Mumbai: The Maharashtra government on Wednesday announced an inquiry into alleged irregularities worth ₹850 crore in a land tender process linked to a project-affected persons (PAPs) housing project in Malad that allegedly caused losses worth over ₹600 crore to the Brihanmumbai Municipal Corporation (BMC).
Minister of state for urban development Madhuri Misal told the state assembly that the inquiry will be conducted by an additional chief secretary, until which the project will remain on hold.
The matter was raised through a calling attention notice by MLAs Aslam Shaikh (Congress), Yogesh Sagar and Murji Patel (both from BJP). They alleged that a leading developer was granted Transferable Development Rights (TDR) and a premium far in excess of what was due, raising concerns of possible irregularities.
The MLAs demanded an investigation into the matter by a committee headed by a retired judge and action against senior BMC officials, claiming that they deliberately acted to serve the interests of the builder. Responding to the demand, Misal said the government would first conduct a detailed inquiry through senior officials before deciding on further action.
According to the MLAs, the builder received ₹850 crore along with TDR to construct 13,347 tenements for PAPs in Malad on a 80,934 square-metre plot originally reserved for police housing in Mumbai’s Development Plan (DP) 2034. Shaikh and Sagar also claimed that the plot falls within a mangrove area classified as a no-development zone. Shaikh sought clarification on whether the developer had obtained a no-objection certificate from the environment ministry.
The PAP tenements were constructed by the Slum Redevelopment Authority (SRA) for ₹15 lakh, but the builder in question increased the cost to ₹50.98 lakh in April last year, putting an additional burden of ₹618 crore on the civic body, the MLAs said.
In its response, the state government said the tenement price was increased to ₹50.98 lakh from ₹32.21 lakh in June 2025 after the developer—identified as Valor Estate Ltd—requested a revision, stating that the land valuation had been incorrectly based on a nearby special development zone. The rate was later revised based on that of an adjacent plot, following a report filed by the inspector general of registration, the government said.
Misal said the developer had received payments, a credit note and TDR, as per the agreement. “Despite this, no plan was submitted by the developer for the construction of [housing for] the PAPs,” she said.
Coming down hard on the BMC, she said, “There is no reason to make payment without having the plan in place. It is a serious flaw on the part of the BMC. I have already ordered the BMC to submit a report on the utilisation of the credit note. Apart from this, the additional chief secretary will conduct a probe into the irregularities.”
Valor Estate Ltd rejected the allegations as “baseless” and said the project complies with all regulations. It said the Malad plot lies about 10 km from the coastline and is outside the Coastal Regulation Zone, with all required clearances in place. The firm said plans have been submitted to the BMC and are awaiting approval. It maintained there were no cost irregularities, adding it had bid ₹60 lakh per tenement and was awarded the contract at ₹52 lakh, resulting in savings for the BMC. Of this, about ₹30 lakh is via credit note and ₹20 lakh through TDR.
“We welcome this independent examination unreservedly, as it will conclusively establish that the allegations are entirely unfounded. We remain committed to full transparency and cooperation with all government authorities and look forward to the CAS inquiry, which will comprehensively address these baseless claims,” the company said.
