FIR ordered against MHADA officials and developers for causing over Rs 40,000 crores loss to state

Mumbai: Nailing the ‘unholy nexus’ between the defaulting developers and the officials of the Maharashtra Housing and Area Development Authority (MHADA), the Bombay High Court on Wednesday ordered the Economic Offences Wing (EOW) of Mumbai Police to register an FIR against them.

This comes after the HC noted that the developers and the bureaucrats allegedly duped the state to the tune of Rs 40,000 crore.

A bench of Justices Satyaranjan Dharmadhikari and Sandeep Shinde has ordered the EOW to file the FIR within five days against all the MHADA officials, who have connived with defaulting developers, who have failed to give back to the government, a total of 1.37 lakh square metres of surplus area from the redeveloped cessed buildings.

The FIR is likely to be filed against IAS officers Sumant Bhange and Sambhaji Zende, the then chiefs of MHADA and several other low rank officials and developers.

The significant judgment was delivered while dealing with a criminal public interest litigation filed by activist Kamlakar Shenoy, claiming that MHADA has failed to take possession of around 1.37 lakh square meters of surplus area from developers after redevelopment of cessed buildings.

Notably, MHADA is the agency responsible for the maintenance of hundreds of old and dilapidated buildings, which are mostly privately-owned in the city. The tenants of this buildings pay ‘cess’ to the housing agency.

In his plea, Shenoy argued that as per the provisions of the Development Control Regulation, any surplus area of a redevelopment project, has to be surrendered back to the government by the developer. He argued that such a land is a property of the government.

Accordingly, he accused MHADA officials of ‘wilfully’ not recovering the surplus area from the redeveloped buildings, until 2010, when he filed multiple applications under the Right To Information (RTI) act seeking details on the issue.

As per Shenoy, at least 379 developers have defaulted in giving back the surplus area, measuring over 1.37 lakh square metres. He accordingly filed complaints with the Mumbai police, however, no FIR was registered initially.

The matter was then dealt by two senior officials of the Anti Corruption Bureau (ACB) who concluded that the conduct of MHADA officials was not ‘free of doubt’ and accordingly recommended thorough probe. Despite their findings, the EOW kept on dragging its feet on registering an FIR.

“The material placed on record shows the authorities (EOW and others) themselves, that for years together and at least since 1991, the officials of MHADA have not taken any steps to recover the penalty or to recover constructed surplus area from such developers to whom permissions weregranted for re-developing cess buildings,” the judges noted.

The bench then relied upon the findings of the two officials of ACB and said, “Two high rank officers of the state were of the opinion that Shenoy’s complaint prima-facie discloses cognizable offence committed by the MHADA officials. However, in spite of this fact, the EOW and the ACB declined to entertain the complaint,” the bench noted.

“It is nothing but shirking the responsibility and acting in defiance of provision of penal laws,” the judges noted in their order.