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The Mumbai police's Economic Offences Wing detained Radius Sumer Developers promoters Ramesh Shah and his son Rahul Shah earlier this week on suspicion of defrauding 78 investors out of about INR 35.7 crore. The investors had committed funds to the 'Harbor Heights' residential project in Mazgaon, South Mumbai, which was stalled at the plinth level for years. Despite repeated assurances of timely possession and promising lucrative returns, the project remained incomplete, and refund cheques issued to buyers were dishonoured. This case has spotlighted the persistent risks buyers face in incomplete projects and the urgent need for stricter regulatory enforcement in the real estate sector.
In a significant development earlier this week, the Economic Offences Wing (EOW) of Mumbai police arrested Ramesh Shah and his son Rahul Shah, promoters of Radius Sumer Developers, in connection with allegations of defrauding homebuyers to the tune of INR 35.7 crore. The case pertains to the stalled 'Harbor Heights' residential project situated in Mazgaon, South Mumbai, which failed to progress beyond the plinth stage despite large-scale investments from 78 buyers. Advertisement
The initial complaint was filed by Mahesh Mirani and his brother Purushottam Mirani, non-resident Indians based in Hong Kong, who were among the investors misled by the developers. The Mirani brothers had invested in the project during a real estate exhibition in Hong Kong several years ago. Following this, they entered into a Memorandum of Understanding (MoU) through their partnership firm, Metro Investment, for acquiring 18,181 square feet of carpet area at a price of INR 28,875 per square foot. This transaction amounted to a total investment of INR 52.5 crore. The Miranis made an advance payment of INR 21.95 crore via official banking channels, with all relevant documents such as tax receipts, booking forms, and allotment letters duly executed.
The MoU had stipulated a two-year lock-in period and included a provision allowing for a refund under specific conditions. However, by the end of that period, the project had made little to no visible progress. Frustrated by delays, the Miranis and other investors requested cancellation of the deal and sought a refund. In response, the promoters issued eight cheques amounting to INR 35.7 crore. Unfortunately, all these cheques were dishonoured due to insufficient funds, raising suspicions of deliberate cheating.
The EOW's investigation unearthed that despite repeated assurances from the promoters promising project completion and possession within stipulated timelines, the development remained incomplete. The promoters have consequently been charged under relevant sections of the Indian Penal Code for cheating and under the Maharashtra Protection of Interest of Depositors (MPID) Act, aimed at safeguarding depositors' interests in financial transactions.
The case is illustrative of the broader challenges faced by real estate investors in India, particularly those who fall victim to stalled or abandoned projects. Despite regulatory reforms such as the Real Estate (Regulation and Development) Act (RERA), enforcement gaps and lack of timely action still leave many homebuyers vulnerable to fraud and financial loss.
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