Maharashtra orders inquiry into 'Rs 1,000cr scam' in BMC HSG project

MUMBAI: Junior urban development minister Madhuri Misal admitted in the assembly that there was an irregularity in BMC’s agreement for a housing project planned in Malad (E) for project-affected persons (PAPs) as the civic body had not mentioned any date for starting the project but all the money had been given to the developer through credit notes and TDR. She said she has called for a report on all credit notes issued.

Congress MLA Aslam Shaikh, who raised the issue, alleged land classification was illegally changed and ready reckoner rates hiked, increasing cost of each PAP unit and raising project cost by Rs 618 crore. He said the project would not be ready for 10-20 years. Shaikh and BJP MLA Yogesh Sagar demanded the inquiry be conducted by a retired HC judge and not by an ACS rank officer.



Shaikh said, “The plot was originally reserved for police staff quarters but was used for PAP housing, and the letter of acceptance was amended after April 2025. The ready reckoner rates were changed from Rs 84,460/m 2 to Rs 1,33,670/m 2 by illegally shifting land classification.

This change was made without any fresh physical inspection or independent evaluation, which raises suspicion of collusion. Because of this, the cost per PAP unit increased from Rs 32.2 lakh to Rs 50.9 lakh. Other PAPs from SRA are available for just Rs 15 lakh. This resulted in increase in cost of Rs 618 crore.” He further alleged the contract was given to “someone who is an accused in the 2G scam.”

Misal said the developer is to construct 13,347 flats for PAPs. Forty per cent of the plot’s area is reserved for police housing and the remaining 60% is proposed for construction of PAP flats, she said.

“Accordingly, the developer has been given a credit note of Rs 470 crore for the first phase. Also, a conveyance deed has been signed on date 27/ 06/2025 to transfer land to BMC, and after including BMC’s name on property card, credit note of Rs 470 crore has been given for the second phase and 100% TDR (97102 sq m) has been given,” Misal said in a written reply.

Shaikh said the private plot lay in a no-development zone but it was first reclassified for a police housing society and then converted for the PAPs project in favour of a builder. Shaikh said BMC paid the developer despite no green clearance being obtained.

He said, “BMC has spent Rs 200 crore to construct the road to access the plot. Under the PAP scheme it’s supposed to be constructed by the builder at his cost.”