India, Sept. 2 -- The director of Ostwal Builders Pvt. Ltd., arrested on Sunday for defrauding several people by selling them flats with fake construction permits, was remanded to police custody for two days after he was produced before a local court on Monday.

According to the Economic Offences Wing (EOW) of the Mira Bhayander Vasai Virar (MBVV) police, the accused, Umraosingh Ostwal, had received permissions to build a four floor building, Ostwal Paradise, in Nayanagar, Mira Road. Instead, he constructed a seven-storey tower, and the police suspect that the Mira Bhayandar Municipal Corporation (MBMC) too may have had a role to play in the case.

Initially, in 2005 and 2006, Ostwal Builders got two separate construction permissions from...