• Regulatory
• 2 min read

Mumbai court frames charges against builder, firm in ₹28-crore flat fraud case

In a significant development, a special MPID court in Mumbai has laid down charges against developer Vijay Machhindar and his spouse for allegedly defrauding homebuyers of Rs 28 crore by failing to deliver promised residential flats. The couple faces accusations of document forgery to obtain a loan from PNB Housing Finance Ltd.

The accused will face trial under various provisions of the Indian Penal Code (IPC), the MPID (Maharashtra Protection of Interest of Depositors in Financial Establishments Act, and the Maharashtra Ownership Flats Act (MOFA).

According to the charges framed by the court, the accused, acting as directors of Ornate Spaces, collected approximately Rs 28 crore from prospective buyers and investors from 2012 onwards with assurances of handing over possession of residential flats in a project named 'Grove Tower' in Oshiwara by late 2017-18.

However, they neither delivered the flats nor returned the principal amounts, thereby committing cheating and criminal breach of trust under IPC sections 420 (cheating and dishonestly inducing the delivery of property), 406 (criminal breach of trust), and 409 (criminal breach of trust by a public servant, banker, merchant, or agent) read with 34 (common intention), the charge framing order said.

The court also charged the couple with forging a general body meeting resolution on the letterhead of the housing society to fraudulently secure a loan from PNB Housing Finance Ltd.

Additionally, the accused face charges under Section 13 of MOFA for failing to execute and register sale agreements, withholding disclosures regarding title and sanctioned plans, and misutilising collected advance deposits.

They have also been charged under Sections 3 and 4 of the MPID Act for fraudulent default against flat purchasers through false assurances of assured returns, timely possession, and financial security.

The case arises from an investigation by the Mumbai Police's Economic Offences Wing (EOW) following an FIR originally registered at Oshiwara police station in 2021. The contents of the charges were read over and explained to the accused, paving the way for the trial to commence.