The Enforcement Directorate (ED) on Wednesday, 22 July filed a prosecution complaint before the Special Court of Mohali against Punjab coloniser Ajay Sehgal, alleging he laundered proceeds of crime worth approximately ₹348 crore by obtaining change of land use (CLU) approvals through forged consent letters for the residential-commercial project SUNTEC CITY. The complaint, filed under the Prevention of Money Laundering Act (PMLA), 2002, follows an investigation triggered by a Punjab Police first information report (FIR) against Sehgal and others.

How the Fraud Was Allegedly Executed

Ajay Sehgal, identified as Secretary of Indian Cooperative House Building Society Ltd, allegedly submitted fake consent letters to Punjab's Department of Town and Country Planning to secure CLU for 108.58 acres of agricultural land, converting it for residential and commercial use under the SUNTEC CITY project. Based on these forged documents, the Greater Mohali Area Development Authority (GMADA) issued a development licence, and Sehgal also obtained registration under the Real Estate (Regulation and Development) Act (RERA) using the same fabricated letters, according to the ED.

The investigation further revealed that the building plan and CLU were approved without a mandatory solid waste management area, in violation of Building Plan Rule 3.12.2 (Internal Development Works).

Role of ABS Township and Family Links

According to the ED, an agreement was subsequently executed between Indian Cooperative House Building Society Ltd and ABS Townships Private Ltd, transferring all development and sale rights of the project to ABS Township. The directors of ABS Township were Sehgal's brothers — Sanjay Sehgal and Anil Sehgal. ABS Township then registered La Canela Phase I and District VII with RERA and began selling units, generating what investigators describe as proceeds of crime. Residential units in La Canela Phase II were reportedly sold without any RERA approval.

Regulatory Failures and Continued Operations

GMADA began receiving complaints about the use of forged consent letters as early as 2020, yet no action was taken against the accused, according to the ED. This inaction allegedly allowed the Sehgal network to continue selling residential and commercial units in a project whose approvals were obtained illegally. ABS Township was even granted a fresh CLU of 14.59 acres, altering the original project layout without following due procedure under Section 14 of the RERA Act. Only a partial CLU was later revoked under Section 85 of the Punjab Regional and Town Planning and Development Act, which the ED says permitted further generation of proceeds of crime.

Separately, Sehgal allegedly failed to transfer land reserved for the Economically Weaker Section (EWS) to the Estate Officer of GMADA as required under licence conditions, and began giving possession to land owners without obtaining either a partial or full completion certificate from GMADA.

Scale of Alleged Money Laundering

The ED has quantified the proceeds of crime at approximately ₹348 crore, comprising sales of ₹212.58 crore and unsold inventory valued at ₹135.41 crore. Investigators allege that the accused knowingly generated, acquired, possessed, concealed, and utilised these proceeds arising from the scheduled offences of obtaining CLU through fake consent letters, illegal approvals, and fraudulent RERA registration. The investigation into the full extent of money laundering is reportedly ongoing.

The case underscores mounting scrutiny of real estate developers in Punjab who allegedly exploit regulatory gaps in land-use conversion processes, with the ED's prosecution complaint marking a significant escalation in legal proceedings against the Sehgal network.