Mumbai Economic Offences Wing Investigates Major Construction Fraud Case
The Economic Offences Wing (EOW) of Mumbai has registered a formal case against a director of a construction firm and his son for allegedly defrauding a businessman of Rs 5.15 crore. The complaint centers on a slum redevelopment project in Malad (East), where the accused are accused of making false promises regarding development rights and failing to fulfill contractual obligations.
Details of the Alleged Fraud Scheme
According to the FIR filed at Kasturba Marg police station, the complainant, Nilesh Raghani, director of Classic Treasure Pvt. Ltd., was introduced to directors Mansukh H. Shah and his son Akash Mansukh Shah of Shah Housecon Pvt. Ltd. in March 2025. The discussion involved a Slum Rehabilitation Authority (SRA) redevelopment project at Khot Dongri Cooperative Housing Society on Rani Sati Marg.
The parties executed several agreements:
- A term sheet dated May 6, 2025
- A Memorandum of Understanding (MoU) on May 17, 2025
- A supplementary MoU on July 16, 2025
These documents outlined plans for developing a 5,600 square meter plot with a proposed sale component of 4.5 lakh square feet. Raghani's company paid the full Rs 5.15 crore in installments as per the MoU schedule.
Multiple Allegations of Misrepresentation and Fraud
Raghani alleges that after making the payments, he discovered numerous irregularities and false representations:
- False Development Rights: The accused allegedly misrepresented their development rights over the land, which was reportedly owned by a charitable trust rather than being available for the promised redevelopment.
- Failure to Perform Essential Work: Shah Housecon allegedly failed to carry out crucial redevelopment tasks including eviction of occupants, title creation, and coordination with stakeholders.
- Hidden Land Disputes: The company is accused of concealing existing disputes related to the land in question.
- Parallel Agreements: The FIR alleges that Shah Housecon entered into separate redevelopment agreements for the same plot with other developers, including Jha Buildcon LLP (Rs 6.93 crore), B-Right Real Estate Ventures LLP (Rs 14 crore), and Salasar Land Developers.
- Additional Financial Demands: After receiving the initial payment, the accused allegedly demanded an additional Rs 25 crore from Raghani's company, accompanied by threats when the demand was refused.
Complications with Slum Dwellers and Legal Challenges
The investigation has revealed further complications regarding the slum dwellers on the disputed plot:
Many of the purported slum dwellers shown on the 5,600 square meter plot were not recognized as original occupants under SRA records. The complaint alleges that certain encroachments were created with the assistance of a local resident, from whom monthly rent of Rs 3,000 to Rs 4,000 was being collected.
Additionally, some slum dwellers have reportedly filed a writ petition in the High Court against Shah Housecon for failing to provide rent or alternate accommodation as required under rehabilitation guidelines.
Pattern of Dishonest Intent Alleged
The FIR paints a picture of systematic deception, alleging that after receiving payments from multiple parties, the accused issued termination notices, indicating dishonest intent from the beginning. Raghani has accused the directors of misusing funds, concealing critical information about land disputes, and engaging in parallel negotiations with other developers for the same property.
The Economic Offences Wing is now conducting a thorough investigation into these allegations, examining financial transactions, contractual documents, and the actual status of development rights on the disputed land. The case highlights the risks associated with real estate investments in redevelopment projects and the importance of thorough due diligence before committing substantial funds.
