Every year, newspapers are decorated with real-estate ads during the Dasara and Diwali season, promising their customers a richly luxurious and expensive “dream” home. I’m sure bookings will already be in order.
Yet, there will be many, even more families, who won’t be able to catch a glimpse of their pre-booked, long-cherished dream homes. These are the victims of India’s biggest and least talked-about scam.
The real-estate scam.
Critics say that India is a country of scams; coal scam, 2G scam, chopper scam, chaara scam, you name it! We people learn about them corrupt activities through the media and despite having no “personal” connection with those scams, we are infuriated, aren’t we? So much so that in 2014 we voted a different party to power!
But, everybody keeps mum when it comes to real-estate scams and god knows why!? Maybe, because several “VIPs” are involved too and across the party lines? Maybe because the media, and especially newspapers, earn hefty revenues from those ads such that they can’t help but turn their eyes away?
In 2019, the government approved Rs.25,000 crores (3.5 bn USD) to revive over 1600 stalled housing projects, but guess what, that could fund merely 6% of all those dumped projects!
Because, there are $63 billion of stalled residential projects across the country, according to Anarock Property Consultants, and that’s a worrying number for our banks, isn’t it?
How did that come about in the first place?
Let’s consider the example of Jaypee’s Wish Town in Noida, to see the big picture. They announced 30,000 flats over a decade ago and yet just a few flats have been delivered to the customers. The rest of wish town remains deserted.
During all this, both the government and media, have stayed silent. Similar stories span across India, hence, lakhs of dream homes have been crushed by petty play between money and politics.
The most fascinating (and disappointing) part is the involvement of multiple political parties with the “real estate mafia” if you can call it.
- BSP gave them the land for wish town at the cost of peanuts
- SP gave them all the necessary permits
- Esteemed Congress minister Kapil Sibbal became Jaypee’s lawyer
- UP CM Yogi Ji ensured delivery of all flats by March and yet here we are
Middle class homebuyers demanded a forensic audit to seek info on where the monies went to really? But, to no avail as the bankers of Jaypee refused to do so and there’s hardly any question why.
Middle class people are quite gullible to be honest. They tend to think: “Paisa hamne de diya…EMI bhi denge…so Flat to milega hi na!”
However, they seriously underestimate the “mix” of law and politics, whose professionals can easily roll the ball in their court by proving: “Risk to builder ne liya na? Dil ka daura to use padega!”
The buyers turned to Supreme Court, ultimately. As a result, Jaypee group was asked to deposit a penalty of 2000 crores. After continued negotiations with the apex court, the group deposited a Rs.750 crores penalty.
The case was handed over to National Company Law Tribunal aka NCLT, a body that settles issues relating to Indian companies.
Their job was to replace Jaypee, as in, finding an alternate real estate player to complete the Wish Town project. If not, the NCLT may auction it, which would mean “big monies” for the bankers involved and “baba ji ka thullu” for thousands of homebuyers.
This could very well be be a disaster, the home-buyers thought. Thankfully, the Supreme Court intervened and approved home-buyers’ status as financial creditors. Since their status was now on a par with banks, the buyers took a deep sigh of relief.
In Dec 2019, National Buildings Construction Corporation (NBCC) came forth to complete the Jaypee project. The concerned 12,000 buyers voted them in because their track record, especially as a blue-chip Government of India enterprise, was excellent.
NBCC sought to deliver Wish Town on the basis of those 750 crores that Jaypee had submitted as penalty. But here it goes: The Jaypee group comes back into the picture, demanding their monies, on the basis of a slight legality, since the project was no longer their own!
The whole “Tu-Tu Main-Main” between companies started all over again and the case was directed to the Supreme Court.
Now, home-buyers hope that the court allows NBCC all the facilities necessary to finish the stalled project, whereas, the Jaypees wish otherwise.
Many such horrible stories abound in all parts of the country. In the end, strangely, the lesson to learn is that the middle class people should not be dreaming too big. Or, if they do, dream with caution!