Maharashtra govt orders seizing of Mumbai developer’s assets for fraud

The state Home Department recently ordered the seizing of all movable and immovable assets of Mahavir Patva Developers and Constructions Pvt Ltd under the Maharashtra Protection of Interest of Depositors in Financial Establishment Act 1999 MPID for allegedly duping hundreds of flat buyers The collective investment by flat buyers in the stalled affordable housing project in Bhiwandi is said to run into crores with flats costing between Rs 6 lakh and Rs 20 lakhThe developer started advertising the affordable housing project located in the Kharbao Malodi Payegoan and Paye talukas of Bhiwandi and having all required permissions in 2010 According to a complaint to Chief Minister Eknath Shinde by duped buyers sales executives lured them with claims of rail and road connectivity and an eventual takeover of the land by the MMRDAHowever the builder stopped all work after five to 10 per cent construction ldquoIn 2014 the builder was giving evasive replies to buyersrsquo queries He tried to armtwist some buyers demanding a refund All cheques issued by the builder as refunds bouncedrdquo said Nitin Mohite who made a part payment of over R9 lakh for a 3BHK spread over 770 sq feet ldquoIt took the intervention of political leaders at the state level to register an FIR in October 2017 The case was transferred to the Economic Offences Wing EOW and then referred to the Home Department to get the order to attach the developerrsquos property The order was issued on November 9rdquo Mohite saidThe MPID order issued by Anup Kumar Singh principal secretary special to the state government states ldquoThe Government of Maharashtra is satisfied that the Financial Establishment Ms Shree Mahavir Patva Developers and Construction Pvt Ltd and its Chairman Directors Managers and Promoters have collected the deposits and have failed to complete the project failed to repay the deposits and the said Financial Establishment is not likely to give possession of flats and return the deposits to the depositorsrdquo The order also appointed the subdivisional officer Bhiwandi subdivision as the competent authority to control the assetsFlat buyers hopefulldquoWe see the MPID order as a ray of hope though wersquore mostly pessimistic about the process Those who invested in the project come from economically weaker sectionsrdquo said MohiteAnother flat buyer Kunal Gautam had invested in two 355 sqft flats in 2011 He paid around R5 lakh out of the total cost of R14 lakh ldquoI was out of the city for work for a few years When I returned in 2019 the project site was in ruins with no buildings I then came to know about the flat buyersrsquo struggles I will never get a house at that same price I hope the MPID order helps buyers from the lowermiddle class get their money backrdquo Gautam saidlsquoSuperficial actionrsquoExperts in the domain of real estate however consider the governmentrsquos action superficial and recommend a forensic audit ldquoThe order under MPID Act is a superficial move by the state government since it will only recover part of the property acquired from the illgotten money The money acquired from seized assets wonrsquot be enough for a room in a slumrdquo said Advocate Godfrey Pimenta who practices in MahaRERAldquoThe state government should order a forensic audit of the developersrsquo accounts which would reveal the money trail If a diversion of funds is found it would be nothing but organised crime and the parties involved should face the stringent Maharashtra Control of Organised Crime Act MCOCArdquo said Pimenta Advocate Shreeprasad Parab expert director State Housing Federation said that the success of MPID Act should be a consideration ldquoThe main question concerning the success of MPID Act is that in how many cases have depositors got their money back Or how many convictions have been securedrdquoParab added that the Act also requires many amendments ldquoThere should be immediate attachment of property or an insistence on security for the claimed amount after FIR is registered It should also provide for the reversal of transfer of properties in the past by the financial establishments involved Provisions should also be made for supervision by competent and senior judicial entities Lastly the State should also formulate a policy to get stalled projects completed by a competent authorityrdquo added ParabNov 9Day state govt issued order to freeze assetsNov 9Day state govt issued order to freeze assets