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The ED has arrested the head of a Bengaluru builder over Rs 927 crore paid by flat buyers. Here is what the law says and what buyers can do.
Key points
- The ED says it arrested the head of a Bengaluru builder on 30 September 2026. A special court gave the ED 14 days of custody.
- The agency alleges that Rs 927.22 crore paid by flat buyers was diverted instead of being used on the projects. The builder side has not been proved guilty of anything.
- If the charges are proved, cheating under BNS 318(4) can mean up to 7 years in jail and a fine. It is non-bailable.
- A buyer with a stuck flat is not helpless. There are police, consumer and RERA routes, and each one works differently.
- Keep every receipt, the builder-buyer agreement and all messages.
What happened?
The Enforcement Directorate (ED) has arrested S. Vasudevan, the chairman and managing director of Ozone Urbana Infra Developers, a Bengaluru builder. This is according to reports by The420, Siasat, The News Mill and Deccan Herald on 1 and 2 October 2026.
The ED says the arrest was made on 30 September. He was produced before a special court in Bengaluru on 1 October. The court gave the ED 14 days of custody, the reports say.
The ED alleges that flat buyers paid about Rs 927.22 crore. It says the projects stayed unfinished and the money was diverted for other uses.
These are allegations. Nothing has been proved in court.
What did the ED do before this?
Reports say the ED searched 10 places in August 2025. In October 2025 it attached (froze) property worth about Rs 423.38 crore. This included unsold flats and land.
Reports also say the case began with FIRs (First Information Reports, the police’s first record of a crime) by the Bengaluru police and the CBI.
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Which criminal laws can apply to a builder who takes money and does not deliver?
The reports do not give the full list of sections in each FIR. So here is what the law says about this kind of case. Only a court can decide if any offence is made out.
- Cheating (BNS section 318(4)). Lying to a person so that he hands over money or property.
- Criminal breach of trust (BNS section 316(2)). A person is trusted with property and dishonestly uses it for himself.
- Criminal conspiracy (BNS section 61(2)). Two or more people agree to commit a crime.
A late project alone is not always a crime. A builder who simply misses a deadline may face only a civil case. The law turns criminal when there was a dishonest intention from the start, or money was dishonestly diverted.
Sections involved
What is the punishment? Is it bailable?
Cheating under section 318(4) can mean up to 7 years in jail and a fine. It is cognizable (police can arrest without a court’s permission). It is also non-bailable.
Criminal breach of trust under section 316(2) can mean up to 5 years, or a fine, or both. It is also cognizable and non-bailable.
Non-bailable does not mean no bail. It means bail is not a right. A court looks at the facts and decides.
The ED works under a separate law on money laundering. It has its own rules for arrest, custody and bail. The reports say the ED made the arrest under that law.
What happens next?
The ED can question the accused during custody. After that, he goes back to the court. The court can send him to judicial custody or grant bail.
The ED then files a complaint in the special court. The trial follows. This can take years.
Property that is attached stays frozen while the case goes on. Rules decide how it can later be used to repay victims.
What happens next
- 1ComplaintBuyers complain to police, or the agency starts a probe.
- 2FIRPolice register an FIR; other agencies can join the probe.
- 3Searches and attachmentAgencies search and can freeze property linked to the money.
- 4Arrest and custodyThe accused is produced in court; custody or bail is decided.
- 5Charge sheetThe agency files its final report with the evidence.
- 6TrialThe court decides guilt. Buyers can also pursue refunds separately.
What can a flat buyer do if the project is stuck?
You have more than one road. You can use them together.
- Police or economic offences wing. File a written complaint if you think you were cheated. Ask for a receipt.
- RERA authority. RERA is the real estate law of 2016. Each state has an authority. Buyers can seek refund or interest for delay.
- Consumer commission. A buyer can ask for refund with interest and compensation.
- Civil court. A suit to recover money or enforce the agreement.
Which route is best depends on your papers and how much you paid. A lawyer can read your agreement and tell you.
Before you pay a builder
- Check that the project is registered with the state RERA authority
- Read the builder-buyer agreement, especially the possession date and the refund terms
- Pay only by cheque or bank transfer to the project’s account, and keep every receipt
- Visit the site and compare the work done with the payments asked
- Be careful with schemes that promise the builder will pay your EMI until possession
If this happens to you
- Collect your papers. Agreement, receipts, bank statements, emails and messages.
- Send a written notice to the builder asking for possession or refund by a set date.
- File a complaint with the police or economic offences wing if you suspect cheating. Keep the receipt.
- Think about RERA and the consumer commission for refund and interest.
- Get advice. Read about property disputes in Delhi and civil recovery cases.
- If a family member is called by an agency, read about how bail works in Delhi.
Case at a glance
- Where
- Bengaluru, Karnataka
- Agency
- Enforcement Directorate, Bengaluru zonal office
- What
- Alleged diversion of Rs 927.22 crore paid by homebuyers
- Accused
- The builder’s chairman and managing director, arrested 30 September 2026
- Status
- 14 days ED custody granted on 1 October 2026; trial not begun
Related news
Sources
- Enforcement Directorate: Press release, Bengaluru Zonal Office, arrest of S. Vasudevan (Ozone Urbana)
- Enforcement Directorate: Prevention of Money-Laundering Act, 2002 (official text; Section 19, arrest)
- India Code: Sections 318 and 61, Bharatiya Nyaya Sanhita, 2023
- The420.in: Ozone Urbana CMD Arrested in Rs 927 Crore Homebuyer Fraud Case, Sent to 14-Day ED Custody (1 October 2026)
- Siasat: Ozone Urban Infra MD held over Rs 927 cr buyers' funds diversion (1 October 2026)
- The News Mill: ED arrests Ozone Urbana Infra CMD in Rs 927 crore homebuyer fraud case (October 2026)
- Deccan Herald: Bengaluru: ED arrests CMD and promoter of Ozone Urbana developers in Rs 927 crore cheating case (2 October 2026)
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This explainer is general legal information based on news reports and the text of the law. It is not legal advice on any particular case, and it does not say that any person has committed an offence; allegations are decided by the courts.