NCLT Bar Slams ED Searches at Lawyers’ Homes in Alleged Undervalued Land Sale Probe
Bar Association Calls Searches Illegal and Threat to Independence of Advocates
ED Investigates Suspected Misuse of Insolvency Process in Universal Buildwell Case
By Our Legal Reporter
New Delhi: December 08, 2025:
In a rare and strongly worded resolution, the National Company Law Tribunal Bar Association (NCLTBA) has condemned the Enforcement Directorate (ED) for conducting search operations at the residences of two lawyers associated with insolvency proceedings. The searches were linked to an investigation into the alleged undervalued sale of land belonging to Universal Buildwell Pvt Ltd, a company undergoing Corporate Insolvency Resolution Process (CIRP).
The Bar Association described the ED’s actions as “an affront to the dignity of the legal profession” and warned that such measures pose a grave threat to the independence of advocates, who are officers of the court and integral to the administration of justice.
Background of the Case
- Universal Buildwell Pvt Ltd: A real estate company facing multiple FIRs for non-completion of projects and cheating homebuyers.
- CIRP Proceedings: The company was admitted into insolvency under the Insolvency and Bankruptcy Code (IBC), with assets to be liquidated as per resolution plans.
- Alleged Undervalued Sale: ED suspects that land parcels were sold at throwaway prices, involving intermediaries, resolution professionals, and lawyers.
- ED Action: On November 20, 2025, ED conducted searches at six locations in Delhi and Gurugram, including lawyers’ residences, citing misuse of the IBC framework.
NCLT Bar Association’s Resolution
On November 25, 2025, the NCLTBA passed a resolution condemning the ED’s actions:
- Violation of Safeguards: The Bar stated that the searches were carried out without due compliance with legal procedures.
- Threat to Independence: It warned that targeting lawyers undermines their independence and ability to represent clients fearlessly.
- Professional Dignity: The resolution emphasized that advocates are officers of the court and must be protected from intimidation.
- Call for Accountability: The Bar demanded that investigative agencies respect the sanctity of the legal profession.
ED’s Stand
According to the ED’s press release:
- Basis of Investigation: More than 30 FIRs were registered against Universal Buildwell for cheating homebuyers.
- Misuse of IBC: The ED alleged collusion between intermediaries, resolution professionals, and buyers to undervalue assets.
- Targeted Entities: Searches included lawyers, resolution professionals, and the buyer company RDB Infrastructure and Power Ltd, promoted by Vinod Dugar.
Wider Legal Context
- Insolvency and Bankruptcy Code (IBC): Designed to ensure fair resolution of distressed companies, but misuse has been reported in undervalued asset sales.
- Role of Advocates: Lawyers play a crucial role in insolvency proceedings, representing creditors, debtors, and resolution professionals.
- Judicial Oversight: Courts have repeatedly emphasized the independence of advocates as essential to justice delivery.
- Past Precedents: Similar concerns have been raised when investigative agencies targeted professionals without clear evidence.
Implications of the Ruling
- For Lawyers: Raises concerns about professional independence and protection from investigative overreach.
- For Insolvency Proceedings: Highlights risk of misuse in asset sales, requiring stricter monitoring.
- For ED: Reinforces the need to balance investigative powers with respect for legal safeguards.
- For Judiciary: May prompt courts to issue guidelines protecting advocates during investigations.
Also Read: MahaRERA Rules: No Power to Order Eviction or Possession Recovery in Builder-Homebuyer Disputes
Industry and Expert Reactions
- Legal Experts: Welcomed the Bar’s resolution, noting that unchecked searches could intimidate lawyers.
- Corporate Sector: Expressed concern that such actions may discourage professionals from participating in insolvency cases.
- Homebuyers: Supported ED’s probe, hoping it would expose collusion and recover value lost in undervalued sales.
- Public Opinion: Divided between protecting advocates’ independence and ensuring accountability in real estate fraud.
Conclusion
The NCLT Bar Association’s condemnation of ED searches at lawyers’ residences marks a critical moment in the intersection of law enforcement and professional independence. While the ED investigates alleged misuse of the insolvency process in the Universal Buildwell case, the Bar has warned against actions that undermine the dignity of the legal profession.
This case highlights the delicate balance between investigative powers and judicial independence, and its outcome will likely shape future interactions between enforcement agencies and the legal fraternity in India.
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