The state government pulled up MCGM’s high-powered committee for not exercising due diligence.
To some activists, the design behind Remaking of Mumbai Federation was clear from the start. UTSAL KARANI AND HIS COLLEAGUES AT JANHIT MANCH blew the whistle on Lok Group and ROMF several times, until Chief Minister Prithviraj Chavan and Municipal Commissioner Subodh Kumar finally opened their eyes.
We need to remember that builders can create a marketable asset without having anything in hand, just like magic.
We must remember that builders will always find innovative ways of bypassing the processes of competitive bidding and project evaluation by whipping up public sentiments.
On this solemn occasion of Shri Lalit Gandhi’s second death anniversary, let us all maintain one minute’s silence and remember how Lok Group and Remaking of Mumbai Federation nearly pulled a fast one on this city.
Contrary to the public perception that was created, there was nothing “inclusive” about Remaking of Mumbai Federation. It was never a true federation of stakeholders, and it never gained the grassroots level support from landlords and tenants of Chira Bazar. The couple of tenants associations supposedly supporting ROMF were little more than letterheads.
To Lalit Gandhi’s Lok Group — the owner of this NGO — Chira Bazaar Cluster Development was a cash cow to be carved up into beef and sold to the highest bidder. Had things gone according to plan, Lok Group might have reaped bumper profits by selling it for at least Rs 37.5 crores, if not much more. See the last page of the Chira Bazaar sale agreement between Lok Group and Unity Realty & Development Ltd: http://tinyurl.com/Chira-Bazaar-Sale-Agreement
On page 6, under the heading, ‘Cancellation of earlier MOUs and Agreements’, this document refers to an earlier transaction worth Rs 37.5 crore in August 2010, in post-dated cheques dated from November 2010 till end-2013. ROMF had claimed that it would deliver the Chira Bazaar cluster development project, tied up neatly, to Unity Developers. (Unity Infraprojects Limited — UIL — is the holding Company of Unity Realty & Developers Ltd – the buyer of this project. The promoters of UIL — K K Avarsekar and his associates – are known to have the blessings of the Thackeray family; this may explain the eagerness of MCGM’s High Powered Committee to overlook the glaring shortcomings of this project.)
So, in effect, this present agreement, which scaled down the payment to Rs 10 crore, was an admission of ROMF’s inability to deliver as promised.
As per the present agreement made in Jan 2011, Lok Group and ROMF sold a 5 acre “pilot project” carved out of this 30-acre project to Unity Realty & Development Ltd (URDL) for down-payment of Rs 5 crore, plus Rs 5 crore linked to the project progress. See page 9-11 of their redevelopment agreement under the heading, ‘Monetary Obligations & Considerations’.(Incidentally, this deal was transacted on stamp paper of Rs 100. Stamp duty of 5% of value of immovable properties / land / development rights was not paid on this Development Agreement. If we take the deal at its face value — Rs 10 crore – it amounts to stamp duty evasion of about Rs 50 lakh. But some experts feel that the true value of this agreement is far beyond these figures; even under the scaled-down agreement, ROMF was delivering to Unity Realty an intangible asset worth hundreds of crores. One way or another, it is a huge evasion, and Maharashtra Stamp Duty department should estimate what its true value is!)
In this agreement, the seller is ROMHIF. So what is the connection of ROMHIF with ROMF? This extract from Lok Housing & Constructions Ltd Directors Report 2010 explains it: “Remaking of Mumbai Housing Infrastructure & Finance Ltd (ROMHIF) submits proposal for Chira Bazaar Cluster redevelopment in C Ward of Mumbai. The High Powered Committee clears Chira Bazaar Cluster redevelopment proposal of ROMHIF to redevelop around 30 acres of land (362 buildings and over 8000 tenements)… The proposal for demolishing of old and dilapidated structures and construction of high rise buildings is under consideration with Government of Maharashtra… ROMHIF has submitted its proposal to redevelop around 30 acres of land (362 buildings and over 8000 tenements) in the Kalbadevi-Chira Bazar area in C Ward… It proposes to demolish these old and dilapidated buildings and in their place construct high rise structure in the ear-marked plots… Lok Housing Ltd has 49% stake in the shareholding of Remaking of Mumbai Development Ltd. (ROMD) which is the holding Company for ROMHIF”. As per the website of Registrar of Companies, the registered Addresses of both ROMD and ROMHIF is Lok Bhavan, Andheri East, Mumbai. Paid up capital of ROMD and ROMHIF is Rs 40 lakh and Rs 5 crore respectively.
The state urban development department has rapped the civic high-powered committee for not exercising due diligence while clearing the Remaking of Mumbai Federation (ROMF)’s ambitious 29-acre cluster redevelopment project. It has pointed out that the proposal was forwarded to the state without ensuring irrevocable consent from tenants and landlords on stamp paper.
The project was to cover Mumbai’s oldest ‘gold street’, Chira Bazaar, and parts of Kalbadevi.
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