facilities and amenities promised to us were not delivered. There was a lot of pending work, defects and deficiencies in workmanship, construction, finishing, fittings, and fixtures in the flats,” Goyal said.

Fraud allegations against Prateek Group

The FIR further states that Prateek Group collected over Rs 9 crore as Interest-Free Maintenance Security (IFMS) from flat owners but did not refund this amount to the owners' association despite notices from the Authority. Buyers also claim the developer overcharged for grid electricity, meter connection, WiFi, cooking gas security, and sewer connections.

Goyal elaborated on these issues, stating, “Though common prepaid electricity sub-meters were calibrated and energised in April 2019, developers started to recover fixed charges for the grid and DG power with effect from January 2019. The builder also charged Rs 18.8 lakh towards purported water charge arrears.”

The complainants also allege misuse of prepaid sub-meters installed in flats to recover charges for water and electricity illegally.

Prateek Group denies allegations

In response to these allegations, a spokesperson for Prateek Group stated that the developer had not yet received any communication from the police. “The flat owners who complained have already been given possession of their flats. Registration and possession are complete. We will take further action once we receive all the information,” the spokesperson said.

The case remains under investigation as authorities gather more information. The homebuyers are seeking justice for the discrepancies in property sizes, overcharged amounts, and delayed possession of their flats.