NEW DELHI, Nov 1 The apartments in the upscale Colaba neighbourhood of Mumbai were for the noblest of causes giving shelter to wounded Indian war veterans and the widows of those slain in battle.

But the Adarsh Housing Society in Mumbai appears to have been a huge scam, with nearly every one of the valuable units being sold for a song to a clutch of top politicians, their kin and retired generals in a scandal that has rocked India's ruling Congress Party.

The scandal, first reported last week in The Times of India newspaper, is considered so toxic that Congress Party chief Sonia Gandhi appointed India's defence minister and finance minister to investigate.

Chief Minister Ashok Chavan, the top elected official in Maharashtra state where Mumbai is located, offered to resign over the weekend after media reports revealed that his mother-in-law and other relatives had apartments in the building.

The scandal comes at a sensitive time for the Congress Party. Chavan is slated to play host to Barack Obama when the US president visits Mumbai this weekend. Party leaders have not made a decision on whether to accept Chavan's resignation and quickly replace him.

The land in the upscale neighbourhood in southern Mumbai had been earmarked for a six-storey building of apartments for disabled veterans, war widows and heroes of the 1999 Kargil conflict between India and Pakistan that raged for three months across the disputed Kashmir region.

But the original blueprints for a modest building were cast aside and in its place arose a 31-storey luxury high-rise, even though zoning laws and environmental regulations appear to bar tall buildings along the coast.

Of the 103 apartments in the building, only three went to families connected to the Kargil conflict, according to the Asian Age newspaper.

The remainder went to two retired Indian army chiefs, a former naval chief, relatives of federal ministers and scores of top politicians and bureaucrats in Maharashtra.

The apartments, finished in 2008 and bought for as little as Rs6 million ($130,000), are now worth about Rs80 million ($1.8 million) in Mumbai's highly inflated real estate market, according to media reports.

India's opposition parties have demanded the government come clean on who authorized the changes in the building plans and who allocated the apartments to powerful officials.

The defence ministry has ordered an investigation into the building, said Sitanshu Kar, a defence ministry spokesman.

Chavan has directed municipal officials to begin proceedings to expel the residents, and the local utility company has threatened to cut off power and electricity to the building.

And some of the recipients have rushed to distance themselves from the building, with the former military commanders offering to give back their apartments.

The allegations come just weeks after the end of the Commonwealth Games, which were marred by accusations of sleaze and corruption. —AP