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RERA orders forensic audit of Mantri firm, tells buyers to cover cost

The total cost of Mantri Manyata Energia, to come at Rachenahalli in KR Puram, was estimated at Rs 475.92 crore
Last Updated 29 November 2022, 16:57 IST

In a rare order, the Karnataka Real Estate Regulatory Authority (RERA) appointed a private company to conduct forensic auditing of accounts belonging to Mantri Technology Constellation Private Limited, a subsidiary of Mantri Developer Private Limited.

The total cost of Mantri Manyata Energia, to come at Rachenahalli in KR Puram, was estimated at Rs 475.92 crore. The Authority noted the respondent company collected Rs 75.17 crore from the buyers but "failed to discharge their statutory obligation" as it didn't disclose crucial details of the project. On the one hand, the company submitted that 60 per cent of the apartments were sold but stated that only 3 per cent of the work has been completed.

As the complainants -- Mantri Energia Frontiers -- sought to investigate the "large scale mismanagement" of funds, RERA issued the interim order appointing JAA & Associates with the condition that the complainant has to bear the cost of auditing.

N Bhagyalakshmi of the Lawman and Associates, the firm that represented the buyers, said the home buyers preferred an external audit firm over RERA's internal audit. "The buyers proposed the firm. The authority screened the company and allowed their request," she said.

The order was not clear as to why the buyers had to pay for the audit. As per the RERA Act Section 75(2)(B), the authority has to utilise its internal funds for discharging its duty. Bhagyalakshmi said that during the hearing, the RERA referred some auditors. The complainant was, however, not happy with them. The complainants have to move an interim application seeking recovery of the audit cost.


While the audit may help to establish possible financial fraud, home buyers seem to have a long battle ahead as the promoter company, Mantri Technology Constellations Ltd, is in trouble. In June, the NCLT suspended the board of the firm and appointed Justice Anand Byrareddy as administrator.

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(Published 29 November 2022, 16:57 IST)

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