Published On : Tue, Feb 9th, 2016

First City Mihan – why the haste to come to the builders’ rescue Mr. C.M. and Mr. Gadkari?

Nagpur: First City as many in Nagpur know was one of the most prestigious and talked about residential ‘city’ schemes slated to come up within MIHAN itself. Reatox Builders had bagged the scheme in 2008, promising to hand over the apartments in 27 months originally, that is by 2011.

Though there was not much happening in MIHAN then, many Nagpurians rushed to book flats which were then priced at approximately Rs. 30 lakhs for a 2 BHK : not at all cheap, but they were promised it would be a very good investment that would double in value in no time. And then, First City was like THE official city which was going to be Inside Mihan.


Remember that was the time our ‘local politicians’ were booking stadiums to make grand announcements about Mihan and its golden future. Actually the hype had begun right at the beginning of 2000 but it was yet to die down till then.


Flats were bought, purchase agreements even registered – thus generating revenue for local governments.


And then disaster struck. A leading paper began “exposing” one drawback after another in this signature scheme. What its motive was is anybody’s guess but the bad press generated soon had bookings dwindle and then stop…but not before 550 Nagpur families had sunk their money in it.

Due to “lack of funds” pace of work slowed down and almost came to a standstill in 2-3 years… yet, the Builder kept selling new properties without any explanation proffered for the delay to previous buyers or any guarantee on completion deadlines.

By then MADC got into action, and forced to act due to media pressure probably, canceled the agreement with Reatox. The latter went to High Court challenging the action. They lost; the case then went to the Supreme Court, where too they lost it in 2014.

Which means that MADC and the builder – now called by another name, Chaurangi group – are on opposite sides of the law, right?

Then how come when Vijaya Bank, which had given a huge loan to the Builder, (Rs. 160 crores plus interest) was all set to auction the land to recover its debt, the Chief Minister of the state and senior Union Minister from Nagpur, Nitin Gadkari ( who are supposed to represent Mihan) jumped in to intercede and prevent the auction? Why are they so eager to save Mr. Atul Shirodkar, the owner of Reatox, from losing this stalled project? If this was their objective why did they go on ‘fighting’ him in the courts?

There is more to all this than meets the eye, and raises lots of questions. Has the change of government, led the said newspaper to ‘lighten up’ against the builder… are MADC, Builder. government and bank all on the same side now?

But which side is that exactly? Whom does it benefit?

What is the guarantee that after a ‘settlement’ has been reached between Vijaya Bank and the Builder the later will return Rs. 180 crores to the Bank? Where is the money going to come from…and if he can reimburse the bank why not the middle class investors whose outlay is less than the bank’s?

Definitely not the middle class, ordinary citizens who are the flat owners and who together have sunk in about Rs. 60 crores in the project already.

If our ruling politicians had been bothered with them they would not have ignored plea after plea that was sent their way by the beleaguered flat owners Association by way of letters.

Read what one letter says –

“We belong to a middle class family where buying home requires a lot of planning and sacrifices on the part of family, and the decision to invest in “FirstCity” felt like a worthy one. After the initial down payment towards booking (on 10th Nov 2007) & allotment (on 5th Aug 2008) for flat Prestige-1A-0803, we took a loan from the SBI bank and by 11th Oct 2008, we paid almost half of the value of the Flat. Not a single wall or even ground floor has being constructed of the Bldg Prestige1, the news of the project being stalled flashed and later construction on site stopped altogether due to various legal issues between the MADC and the Builder in question.

Now, we have come to know that (Reatox) Chaurangi Builders are no longer in charge of the project as MADC has terminated#1 the contract of residential township development “FirstCity” and the matter is sub-judice#2.

However, in the midst of all the recent developments, no authority, be it MADC, or the Builders, or the Law Courts, have made their position clear about the fate of the buyers who have invested heavily in the project. These are people not of any influence, or clout, but ordinary hardworking people, who save all their lives for building their dream home. There are around 500 such home seekers whose hard earned money is stuck in this project and are anxious to know their fate.”

We are not people of any clout, or any influence, but ordinary hard working people... that is their tragedy and their fault probably.

Absolutely no one has bothered with them.

All the letters they wrote went unanswered, both by the present CM and the past – there was not a chance that they were going to get an audience even to narrate their woes.

Where are the claims of – ‘sabka saath, sabka vikas?’

Or even the claim of the party in power earlier- ‘Congress ka haath, aam admi ke saath?’

And today, when the builder is in trouble, not one but two senior and important politicians are rushing to save his goose?

As a flat owner Kuldip Singh Bindra laments ” no one has bothered with us for so many years, it is NINE years now that we invested in this scheme and SEVEN that we have been running from pillar to post to either get our money back or get possession of the flat that was promised to us. Some of us have begun paying EMI to banks who gave us loans to purchase this property as we are scared that not paying back bank loans will lead to our present assets being seized and auctioned by banks.”

That is right – only the middle class in India bothers to return loans taken for purchase of property or vehicles, they never default. It is the domain of the rich and the powerful to default on loans that have led to lakhs of crores of bad debts for nationalized banks.

Common ‘First City’ affected people have number of grievances. They have not just been subjected to fraud but also cheating and lying.

Consider this – even after MADC had withdrawn the project from the Builder he continued taking bookings / money from prospective customers.

One such customer, Gagandeep Singh Kohli, has gone to the High Court with a ‘criminal case’ registered against three parties – 1. Chaurangi builders 2. MADC officials and 3. Marketing agents ( sub builders).

On Wenesday , 10 Feb,  one hearing is due in High Court…lots of hopes are being pinned on this. Almost 25 other owners have also recorded their statements with the Crime police.

Let us see, what justice is rendered to these hapless common people….and when?

The biggest irony in all this is, if you google search for ‘First City, Mihan’ even today you get a site that claims the following –

First City is one of the popular residential developments in Mihan, neighborhood of Nagpur. It is among the completed projects of its Builder. It is lavish …

It is also claimed that there are facilities like – Swimming pool, gymnasium, indoor games and kids friendly play area. There are vitrified tiles, cable and intercom system too.

The best part is, this is the ONLY completed project of the Builder, now called IJM India, and flats have been ready for occupation since March 2012!!!

Really? How astonishing then that there is not a single user review as yet for such a wonderful project!

Or is it? when there are NO users, since there are no flats, WHO is expected to write reviews? But look at the guts of the builder, he is still advertising this property on the net!

…  Sunita Mudaliar- Associate Editor