Developers Arrested for Defrauding 78 Buyers in Failed Mumbai Real Estate Project

Mumbai: Ramesh Shah and his son Rahul Shah, developers of Radius Sumer Developers, have been arrested for cheating 78 flat buyers out of Rs 35.7 crore in a failed housing project in Mazagaon.

Real EstateDevelopersFraudMumbaiRadius Sumer DevelopersReal Estate MumbaiMay 16, 2025

Developers Arrested for Defrauding 78 Buyers in Failed Mumbai Real Estate Project
Real Estate Mumbai:Mumbai: Ramesh Shah (65) and his son Rahul Shah (40), well-known developers of Radius Sumer Developers, were arrested by the city police's Economic Offences Wing (EOW) on Friday. The charges against them include luring 78 flat buyers to invest in a housing project in Mazagaon, failing to develop it, and cheating them out of Rs 35.7 crore. The father-son duo was arrested from their plush apartment in Gamdevi and produced before the special MPID court, which remanded them to police custody. The primary complainant is Mahesh Mirani and his non-resident Hong Kong-based brother, Purushottam Mirani. They accused the developers and the company's director, Sanjay Rajkumar Chhabria, of defrauding them since 2016 by luring them to invest in the failed ‘Harbor Heights' project. Besides Mahesh and Purushottam Mirani, there are 77 other investors who invested or booked flats in the project, which was never developed, according to investigating officer Ravindra Avhad. Mirani, a resident of Bandra West and proprietor of Metro Impex, claimed that he and his brother were lured into investing in the under-construction project during an exhibition in Hong Kong in late 2016. The project was promoted as a lucrative opportunity for NRIs seeking investment in Indian real estate. Following an in-person meeting with Chhabria and Rahul Shah in February 2017, the brothers entered into a Memorandum of Understanding (MoU) through their partnership firm, Metro Investment. The deal involved purchasing 18,181 sq ft of carpet area at Rs 28,875 per sq ft, amounting to a total of Rs 52.5 crore. An advance of Rs 21.95 crore was made via official banking channels and was documented through tax receipts, allotment letters, and booking forms. The MoU included a two-year lock-in period, with provisions for a refund if the developer failed to obtain a commencement certificate (CC) up to the 25th floor of Tower 3. However, even by 2019, only a plinth-level certificate was issued. Consequently, a cancellation agreement was signed in April 2019. As per the new agreement, the developer issued eight cheques totalling Rs 35.7 crore, including interest and taxes. However, all cheques were dishonoured due to insufficient funds in the developer's bank account, leading to claims of deliberate default and fraud. Mirani alleged that despite repeated assurances and documented agreements, Radius Sumer Developers neither progressed with the construction nor returned the invested funds. The arrest of Ramesh Shah and Rahul Shah is a significant step in the ongoing investigation, and the police are working to recover the funds and bring justice to the affected investors. The case highlights the risks associated with real estate investments, especially in projects that do not have a track record of successful completion.

Frequently Asked Questions

What is the Harbor Heights project? A: The Harbor Heights project is a housing project in Mazagaon, Mumbai, that was promoted as a lucrative investment opportunity for NRIs. However, the project failed to develop as promised, leading to the arrest of the developers. Q: Who are the primary complainants in this case? A: The primary complainants are Mahesh Mirani and his non-resident Hong Kong-based brother, Purushottam Mirani. They accused the developers of defrauding them out of Rs 35.7 crore. Q: What charges are the developers facing? A: The developers, Ramesh Shah and Rahul Shah, are facing charges of cheating under Section 420 of the IPC and under the Maharashtra Protection of Interest of Depositors (MPID) Act. Q: How much money was involved in the fraud? A: The total amount of money involved in the fraud is Rs 35.7 crore, which was invested by 78 flat buyers in the failed Harbor Heights project. Q: What is the current status of the legal proceedings? A: The developers have been arrested and produced before the special MPID court, which remanded them to police custody. The police are continuing their investigation to recover the funds and bring justice to the affected investors.

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