Father-Son Developers Arrested for Defrauding Investors in Failed Mumbai Real Estate Project

Mumbai police's Economic Offences Wing (EOW) has arrested Ramesh Shah and his son Rahul Shah of Radius Sumer Developers for allegedly cheating 78 flat buyers out of Rs 35.7 crore in a failed housing project in Mazagaon.

Real EstateDevelopersFraudMumbaiEowReal Estate NewsMay 17, 2025

Father-Son Developers Arrested for Defrauding Investors in Failed Mumbai Real Estate Project
Real Estate News:Mumbai: Ramesh Shah (65) and his son Rahul Shah (40), well-known developers from Radius Sumer Developers, were arrested by the city police's Economic Offences Wing (EOW) on Friday. The father-son duo is accused of 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 EOW's general cheating unit arrested the developers from their plush apartment in Gamdevi and produced them before the special MPID court, which remanded them to police custody. The complainant is Mahesh Mirani and his non-resident Hong Kong-based brother, Purushottam, who accused the developers and its 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 the investigating officer, Ravindra Avhad, the developers have been charged with cheating under Section 420 of the IPC and under the Maharashtra Protection of Interest of Depositors (MPID) Act. 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 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 totaling Rs 35.7 crore, including interest and taxes. However, all cheques were dishonored 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 highlights the ongoing issues in the real estate sector, particularly the challenges faced by investors and buyers in ensuring that developers adhere to their commitments. The EOW is continuing its investigation to identify any other potential victims and ensure that justice is served.

Frequently Asked Questions

Who are Ramesh Shah and Rahul Shah? A: Ramesh Shah (65) and Rahul Shah (40) are well-known developers from Radius Sumer Developers, a company involved in real estate projects in Mumbai. Q: What project are they accused of defrauding investors in? A: They are accused of defrauding investors in the ‘Harbor Heights' project in Mazagaon, Mumbai. Q: How much money did the investors lose? A: The investors lost a total of Rs 35.7 crore in the failed project. Q: How did the investors get lured into the project? A: The investors were lured into the project during an exhibition in Hong Kong in late 2016, where it was promoted as a lucrative opportunity for NRIs seeking investment in Indian real estate. Q: What action has been taken against the developers? A: The developers, Ramesh Shah and Rahul Shah, have been arrested by the Mumbai police's Economic Offences Wing (EOW) and charged with cheating under Section 420 of the IPC and the Maharashtra Protection of Interest of Depositors (MPID) Act.

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