The Hiranandani Group has received just a slap on the wrist in the alleged multi-crore land scam involving its Powai project.A state government-appointed arbitrator has absolved builder Niranjan Hiranandani of fraud, concealment and violation of lease agreement with the Mumbai Metropolitan Region Development Authority in the 230-acre Powai Area Development Scheme.

[quote]Arbitrator Arvind Sawant, former Kerala HC chief justice, also rejected the MMRDA’s Rs 89.75-crore damage claim on the builder. However, Justice Sawant said the builder could not seek a refund of the Rs 3 crore he had deposited with the MMRDA in 2008 to enable him to carry out the construction.[/quote]

In 1986, a tripartite agreement was signed by the Powai land owners (with Hiranandani holding the power of attorney), the state government and the MMRDA to set up a residential township, mostly for low-income housing.

A state government appointed arbitrator in the Powai land case involving the Hiranandani Group has ruled that the authorities failed to detect any irregularities for over 20 years and the case was ‘barred by the law of limitation.’ The developer will however forfeit Rs 3 crore he paid MMRDA in 2008 to continue construction.

After a tripartite agreement was signed in 1986 by the land owners at Powai, the state government and the MMRDA for the Powai residential township, the developer, Niranjan Hiranandani, has built 70 buildings since 1989. One of the MMRDA’s allegations was that the builder amalgamated smaller flats meant for public housing and sold them as one large unit to high-end clients.

[box type=”note” size=”large” style=”rounded”]In January 2009, the MMRDA claimed damages of Rs 1,993 crore from the developer, but later revised it to Rs 89 crore. “Even assuming that the claimants (MMRDA and the state government) were entitled to claim any amount in respect of the alleged violations, these claims are clearly barred by the law of limitation…,” said the 150-page report submitted last month by Justice Arvind V Sawant, former Kerala High Court Chief Justice.[/box]

The MMRDA said the builder had procured exemption under the now-abolished Urban Land Ceiling (Regulation ) Act on the condition that half the flats were to measure 40 sq m (430 sq ft) in size, and the remainder 80 sq m (860 sq ft).

An inquiry initiated by the MMRDA commissioner with the help of the BMC in 2008 revealed that out of the 5.74 lakh sq m of built-up area allowed on the land, the developer used 76,120 sq m, or 15%, for low-income housing. A large majority of the apartments were amalgamated and sold as luxury pads of 2,000 to 4,000 sq ft.

The then MMRDA commissioner Ratnakar Gaikwad imposed a penalty of Rs 1,993 crore on the developer for building larger flats and commercial complexes when no such permission was given under the agreement. Subsequently, when Hiranandani explained his case to the government, the penalty was reworked to around Rs 89 crore.

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