Fortunes of hundreds of middle-income families are linked to Raut’s case

Mumbai: In Mumbai’s Goregaon, better known for its film studios, a 47-acre plot, Siddharth Nagar, or Patra Chawl, seems like a location stuck in a time warp. The plot with overgrown weeds is pock-marked with long-abandoned construction equipment and shells of incomplete buildings. These are structures that by now should have been home to hundreds of middle-income families.

‘New CM, Old CM, Congress, BJP, Shiv Sena…As buyers, we don’t care about the politics,’ says Digesh Patel, who had booked an apartment in Meadows, one of the buildings that was to be developed on the site. Patel, who is a chief engineer in merchant navy, had paid his first instalment in 2010, hoping to move into his ‘dream home’ with his wife, two kids and mother by 2014 at the latest. ‘So far, I have invested ₹65 lakh in the house and have nothing to show for it,” says the Goregaon resident, whose family of five currently lives in a cramped 1 BHK.

Beyond the political implications of Sanjay Raut’s arrest, the Patrawala redevelopment is a cautionary tale about all that ails Mumbai’s construction industry –disingenuous builders, negligent bank officials and government bodies--and at the receiving end, hundreds of hapless families left footing the bill for this gigantic mess.

The story begins in 2008, when Maharashtra Housing and Area Development Authority (MHADA) gave the contract for the redevelopment of this plot that housed 672 homes to Guru Ashish Construction Private Limited (GACPL). Guru Ashish is the sister concern of HDIL which led to the eventual crash of PMC Bank. As per the original deal, HDIL directors Sarang and Rakesh Wadhawan, were to redevelop the plot, rehabilitate the 672 tenants who lived there, and provide housing for 306 additional tenements to MHADA. In lieu of this, the Wadhawans would be granted saleable floor space index (FSI), which they could sell to other developers. In 2008, a tripartite agreement was signed to this effect between GACPL, the tenants’ society, and MHADA.

The Enforcement Directorate has claimed that Pravin Raut, a close associate of Sanjay Raut, and other directors of GACPL misled MHADA, and that they sold the floor space index (FSI) to nine private developers for ₹901.79 crore but GACPL reneged on developing the rehab portion, i.e., the homes for the 672 displaced tenants and the 306 MHADA flats that constituted the original Patrawala chawl. GACPL also launched its own project, Meadows, on the same site and collected the booking amount of some ₹138 crore from flat buyers including the merchant navy engineer Digesh Patel. GACPL had also committed to paying the rent to all 672 displaced tenants every month till such time they were given possession of their homes. However, the company stopped paying rent in 2014-15. MHADA thus issued a termination notice to the developer in January 2018. In mid-2017, the National Company Law Tribunal (NCLT) admitted the application from Union Bank of India to declare GACPL insolvent. The nine developers, including Kalpataru, Ekta World, Sangam Lifespaces among others who had bought the saleable FSI from GACPL then petitioned the Bombay High Court to prevent MHADA from retaking the land from Guruashish Construction Pvt Ltd.

As the matter wound its way in court, construction work on the project halted, leaving not just 672 of the original inhabitants of the plot in the lurch, but also the hundreds of middle-income families who had booked homes in the projects being developed by these nine builders.

Businessman Rahul Thakkar, who has been part of the group of flat purchasers at Meadows -- the building that was to be developed by GACPL – and who has been leading the charge against GACPL and MHADA, says, “MHADA now alleges GACPL had no right to sell the flats [the saleable FSI] before the MHADA rehab homes were constructed, but what were the MHADA officials doing when the plots were sold to the nine builders and construction on those buildings began? Some of those towers are nearly complete. How can the MHADA officials say that they didn’t know construction was underway?” Thakkar’s group, represented by solicitor, Sandip Vimadalal has made MHADA a party to their suit, as they say the body was a co-promoter. “The builder was merely assigned developing rights,” says Thakkar. “We are saying that MHADA, a government body whose purpose it is to provide affordable housing, should complete our project and give us our flats. You cannot punish purchasers for the crimes of a builder. Our application is pending hearing and likely to come up on August 29,” adds Vimadalal.

Dharmesh Padmanabhan, a manager in a tech company who booked a flat at Ekta Tripolis in 2019 on the same site, was expecting possession of his home by 2021, has been watching the events play out with utter dismay. He has already paid ₹2.5 crore towards the apartment and continues to pay EMIs on the ₹1.7 crore he borrowed from the bank. “I have already paid ₹45 lakh towards interest,” says Padmanabhan. The 36-floor building he hopes to move into has already been constructed right up to its top floor. He says he does not blame the builder in this case “All of this has come to pass because of the apathy of MHADA officials. They are heartless,” says Padmanabhan who has a wife and three children to support.

“Two months ago, when we went to meet Yogesh Mhase at MHADA, there were people in our group of buyers who were in tears over their situation. And yet, we were made to wait for five hours to even see him,” says Padmanabhan. “A month before meeting Mhase we had met the then housing minister Jitendra Awhad and he told us he had instructed MHADA to issue our OC in the next two days.” That never happened.

The group of aggrieved buyers that businessman Rahul Thakkar is part of has been given similar runaround for over a decade. Thakkar who lives in a joint family, had booked a 2 BHK in Meadows – the GACPL complex -- back in 2010, hoping that the growing family could get some space. He has about ₹30 lakh locked in the project. It’s his entire family’s savings pooled together, but Thakkar says he feels much worse for the others in the group. ‘Unlike me, many of the others have been paying EMIs on these homes for years. There are some who were to get married and move into their new homes here but couldn’t. Marriages broke up as a result. One family I know had hoped to watch their kids grow up in this larger home but those kids are adults now, ready to move out into their own homes. There are 450 buyers in the Meadows project alone and 600 flats in the three towers of the Ekta Tripolis project of which 450 flats have already been sold.

In 2020, the Maharashtra government appointed a one-member committee led by retired bureaucrat Johnny Joseph to study the case and recommend solutions. In July 2021, the Uddhav Thackeray government finally cleared a revival plan for the stalled redevelopment project. According to a July 9, 2021 Government Resolution, MHADA would act as the developer to fund, and complete the rehab tenements, pay the displaced tenants rent in the interim, and also complete the pending work on 306 flats to be allocated through a MHADA lottery.

The GR also increased the FSI allocation for the property, from 2.5 to 4 as per the 2024 Development Control and Promotion Regulations (DPCR). The Sena government estimated that MHADA could generate revenue of close to ₹2,600 crore as a result of this, which would more than make up for the money required to complete the work. The GR also provided for the signing of consent terms with some of the developers including Kalpataru group, Ekta group, and KBK – the high-rise towers being developed by these builders on the site could thus be granted Occupancy Certificates, allowing the residents to move into their long-awaited homes. In accordance with the July 2021 GR, MHADA appointed Relcon Infrastructure Pvt Ltd to complete the rehabilitation buildings and VJTI engineers were asked to carry out a structural audit to set the ball rolling. “Construction resumed in March 2020 but the key issues are yet to be settled,” says Makarand Parab, secretary of the tenants’ society.

“Although MHADA has agreed to pay arrears of the transit rent from March 2018, the rent amount has not been finalised. MHADA has proposed a rent of ₹18,000 per month, but this is the amount that the developer GACPL was paying in 2008 when we left our homes. Fourteen years have passed since then, and the figure doesn’t factor in inflation. We expect at least ₹40,000 towards monthly rent,” says Parab.

MHADA has also yet to sign a formal agreement with the tenants’ society, listing the details of the amenities, the possession date and so on. “There was a meeting scheduled to finalise these details when the Maha Vikas Aghadi government collapsed. We can only hope that the new government helps us resolve these issues,’ says Parab. Several of the original tenants have passed away over these 14 years, and the paperwork will also include transfer of the tenement (TOT) documents. “Almost 100 tenants are in the queue for these transfers to be complete,” adds Parab.