The Air Force alleges that MHADA manipulated property records to take over nearly 49,000 sq m of defence land at the Rifle Range in Golibar area of suburban Santacruz.
It also alleged that six buildings have illegally come up on the land under the slum rehabilitation scheme.
The land (survey No 13/CTS 387) is located close to an IAF installation.
The Cotton Green-based 411 Air Force station said that the land was part of 2.49 lakh sq m of military land, which had been in its possession since May 8, 1964.
According to official at the 411 Air Force station, MHADA allowed a private developer to illegally set up multi-storied apartments on the land without procuring a no-objection certificate from the Air Force.