Developers Arrested for Rs 35.7 Crore Fraud in Failed SoBo Real Estate Project

Mumbai: Ramesh Shah and his son Rahul Shah of Radius Sumer Developers have been arrested by the Economic Offences Wing for allegedly defrauding 78 flat buyers out of Rs 35.7 crore in a failed housing project in Mazagaon.

Real Estate FraudDevelopers ArrestedMumbaiRadius Sumer DevelopersEconomic OffencesReal Estate MumbaiMay 16, 2025

Developers Arrested for Rs 35.7 Crore Fraud in Failed SoBo Real Estate Project
Real Estate Mumbai:Mumbai: Ramesh Shah (65) and his son Rahul Shah (40) of Radius Sumer Developers were arrested by the city police's Economic Offences Wing (EOW) on Friday. They are charged with 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.nnThe 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.nnThe arrested developers have been charged with cheating under Section 420 of the IPC and under the Maharashtra Protection of Interest of Depositors (MPID) Act. 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.nnMirani, 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.nnFollowing 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 it was documented through tax receipts, allotment letters, and booking forms.nnThe 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.nnHowever, 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.nnThe arrests highlight the ongoing issues in the real estate sector, particularly in Mumbai, where numerous projects have faced delays and financial irregularities. This case is expected to draw attention to the need for stricter regulations and oversight to protect investors and buyers from such fraudulent activities.

Frequently Asked Questions

Who were the developers arrested in the SoBo real estate fraud case?

Ramesh Shah and his son Rahul Shah of Radius Sumer Developers were arrested for the fraud.

How much money were the investors cheated out of?

The investors were cheated out of Rs 35.7 crore.

What was the name of the failed real estate project?

The failed real estate project was called ‘Harbor Heights'.

When did the investors first become involved in the project?

The investors, Mahesh and Purushottam Mirani, first became involved in the project in late 2016 during an exhibition in Hong Kong.

What charges were the developers arrested under?

The developers were arrested under Section 420 of the IPC and the Maharashtra Protection of Interest of Depositors (MPID) Act.

Tags:

Related News Articles

Adani Goodhomes' Resolution Plan for Radius Estates Upheld by NCLAT
real estate news

Adani Goodhomes' Resolution Plan for Radius Estates Upheld by NCLAT

The National Company Law Appellate Tribunal (NCLAT) has upheld Adani Goodhomes' resolution plan to take over the bankrupt real estate company Radius Estates

May 28, 2024
Read Article
Om Logistics Expands PAN India Operations with Acquisition of Inland Container Depot Bawal
Real Estate Mumbai

Om Logistics Expands PAN India Operations with Acquisition of Inland Container Depot Bawal

Om Logistics acquires ICD Bawal in Haryana for INR 110 crore, strengthening its position in the logistics industry

August 28, 2024
Read Article
Chennai Metropolitan Authority Mandates 30-Day NOC Issuance for Real Estate Projects
Real Estate

Chennai Metropolitan Authority Mandates 30-Day NOC Issuance for Real Estate Projects

The Chennai Metropolitan Authority (CMA) has issued a new directive to various departments, mandating them to issue No Objection Certificates (NOCs) within 30 days. This move is expected to streamline the real estate market, ensure accountability, boost e

November 10, 2024
Read Article
Average Home Prices in Top 7 Cities Reach Rs 1.23 Crore, Marking a 23% Yearly Increase
Real Estate Mumbai

Average Home Prices in Top 7 Cities Reach Rs 1.23 Crore, Marking a 23% Yearly Increase

In the first half of the financial year 2024, the average price of homes sold in the top 7 cities in India has surged to approximately Rs 1.23 crore, marking a significant 23% increase from the previous year.

November 20, 2024
Read Article
India's Real Estate Sector Sees $11.4 Billion Investment in 2024: Report
real estate news

India's Real Estate Sector Sees $11.4 Billion Investment in 2024: Report

The Indian real estate sector has witnessed a significant influx of investment, reaching $11.4 billion in 2024. This growth is primarily driven by domestic investors, although international interest is on the rise. The sector's resilience amid economic ch

January 11, 2025
Read Article
The Fern Residency Expands in Pune with New Woodland Property
Real Estate Pune

The Fern Residency Expands in Pune with New Woodland Property

The Fern Residency, a leading hospitality brand, has unveiled its latest expansion in Pune with a 6,350 sq. ft. venue located at One Woodland, developed in partnership with Nucleus Office Parks, a subsidiary of Blackstone India Real Estate.

February 28, 2025
Read Article