HC orders probe after PIL alleges MHADA official-builder nexus

The Bombay High Court today ordered a probe by Anti-Corruption Bureau into allegations that several developers failed to hand over a part of redeveloped properties to Maharashtra Housing and Area Development Authority (MHADA), causing loss to the exchequer.
A public interest litigation filed in the court claimed that builders often fail to hand over part of the redeveloped "cess buildings", which they are required to do according to the agreement with MHADA.
MHADA officials were complicit in this, it alleged.
Cess buildings are old, dilapidated buildings, whose maintenance is the responsibility of MHADA, a state body. Residents of the buildings pay a "cess" to the MHADA for this.

A bench of justices S C Dharmadhikari and Bharati Dangre also directed petitioner Kamlakar Shenoy to record his statement with the state ACB. MHADA should come up with a procedure to prevent such practices in the future, it said.
The government provides additional Floor Space Index (FSI) to developers as an incentive to redevelop dilapidated properties; in return the developers are required to return a few flats in the redeveloped building to MHADA.

Shenoy alleged that developers must surrender a part of the redeveloped property to MHADA before obtaining Occupation Certificate, but it often doesn't happens.
This is very common in redevelopment of cess buildings in the upscale south Mumbai area, he said.

This has caused a loss of about Rs 14,000 crore to MHADA due to "deliberate inaction" of its officials, he said.
MHADA told the court that cases of breach of agreement by developers occurred before 2011, not thereafter.
"We have already filed FIRs against private developers in the earliercases," the MHADA lawyer told the HC. It has also initiated civil proceedings in these cases, the lawyer added.
Shenoy, however, said while criminal cases were filed against developers, no action was even taken against the MHADA officials complicit in these frauds.
The court said the ACB should look into the entire case and take appropriate action.