Explained: What is Mumbai’s Patra Chawl case, in which ED has summoned Shiv Sena leader Sanjay Raut?

A tripartite agreement was signed between GACPL, the tenants’ society and MHADA for the redevelopment of Patra Chawl. It has been 14 years since then, and the people of the area continue to wait to get their homes.

So, what is the ED’s case against Sanjay Raut?

According to the tripartite agreement, GACPL was to provide flats to 672 tenants of Patra Chawl, develop flats for MHADA, and sell the remaining area to private developers.

However, the ED claims, Pravin Raut, a close associate of Sanjay Raut, and the other directors of Guru Ashish Constructions misled MHADA, and sold the floor space index (FSI) to nine private developers, collecting Rs 901.79 crore, without constructing either the rehab portion for the 672 displaced tenants, or the MHADA portion.

Subsequently, GACPL launched a project called Meadows, and took the booking amount of around Rs 138 crore from flat buyers. The ED has alleged that the total proceeds of the crime generated by Guru Ashish Constructions through these “illegal activities” amount to Rs 1,039.79 crore.

What does ED claim to have found during its probe?

The agency has claimed that Pravin Raut received Rs 100 crore from real estate company HDIL, and “diverted” it to various accounts of “his close associates, family member, his business entities”, including the family of Sanjay Raut.

The ED has alleged that in 2010, Rs 83 lakh, which was part of the proceeds of crime, was transferred to Sanjay Raut’s wife Varsha Raut, who used the money to buy a flat in Dadar.

Apart from this, at least eight plots of land were purchased at Kihim beach at Alibaug in Maharashtra in the name of Varsha Raut and Swapna Patkar, the ED has alleged.

What went wrong with the project?

As per the agreement, the developer had to pay rent to all 672 tenants every month till the completion of the project. However, the rent was paid only till 2014-15. The tenants then started complaining about the non-payment of rent, and the delay in the completion of the project.

Around the same time, it was revealed that Pravin Raut and the other directors of GACL had misled MHADA and sold the FSI to nine private developers, collecting Rs 901.79 crore, without constructing the rehabilitation portion for the 672 displaced tenants or the MHADA portion.

Subsequently, GACL also launched a project called Meadows, and took the booking amount of around Rs 138 crore from flat buyers.

Due to the non-payment of rent, delay, and the irregularities by the developer, MHADA issued a termination notice to the developer on January 12, 2018. Against this notice, nine developers who had bought FSI from GACL, filed a suit in the Bombay High Court. The redevelopment project was stalled, leaving 672 tenants in the lurch.

What is the status of the project now?

In 2020, the Maharashtra government appointed a one-member committee led by Johnny Joseph, a retired chief secretary of Maharashtra, to study and recommend solutions for the rehabilitation and rental payment to 672 tenants.

Following the recommendations of the committee and feedback from MHADA, the state cabinet, in June 2021, approved redevelopment of the Patra Chawl again, and the government resolution was issued in July 2021.

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On February 22 this year the stalled construction work was restarted on the orders of Chief Minister Uddhav Thackeray.

Now, MHADA will develop the project and give possession of flats to the 672 residents. It will also immediately complete the remaining work in 306 flats in the building, for which a lottery draw was held, before handing over the flats to the lottery winners.

“MHADA itself will now be working on the entire project as a developer and will be providing 650 square feet carpet area flats to the 672 tenants through the redevelopment project,” said an official.