Agency has seized fugitive businessman’s two 4-BHK houses at Springs Tower building; office-bearers say their finances are in disarray
Springs Tower, Dadar, where Choksi owns the flats
A plush housing society in Dadar East has written to the Enforcement Directorate to release pending maintenance of Rs 49 lakh against two seized flats belonging to fugitive businessman Mehul Choksi. The 4-BHK apartments are on the 37th floor of Springs Tower and were bought by Choksi in 2016 from a Bollywood actor. The dues are from July 2016, while Choksi fled India in January 2018.
In its letter dated August 24 to the ED, the society said Choski owns flats 3701 and 3702 with a combined area of 5,377 sqft and balconies spreading over 1,500 sq ft. “He [Choksi] has not paid any Common Area Maintenance Charges since the time he purchased the said flats [July 2016] from the earlier owner which is applicable to all the flat owners, as per the society bye laws of Springs Tower.
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Since his flats are sealed due to various recoveries from banks, we are unable to recover the dues pertaining to the above said flat and the total alleged outstanding principal amount of Common Area Maintenance charges till date is R49,02,928,” reads the letter signed by Ajay Panicker, president of Springs Condominium Association of Apartment Owners.
Ajay Panicker, president, Springs Condominium Association of Apartment Owners
The letter says 12 per cent interest per annum is applicable till the amount is cleared. “Due to the huge amount of outstanding, we are having a huge deficit in terms of finance in maintaining the Common Areas of Springs Tower.” The letter ends with a request to release at least the principal outstanding amount. ED had seized the flats in 2019.
Sources from the real estate industry said the society is home to many corporate head honchos, directors and noted industrialists. It is alleged that some well-known names have also not been clearing their maintenance dues. The 41-storey building is now undergoing major repairs.
When contacted, Panicker said, “Choksi has two apartments in our Springs Tower building. He and his family were residing in our building till January 2018. One fine morning they all disappeared and fled India, leaving our building management with the huge burden of pending maintenance dues. The dues against these two flats have crossed Rs 49 lakh.”
Panicker said few banks have pasted recovery notices on the doors of the flats. “The society charges approximately Rs 20 per sq feet towards monthly maintenance charges, excluding BMC property tax of approximately Rs 2 lakh per flat, which also remains unpaid along with the dues that Choksi owes to the society.”
He said they will move court if ED does clear the dues. “For this purpose, we have now served a notice on ED. As the president of Springs Tower, I am under pressure to start the recovery action against Choksi and ED,” explained Panicker.
‘If PMLA applicable, govt has the first right’
Under the Prevention of Money Laundering Act (PMLA), senior criminal lawyer Dinesh Tiwari, the properties will be liable to be forfeited to the government only if they were purchased with the proceeds of a crime. In such a case, even bank loans will have to be written off. “As regards the society’s claims about pending dues, the same is liable to be written off [if the flats were bought with the proceeds of a crime] as the claim of the government is superior to that of the claim of the cooperative society,” he said. Tiwari even cited an example.
“The unavailability of previously acquired properties for the purpose of attachment and forfeiture has been accepted by various high courts including that of Punjab and Haryana [Seema Garg matter], and Patna High Court.”
Advocate Jamshed Mistry said the society should wait for ED’s response. “The society can approach the Bombay HC, by filing a writ of mandamus, by making ED the party and get appropriate order from the court seeking directions to ED to either clear the dues from its funds or through auctioning the sealed property,” said Mistry.
Uphill task: Expert view
Advocate Vinod Sampat, president of Cooperative Societies and Resident Users Association and who practises in property law, said though entitled to 12 per cent interest, societies barely get 9 per cent if the flats go to a liquidator. Also, the cooperative society will have to pay a fat fee to a lawyer to fight in HC. “The first thing that needs to be emphasised is how best the society can recover its dues? In view of the fact that the attachment is there, even the Registrar’s office does not act when an application for recovery of dues is made.”
If the flats are sold through a liquidator, Sampat explained, a list of demands of outstanding amounts will be drawn up first. “From whatever is the amount recovered, pro-rata amounts are paid to all the creditors including the cooperative society,” said Sampat.
“In the list of creditors, the dues of the government and society rank at a higher level compared to that of others. In such situations, the society’s office-bearers are literally helpless. It is indeed sad and unfair that other members have to pay 21 per cent interest on outstanding dues. Here getting the principal amount itself is a big problem.”
Sampat also said such matters can stretch for more than 10 years. He added, “There have been such instances earlier also. Many people have done illegal acts and have deprived cooperative societies of their legitimate payment.”
5,377
Total area in sq ft of both flats together
37th
No. of the floor on which both flats are located
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