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Internal Lokpal Order - Mayank Gandhi


 

Before the Lokpal

 

Presiding Officers:

 (i) Admiral Ramdas

 

(ii) Illina Sen


 

In the Matter of Complaint Against Mayank Gandhi, member of the National Executive of Aam Admi Party.


 

Complaint filed

 

The case of the complainant is that

 

1. Following the house collapses in Chira Bazar, a plan for cluster re-development was envisaged by Lok Group with its co-founder ,Shri Lalit Gandhi . To further this goal, he formed a NGO Remaking of Mumbai Federation( ROMF ) with his nephew Shri Mayank Gandhi as the paid Secretary.

 

2. This NGO claimed among its Patrons, lumineries like Justice P N Bhagwati, Sri SriRavishankar, ShriNarayanamurthy( of Infosys fame), Deepak Parekh and others.

 

3. With the strength of these well known names, the NGO conducted various meetings in the Chira Bazar-Kalbadevi area and collected letters of consent in plain paper from the Tenants and Shop Keepers while totally ignoring the Land Lords and other Stake Holders.

 

4. On the strength of the purported letters and the Project report prepared by the Shri Mayank Gandhi led NGO, Lok Group approached the Government for permission for Cluster Redevelopment.It also formed a joint venture company with Unity Developers ( a well known Builder known for close contacts with the Thackeray Family ). Surprisingly, the commercial Venture bore the same name as the NGO, viz Remaking of Mumbai Housing Infrastructure and Finance Limited ( ROMHIF )

 

5. Shri Mayank Gandhi was also incidentally a Director of the promoter company of the Lok Group.

 

6. The Project Report prepared by the NGO ROMF was sold to the Commercial Venture ROMHIF

 

7. As this agreement was of commercial nature, it should have attracted a Stamp Duty of 5 % or about Rs 50 Lakhs which was evaded and as a signatory to the Agreement ( albeit as a witness) ShriMayank Gandhi could be deemed to have aided in this evasion of Stamp Duty.

 

8. By allowing a commercial exploitation of the work done by the NGO, Shri Mayank Gandhi has misused the trust placed on him by the hundreds of Residents of the Chira Bazar Kalbadevi area.



 

The  Case of the Respondent is that

 

  1. The Respondent is a social activist since 2002.

 

  1. The Respondent in association with his uncle Late Lalit Gandhi was working on plans for redevelopment of Mumbai inner areas, consisting of over 30000 old and dilapidated buildings using the cluster process.  They instituted the Remaking of Mumbai Federation (RoMF -a NGO consisting of over 40 stakeholder associations, NGOs and institutions) for the said purpose in Feb 2007.  The Respondent was  only the honorary secretary of the Federation. As this NGO was promoted by Late Lalit Gandhi's company Lok Housing and Construction Ltd (LHCL), the Respondent was invited to be on the board of the company as a Director. However, as the respondent did not have any interest in the commercial aspect, he stayed on the Board of LHCL only as an Independent Director with no shares nor commercial interest. However he had agreed to become an honorary Secretary of ROMF as he believed in the cause.

 

  1. Initially, the purpose of ROMF was to push for policies for integrated and holistic development of Mumbai. The then redevelopment model of the inner city of Mumbai was replacement of individual old and dilapidated buildings with tall towers. This would be very dangerous for the city and its residents as there would be an increase in population and density without any augmentation and increase of infrastructure. ROMF was suggesting that all development should only take place on a cluster basis (cluster of over 100 contiguous old buildings). That would enable fast development of the city, removal of reservation aberrations, increase and augmentation of infrastructure, increase in open space, roads, gardens, parking etc.  and a world Class city could be created.

 

  1. ROMF proposed that instead of the haphazard growth that was taking place in Mumbai, they should create a City Planning and Monitoring Company (CPMC) a public private body with representatives from Central, State and Local Government on one side and representatives from all stakeholders on the other. This CPMC should divide the Island City of Mumbai with its over 30000 old buildings into over 100 clusters or sectors of an average of 70 acres each. Each sector should be developed on a Sector-by-Sector Development Scheme (SSDS). The CPMC will engage with the best global architects for master planning and monitor the implementation of each of the sector of SSDS that could be given to various developers on a tendering basis to check for time, quality and aesthetic parameters.

  2. The respondent used the process of advocacy with the urban development and Municipal corporation for holistic and integrated urban development. The state government and its officers found this logical and added the cluster development policy in the new Maharashtra Housing Policy . This led the UD to suggest to take up one sector and show the efficacy of the model that was being suggested.  The government upon being convinced with the concept came out with its Housing Policy which talks about the cluster development concept and also DCR 33(9) for cluster development. However, to show the efficacy of the development model, one had to demonstrate a sustainable commercial model. Thus, a commercial company, Remaking of Mumbai Housing Infrastructure and Finance Ltd (ROMHIF) was formed by Late Lalit Gandhi by converting one of his old NBFC into a commercial company ROMHIF in October / November 2007. Although  the Respondent was never an office bearer nor a shareholder in ROMHIF,  he was holding a token 500 shares (paid up cost of Rs 5000) out of 40 lakh paid-up shares of ROMDL( another Company Remaking of Mumbai Development Ltd (ROMDL) which was a holding company of ROMHIF. This amounted to 0.13% shares of ROMHIF.

 

  1. In or around 2008 ROMHIF worked with the tenants and all stakeholders to get their consents for redevelopment in 30 acres properties in Chira Bazar.  The DCR 33(9) was then not yet passed but was being discussed. In absence of a proper format, ROMHIF took the consents of the tenants on plain paper. After the DCR was passed, ROMHIF approached the High Power Committee (HPC) for a Letter of Intent (LOI) to redevelop this 30 acres. This was not accepted by the HPC as it said that the consents was not in the correct format. ROMHIF argued that there was no format then, nor was there one now. While the HPC appreciated the work and concept, it did not issue a LOI.

 

  1. ROMHIF needed to purchase buildings and re-present a case for redevelopment. But because ROMHIF did not have funds it made a Joint Venture development agreement with Unity Developers to redevelop the area. ROMHIF asked for a certain amount as premium for the works (planning, survey, data collation etc) that it had done from Unity, including the plain paper consents. The JV was for redevelopment of 5 acres with premium amount of Rs 2 crores per acre - Rs 10 crores. Out of this, Rs 5 crores was paid as advance.  This was a legitimate business deal, for ROMHIF to charge for intellectual or intangible activity.

 

  1. Along with Unity, ROMHIF again approached the HPC and convinced them that to go back to so many tenants for the consents would be difficult. HPC was requested to issue a provisional LOI, so that within a period of 9 months, 70% consent of the tenants in the right format would be obtained. The HPC found this reasonable and forwarded to the Urban Development (UD) Ministry headed by the hon'ble Chief Minister. The UD stated that while the consents were in the name of ROMHIF, the new application was in the name of the Joint venture company and asked the HPC to reply on their queries and suggested that ROMHIF be given just 3 months to get the consents in the correct format.

 

  1. It is now more than one year and there is no movement of files and the project is as good as dead.

 

  1. It is pertinent to note that the Respondent still believes that this was a great project and would have changed the face of Mumbai and saved the lives of many. If ever the project sees the light of day, it would be a great day for the city.

  2.  The Respondent had to leave the Federation, due to his social activism  and preoccupation with the fight against Corruption.

 

  1. The Respondent has  resigned from the independent directorship of LHCL in August 2011 (just before Anna Hazare's fast)

 

Observations and findings:

Upon proper  perusal of the pleadings of  both the parties, our observations and findings are as under:

 

  1. The Complainant has alleged that the Respondent is a paid secretary However, complainant has not produced any evidence. The Respondent has asserted that he has been working as the honorary secretary of ROMF.

 

  1. The Complaint alleges of Respondent totally ignoring the Land Lords and other Stake Holders.   It is Respondents case that the consents of the tenants were taken by ROMHIF  and that their consents were given for the project and the proposed benefits. Respondent had no role in that matter. In any case, there are no specific allegations as to what are the adverse effects and its impact on such landlords and other stakeholders, and as to what has been or would have been the hardships upon such land lords. There are no complaints, either by any landlord or other stakeholders, as ought to have been the case if their interest were ignored.  

 

  1. It is the case of the Complainant that the Respondent was the Director of the promoter of the Lok Group whereas the Respondent has informed that he was an independent director of LHCL with no share and that he has resigned from the company on 12th August 2011.

 

  1. It is the case of the Complainant that the consents obtained by NGO ROMF were sold to the Commercial Venture ROMHIF.  However the Respondent claims that the consents were never obtained by NGO. The consents were directly obtained by ROMHIF. Complainant has not given any evidence to support his charge.

 

  1. The Complainant has pointed out that the subject agreement was of commercial nature, it should have attracted a Stamp Duty of 5 % or about Rs 50 Lakhs which was evaded and as a signatory to the Agreement ( albeit as a witness) and that Respondent could be deemed to have aided in this evasion of Stamp Duty.  We find no strength in the claim.  The duty, if any, is to be paid in due course of business by either of the Companies (which are the parties to transaction) and  which are in all case separate legal entities different from the Respondent.   Moreover, the Respondent was merely a witness to the agreement.

 

  1. The Complainant alleges that by allowing a commercial exploitation of the work done by the NGO, the Respondent has misused the trust placed on him by the hundreds of Residents of the Chira Bazar Kalbadevi area. However, that is wrong. According to the respondent, the consent of the tenants were obtained by the company ROHMIF. Moreover, the fact that there are no complaints filed by any residents to any of the authorities makes us accept the Respondents claim that the tenant signatories had agreed after knowing all aspects of the scheme. Moreover it appears that though signatures were obtained from the Residents, no money has been taken from them, no land was purchased and no land was sold.


 

Order:

 

We, for reasons as explained above, do not find any merit in the Complaints.

 

In accordance with procedure laid down by AAP for enquiry by Lokpal, following is our unanimous opinion-

 

There is no substance in the Complaint and the respondent stands exonerated of all charges.


 

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