Mumbai Court Rejects Police Clean Chit, Orders Process Against Seven in Anchor Group Redevelopment Fraud Case

A metropolitan magistrate's court in Mumbai has rejected the police closure report that sought to clear Anchor Group and its partners in a redevelopment fraud case, directing instead that process be issued against seven accused individuals.

Partnership Dispute Leads to Fraud Allegations

The complaint was filed by Shreenathji Group, which had been partnering with Anchor Group on projects since 2010. The business relationship deteriorated in 2017 when Shreenathji faced financial difficulties. The complainant alleged that Anchor Group committed fraud by misusing powers to retain control of projects beyond the agreed timeframe.

This case highlights ongoing challenges in Mumbai's redevelopment sector, where partnerships between developers often face complex legal and financial hurdles.

Serious Allegations of Financial Misconduct

Following court directions, an FIR was registered in October 2023. The complaint accused Anchor Group partners of multiple serious offenses including forging signatures to open bank accounts, concealing crucial loan documents, misappropriating project funds, and selling flats in violation of partnership terms.

According to the complainant, these actions formed part of a conspiracy to deprive Shreenathji of its rightful share in the redevelopment projects. A forensic report submitted to the court supported the allegations of forged signatures, adding credibility to the fraud claims.

Such fraudulent practices are particularly concerning given the recent focus on stricter regulations to protect homebuyers from misleading practices in the real estate sector.

Court Criticizes Investigation Quality

Magistrate Ajay Bhatewara of the 34th Metropolitan Magistrate's Court rejected the "C-Summary" closure report last week, observing that the investigating officer had failed to conduct a fair investigation. The court noted that the officer relied mainly on statements from the accused, failed to independently verify key claims, ignored forensic findings, and acted "more like a postman" instead of properly probing the allegations of cheating and forgery.

The magistrate's criticism reflects broader concerns about investigation standards in Mumbai's real estate redevelopment challenges where thorough scrutiny is essential for protecting stakeholder interests.

Seven Individuals Face Legal Action

The court has directed that process be issued against Rikhav Shah, Rushabh Shah, Mehul Jadhavji Shah, Hemang Jadhavji Shah, Piyush Shah, Kapil Bagala, and Harish Sharma. Relief was granted only to Jadhavji Shah, who had retired from the partnership before the alleged offenses took place.

The court stated in its order that "Prima facie it appears that there is substance in the allegations of the informant. The summary report appears pro-accused and lacks neutrality. Therefore, the closure report deserves to be rejected except qua Jadhavji Shah."

This development comes at a time when major developers are entering Mumbai's redevelopment market with significant investment plans, making legal clarity and proper oversight more crucial than ever.