Patra Chawl: ED crackdown unfolds the murky saga
The action against Rajya Sabha member Sanjay Raut by Enforcement Directorate (ED) may have brought down struggling Shiv Sena to its knees but it has also helped to reveal a pathetic side of the Patra Chawl redevelopment project, located in upscale Goregaon (West) in north-west Mumbai.
The Uddhav Thackeray-led Shiv Sena and Sanjay Raut himself are capable enough to defend themselves, but the moot question is about the fate of the redevelopment project, now stuck in legal wrangles. It’s difficult to predict when the project work would complete and 672 residents of Patra Chawl get new homes- for which they have been struggling since last over two decades. The long-drawn battle of the residents for early completion of the project throws light on the overall decision-making and the working style in Maharashtra Housing Development Authority- Mhada and Mantralaya- the state government headquarters.
Project first mooted in 1988
The 48-acre land parcel, also known as Siddharth Nagar attracted media attention on a few occasions when the residents would raise their voices over the delay in completion of the project and the failure of the builder Pravin Raut of Guru Ashish Constructions to clear their rent arrears.
Going by history, the first talk of rehabilitation of the Patra Chawl began in 1988 when the Congress government was in power. The residents formed a cooperative housing society for the purpose and the project got rolling when an MoU was signed between the society and Lokhandwala Developers. The project was supposed to come up on a 10-acre land parcel carved out from the original 48-acre colony. Before something happens in a positive direction, disputes between the residents and the developer led to stalling further developments and the developer exited.
Got momentum in 2007
Some major developments took place in the year 2007 and the residents’ society approached Mhada with a new proposal along with a new developer- Ms. Guruashish Construction Ltd, a subsidiary of HDIL, which is facing several inquiries. The new proposal was about carrying out the redevelopment project on 40 acres instead of the 10 acres approved earlier. The decks were cleared and a tripartite agreement was signed between the society, the Mhada, and Ms. Guruashish Construction Ltd. Today, no one is ready to speak about how the scope of the project was increased from just 10 acres to 40 acres and how Ms. Guruashish entered into the deal when the alliance government of Congress-NCP was in power.
Area increased; builder stopped paying rent
While the developer was supposed to build 672 housing units for the rehabilitation with the construction of 46,000 sq meters, Mhada was to get a construction area of 1.11 lakh sq meters and for the developer, it was a sort of a bonanza by constructing 2.74 lakh sq meters.
Later when the area of construction was recalculated it was noticed that the area of construction was much more than the earlier projections making it 2.25 lakh sq meters in favor of Mhada, 2.75 Lakh sq meters for Guruashish, and slightly more in favor of the residents’ society.
Stop work order during BJP-Sena rule
Things took a different turn after the developer stopped paying rentals to the 672 residents and became unable to secure the occupation certificate (OC) for buildings constructed for Mhada. Making things more complicated, the firm failed to ink an agreement for the right to construct an additional area which led Mhada to issue a stay order in April 2015 on selling the units in the open market when the BJP-Shiv Sena government was in power. The orders were revoked after Ms. Guruashish committed to following the provisions made in the tripartite agreement.
Despite that situation failed to improve forcing the state government to intervene to review the project. After deliberations, it was decided to cancel the agreement by taking over control of the project. A notice to that effect was also issued in 2018. It was then skeletons began tumbling out with shocking details- such as one, the developer had already created third-party interests by selling the development rights to other developers. Besides Ms. Guruashish had secured loans against the project from a nationalized bank.
Nine builders approached HC
Soon after the government decided to scrap the agreement, Ms. Guruashish, along with nine others approached the Bombay High Court (HC). The government as well as the Mhada left red-faced when the HC restrained them from taking coercive action against the petitioners. It was after this development, it seems, that the government and the Mhada realized that the developer used an NoC given by the then vice president and chief executive officer (CEO) of Mhada in 2011 for selling the housing units into the open market and securing a loan from the bank.
How Mhada CEO issued NoC?
The sale of housing units in the open market violated the tripartite agreement where it was decided that the developer will not sell housing units in the open market until the houses meant for 672 residents were allotted. The NoC by the then VP & CEO Mhada proved detrimental to the interests of the residents and the state government. It creates a huge confusion since no government officer howsoever senior or junior would dare to take such a bold decision, knowing its consequences. How it happened is a mystery.
In the league of events, since the developer failed to pay back the loans, the Union Bank of India approached NCLT to declare the construction firm bankrupt. Rattled Mhada made swift moves and secured relief from the appellate tribunal and saved the Goregaon land parcel.
Johny Joseph committee gave a clean chit to Mhada CEO
Meanwhile, the authority had also sought legal advice from senior counsel S. U. Kamdar who seems to have recommended a high-level probe into the matter of the NoC given by the VP & CEO of Mhada and certain concessions. Subsequently, a committee under retd chief secretary Johny Joseph was appointed which stated in its report that the VP & CEO Mhada was within his rights to issue such an NoC to the developer to secure a loan for the project.
Regarding the sale of the housing units, the committee adopted a different approach saying Mhada was not among the entities enlisted with the government registration office for prohibiting certain sale deeds. The state registrar comes under the state revenue department and the list of prohibited deeds was drafted by the concerned department. Now, the state should ensure the inclusion of the Mhada’s name into the list to prohibit registration of sale deeds concerning properties and land parcels of Mhada, it said.
But recommended criminal proceedings against builder
Interestingly, the Joseph committee which preferred maintaining silence over the action against Mhada officials recommended criminal proceedings against Ms. Guruashish. The committee thought that the Patra Chawl redevelopment has become a failed project. The committee also asked the state government to suggest modalities for the effective monitoring and submission of progress reports at regular intervals.
All said and done, it becomes clear that despite having three or more IAS officers- each heading Mhada, Mumbai housing board, repair & reconstruction board, and Konkan Housing Board respectively and a senior IPS heading its vigilance unit such grave anomalies take place. The committee as well as the state government is silent over the mishandling of the Patra Chawl project or seems to have decided to turn a blind eye.
In the Patra Chawl case, the ED probe may reveal at which stage did Sanjay Raut enter the scene, and what was the nexus between the developer, Pravin Raut, and the developers who bought development rights from him.
Five-Member panel working on modalities
Since Mhada never transfers title rights of the land parcels, the sale of development rights becomes void. The tripartite agreement has also been scrapped but a few litigations are still pending at different stages. The state government has asked Mhada to carry out further development works on its own. The residents are still waiting for the rent arrears. The state and the Mhada have now appointed a five-member panel headed by retd Justice D. K. Deshmukh to work on the third-party interests created by the sale of development rights.
Mumbai- in the hands of builders
The overall picture shows us that Mhada has no effective control over its projects, and land parcels even though it was created by special legislation. The murky picture of Mumbai- where intense battles take place for a few square feet thanks to the geographical limitations and prices of land, has become a victim of haphazard constructions undertaken by construction czars. The nexus between the authorities and the builders have been a major cause of worry. That’s why very few people spoke for the 672 families. It was only after the ED action against Sanjay Raut that the project became a hot topic exposing the murkier side of the so-called best-administered state.
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