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Loan diversion, stalled flats: Bengaluru police launch probe against bank officials, developers in ‘Rs 130-crore housing fraud’
Over 123 homebuyers, mostly senior citizens, have been left in the lurch after paying Rs 70 crore for flats that were never delivered.
The victims were allegedly promised delivery of 123 flats (Image generated using AI).
The Central Crime Branch (CCB) of the Bengaluru police Friday registered an FIR against Shore Dwellings Pvt Ltd (Mantri Dwellings), senior officials of ICICI Bank, Kappa Developers LLP, and others in connection with a housing fraud allegedly involving over Rs 130 crore.
According to the complaint, joint development agreements were signed between Shore Dwellings and senior developers for constructing residential flats on properties in Kharadi and Ghorpadi villages, Haveli taluk, Pune district, Maharashtra. Shore Dwellings allegedly promised delivery of 123 flats and collected around Rs 70 crore from homebuyers.
The complaint alleges that Shore Dwellings mortgaged these properties to Yes Bank and obtained loans totalling approximately Rs 40 crore, which were later taken over by ICICI Bank. ICICI Bank allegedly sanctioned loans totalling nearly Rs 130 crore, of which Rs 60.67 crore was disbursed. Despite minimal construction activity, bank officials are accused of releasing funds in violation of project finance norms, with portions of the loan allegedly diverted for non-construction purposes.
In December 2021, an agreement was executed with Kappa Developers LLP to develop the project, allegedly without safeguarding the interests of existing flat purchasers. Other accused include Nidhi Jain and Plaza Agencies Pvt Ltd.
Sources said the initial promoters operated from an office on Vittal Malia Road, Bengaluru, while the project loans were sanctioned by banks and financiers from the city, establishing a financial nexus to Bengaluru. The case pertains to the stalled Mantri Vantage project in Pune, developed by Shore Dwellings Pvt Ltd, a subsidiary of Mantri Developers Pvt Ltd.
The FIR registered after the complaint was submitted to the Commissioner of Police, Bengaluru, cites multiple provisions of the Indian Penal Code (IPC), including Sections 120B (criminal conspiracy), 403 (dishonest misappropriation), 405/406 (criminal breach of trust), 415/420 (cheating), and 464 (forgery). These provisions cover conspiracy, misappropriation, cheating, breach of trust, and document fabrication.
Sources say the project, Mantri Vantage in Pune, a subsidiary of Mantri Developers Pvt Ltd, was originally scheduled for completion in December 2019 but stalled during the Covid-19 pandemic. By 2021, promoters became unresponsive. Around 123 flat buyers – mostly senior citizens – had paid over Rs 70 crore via advance bookings and instalments. Buyers later discovered that the project was mortgaged to Yes Bank and ICICI Bank, and the loan account was classified as NPA in 2019.
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In 2021, arrangements were allegedly attempted between the developer, lenders, and a third-party developer for a takeover via one-time settlement, but the plan did not materialise. In December 2024, buyers noticed a possession notice on-site and discovered previously undisclosed financial and legal arrangements affecting the project.
With construction stalled for over seven years and only partial structures in place, buyers – many still paying EMIs – have filed criminal complaints alleging financial irregularities and lack of transparency.
Further investigations are underway.
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