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
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.
The 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.
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 it 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 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.
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