Around 40,000 crore loss noted, Bombay HC orders to file a case against MHADA.

By Abhay Shah, Realty Quarter

On September 18, the Bombay High Court ordered the authorities to file a case against Maharashtra Housing and Area Development Authority (MHADA) officials for supposedly colluding with promoters and causing the government exchequer to lose Rs 40,000 crore.

A division bench of Justices S C Dharmadhikari and S K Shinde was hearing a lawsuit of public interest filed by Kamlakar Shenoy, claiming that MHADA had neglected to take ownership of approximately 1.37 lakh sq mt of the surplus area from builders following the redevelopment of cessed buildings.

MHADA, the government housing agency, is also responsible for maintaining hundreds of old and dilapidated private buildings in Mumbai, whose tenants are paying their ‘cess’. The petitioner asserted that any surplus area of a redevelopment project is the property of the state government under Development Control Regulation 33(7). Shenoy claimed that this provision was known to MHADA authorities but still failed to retrieve surplus area from builders who redeveloped cessed buildings. In its judgement, the panel directed the police’s Economic Offences Wing to record an FIR within five days. The court took note of a letter written to the state government in April 2018 by a senior official of the Anti-Corruption Bureau, claiming that MHADA officials’ role in this matter was not above suspicion.

“Despite a senior ACB officer stating that prima facie cognizable offence had been committed, both the EOW of the town police and the ACB, they refused to accept the complaint of the petitioner.” It’s just shirking accountability and acting in breach of the law, said the court. When sanctioning a redevelopment project, part of the building area must be surrendered to MHADA.

“Once permission was granted to the developer to redevelop cessed buildings, officials of MHADA, being public servants, were under statutory obligation to ensure the recovery of the surplus constructed area.” But the MHADA authorities, by deliberate omissions, permitted developers to appropriate such surplus area and thus triggered enormous loss to the state and illegitimate benefit to developers, the high court said.

Developers sold the surplus area in the open market, the court noted.