MHADA to builders: Pay dues or stop work

Published: Dec 26, 2012, 08:18 IST | Varun Singh |

24 developers together owe the housing agency Rs 26 crore as rent for flats they used to accommodate residents of buildings they were redeveloping; six of them have already been issued stop-work notices for ongoing projects

In a desperate bid to recover dues of almost Rs 26 crore from 24 builders, MHADA has started dispatching stop-work notices for their ongoing projects in Mumbai. The money is owed as rent for the MHADA flats that these builders used to accommodate residents of buildings that they were redeveloping.

Acting Tough: This is the first time MHADA has taken such a harsh step, practically stopping the ongoing construction works of builders who are sitting on money owed to the government. File pic

In total, 26 builders had rented 892 flats from MHADA at nominal rates. Two of these builders have paid their dues of around Rs 1.5 crore to MHADA. Of the remaining 24, six builders have already been sent notices.

These six builders, who have defaulted in paying dues of Rs 4 crore, have been sent stop-work notices for their projects in Worli, Jacob Circle, Dadar, Mazgaon, Bhuleshwar and Mahim.

The rent rates have escalated over the years. In 2002, the rent for a flat in a building with an elevator was Rs 1,200 per month while flats in buildings without elevators were occupied at nominal rates between Rs 500-600 per month.

The rates have now gone up to Rs 12,000 and Rs 6,000 per month respectively. Applying the different rates for different time periods, the total sum has amounted to a staggering Rs 25.89 crore.

A senior officer said, “We have already sent six builders notices regarding the non-payment of dues. This is the first time MHADA has taken such a harsh step, practically stopping the ongoing construction works of builders who are sitting on money owed to the government.”

“We rented out the flats to the builders, we even paid for their maintenance. Many builders haven’t paid rents for over 15 years. This is government money and we will collect it from the builders anyhow. Till the time the builders pay up, we won’t let them construct anything on any other plot,” said Prasad Lad, MHADA’s Repair Board chairman.

It seems that MHADA’s notices to the six builders have already done the trick. According to a senior engineer from MHADA, some of the builders have approached for payment.

“Nearly four to five builders have come to us and we are hopeful that the others too would come forward and pay the penalty. Meanwhile, MHADA is in talks with the Slum Rehabilitation Authority, as some of the builders who rented MHADA flats are redeveloping buildings under the SRA scheme,” said the officer.

Of the 24 buildings, nine are being redeveloped under the SRA scheme.  

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