Developers Arrested for Defrauding 78 Investors in Failed Mumbai Real Estate Project
Ramesh Shah and Rahul Shah 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, Mumbai.
Real Estate FraudDevelopersMumbaiRadius Sumer DevelopersEconomic OffencesReal Estate NewsMay 17, 2025
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 complainant, Mahesh Mirani, and his non-resident Hong Kong-based brother, Purushottam, accused the developers and their director, Sanjay Rajkumar Chhabria, of defrauding them since 2016 by luring them to invest in the failed ‘Harbor Heights’ project. Besides the Mirani brothers, there are 77 other investors who invested or booked flats in the project, which was never developed, according to investigating officer Ravindra Avhad.
Mahesh 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 square feet of carpet area at Rs 28,875 per square foot, amounting to a total of Rs 52.5 crore. An advance of Rs 21.95 crore was made via official banking channels and 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, 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 the Shahs is a significant step in the ongoing investigation to recover the lost investments and bring the perpetrators to justice. The EOW is continuing its probe into the financial transactions and the involvement of other parties in the fraudulent activities.
Frequently Asked Questions
Who are Ramesh Shah and Rahul Shah?
Ramesh Shah (65) and Rahul Shah (40) are developers from Radius Sumer Developers. They were arrested for defrauding 78 flat buyers in a failed housing project in Mumbai.
What was the ‘Harbor Heights’ project?
The ‘Harbor Heights’ project was a housing development in Mazagaon, Mumbai, promoted as a lucrative investment opportunity for NRIs. The project was never developed, leading to the fraud allegations.
How much money was involved in the fraud?
The total amount of money involved in the fraud is Rs 35.7 crore, which was invested by 78 flat buyers.
What legal action has been taken against the developers?
Ramesh Shah and Rahul Shah have been arrested and charged under Section 420 of the IPC and the Maharashtra Protection of Interest of Depositors (MPID) Act. They were remanded to police custody by the special MPID court.
What is the next step in the investigation?
The Economic Offences Wing (EOW) is continuing its probe into the financial transactions and the involvement of other parties in the fraudulent activities to recover the lost investments and bring the perpetrators to justice.
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