#NewsBytesExplainer: What is Patra Chawl scam that got Raut arrested
The Enforcement Directorate (ED) arrested Shiv Sena MP Sanjay Raut on Sunday after hours of interrogation in connection with the multi-core Patra Chawl land scam in Maharashtra. Raut had already been questioned by the ED after receiving many summonses in the money laundering case. Here's more details about the Patra Chawl project and its connection with Raut.
Why does this story matter?
The ED crackdown on Raut—a Sena troubleshooter—is being seen by many as a political vendetta and conspiracy by the BJP. The development comes a month after Maharashtra's Sena-led Maha Vikas Aghadi government was toppled and rebel leader Eknath Shinde was sworn in as the CM with the support of rebel Sena MLAs and the BJP.
What exactly is the Patra Chawl redevelopment project?
Patra Chawl is another name for Siddharth Nagar. It's located in Goregaon, North Mumbai, and there are 672 houses on an area of 47 acres. The Maharashtra Housing and Region Development Authority (MHADA) began its reconstruction project in 2008, awarding the contract to Guru Ashish Construction Pvt Ltd (GACPL) to rehabilitate 672 families and renovate the area.
ED case against Sanjay Raut
The ED claimed that Sanjay Raut's close aide Praveen Raut and other GACPL directors misled MHADA by fraudulently selling flats designated for 672 tenants. Following this, GACPL created a project named Meadows and accepted a booking amount of roughly Rs 138 crore from flat purchasers, according to which the ED claims the business generated Rs 1,039.79 crore from these illicit activities.
What did the investigation reveal?
According to the ED, Praveen Raut earned Rs 100 crore from the real estate firm HDIL which he distributed among close associates, family members, and Sanjay Raut's relatives. The probe agency further revealed that Rs 83 lakh was sent to Sanjay Raut's wife Varsha Raut's account in 2010 after which she purchased an apartment in Dadar with this money.
Properties purchased following the fraud
The ED also alleged that at least eight plots were purchased in the names of Varsha Raut and Swapna Patkar on Kihim Beach in Alibaug, Maharashtra. Swapna is the wife of Sanjay Raut's close acquaintance Sujit Patkar. In this land transaction, cash was also exchanged, ED claimed. Praveen Raut's and his colleagues' properties have already been attached by the agency.
What stalled the project?
The developer was required by the agreement to pay the monthly rent to all 672 residents until the project was completed. However, the rent money was only provided until 2014-15, resulting in multiple complaints by tenants. Following this, MHADA issued a termination notice to the developer in 2018, forcing it to file a petition with the high court, effectively putting the project on hold.
Current status of the project
To rehabilitate 672 tenants and address the rent issue, the Maharashtra government appointed a commission led by Johnny Joseph, the retired chief secretary of Maharashtra, in 2020. The state cabinet re-approved the Patra Chawl rehabilitation project in June 2021, based on the committee's recommendations and MHADA response. On the directives of Chief Minister Uddhav Thackeray, the halted building work was resumed in February.
What has transpired in the ED investigation so far?
On July 1, Sanjay Raut was questioned for ten hours in this matter, and his testimony was recorded under the Prevention of Money Laundering Act (PMLA). Varsha Raut and two of her accomplices had their assets seized by the ED in April. The ED arrested Praveen Raut in the Patra Chawl case in February this year. He is now being held in judicial custody.