MUMBAI: A developer has accused his former business partner of defrauding him of Rs 11.51 crore by allegedly hiding the prior sale of 19 flats in a Bandra East slum rehabilitation project and misappropriating the proceeds. The Economic Offences Wing (EOW) has filed an FIR against Vaman Madye, the owner of Rajhans Rebuilds and Developers, on charges of cheating, forgery, and breach of trust.
In his complaint, Basantaraj Sethiya, director of Sethia Infrastructure Pvt Ltd, alleged that Madye fraudulently sold flats in the Vishal Ashiana redevelopment project located in Nirmal Nagar, Bandra East, without informing him of these transactions.
According to police records, a Memorandum of Understanding (MoU) dated October 29, 2010, was signed between Madye and Sethiya Infrastructure for joint development under the Slum Rehabilitation Scheme. Under the agreement, Sethiya’s company would cover the development costs and receive 70% of the saleable component, while Madye would retain 30%.
Sethiya points out that Clause C(c) of the MoU explicitly stated that no third-party rights had been established over the property and that no flats had been sold before the agreement. He also claimed that Sethiya Infrastructure was granted the authority to sell all salable flats within the project.
Subsequently, on January 6, 2011, Sethiya Infrastructure was added as a partner in Swaraj Associates following a partner’s retirement, with Sethiya reportedly becoming the managing partner empowered to execute agreements, allotment letters, and sale deeds pertaining to the project.
Upon returning to active involvement in the project after treatment for oral cancer in 2018, Sethiya discovered that Madye had sold 19 flats both before and after the MoU and partnership deed were executed. He alleged that the sale proceeds were diverted into personal accounts instead of being allocated to the partnership firm.
Sethiya procured property records from the sub-registrar’s office and found details of 16 flats allegedly sold by Madye. The flats were reportedly purchased by various individuals between 2010 and after the partnership deed was established in January 2011.
He also claimed that the flats were sold at prices significantly lower than current market rates. Sethiya estimated the government valuation of the 16 flats with a combined salable area of 577.66 sqm at Rs 11.51 crore, while the actual sale amounts reported in agreements totaled around Rs 3.5 crore.
