MUMBAI, JULY 20: Seven managing committee memberes of a cooperative housing society in Kurla have been held guilty for defrauding the society of Rs 26 crore by illegally selling its floor space index (FSI) and transfer of development rights (TDR). The fraud is one of the biggest in the history of cooperative housing societies in Maharashtra.The Maharashtra State Cooperative Appellate Court (MSCAC), which pronounced its verdict on Monday, also expelled the seven accused from the Kurla Kamgar Cooperative Housing Society. The seven members, as well as three builders, also face charges of fraud in a parallel case filed by the Economic Offences Wing of the Mumbai police in the Sessions Court. If the court does indeed find them guilty, all 10 accused could face life imprisonment.While delivering his verdict, MSCAC President Anand Nirgude also deemed as illegal a seven-storey building constructed by the three builders on a plot reserved as a playground for the society.The society itself was set up in 1953 under the government's subsidised housing scheme for industrial workers on a 21-acre plot at S G Barve Marg, Kurla (E). Only industrial workers as defined by the Factories Act, 1948, were entitled to be enlisted as members though the managing committee later allowed three private builders to enrol with the society. In the course of time, 382 houses measuring 1,100 sq ft each were constructed by the society, which retained 42,000 sq ft as additional FSI as well as 70,000 sq ft as TDR.In 1993, the society's managing committee was constituted with Ganesh Gavde, Bhanudas Kadam, Vasant Puranik, Anant Aswankar, Shantaram Deshmukh, Shankar Ingavane and Harishchandra Sawant on its rolls. The committee then enrolled three builders - Champaklal Chheda, Jayantibhai Shah and Kuroon Gala - as members of the housing society, in violation of the rules.Soon thereafter, the trio submitted a proposal to the Brihanmumbai Municipal Corporation (BMC) for the construction of two seven-storey buildings on a plot reserved as playground for the society. Surprisingly, the BMC approved the plan. Purchasing the 42,000 sq ft additional FSI from the society at Rs 600 per sq ft though the prvailing market rate was Rs 3,400 per sq ft, the builders began construction on one of the two buildings in 1994. This misappropriation alone amounted to Rs 14 crore. The committee also sold the society's 70,000 sq ft TDR to Kukreja Builders in 1994, for Rs 260 per sq ft against the market rate of Rs 1,800 per sq ft. This constituted a fraud amounting to Rs 12 crore.While both deals required tenders to be floated, scrutiny by experts and the consensus of the society's General Body, the managing committee observed none of these rules. Neither did it seek permission nor apprise the suburban district collector of the deals.Besides, the managing committee, which had been elected in 1993 for a three-year term, was dissolved in 1995 and elections for a new committee were held. The seven members, held as guilty by the MSCAC, thus tried to dissociate themselves from the deals as they ceased to be office-bearers of the society. Finally, two of the society's members, Dilip Abhyankar and Deven Hatle, filed a complaint with the MSCAC in 1994.
