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City builder held for duping investors in Rs 250 cr loan default case

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The Hindu had reported how 300 people had lost crores after investing in Orbit's project

The Azad Maidan police on Thursday arrested Pujit Agarwal, head of Orbit Constructions, for allegedly defaulting on a Rs 250 crore loan that he had taken from several financial institutions against three projects in the city.

The Hindu had reported on August 27 how hundreds of people who had invested in Orbit Residency Park in Sakinaka, were left in the lurch after the project was seized by the Life Insurance Corporation Housing Finance Limited. The investors, many of whom invested their life savings when the project was announced in 2009, are now living in rented houses and also paying back the loans they took. Deputy Commissioner of Police (Zone I) Dr. Manoj Kumar Sharma confirmed that Aggarwal was arrested on Thursday morning, produced in the Esplanade Court, and remanded to police custody till September 12. The arrest was made after Capri Global Capital Limited, that had invested in Orbit Residency Park, approached the police earlier this year.

“We had invested Rs. 2.53 crore in three flats in Orbit Residency Park promoted by Pujit Aggarwal and his father Ravikiran Aggarwal. They had mortgaged the project with LIC Housing Finance Limited and were supposed to deposit sale proceeds of all the flats in an escrow account with HDFC Bank. The Aggarwals cheated us by not depositing the money in that account, and when LICHFL took possession after they failed to repay the loan, they derecognised many investors like us,” a spokesperson for Capri Global Capital said.

Sources told The Hindu that Aggarwal’s troubles could multiply in the days to come, as he has also borrowed heavily from other Public Sector Undertakings against two other projects, and his projects have been declared as Non-Performing Assets. These PSUs are expected to approach the police with complaints of their own soon, a source said.

The Orbit Residency Park was announced in 2009 and over 300 people, unaware of Orbit’s escrow arrangement with LIC HFL, booked flats in the project.

After LIC HFL declared it a Non-Performing Asset in 2013, the investors had held several meetings with Aggarwal, LIC HFL officials and the National Housing Board before finally approaching the police. An FIR was registered with the Sakinaka police in June this year, while the Economic Offences Wing of the Mumbai Police also initiated an open inquiry against Orbit.

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Printable version | Dec 16, 2019 2:07:47 PM | https://www.thehindu.com/news/cities/mumbai/news/City-builder-held-for-duping-investors-in-Rs-250-cr-loan-default-case/article14628905.ece

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