Is RNA Corp using a Cheat-Code, or is the company bankrupt?

Dr. Bharati Lavekar, BJP MLA from Versova, wrote this letter to CM Fadnavis last week, requesting him to cancel the agreement of Aram Nagar redevelopment project awarded to RNA by MHADA. She wrote that the tenants of Aram Nagar were kept in dark and the project would only benefit only RNA, and not tenants. The CM noted in red ink on the letter that VP MHADA should stay the redevelopment process and examine the issues.

“The SRA scheme was initiated by the government to give a better quality of life to slumdwellers by moving them into well-constructed buildings. But the developer has taken undue advantage of this scheme for the last 12 years and is causing harassment to the Project Affected Persons (PAPs),” wrote Rajya Sabha MP Ramdas Athawale in this letter to Fadnavis in February 2015. In this letter, Athawale complained that although RNA builders had undertaken the redevelopment of Parishram SRA Cooperative Housing Society in Bandra East in 2002, it had completely stopped the construction work for the last two years, stopped paying rent to the displaced persons, and bounced the cheques issued to them. Although RNA was granted Commencement Certificate (CC) in 2004, it delayed construction by continually changing the plans of the sale-component for its undue advantage. As per a CAG report and as per the SRA Act, appropriate action has to be taken against the developer, Athawale said. After the demise of Anil Agarwal, his company was required to submit fresh Annexure-3 (financial capability report), or the developer should be changed by SRA, Athawale pointed out. “The developer has constructed A1 and A2 buildings in which the height of the individual flats is less than 8 ft 3 inches. The developer was given notice to demolish the same. After that, the same buildings were regularized.” said Athawale, pointing out the collusion of the administration with Anil Aggarwal. “The developer has illegally incorporated into his project the areas occupied by shop owners who are not within the scope of the SRA scheme. Also, he has illegally incorporated open plot of market admeasuring 2300 sq. metres. The developer has included 56 bogus Project Affected Persons (PAPs) supported by bogus documents. For the last 10 years, many people were accommodated in the transit camp, in individual units admeasuring around 100 square feet, forcing the families to live in cramped conditions and raising the probability of accidents. An FIR was registered against the builders for various MRTP violations. The offences were explained in a letter to the then Chief Minister Ashok Chavan by project affected persons. 

Bombay High Court passed an order against GA Builders, an RNA group entity, on 21st September 2015 for not paying rent to tenants and not getting Occupation Certificate (OC). GA Builders Pvt. Ltd. is owned by Gokul Anilkumar Aggarwal, Anubhav Anilkumar Aggarwal and Saranga Anil Aggarwal. The order in “Manjula S. Chauhan V/s. GA Builders Pvt. Ltd. and Others” panned the builder for not getting Occupation Certificate, not paying transit rent and also breach of undertaking given to the court. But this order reveals only the tip of the iceberg; the society in question, namely GA Ganga Sagar CHS of Ghatkopar East, is so full of fraud, forgery and violations committed by GA Builders in collusion with the society’s office bearers, that this building can never hope to get MCGM’s occupation certificate. There are many criminal and civil suits pending in Metropolitan Court and High court pending in this case.

East & West Builders (RNA Group) with the connivance of MCGM and SRA officials, illegally incorporated the Shastrinagar Municipal Market, Bandra East, and its open plot into an SRA scheme, causing MCGM an estimated loss of over Rs 150 crore. Thirteen shop owners led by Prabhakar M Shetty wrote a letter to CM Devendra Fadnavis in January 2015, explaining their plight. The letter says that in 2012, the developer demolished six shops completely and 21 shops partially, reducing their length by 12 feet and leaving only five feet. The shopkeepers were promised that they would be accommodated in the newly constructed building within six months. But till date, the construction work had not commenced, nor were they given any rent for alternative accommodation. In fact, after giving cheques to the shopkeepers, the builder fraudulently issued stop-payment instructions. All the shopkeepers’ efforts to contact the developer on phone and in person have been futile. Although the developer has received IOA and CC as early as 2004, the A4 building that is supposed to be constructed for shop-owners of municipal market has not been started. The site for A4 building is currently an open plot without any obstructions or encumbrances, but the work is at a complete standstill. 

In January 2012, MCGM itself had red-flagged RNA with this show-cause notice. Assistant Commissioner (Estates), MCGM, wrote to RNA‘s East & West Builders: “Whereas the Pariwar Safalya Cooperative Housing Society formed by the tenants on the subject property have appointed you as the developer for the redevelopment of the property; Whereas your architect has submitted the proposal for redevelopment of above property, the same was approved by Improvement Committee/Corporation under the Resolution no. 174 dated 7^th Feb 2005 and No. 113 dated 10^th February 2005 respectively, as per the total capitalized value amounting to Rs 29,02,91,270/- in the scheme is required to be paid by you to MCGM; Whereas you were required to complete the project within three years and also to pay remaining 90% capitalized value to MCGM before Occupation Certificate to sale component; Whereas you have failed to complete the project till date as the project completion period is already over on 17^th March 2010 and therefore cost delay for payment 90% capitalized value to the MCGM till this date; Whereas it is a failure on your part to complete the project within stipulated period which is causing loss of revenue to the MCGM and hardship to the tenants residing in the old buildings who had consented for this development as per the clause in the tripartite agreement, the project period is fixed as three years from the date of issuance of the commencement certificate by Building Proposal Department. The project period can be extended by the Municipal Corporation for the reason of delay state in your reply letter subject to your consent and payment of capitalized value on revised 20:60:20 basis of approval vide ICR 175 dated 4^th February 2009 and CR/1259 dated 9^thFebruary 2009 respectively; This office has received orders from Additional Municipal Commissioner to inform you that the Municipal Commissioner will not extend the project period if you are not able to give satisfactory explanation of the delay in completion of the project… You are hereby finally directed to show cause within seven days on receipt of this letter and to pay the 90% capitalized value amounting to Rs 26,12,62,143/- with interest thereon at 18% calculated till 31^st December 2011, amounting to Rs 8,43,91,251/-. The total amounting to Rs 34,56,53,394/- within seven days and payment of applicable stamp duty with penalty if any failing which following action will be initiated against you; The Building Proposal Department will be directed to issue stop work notice for the above referred project work and all other projects undertaken by you in MCGM; You and your companies will not be allowed to take up any other MCGM project in future; The law officer will launch prosecution against you for recovery of payment which is due to MCGM. If the building is found occupied in part or full, the building Proposal Department will be asked to issue notice u/s 353 of MMC Act and take further action, which please note”. This letter has a footnote directing Executive Engineer (Building Proposal) City to issue stop work notice to the Pariwar Safalya CHS redevelopment project and “any other project being undertaken by this developer / Notice u/s 353 of MMC Act and not to process any other redevelopment project as per AMC(ES)s order under No. AMC/ES/702/4 dated 26-12-2011.”

RTI Activist Sulaiman Bhimani, who is also a Project Affected Person (PAP), recently made a detailed complaint to the Economic Offences Wing (EOW) of Mumbai Police regarding the corrupt misdoings of Skyline Construction Company of RNA Group at its SRA project at Oshiwara District Centre (ODC), Jogeshwari West. Highlights of this complaint: “MMRDA has spent almost Rs 9 crore for repairing the substandard work in PAP building in lieu of which TDR was released, and MMRDA has not recovered any amount from the developer, the MMRDA officials accepted the substandard work without any verification. The plumber has certified that he has used AC pipes but on site very low quality and substandard PVC pipes have been used and the engineer who accepted this certificate has not put any note on it for the change of material nor raised any objection for substandard work. The Project Management Consultant (PMC) certified that Plumbing and Drainage work is done as per approved plan, but on site the story is different. The Chambers as per approved plan have been shown 1.5mts away from the building line but onsite they are touching the building line as well as the underground water tank. Due to this shoddy work the water gets contaminated and even after spending Rs 9 crores this defect still exists. The Developer was issued IOA and CC on the same day, which is very unusual. Normally IOA is issued to the developer with 38 conditions to comply and it takes almost 45 days to comply all the conditions of IOA and the developer after complying all the conditions applies for CC and the MMRDA officials visit the site to verify all the compliance but in this case the IOA and CC were issued on the same day. There is open space violation which is in violation of fire safety norms, but MMRDA officials have turned Nelson eyes even after repeated complaints. The Recreation which as per Agreement was supposed to be developed by developer not been handed over to MMRDA for Public Use even after 10 years. Pedestrian Plaza as per Agreement and IOA condition and LOI was supposed to be developed by developer, but the same is not constructed. But TDR/FSI of 55000 sft is released for the same to the developer.” The so-called pedestrian plaza is a scam whereby, without laying a single brick or redeveloping a single inch of slum land, RNA earned 55,000 square feet of TDR, worth over Rs 4,000/- per square foot. That alone means a free gift of over Rs 22 crore for the Aggarwal family. He has also pointed out how RNA Exotica in ODC has gobbled up a 25-metre public road and used it for RNA‘s site office.

In the case of RNA Palazzo in Kandivali West, which is being advertised as “space, Luxury and lifestyle all packed into your customized 2 BHK apartments”, 24 investors and flat purchasers have filed a complaint to EOW of Mumbai Police of outright cheating and fraud. After cumulatively paying more than Rs 50 crore (some have paid 50 percent, and other 100 percent of the value of the flat purchase), these purchasers are left high and dry, because the construction work stopped in September 2011, and has not resumed till date. The completion date was December 2012, and more thanthree years later, the Aggarwals have nothing to offer their buyers other than false assurances.