Background and Scope of audit of the case of Adarsh Co-operative Housing Society

The issue of allotment of Government land to Adarsh Co-operative Housing Society,

Mumbai1 and other related regulatory issues were examined (November 2010 to April 2011),
at the Revenue & Forest Department (R&FD), Urban Development Department (UDD) and
Environment Department of the Government of Maharashtra; Collector, Mumbai City;
Mumbai Metropolitan Region Development Authority (MMRDA) and Municipal
Corporation of Greater Mumbai (MCGM). The scope included tracing the genesis of the case
and examining the different decisions that were taken at various levels in departments and
agencies of the Government of Maharashtra in relation to the allotment of Government land
to the Society. The methodology included scrutiny of files and documents in these offices to
examine the decisions taken at various levels. We also noticed that many questionable
decisions, relating to the membership of the Society, grant of additional floor space index
(FSI), grant of additional FSI in lieu of recreation ground, decisions taken by the High Rise
Committee of the MCGM, relaxation of eligibility conditions of the members and violation of
the provisions of the Coastal Regulation Zone Notification were taken by various
departments and agencies of the Government of Maharashtra. The audit observations were
issued to UDD, R&FD, Environment Department, Collector, Mumbai City; MMRDA and
MCGM in April 2011. The replies, wherever received, have been incorporated as and where
applicable.

The genesis
In February 2000, Shri Ramchandra Sonelal Thakur, a serving Sub-divisional Officer in the
Defence Estates Office (DEO) Mumbai, in his capacity as Chief Promoter of the Adarsh Co-
operative Housing Society, addressed a letter to the then Chief Minister of Maharashtra for
allotment of 38542 sq m of land in Block No VI of the Back Bay Reclamation Scheme
(BBR), Colaba, Mumbai for construction of a residential building for the welfare of serving
and retired personnel of the Defence Services.
As events would turn out, there was no place for any girls’ hostel or for that matter any other
facility for welfare of servicemen. It would be only reasonable to conclude that though
references to ‘widows’ and ‘Kargil Heroes’ was being repeatedly made, such could never
have been the intention as these individuals would not have the financial capability to meet
the cost of apartments in this structure.
 Violation of Regulations

Membership of the Society

The Chief Promoter of the Society forwarded (10 April 2000) a list of 40 proposed members
to the Collector, Mumbai City. It is noteworthy that all the initial members were Defence
officials. Out of the 40 members, 30 were serving and retired Service officers, eight belonged
to the Defence Estates Organisation, one officer belonged to the Military Engineer Services
(MES) and one was a widow of a retired MES employee. While on the one hand, the
membership kept expanding, on the other hand even junior service and civilian officers went
out of the Society and many senior service officers and public servants became members.
Notable among the Service officers who became members of the Society at a later date were
two former Chiefs of Army Staff, General NC Vij and General Deepak Kapoor. Both of them
were allowed to be members of the Society as a “one time special case” keeping in view their
noteworthy service in the Indian Army and their social status. Thus, in the name of welfare of
servicemen and ex-servicemen, it was the select elite belonging to the Services and the
civilian administration, politicians and individuals connected with them who benefitted from
misappropriation of the public property. As subsequent paragraphs would reveal, the
Government of Maharashtra actively aided and abetted the venture by relaxing regulations
and turning a blind eye to the construction of a 31 storey building in the heart of Mumbai.

Concessions granted by the Government of Maharashtra

The flouting of norms in the case was not only restricted to wrongful appropriation of
Government land to benefit influential Armed Forces and civilian officers, politicians and
their relations. Almost at every stage, significant concessions were extended by the
Government of Maharashtra in favour of the Society. Many officers -both civilian and
Services- who were dealing with the case and were instrumental in taking those decisions
eventually became members of the Society. In some cases, relations of these officers became
members.
MMRDA Development Plan5 for the Area was modified to accommodate the Society
As stated earlier in paragraph 4, on 12 May 2000, Collector, Mumbai City reported to
Government of Maharashtra, R&FD that the land sought by the Society was reserved for road
widening as per MMRDA development plan and therefore, NOC from MCGM and approval
of MMRDA should be taken and that the membership should be approved by the
Government.
On 2 June 2000, the Society addressed another letter to the Minister of Revenue signed by
Shri R C Thakur as Chief Promoter and Brigadier (Retd). After calling for
objections/suggestions from the public in October 2001, UDD approved modifications to the
MMRDA Development Plan in April 2002 by deletion of a 60.97 metres wide road leading to
the South Colaba Harbour link and the changing width of Captain Prakash Pethe Marg from
60.97 metres to 18.40 metres and inclusion of the deleted area in Residential Zone, Parade
Ground, Helipad, Garden and BEST Depot. During audit, it was noticed that a request of
Bombay City Sainik Welfare Office for allotment of the same land for construction of a rest
house for military ex-servicemen was refused in March 1986 by Collector, Mumbai City on
the ground that the land was earmarked for widening of the very same road. Thus, the
Development Plan of the area was amended and the area reserved for roads was converted
into a residential area to facilitate the housing project by the Society.

Grant of additional Floor Space Index

Meanwhile, the membership list of the Society went on expanding much beyond the 19
civilian members agreed to earlier by the Chief Promoter in June 2000. On 15 March 2003,
the Chief Promoter of the Society furnished the information required in the Letter of Intent
along with a list of 95 members comprising 45 Defence personnel (including eight Defence
Estate Officers and one MES Officer) and the remaining either MLAs/MLCs, or officers of
Government of Maharashtra or their relations and private persons. In order to accommodate
the additional members, the Society requested (17 March 2003) the UDD for allotment of
additional Floor Space Index (FSI) of the adjoining plot of 2669.68 sq m, used by BEST as
an approach road to its depot, on payment of reasonable charges. Interestingly, in his letter,
the Chief Promoter termed the use of the land by BEST as “unauthorized” and also stated that
BEST cannot use the FSI of this land for expansion of the Depot due to CRZ restrictions. It
could be seen that the Society had no hesitation to state that the use of the adjacent plot of
land by BEST was “unauthorised”, ignoring the status of their The Minister of State for
Urban Development convened a meeting on 14 July 2004 for considering the proposal of the
Society for allotment of additional FSI.
It could be seen that the Society had no hesitation to state that the use of the adjacent plot of
land by BEST was “unauthorised”, ignoring the status of their own plot. While it stated that
no building could be constructed on the land used by BEST “there being restrictions of CRZ
in their open plot”, it conveniently ignored the fact that transfer of developmental rights on
the plot was not admissible in accordance with the CRZ regulations and Development
Control Rules. While DCR6 1967 did not even mention about Transferable Developmental
Rights (TDR), DCR 1991 prohibited utilisation of TDRs in the island city. The Society’s
claim in the same letter that the Ministry of Environment and Forests had issued a No
Objection Certificate was also misleading.
As the FSI was not sufficient, Shri Gidwani indicated the requirement of additional FSI of
adjoining land being used by BEST. Shri Ramanand Tiwari, Principal Secretary, UDD
informed that as the land was reserved for the BEST Depot and was in use as an access to the
BEST bus depot, it would not be feasible to allot the FSI of this reserved land to the Society.
“In order to sort out the issue”, he further stated that the Society would have to approach the
Government of Maharashtra for allotment of the said land by deleting reservation of the
BEST Bus depot by following the due process of law, which would take at least six months.
Subsequently, in October 2004, UDD called for the specific comments of BEST to consider
the request of the Society for additional FSI. In a meeting held on 15 December 2004 at the
official residence of Shri Rajesh Tope, Minister of State (UD) in Nagpur in which S/Shri
Kanhaiyalal Gidwani and RC Thakur were present, the Assistant General Manager (Civil) of
BEST informed that it would not grant NOC for de-reservation of land as suggested by Shri
Ramanand Tiwari, Principal Secretary, UDD in the earlier meeting. Further, he informed that
if the Government of Maharashtra decided to transfer FSI of this plot to the Society with
certain conditions, BEST would examine the proposal as and when received.

Further relaxation to grant additional FSI in lieu of Recreation Ground (RG)

MMRDA, while approving the plan of the Society building in September 2005, had deducted
15 per cent FSI for ‘Recreation Ground’ (RG) under Regulation 35 of DCR 1991. A proposal
to release this FSI to the Society was rejected by the Government of Maharashtra in June
2006.
Omission of the condition had resulted in releasing of additional FSI without confirming the
fact that 15 per cent RG area was actually available in the scheme.

High Rise Committee

The CRZ Notification of the Ministry of Environment and Forests, Government of India
(MoEF) came into effect on 19 February 1991. As per that Notification, the plot in question
fell in CRZ II. Buildings permitted in the area are subject to the existing local Town and
Country Planning Regulations. As on that date, for the Backbay Reclamation Area,
Development Control Rules (DCR), 1967 were applicable. This fact was corroborated and
supported in the meeting of the Maharashtra Coastal Zone Management Authority (MCZMA)
held on 3 November 2010.
According to DCR 1967, no building should be erected or raised to a height greater than one-
and-a-half times the sum of the width of the streets on which it abuts and the width of the
open space between the street and the building as measured from the level of the centre of the
street in front. The maximum height of the Society building permissible as per DCR 1967
according to MCZMA was 45.6 metres. However, DCR 1991 was consistently applied
incorrectly for the Society by different departments and agencies of the Government of
Maharashtra. DCR 1991 had no height restriction but brought down the FSI for BBR Block
VI to 1.33 from 3.5 as per DCR 1967. The Society, as also the Government of Maharashtra
used DCR 1991 to avoid the applicable height restriction (45.6 metres) of DCR 1967. The
loss of FSI (from 3.5 to 1.33) was offset by transferring the developmental rights of the BEST
plot and relaxation of 15 per cent on account of RG as and when required. The Society was
thus allowed to circumvent both DCR 1967 and DCR 1991.
Non-consideration of the refuge area for levying penalty was highly irregular. The conversion
of the refuge area into residential flats was unauthorised. Hence, the regularisation of the
unauthorised conversion of refuge area into a residential area was also in violation of the
DCRs as well as safety norms.

Eligibility conditions relaxed in favour of the members

The Revenue and Forest Department, Government of Maharashtra issued a letter of intent on
18 January 2003, conveying the intention of the Government to allot the plot of land to the
Society subject to inter alia verification of eligibility of the proposed members by the
Collector in terms of the Government Resolution dated 9 July 1999. The letter enclosed a list
of 71 members to the Collector with the direction to verify the eligibility of the proposed
members in terms of the abovementioned GR. The conditions envisaged in the said GR
included a minimum of 15 years’ domicile in the State of Maharashtra and a stringent income
limit. Initially, the Society submitted details of 41 members, which were scrutinized by the
Collector, Mumbai City with respect to the criteria of income, domicile and caste. Only 30
members were found eligible.
The Society went on adding new members and the final list consisted of 102 members, which
included 37 Defence personnel, even though its Chief Promoter had initially approached the
Chief Minister for allotment of the land for residential development for its members
belonging to the Defence services. The Society also did not provide any accommodation for
a girls’ hostel for the daughters of serving/retired Defence personnel as requested by the
Defence authorities while giving the ‘go ahead’ for the project.

Environmental Clearance under Coastal Regulation Zone Notification

The Ministry of Environment and Forests, Government of India, notified the Coastal
Regulation Zones effective from 19 February 1991. The land transferred to the Society was in
CRZ II. The Ministry, in a notification dated 21 May 2002, amended the said notification,
incorporating a new clause (iii) (a) under Paragraph 3(2), which required environmental
clearance from the Ministry for housing schemes in CRZ areas as specified in Paragraph 6(2)
of the said notification.
As per the laid down procedures, the project proponent was required to submit the project
proposal to the concerned Coastal Zone Management Authority, which in this case was not
done. Apart from this, the correspondence also indicates a deliberate attempt on the part of
the Urban Development Department of Government of Maharashtra to skirt the procedures to
enable grant of NOC to the Society.
The Ministry of Environment and Forests had issued a Press Note on 28 October 2010
indicating that the Ministry had never issued CRZ clearance or NOC. The Maharashtra
Coastal Zone Management Authority, one of whose functions was ensuring compliance
of all specific conditions that are stipulated and laid down in the approved Coastal Zone
Management Plan of Maharashtra, as also the Environment Department confirmed in
2010 that no environment clearance was obtained.

INFRASTRUCTURAL AND ALLIED LAWS

I. Building Regulations in Mumbai | Building Bye-Laws in Mumbai

1. FSI allowed in Mumbai: varies with the location. For residential buildings is 1.33 from
South Mumbai till Mahim in the West and Sion in the centre.

North of that it is 1.0. This is called the base FSI. To this, one is allowed to add TDR or
transferable developent rights (see below) to arrive at the total FSI. This works out to an
additional FSI of 1. FSI is calculated using the Fungible FSI (see below) system, except in
CRZ areas, where it follows the old system.

For educational, healthcare and hospitality projects, FSI is 1.33 plus 300% extra, which is
1.33 x 4 = 5.32.

The following are not counted in FSI calculations:

• Basements

• Stilt Parking

• Staircases

• Lifts and lift lobby (lobby area to an extent equal to lift area, additional lobby areas are
counted)

• Pump rooms, utility areas, security cabins

• Shafts

• Society Office upto 12 m2 if there are less than 20 apartments, and 20 m2 if more

• Gymnasium upto 2% of FSI area

• One Servants’ toilet per floor upto 2.2 m2 with access from lift lobby

• Refuge Areas and terraces

Normally, 15% of the plot must be reserved as a recreation area. If the plot area is greater
than 2,500m2, then this 15% is also subtracted from the total FSI of the plot. Note that this
explanation pre-dates the concept of "Fungible FSI". See below for an explanation of
fungible FSI.

What is FSI?

FSI or floor space index is the upper limit to the built space you may construct on a given
plot. It is the ratio of allowed built-up area to the plot area. For example, on a 10,000 ft2 plot
which has an FSI of 2, you may construct a maximum of 20,000 ft2 of area, and no more. FSI
can also be called FAR or floor area ratio. Certain types of spaces, such as basements,
parking areas, and utility rooms, are exempt from FSI, which means that they do not need to
be counted in the FSI calculations. As of 2015, this system is used to govern buildings in
CRZ areas within Mumbai.

What is Fungible FSI?

The word fungible - from the latin root fungiblis - describes something that acts as a
replacement for something else. The municipal corporation of Mumbai introduced this
system to curb misuse of existing building regulations by developers. Developers would build
space over and above the allowable FSI by the means of some grey areas in the building
regulations. These grey areas centered around things that were free of FSI, or not counted in
FSI calculations, such as flower beds, services shafts, and balconies. In the fungible FSI
system, the allowable FSI on a plot is increased by 35%, with a maximum cap on the total
construction area, with no exemptions. This serves to reduce 'overbuilding' on plots by
developers. The fungible FSI seeks to act as a replacement for or a legalisation of the misuse
of regulations, but with a clear mathematical limit that should not be exceeded. As of 2015,
fungible FSI is applicable to all plots in Mumbai with the exception of those that fall under
Coastal Regulation Zone (CRZ) limits. So if the base FSI on a plot is 1, and the TDR on the
plot is also 1, then add 35% to each of them, making a total FSI of 2.7 for the plot. This is
approximate, as there are some variations with respect to recreational grounds and other
factors, which can reduce the total FSI available.

2. TDR: can be an additional 1 on FSI in normal areas, not in CRZ areas. Areas given to road
setbacks and recreational grounds (15% of the plot area) should be deducted from the TDR.
Therefore, if there are no setbacks, the TDR will be 0.85.

What is TDR?

Transferable Development Rights are a mechanism to reduce new construction in crowded

areas and shift it to less dense parts of the city. In Mumbai, TDR was initiated to prevent new
construction in south Mumbai and shift it northwards. It works as follows: say you own a
10,000 ft2 plot with an FSI of 1.3 in South Mumbai, on which you have an existing building
with 8,000 ft2 of built-up area. To utilise your full FSI allowance, you would have to build
10,000 x 1.3 = 13,000 ft2 of space. This means you have 5,000 ft2 of extra capacity in your
plot which you are not using. With TDR you can then sell this right to build 5,000 ft2 to
someone north of you. You then cannot build more than the existing 8,000 ft2 on your plot.

3. Height of Building: depends on location and proximity to airport. Height of a room should
be less than 4.2m.

4. Setbacks / Open Spaces Required around building: Ht/3 for living spaces (bedrooms, living
rooms) and Ht/5 for dead walls and toilets. This can be overcome by paying a premium to
the BMC. This is called open space deficiency. However the CFO will demand a clear
6mx6m for fire engine movement.

5. Min Size of Rooms: as follows:

Min Area Min Width

Habitable Rooms 9.5 m2 2.4m

Toilets 2.2 m2
Toilets (separate) 1.1 m2 (WC) 1.5 m2 (area of bath)

Kitchens (1 BHK Flats) 5.5 m2 1.8m

Kitchens (2 BHK Flats) 7.5 m2 2.1m

6. Balconies: in the fungible FSI system, the area of balconies is counted in FSI.

7. Refuge Areas: one every 24m in height, area not less than 4% of the occupied space
existing till the next refuge area.

8. No. of staircases Required: two if the floor plate is more than 500m2 or the height more
than 24m. Each should be 1.5m wide, enclosed by a 230mm brick wall, ventilated to the
outside, and accessed via a fire door. Higher buildings will require 2m wide stairs.

9. Shafts: min dimension of 0.6m.

10. Service Floors: should have a minimum clear height of 1.5m.

11. Parking:

In residential buildings, for tenements upto 70 m2 in area, 1 car per tenement, 2 for bigger
flats (except in A Ward, where 4 are required). After this, add 10% for visitors. (50% of
spaces can may be 4.5 x 2.3m, the rest not less than 5.5 x 2.5m).

In educational buildings, it is one car per every 35m2 of carpet area of the administrative
offices and public services spaces only.

II. Benami Transactions

Among the 33 benami transactions unearthed by the CBI investigation into the Adarsh
Housing Society scam are also 10 benami transactions linked to a finance company.

CBI sources, who shared the contents of the investigation report with The Hindu , said San
Finance Corporation Ltd. was linked to the purchase of 10 apartments in Adarsh, two more
than what the Adarsh Commission found.
The company's director Abhay Sancheti is the brother of the Bharatiya Janata Party's Rajya
Sabha MP Ajay Sancheti. When contacted, the parliamentarian said, “I have nothing to say
about this case. It is my brother’s company.”

The sources said two flats were purchased by family members of Mr. Sancheti. Eight were
financed by the company. Of the eight, two were allotted to a driver and peon of the
company.

The role of the wife of a serving police officer in the Maharashtra police also figures in the
CBI report. Sources say Sharmila Barve, wife of IPS officer Sanjay Barve, bought a flat in
the name of her father-in-law S.V. Barve. She and her husband owned flats in Mumbai..

Section 4, The Benami Transactions (Prohibition) Act, 1988

4. Prohibition of the right to recover property held benami.—

(1) No suit, claim or action to enforce any right in respect of any property held benami
against the person in whose name the property is held or against any other person shall lie by
or on behalf of a person claiming to be the real owner of such property.

(2) No defence based on any right in respect of any property held benami, whether against the
person in whose name the property is held or against any other person, shall be allowed in
any suit, claim or action by or on behalf of a person claiming to be the real owner of such
property.

(3) Nothing in this section shall apply,—

(a) where the person in whose name the property is held is a coparcener in a Hindu undivided
family and the property is held for the benefit of the coparceners in the family; or

(b) where the person in whose name the property is held is a trustee or other person standing
in a fiduciary capacity, and the property is held for the benefit of another person for whom he
is a trustee or towards whom he stands in such capacity.
 Coastal Regulation Zone norms in India

Coastal Stretches of seas, bays, estuaries, creeks, rivers and backwaters which are influenced
by tidal action (in the landward side) up to 500 metres from the High Tide Line (HTL) and
the land between the Low Tide Line (LTL) and the HTL, are classified under the Coastal
Regulation Zone (CRZ).

Prohibited activities

- Setting up new industries and expanding existing ones, except those directly related to the
waterfront or directly needing foreshore facilities, and projects of the Department of Atomic
Energy.

- Setting up and expanding units for the disposal of waste and effluents. Exceptions include
storm water drains, and facilities required for discharging treated effluents.

- Dumping of city or town waste for the purposes of land filling or otherwise.

- Discarding ash or any other waste from thermal power stations.

- Mining of sand, rocks, and other substrata materials.

- Construction activities in CRZ -I areas, except as specified in Annexure -I of the

notification

Classifications of CRZ areas

Castal stretches within 500 metres of the HTL on the landward side are classified into four
categories, namely: CRZ- I, II, III, IV.

Adarsh Housing Society fell under category-II (CRZ-II)

This category includes areas that have already been developed up to or close to the shoreline.
For this purpose, the term ‘developed area’ is used for areas within municipal limits or in
other legally designated urban areas that are already substantially built up and have been
provided with drainage, approach roads, and other infrastructural facilities.

Norms for regulation of activities

Development activities in different categories of CRZ areas shall be regulated in accordance

with the following norms:

CRZ-II

Buildings shall be permitted only on the landward side of the existing road or on the
landward side of existing authorised structures. These buildings will be subject to the existing
local town and country planning regulations including the existing norms of floor space index
(FSI)/floor area ratio (FAR).

As per CRZ norms, no building can come up in the 200-metre zone from the high tide line
(HTL) of the coast. Adarsh has been built virtually on the edge of the seashore.

Issues Raised

1. Who allotted the land to the Adarsh cooperative Housing Society for the construction
of building for the welfare of ex-servicemen and their widows ?

2. Weather the No objection certificate (NOC) was granted by MMRDA for the
construction of building ?

3. Violations of Regulation by the Chief promoter of society ?

Submissions by the Petitioners

1. Mr. Seervai submitted that the subject plot is situate in CRZ-II and the said fact is not
disputed by any of the respondents. He also submitted that 1991 Notification casts a
responsibility on the local authorities at the State level only to regulate the building and
construction activity with an investment exceeding Rs. 5 crores.

2. The activities which were to be regulated by the concerned authorities at the State
level did not require clearance from MOEF. Thus, the development / construction of
petitioners' building being regulated by MMRDA did not require clearance.

3. The 1997 Notification does not require approval or clearance from MOEF or the
agencies entrusted to clear such projects, what is required is the Regulation by such
authorities at the State or Union Territory level under the relevant provisions of law
governing such Regulation namely,

Mumbai Municipal Corporation Act, 1888, M.R.&T.P. Act, MMRDA Act, Maharashtra Land
Revenue Code, 1966. Such regulation would include the grant of permission for
development, construction such as IOD, CC, OC, etc. from the Planning Authorities.

4. Petitioners have filed additional affidavit stating that subject plot is situate in CRZ-II
and is located between the existing bus depot and the road. Government of Maharashtra has
indicated that the proposed development is permissible under the CRZ Notification.

5. Buildings permitted on the landward side of the existing and proposed roads / existing
authorized structures shall be subject to the existing local Town and Country Planning
Regulations including the existing norms of Floor Space Index / Floor Area Ratio.

6. Mr. Seervai submitted that the note reflects the following things:

(i) the subject plot falls behind the authorized structure;

(ii) MOEF has no objection to the proposed construction as long as the FSI for the
proposed construction is as existed on 19.02.1991.
7. After examining the proposal submitted by UDD, MOEF recorded its satisfaction as
also recorded that it has no objection to the proposed constructions as long as the FSI for the
proposed construction is as existed on 19.02.1991.

8. The State of Maharashtra that the MOEF had already delegated its powers to the State
Government for undertaking development in CRZ-II and accorded its no objection for the
proposed construction to come up on the designated land as per 1991 Notification and the
approved revised CZMP of Greater Mumbai.

9. The building constructed on a subject plot has all the permissions of appropriate
statutory authorities. It is only after seven years, based on newspaper reports, the proceedings
were initiated against the petitioners.

10. He submitted that in the present case, it is admitted position that there was no change
in the classification of the CRZ area. This also shows that MOEF did not attach great
importance on the MCZMA or its recommendations and therefore, not mandatory.

11. MCZMA would have looked into issues such as FSI, amalgamation of plots, zoning,
permissible FSI, etc. is thoroughly misconceived and the same is entirely belied by the
language of order dated 04.01.2002 reconstituting the MCZMA. On the contrary, these issues
are required to be considered by the appropriate regulatory authorities at the State level under
the relevant statutory provisions.

12. The BEST plot was allotted by memorandum dated 05.08.2005. The subject plot and
the BEST plot are owned by the Government of Maharashtra. Thus, it was a single plot.

13. Nobody other than MMRDA can speak with authority about the applicability of
Development Control Regulations, the building does not exceed the permissible FSI, and
therefore, there is no FSI violation.

14. MMRDA has gone on record in asserting that the building of the petitioners is
authorized. For all these reasons, he submitted that the Petition deserves to be allowed and
the impugned show cause notice / recommendations made in the minutes of the meeting /
report / orders dated 14.01.2011 and 16.01.2011 deserve to be quashed and set aside and the
Petition deserves to be allowed.
Submissions by the Respondents

1. Petitioners have not obtained recommendations of MCZMA, which is a mandatory

requirement as per order dated 04.01.2002 issued by MOEF. He submitted that the findings
recorded in the impugned orders are not vitiated.

2. Mr. Khambata submitted that the questions that fall for consideration are -
(i) whether the communications dated 11.03.2003 and 15.03.2003 collectively constitute
clearance;
(ii) what is the effect of not obtaining recommendations of MCZMA and
(iii) whether there are FSI violations

3. Before utilizing FSI of BEST plot admeasuring 2669 sq.mtrs., petitioners did not fulfill the
conditions; the area of staircase, lift, lobbies together is about 2814 sq.mtrs. and to that
extent, petitioners have consumed excess FSI. 1967 DCR contemplate inclusion of areas of
lift room, staircase, lobby while computing FSI. As against this, these areas are exempted
under 1991 DCR.

4. 'clearance' and 'regulation' are interchangeable, if the clearance and regulation are to be
given different meanings, regulation has a wider meaning and will include clearance. In
support of these submissions, he relied upon the following decisions:

a. State of T.N. Vs. M/s. Hindstone32, and in particular case contend that regulation under
CRZ Notification will include clearance as also prohibition.

b. K. Ramnathan Vs. State of T.N.33

5. Petitioners were expressly put on notice to obtain clearance from MOEF before
carrying out construction. At no stage, petitioners objected to these conditions on the ground
that they had already obtained clearance from the appropriate authority.

6. Change of reservation from BEST depot to residential by exercising power under

Section 50 of M.R.&T.P. Act in respect of the BEST plot admeasuring 2669.68 sq.mtrs. was
without the sanction of MCZMA.
7. MMRDA can allow FSI exceeding 1.33, upto cap of 3.5 which is permissible as per
DCRs of 1967. Thus, the upper limit of FSI is not altered but only prior permission from
MMRDA is envisaged.

8. The Government of Maharashtra issued Notification sanctioning reduction of the

width of Captain Prakash Pethe Marg from 60.97 mtrs. to 18.40 mtrs. and the area so deleted
was proposed to be included partly in residential zone, partly in parade ground and partly in
helipad and garden area and partly in BEST depot as shown in the accompanying plan. The
area so included in the residential zone and marked as 'A-B-C-D' (subject plot) was the plot
created for the first time for allotting it to Adarsh Society.

9. It is not the case of the petitioners that there is order of amalgamation of two plots,
The BEST plot and the subject plot are two separate plots with two separate Cadestral Survey
Number. Property cards bear this fact out.

10. Area in the DP Road was converted into partly in residential zone among others.
MCZMA could have gone into following aspects:
1) User of FSI of BEST plot in the subject plot;
2) Which DCR is applicable for carrying our development over the subject plot as also what
FSI is permissible;
3) Use of FSI as per memorandum dated 05.08.2005 and notification dated 03.03.2006;
4) Change of zoning;
5) Valid permission of the State Government;
6) Whether Section 50 can be applied for utilization of FSI of BEST plot over the subject
plot.

11. Appropriate authority has to satisfy itself that the land so reserved is not or no longer
required for public purpose for which it is designated or reserved or allocated in the
development plan. Appropriate authority has to make application to the State Government for
deletion of reservation after arriving at its satisfaction.

12. FSI of BEST plot has to be utilized in BEST plot, otherwise, it will amount to
Transferable Development Rights (TDR). Admittedly, subject plot is situate in A Ward where
loading of TDR is prohibited. So, petitioners were not entitled to utilize FSI of the BEST plot
while carrying out construction in the subject plot.
13. MCZMA show cause notice / report / impugned orders do not hold that petitioners'
building has exceeded FSI under 1967 DCR. In the minutes of the meeting dated 03.11.2010
of MCZMA, it is recorded that the plot is not amalgamated.

14. Petitioners have contended that they were allotted BEST plot and hence, they are
entitled to utilize FSI of BEST plot. If that be so, respondents are entitled to meet the
arguments so advanced by the petitioners, and therefore, issue about utilization of excess FSI
directly arises from the petitioners' arguments.
 Case Time Lines

Nov, 2010: Adarsh scam unearthed. CBI probe begins.

January, 2011: CBI registers FIR in case against 14 persons, including former Maharashtra
chief minister Ashok Chavan, under IPC section 120 (b) for criminal conspiracy and various
sections of Prevention of Corruption Act.

July, 2012: CBI files first charge sheet in the case before special CBI court.

Dec 2013: Maharashtra Governor K Sankaranarayanan refuses sanction to prosecute Ashok

Chavan.

Jan 2014: Sessions court refuses to delete Ashok Chavan’s name as accused in the case on
request made by CBI.

Mar 2015: Bombay High Court also dismisses Ashok Chavan’s petition seeking deletion of
his name from the case.

Oct 2015: CBI submits fresh evidence to Maharashtra Governor Ch Vidyasagar Rao seeking
sanction once again.

Feb 2016: Governor Rao grants the CBI permission to prosecute Ashok Chavan. Chavan
approaches HC challenging Governor’s order.

Dec 22, 2017: HC allows Chavan’s petition and quashes and sets aside Governor’s order
granting sanction to prosecute him.

Jan 11, 2018: The Supreme Court stayed proceedings against former Maharashtra chief
minister Ashok Chavan in the case related to irregularities in the allotment of flats in
Mumbai’s Adarsh housing society.
 Conclusion and Recommendations

The entire episode of the Adarsh Co-operative Housing Society, Mumbai is a remarkable
case study. It is a classic example of the fence eating the crops; of those holding fiduciary
responsibility betraying the same for personal aggrandizement. It reflects a consistent failure
across all departments, State and Central Governments and cross-sections of officialdom. It is
an example of how a group of select and powerful elite could collude to subvert rules and
regulations for personal benefit. In the process of seeking apartments in a prime location for
themselves, they have resorted to falsification of the records, suppression of facts and
abundantly used the avowed noble cause of welfare of ex-servicemen and their widows. The
saga starts with an innocuous letter written in February 2000 by a serving Sub-Divisional
Officer in the Defence Estates Office in Mumbai to no less than the Chief Minister of
Maharashtra, for allotment of a certain extent of land in the Back Bay Reclamation Scheme,
Colaba for construction of a residential building for the “welfare of serving and retired
personnel of defence services”. He addressed this letter in his capacity as the Chief Promoter
of Adarsh Co-operative Housing Society (proposed). It was processed speedily in Mantralaya
and passed on to the Collector of Mumbai City. The letter got a surprisingly prompt response
such that on 29 March 2000 the Collector, Mumbai City approached the Headquarters
Maharashtra & Gujarat Area of the Armed Forces for issuance of an NOC for the plot as it
was under the occupation of the military. This request of the Collector got further prompt
response from the Headquarters M&G Area such that, on 5 April 2000 itself- within six days
of the earlier letter- the Collector was informed that the land falls outside the defence
boundary and “necessary action could be taken as deemed fit for the welfare of serving
personnel and their widows”. This communication was construed by the Society as a NOC.
Thereafter commenced a series of letters addressed to agencies within the State Government
and the Central Government seeking concessions and liberally using phrases such as:
“members who are from the Armed forces and serving the motherland”, “dedicated their lives
to the safety of our motherland”, “reward for heroes of Kargil operations who bravely fought
at Kargil and protected our motherland”.
Those in positions of responsibility should have sensed that ab initio, the concept was flawed
as very few war widows or ex-servicemen would have had the financial capacity to pay for an
apartment in such a prime locality. It is also remarkable that a State Government Department
approached the Central Government in the Ministry of Environment and Forests and
“persuaded” them for a prompt response which was then construed by them to be an
environmental clearance.
As per laid down procedures, the project promoter was required to submit the project
proposal to the concerned Coastal Zone Management Authority for environmental clearance,
which in this case was not done nor insisted upon. Apart from this, the correspondence also
indicates a deliberate attempt on the part of the Urban Development Department of
Government of Maharashtra to skirt the procedures to enable grant of “NOC” to the Society.
It is not surprising that the Society used this to their advantage. In March 2003, the Chief
Promoter, in another letter addressed to the Chief Minister directly and separately to the
Minister of State for Urban Development, Government of Maharashtra did not hesitate to
write that “it is submitted that the Department of Environment and Forests, Government of
India, have considered our case on priority as a goodwill gesture to serving and ex-
servicemen looking to their service towards the motherland and have accorded their NOC”.
On 9 July 2004, the Government of Maharashtra accorded sanction for transfer of land to the
Society, levying a charge of ` 10.19 crore. On 28 September 2004, the Society was formally
registered and on 4 October 2004, the plot was handed over. The promoters were so confident
of allotment of land that even before registration of the Society and before handing over of
the site, on 12 July 2004, they wrote for additional FSI from the adjacent land in use by
BEST. Within two days of the letter, the Minister of Urban Development also discussed the
same. This issue was pursued till BEST finally acquiesced. It is significant that the residential
development on the land allotted to the Society in CRZ-II was carried out without the
requisite environmental clearance from the MoEF. Despite this, MMRDA granted
“Occupancy Certificate” to the Society on 16 September 2010. This was cancelled on 30
October 2010 at the instance of MoEF. This was done by MOEF only after media and public
attention was repeatedly drawn towards the grave irregularities and dereliction at all levels in
the administration.
This report details how public servants, who have been entrusted by the Government to
safeguard national interest, facilitated, in the belief that cronyism would be rewarded, a
private housing Society to obtain “NOC” from the Army, modification to the MMRDA
Development Plan, NOC for Residential Development in the CRZ area and transfer to the
Society of Developmental rights of adjoining land in use by a public utility (BEST) with an
additional FSI on account of a Recreation Ground. The entire episode reveals glaring
examples of dereliction of duty and severe lack of probity and accountability which needs to
be very seriously investigated. This case has engaged the attention of national headlines. Not
taking exemplary remedial and punitive action which would serve as a deterrent, would
seriously erode the credibility of Government. Laxity in follow-up would encourage similar
attempts in future. Audit merely strives, as it is constitutionally mandated to do so, to place
documentary evidence in this Report in a sequential form before the ultimate stakeholder. It
is for the State Legislature and the Government to ensure that public trust is not betrayed.
There have been various statements by high dignitaries and observations in the media of the
irregularity of this construction. In many of these, there is an explicit suggestion that the
building should be demolished. Such suggestion probably is hasty and inadequately
considered. To raze it to the ground would compound the problem. Now that it has been
constructed, though incorrectly so, indeed it should not be allotted to those who fraudulently
tried to appropriate it. An option would be for the building to be acquired by the Government
and used for Government Housing of which there is enormous shortage in Mumbai. Those of
the Society members who have paid, may be compensated as per law. In case there are a few
and there certainly are less than half a dozen, genuine war widows and deserving ex-
servicemen, the Government could allot apartments to them as an independent and deserving
gesture.