Hundreds of flat buyers across the city, many from the lower middle class, see ray of hope in Home Department’s action; experts, however, term it superficial, say more stringent steps needed
An unfinished structure at the project site in Bhiwandi
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 lakh.
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The 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 MMRDA.
However, the builder stopped all work after five to 10 per cent construction. “In 2014, the builder was giving evasive replies to buyers’ queries. He tried to arm-twist some buyers demanding a refund. All cheques issued by the builder as refunds bounced,” said Nitin Mohite, who made a part payment of over R9 lakh for a 3BHK spread over 770 sq feet.
“It 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 developer’s property. The order was issued on November 9,” Mohite said.
The MPID order issued by Anup Kumar Singh, principal secretary (special) to the state government, states, “The Government of Maharashtra is satisfied that the Financial Establishment (M/s 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 depositors.” The order also appointed the sub-divisional officer, Bhiwandi subdivision, as the competent authority to control the assets.
Flat buyers hopeful
“We see the MPID order as a ray of hope, though we’re mostly pessimistic about the process. Those who invested in the project come from economically weaker sections,” said Mohite.
Another 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. “I 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 buyers’ struggles. I will never get a house at that same price. I hope the MPID order helps buyers from the lower-middle class get their money back,” Gautam said.
‘Superficial action’
Experts in the domain of real estate, however, consider the government’s action superficial and recommend a forensic audit. “The order under MPID Act is a superficial move by the state government since it will only recover part of the property acquired from the ill-gotten money. The money acquired from seized assets won’t be enough for a room in a slum,” said Advocate Godfrey Pimenta, who practices in MahaRERA.
“The state government should order a forensic audit of the developers’ 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 (MCOCA),” said Pimenta. Advocate Shreeprasad Parab, expert director, State Housing Federation, said that the success of MPID Act should be a consideration. “The 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 secured?”
Parab added that the Act also requires many amendments. “There 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 authority,” added Parab.
Nov 9
Day state govt issued order to freeze assets
Nov 9
Day state govt issued order to freeze assets
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