The Bombay High Court appointed a court receiver, a neutral third party, to oversee slum rehabilitation projects being undertaken by Darshan Developers after serious concerns were raised over non-payment of transit rent to slum dwellers and the financial credibility of the developer.
A division bench comprising Justices G.S. Kulkarni and Aarti Sathe passed the order while hearing a petition filed by slum dwellers who alleged that they had not received transit rent for several years. The court noted that despite having sold hundreds of residential flats and commercial units, the proprietors of Darshan Developers showed almost no funds in their bank accounts, raising doubts about the firm’s legitimacy.
Darshan Developers is owned by Pravin Satra and his son Darshan Satra. The court observed that although the firm claimed to have sold 531 flats and commercial units and was involved in multiple slum redevelopment projects across Mumbai, its financial disclosures revealed negligible bank balances. The bench remarked that even a lower-level government employee would have a better financial standing than the proprietors, questioning whether they could legitimately be termed “developers.”
Expressing “serious doubts” about the credibility of the firm, the court suggested that Darshan Developers may be acting as a front for unidentified third parties. “It appears to be merely a front, and in fact the persons undertaking the slum redevelopment project ex-facie appear to be some third parties,” the judges observed in their order. The court further observed that the disclosures provided by the firm remained incomplete and not transparent.
Taking into consideration all of these worries, the bench asked the chief executive officer of Slum Rehabilitation Authority (SRA) to conduct an inquiry into all of the slum rehabilitation projects initiated by Darshan Developers in Mumbai and Thane. It has to be checked whether this firm is actually carrying out their projects or whether someone is carrying out their tasks in the background.
The issue began with the complaint from slum residents who argued that Darshan Developers had not been paying their transit rent for several years. Based on previous orders issued by the high court, the SRA held a proceedings session, which revealed that the transit rent had not been paid to 33 slum residents for the last four years, with arrears exceeding ₹3.59 crore as of December 11.
Earlier, the court had directed that the Satras be asked to file affidavits about their assets and bank balances. In their affidavit, although completion of various projects and large sales have been averred, it was noticed that their financial statements do not correspond with their scope of business.
The bench further authorized the CEO of the SRA to file a criminal case, in case of any fraud, against the individuals, should it be found during the inquiry. It further asked the CEO of the SRA to himself review the affidavits submitted by the father-son duo and avail himself of the expertise of a chartered accountant to find out if the firm, Darshan Developers, qualifies to be called a developer to handle projects of the SRA.
The judges made it clear that these were required in order to protect the interests of slum dwellers, who rely on access to transit rent during the redevelopment phase, and buyers who purchase flats in redevelopment projects conducted by this company. This case highlights another aspect where a governing body can override corporate rights in the interests of society.
The matter has been posted for further hearing on the 29th of December, when the court is expected to examine the results of the SRA investigations and determine the further course of action.
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