Chira Bazar builders get 55-cr stamp duty fine

They, however, claim that there is no need to pay stamp duty as they have not acquired any land

The office of the collector of stamps has found that the two developers, who had signed an agreement to develop all the buildings in Chira Bazaar, have evaded duty. The state department has asked the two developers to pay Rs 55 crore as stamp duty and penalty. At the heart of the controversy is Mayank Gandhi, a member of the Arvind Kejriwal’s Aam Aadmi Parti. Gandhi was witness to the agreement signed by the two real estate developers to develop Chira Bazar. He was also a member of the NGO that promoted redevelopment in the area.

The issue goes back to 2007 when Lalit Gandhi of Lok Housing formed an NGO – Remaking of Mumbai Federation (ROMF) – to take up cluster development of Chira Bazar, in afirst of its kind experiment. His nephew Mayank, the secretary of the NGO, began interacting with the 8,000 families in the area.

At the time, Remaking of Mumbai Housing Infrastructure (ROMIF), a commercial entity associated with Lok Housing, submitted proposals to various government departments seeking clearance for cluster development of Chira Bazar. However, four years later, ROMIF sold a part of the project to Unity Realty and Developers Ltd (URDL) for Rs 10 crore, claiming they had consent from the residents. Mayank was accused of commercially exploiting work done by his NGO and allowing its commercial arm to sell it to another developer. On the basis of this allegation, the Aam Aadmi Party ordered a probe against Mayank Gandhi by their internal Lokpal.

Meanwhile, Janhit Manch, a Mumbai based NGO filed a complaint to the Office of Collector of Stamp, alleging the developers had evaded stamp duty on the agreement they signed.

“The actual worth of the project was much more. It is also a clear case of commercial entities and NGOs working together with sole motive of earning profits,” alleged Utsal Karani, secretary of Janhit Manch.

The enforcement cell of the Collector of Stamps then initiated an inquiry where both developers were asked to explain their stand. They claim that it was merely an understanding between the two parties and that they had not evaded any duty.

The investigators however did not buy the explanation given by the developers, stating that it was a joint development agreement between the two sides. On March 13, a notice was issued to the developers seeking Rs 36.42 crore stamp duty and a penalty of Rs 18.94 crore.

When Mumbai Mirror contacted ROMF and ROMIF officials, their representative Anil Shinde said, “We received only one communication a few months ago from Collector of Stamps Office and we responded to it. After that we haven’t received any notice to pay duty.”

Vinay Digrajkar, senior manager, corporate communications at URDL confirmed that they had received a notice to pay Rs 55 crore, but added that the developers were yet to take a decision on how to respond to the notice. “It was just an arrangement for future joint business of redevelopment. But land wasn’t procured by any partner, as neither entered in to an agreement of redevelopment with anybody. Under such circumstances Bombay Stamp Act provisions are not applicable to the said arrangement.”

Mayank Gandhi said that he had resigned from the NGO and had nothing to do with the issue.“I merely signed as a witness on the agreement. Let the state recover dues from the two entities,” he said.
Curtosy:
Yogesh.Sadhwani @timesgroup.com 
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