Sanjay Raut gets bail in Mumbai’s Patra Chawl case, what is he accused of?

The ED immediately moved the Bombay High Court seeking an interim stay on the bail order, but did not get relief. Justice Bharati Dangre told the agency that she could not stay the lower court’s order before she had seen it, and had heard arguments from both sides.

The Bench said it would hear the ED’s application seeking cancellation of the bail on Thursday (November 10). “If after hearing, I pass an order cancelling the bail then the accused persons can be taken back in custody,” Justice Dangre said.

What is the Patra Chawl redevelopment project?

Patra Chawl is the popular name for Siddharth Nagar, located in the northern Mumbai suburb of Goregaon. It had a total of 672 houses, spread over an area of 47 acres.

In 2008, the Maharashtra Housing and Area Development Authority (MHADA) took up the redevelopment project and gave the contract to Guru Ashish Construction Private Limited (GACPL) to rehabilitate 672 tenants and to redevelop the locality.

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

So where does Sanjay Raut come in?

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, who is a close associate of Sanjay Raut, and 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 did the ED’s investigations find?

The agency has claimed that Pravin Raut received Rs 100 crore from real estate company Housing Development and Infrastructure Limited (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.

Sanjay Raut was arrested on July 31, and was accused of committing offences under Section 3 read with Section 2(1)(u) of the PMLA, 2002. The ED has alleged that he used Pravin Raut as his “proxy” to receive illegal monetary gratification from GACPL.

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. As the tenants started complaining, it was also revealed around the same time that Pravin Raut and the other directors of GACL appeared to have misled MHADA and sold the FSI to nine private developers. Subsequently, GACL launched Meadows, and collected the hefty booking amount.

Due to the non-payment of rent, delay, and alleged irregularities, 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.

In 2020, the Maharashtra government appointed a one-member committee led by Johnny Joseph, a retired chief secretary of the state, 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 Patra Chawl again. On February 22 this year, the stalled construction work was restarted on the orders of then Chief Minister Uddhav Thackeray.