The court noted that despite selling flats and commercial units, the developer’s proprietors showed almost no funds in their bank accounts

MUMBAI: The Bombay High Court on Wednesday appointed a court receiver, a third neutral third party, to oversee the slum rehabilitation projects being carried out by Darshan Developers after slum dwellers complained that they had not been paid transit rent for several years.

The court noted that despite selling 531 flats and commercial units and handling multiple slum redevelopment projects in the city, the developer’s proprietors, Pravin Satra and his son Darshan Satra, showed almost no funds in their bank accounts.

A division bench of justices GS Kulkarni and Aarti Sathe said they had “serious doubts” about the firm’s credibility and questioned whether Darshan Developers was merely acting as a front for some other builder. “It (the firm) 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 court said.

The judges also observed that the disclosures made to the court by the firm appeared incomplete and raised concerns about who was actually executing the projects. The bench then directed the chief executive officer of the Slum Rehabilitation Authority (SRA) to conduct a detailed inquiry into all projects undertaken by the firm in Mumbai and Thane and submit a report to the court. The inquiry will examine whether Darshan Developers is genuinely carrying out the redevelopment work or if third parties are involved behind the scenes.

The case stems from a petition filed by slum dwellers who alleged that the developer had failed to pay them transit rent. Following earlier court directions, the SRA conducted a hearing and found that transit rent had not been paid to 33 slum dwellers for the past four years. By December 11, the outstanding amount had crossed ₹3.59 crore.

Earlier, the high court had asked the Satras to file affidavits disclosing their assets and bank balances. While they stated that they had completed several projects and sold hundreds of flats and commercial units, the court noted that they hardly had any balance in their bank accounts.

The bench remarked that even a lower rung government employee would have “a better financial standing” and the father-son duo cannot even call themselves “developers”. The judges suspected that either they had given incomplete information to the court or they are working as a front for some other firms that are executing the projects.

The court authorised the CEO of the SRA to initiate criminal proceedings if any wrongdoing is found. The court also directed him to personally look into the affidavit filed by the father-son duo and take an expert opinion from a Chartered Accountant, to check whether the firm “can at all be accepted as a developer in respect of any SRA project.”

The judges said these steps were necessary to safeguard the interests of slum dwellers as well as buyers of flats built by the firm. The matter has been posted for further hearing on December 29.