"The project was launched in 2010 and bookings were accepted since then. But,in the past nine years,only 18 floors of the 46 storeyed-tower have been built, while work has not even started on the second phase,"the association said.
Shyam Chittari, a member of the association, has posted the letter on his twitter account.
The letter claims HDIL had taken Rs 175 crore from Allahabad Bank, J&K Bank and Syndicate Bank for the project.
"Another Rs 525 crore were raised by the company for the project but we believe the money has been siphoned off as the project has been stuck for long," it said.
The letter further said, "HDIL has done a blatant fraud by not informing Allahabad Bank about the sale of flats to home-buyers and has also cheated the customers by not issuing them NOCs from the bank for taking home loans from various lenders."
That apart, there are a few other projects like the Majestic Tower in Nahur and Paradise City in Palghar, which are also stuck.
HDIL has largely been into slum rehabilitation projects, but is facing insolvency proceedings under provisions now after Bank of India dragged to the NCLT.
On October 3, the Economic Offence Wing of the Mumbai Police arrested the promoters of HDIL, Rakesh Wadhawan and his son Sarang Wadhawan, in a cheating case related to the scam at Punjab & Maharashtra Cooperative Bank.
The bank is under regulatory restrictions after the Reserve Bank found out financial irregularities, hiding and classification of loans given to HDIL.
As per the confession made by the suspended managing director of PMC, Joy Thomas, the bank maintained its loans to HDIL--as much as over 73 percent of its book or Rs 6,500 crore of the Rs 8,880 crore assets, as standard even when the bankrupt company was defaulting on repayments from the past two-three years.
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