Influential Pune builder Avinash Bhosale has dragged the City Industrial Development Corporation (Cidco) to court for cancelling the allotment of a 12-acre plot in Seawoods, Navi Mumbai, made to his company in 2008. Cidco’s managing director Tanaji Satre said that the Bombay high court, in an interim order, stayed the cancellation order and directed ‘status quo’ be maintained till all parties are heard. The case was recently adjourned till August 2.
“The court also said that no development be allowed on the plot till that time,” said Satre. Bhosale could not be contacted. An acquaintance said he is currently in Europe. The controversy over the land allotment to Bhosale’s firm was first reported in July 2010. The plot, reserved for a hotel, was sold to Bhosale’s Metropolis Hotels for Rs 282 crore in July 2008 after it emerged as the highest bidder.
Cidco’s then MD G S Gill later allowed Bhosale to convert half the plot into a residential zone. The decision was taken just days before Gill was to retire in March 2010. Soon after, Bhosale sold the six-acre residential portion for Rs 275 crore to the Mumbaibased builder Dheeraj Group. Cidco permitted this change of use by levying a fee of only 550 per sq m on Bhosale’s Metropolis Hotels. In short, Cidco earned just Rs 1.25 crore for allowing the change of use while Bhosale made Rs 275 crore out of it. Following TOI’s expose, the then chief minister stayed the transaction and ordered an inquiry into all such land deals approved by Cidco. Last November, a state government-appointed inquiry committee headed by urban development secretary T C Benjamin recommended cancellation of allotment.
The panel recommended that the 12-acre land allotment be cancelled as Cidco’s decision to convert part of the plot gave an unfair advantage to the winning bidder. “The other bidders were not aware that they could convert part of the plot into residential before the bids were opened in July 2008. If all the competing developers had known about this option, the plot would have fetched a much higher price than the Rs 282 crore,” said Mantralaya sources.
Satre said that following a directive from the state government, Cidco issued a cancellation order on March 16 and declared its intention to take back the plot from Bhosale. “However, on March 31, he moved court,” said Satre. “The court has told us not to take possession of the plot till further orders,” he added.
Another fallout of this deal is the apartments which the Dheeraj Group sold to buyers and investors last year. The builder planned to construct seven residential towers, each 29 storeys high, and 21 luxury villas. The apartments were designed between 1,355 sq ft and 2,690 sq ft (built-up) in size. Many of these were booked for over Rs 8,000 a sq ft. “The biggest investors are property brokers from Vashi, who booked about 80,000 sq ft in this project and paid Dheeraj 50% of the amount upfront. They want their money back,” said a Vashibased real estate developer.
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