12 builders asked to cough up Rs 31 cr in fines to MHADA

Twelve builders with projects in the island city have rubbed the state government the wrong way, and are now facing a penalty of Rs 31 crore.

They were supposed to hand over the Maharashtra Housing And Development Authority (MHADA) over 93,000 sq ft of constructed homes, after they were commissioned to redevelop 33 cessed buildings in Mumbai Central, Mazgaon, Prabhadevi, Matunga, Mahim, Dadar and other localities in south Mumbai. This area of land can accommodate 220 apartment houses of 425 sq ft each.

Representation pic

But the builders lapsed in yielding the developed spaces, compelling the government to direct the state housing authority to claim the developed space and collect penalty from them. The state’s letter to MHADA (copy with MiD DAY) also asks it to initiate legal action against non-compliant builders.

For its part, MHADA has begun typing out notices to the errant construction firms, which include Balwas Estate Cooperative Hsg Society, Paras Enterprises, Sumer and Associates, Arvind Properties, Oscar Builders and others (the complete list is in MiD DAY’s possession).

A senior MHADA officer said, “We are giving them a time period of two months to respond to the notice and pay the penalty. If they don’t, we will send them an ultimatum. By March, we will initiate legal procedure against those builders who have still not complied.”

State orders
In its letter, the government has categorically asked MHADA to ask the developers and builders to surrender an area of 93,000 sq ft. “If the builder can’t give the area meant for MHADA in the same building, then it should give the same area in another building but within the same (locality).”

The letter also gave the authority a formula to derive the penalty of Rs 31 crore. “Since the time the builder is supposed to hand over the constructed area, MHADA should calculate the rent based on government rates that was applicable during that particular period. For example, if a builder is supposed to give 100 sq ft to MHADA and was supposed to hand it over before the year 2006, then the builder will have to pay a penalty of Rs 10 per sq ft on the 100 sq ft till the year 2006. After that, till 2011 the builder would be charged a fine for Rs 25 per sq ft. And after that till June 2012, he would be charged Rs 50 per sq ft,” the letter states.

Common man’s due
The MHADA official claimed that this time, MHADA is not disposed to let go of the flats. “We have decided that in the coming months we will acquire all these flats that are meant for MHADA. High time the builders and developers, who for so many years have been reusing property meant for the common man, part with the dues,” he said.

MHADA will accommodate victims of building collapses in the constructed units it is supposed to get from the builders. The caving in of old structures is a common occurrence in the southern part of the city, following which the stranded families are put up in the housing authority’s transit camps.  

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