HC paves the way for redevelopment of Opera House building

The Bombay high court has lifted the Enforcement Directorate's attachment on two flats in a dilapidated building in Mumbai, allowing for redevelopment. The building owners will furnish fixed deposit receipts in lieu of the attachment.

The Bombay high court has lifted the Enforcement Directorate’s (ED) attachment on two flats of a dilapidated building at Opera House in south Mumbai, paving the way for the structure’s redevelopment.

Mumbai, India – Oct 09, 2023: A view of Hari Niwas building, at Opera House, in Mumbai, India, on Monday, Oct 09, 2023. (Photo by Bhushan Koyande/HT Photo)

A division bench of justice Sunil Shukre and justice Firdosh Pooniwalla accepted the offer of the building owners - Kirti Hansraj Kothari and other members of the Kothari family - to furnish fixed deposit receipts in lieu of the attachment. The 5-storey building, Hari Niwas, has 18 residential and three commercial tenements.

The Ahmedabad unit of ED had in June 2017 booked two tenants of the building. ED’s money laundering case is based on a case registered by the Central Bureau of Investigation against M/s ABC Cotspin Private Limited and others under section 120(B) r/w section 420 of the Indian Penal Code and section 13(2) r/w section 13(1)(d) of the Prevention of Corruption Act.

During the course of its probe, ED had in June 2022 provisionally attached the two flats, claiming that the flats were taken on rent from the funds that formed part of the proceeds of crime. The provisional attachment was confirmed by the adjudicating authority under the Prevention of Money Laundering Act, 2002, in October 2022.

The Kotharis moved the high court last month contending that the building was in extremely dilapidated condition and required to be redeveloped without any further loss of time. Their counsel informed the bench that they were willing to furnish fixed deposit receipts of ₹2.6 crore and ₹2.11 crore respectively, in substitution of the attachment of the transferable tenancy rights in the two flats.

The lawyer added that this was a permissible course of action as it was allowed by the Supreme Court in a number of cases last year and this year as well.

The HC bench accepted their offer and allowed the property owners to furnish fixed deposit receipts issued by a nationalised bank with lien in favour of the joint director, ED, Ahmedabad zonal office. On furnishing the receipts the attachment would stand lifted, the bench added.