MHADA Allocates Rs 200 Crore to Reclaim Plots in Notorious Patra Chawl Redevelopment Scam
The Maharashtra Housing and Area Development Authority (MHADA) is set to pay a substantial sum of Rs 200 crore to re-acquire three plots that were central to the massive Rs 1,039-crore Patra Chawl redevelopment scam. This significant financial decision received formal approval from the state cabinet last week, with an official government resolution being issued on Thursday to solidify the arrangement.
Legal Framework and Contempt Proceedings
This payment forms a crucial part of MHADA's consent terms that were formally filed before the High Court. The court is currently hearing a contempt petition filed by Guruashish Constructions, a subsidiary of the troubled Housing Development and Infrastructure Limited (HDIL). The legal proceedings have brought renewed attention to this long-standing redevelopment controversy that has affected hundreds of residents.
Historical Context of the Failed Redevelopment Project
The origins of this complex situation trace back to 2008 when MHADA initially appointed Guruashish Constructions to undertake the ambitious redevelopment project in Mumbai's Goregaon locality. A tripartite agreement was carefully negotiated and signed between the local residents, the planning authority, and the builder, with the shared goal of transforming the aging housing complex.
However, by 2011, the project had completely stalled, leaving residents in limbo. MHADA eventually took over direct control of the project in 2018 and successfully completed it by 2024, but not before significant complications had emerged.
Alleged Financial Misappropriation and Plot Sales
During the period when the redevelopment project remained inactive, the builder made a controversial move by selling nine plots that were originally part of the Patra Chawl layout to various other developers. The Enforcement Directorate has made serious allegations that approximately Rs 1,048 crore was raised through these sales, and that the majority of funds intended for the construction of 3,000 flats to house 672 tenants were systematically siphoned off.
The current status of these plots varies significantly:
- Private housing societies have been constructed on three of the plots, with the court formally conveying these to the respective societies
- One plot has been specifically reserved for rehabilitation purposes
- On another plot, construction was permitted to continue since the plinth had already been established
- The remaining four plots currently remain vacant and undeveloped
Compensation Dispute and Builder Negotiations
In their contempt petition, Guruashish Constructions has sought substantial compensation along with 9% simple interest dating back to 2011. The builder has indicated that if appropriate compensation is provided, all rights to the properties would then legally vest with MHADA.
However, MHADA has agreed to pay interest only from 2018, which marks the year when the authority assumed direct control over the stalled project. While three builders involved in the dispute have agreed to this arrangement, officials revealed that the fourth builder initially refused the terms.
"Now that the cabinet has approved the payment to the other builder, the fourth builder, too, has agreed to accept the payment," confirmed a government official familiar with the negotiations.
Financial Recovery Mechanism
The substantial Rs 200 crore payment will be strategically recovered through the future sale of flats to be constructed on these reclaimed plots at prevailing market rates. This recovery mechanism was specifically recommended by a government committee headed by former chief secretary Johny Joseph, ensuring a financially sustainable approach to resolving this complex redevelopment dispute.
This development represents a significant step toward resolving one of Mumbai's most prominent housing redevelopment controversies, bringing potential closure to a saga that has impacted numerous residents and highlighted systemic challenges in urban redevelopment projects.
