Police arrests builder over default on loan worth Rs 250 crore

The Mumbai police on Thursday arrested the MD and CEO of Orbit Constructions, Pujit Aggarwal, for allegedly defaulting on a loan of Rs 250 crore that he had taken from various financial institutions. These loans were for three of his projects in the city, including an ambitious residential project in Sakinaka.

While Aggarwal had been on the scanner of the Economic Offences Wing (EOW) and Sakinaka police, he was arrested early on Thursday morning by the Azad Maidan police who were acting on an FIR filed by a Churchgate-based company, which had invested in one of his projects. An Orbit Corp spokesperson stoutly denied the allegations of misappropriation. “All the money that was received was spent on the project,” the spokesperson said.

Sources in the Azad Maidan police said that Aggarwal was arrested after a firm identified as Capri Global Capital Limited, approached the police early last year. The firm had allegedly invested in Aggarwal’s Orbit Residency Park in Sakinaka.

“We had invested Rs 2.53 crore in three flats in Orbit Residency Park, Sakinaka that was promoted by Pujit Aggarwal and his father Ravikiran Aggarwal. They had mortgaged the project with Life Insurance Corporation Housing Finance Limited (LICHFL) and were supposed to deposit sale proceeds of all the flats in an escrow account with HDFC bank. Aggarwal cheated us by not depositing the money in that account and so when LICHFL took over the possession after they failed to repay the loan, they derecognised many investors like us,” said the statement released by Capri Global Capital.

Sources revealed that Aggarwal’s Orbit residency park was announced in 2009 and over 300 people invested in the same and bought flats in the project.

The investors, who had to pay an installment every time a slab was completed, were unaware that Orbit had availed of a loan from LICHFL by pledging 145 flats to the financial institution. Orbit then allegedly defaulted on the Rs 250 crore loan, following which in 2013 LICHFL issued a public notice declaring it a non-performing asset and seizing the possession.

Consequently, investors — many of them retired officials, government officers and teachers — met with Aggarwal and LICHFL officials but this yielded no results. Sources said that when talks with the National Housing Board also proved futile they finally approached the police and registered an FIR with the Sakinaka police in June this year. Simultaneously, the Economic Offences Wing of the Mumbai police also began investigating the case against Orbit.