Friday, 29 September 2017

Bombay HC Order: Slap in Face for Bhagtani Builders, Relief for Riyo Project Victims

Mumbai, 29th September, 2017: The hopes of hundreds of victims of Bhagtani builders ill-fated Riyo project in Mira Road today when Justice Revati Mohite Dere of Bombay High Court gave a strict order requiring Dipesh, Mukesh and Lakshman Bhagtani to pay back Rs 22 crore to the victims within 6 months, as a pre-condition for their anticipatory bail.

Click here to read today's order in Criminal Anticipatory Bail Application no. 1533 of 2017, wherein there were roughly 175 interveners in four Criminal Applications (CA no. 862, 882, 901 and 910 of 2017).



1) Counsel for Bhagtani builders was forced to undertake that (a) the builders will deposit Rs.22 crores (as per the judge's directions on 15th Sept), in 6 equal installments, within six months from today (b) that the first installment will be deposited on or before 12th October, 2017 and (c) the balance 5 installments, thereafter, within one month each and (d) if there is a single default, the protection can be vacated. (e) An affidavit-cum-undertaking of the Bhagtanis stating the above is to be submitted on Tuesday, 3rd October.

2) One of the counsels for interveners pointed out that in addition to the above-mentioned list given by the police Investigating Officer, there were other 18 investors, and that he was in the process of filing an intervention application. Their amount would be an additional Rs.3-4 crores.
3) Mr Mundargi (counsel for Bhagtani builders) stated that the builders were ready to deposit the additional amount of the additional investors who are not included in the list tendered by him today, after the list and the amounts are verified.

4) The matter is now "stood over" to 3rd October, 2017 at 3.00 p.m, for tendering the affidavit-cum-undertaking of the applicants.

5) Interim protection (i.e. protection from arrest) granted earlier to continue till the next date i.e. 13th October.


a) The Investigating Officer said in response to a question that Dipesh and Mukesh Bhagtani are in India. (Dipesh was on the court premises, it seems, though not in the courtroom. The whereabouts of Lakshman Bhagtani were not discussed.)

b) With reference to another another anticipatory bail application (ABA no. 1725 of 2017) filed yesterday by Bhagtani builders for protection in the case of an FIR u/s IPC sections 420, 120(B) and 34, and MOFA sections 3, 4, 5, 6, 13 and 14, Justice Mohite Dere asked why multiple agencies (i.e. Santa Cruz police station and EOW) were involved in filing FIRs on the same topic. Hence, EOW is directed to take all cases in this matter (i.e. Riyo in particular, and Bhagtani builders in general). Aggrieved Bhagtani investors, in future, please go to EOW and Santa Cruz and register FIRs.

c) It is felt that allottees should not deposit any Post Dated Cheques (PDCs) that may be in their possession. Otherwise, it will be seen as trying to take double payment from Bhagtanis.


THE BIG MESSAGE FROM TODAY'S PROCEEDINGS: Many FIRs have been registered by Bhagtani's victims, and they will come up before Bombay High Court soon. The Bhagtani scam will now make headlines, and the tide will turn against them and in favour of their victims. Bhagtani victims from Sapphire, Savannah, Serenity and other projects should now gather courage to go and file FIR immediately with EOW. Join the tidal wave of Bhagtani victims fighting for their rights!  

Krishnaraj Rao

Background of this story:

Wednesday, 27 September 2017

Remedial Paperwork for Bhagtani Investors to get Justice & Repayment

Mumbai, 27th September, 2017: It is hard to legally prove cheating by Bhagtani builders, even if commonsense proves it. Slippery paperwork and fuzzy oral commitments given by Bhagtanis and their office minions is what makes it hard. Flat-buyers, police, lawyers and even courts lose their sense of direction due to the slipperiness and fuzziness. Everybody is getting diverted by bounced cheques, the terms of allotment letter and cancellation deed, etc. etc. A huge smokescreen of confusion prevails, within which Bhagtani's office continues to fool people and collect crores of rupees even till date.


Your basic contract with Bhagtani is, "I give you money in time, you give me flats in time." This contract was totally broken from the builder's side. Over 2,000 persons paid between Rs 8 lakhs to Rs 80 lakhs for flats in several projects -- Riyo, Sapphire, Savannah, Serenity, Powai B15, Krishaang, etc. Bhagtanis neither delivered the flats, nor gave back the money till date. Bhagtanis didn't even return the principal amount -- over Rs 600 crore -- to ANYBODY. And they are claiming that they don't have the money today, but they somehow will have the money tomorrow. But, far from repaying some investors every month, they are actually TAKING MORE MONEY EVERY MONTH on the pretext of enabling transfer to other projects.

Honest builders would have returned the bulk of the money, if not all the money, by now; but Bhagtanis are not honest builders, they are con men. Bhagtanis are not bankrupt; they have not lost your money. They have all the money they collected from you, but they have diverted it into roughly 20 corporate entities of which they are directors, and possibly some more entities where they are promoters but not directors. Bhagtani builders are not normal social people, they are sociopaths. Bhagtani brothers Dipesh and Mukesh are con men with over 15 years of experience. Their main strengths are (a) crooked lawyers who draft their paperwork (b) an office full of well-trained henchmen (c) at least a dozen undercover agents and dirty-tricks experts participating in Whatsapp groups and gatherings of cheated flat-buyers (e) at least 20 private limited companies which they use for funds diversion (f) pots of money and cash-flow of at least a few crores per month, earned by fleecing flat-buyers, which they use for bribing various authorities. These are the only real facts that matter. Everything else is a smokescreen.


1) ASSURANCES: Bhagtanis keep promising EVERYBODY that they will pay them back tomorrow... meaning after 12 months, or 24 months, or 36 months. This "tomorrow" never comes. Because when the day for payment arrives, post-dated cheques (PDSs) bounce, and more PDCs are given, or written assurances of making payment by RTGS are given... and a fresh cycle of broken promises begins all over again. Mr Flat-buyer, these assurances and false hopes are only for keeping you hooked and hypnotized. Mr Investor, don't accept their assurances.
2) TERMS AND CONDITIONS: Bhagtanis have imposed many conditions for repayment, e,g, cancellation deeds and accepting an exchange offer. Why are you allowing people who broke their contract to dictate terms to you? It is their duty to return your money! Mr Investor, don't accept their terms and conditions.

3) THREATS TO NEVER RETURN THE MONEY:  Bhagtanis imply that if you complain against them, or write in social media against them, you will not get your money back. The facts are otherwise: the only people who got about 10 to 25% of their money back, are the ones who filed police complaints, Section 138 cases for bounced cheques, or wrote about them in social media. Mr Investor, don't be cowed down by their threats.

4) MIND GAMES BY "OTHER INVESTORS": Bhagtanis' have a large team of dirty-tricks experts who mingle with investors by posing as investors themselves. These people have convincing back-stories, and also have receipts, allotment letters, etc. These guys play with your mind in different ways. Some are vocal sympathizers of Bhagtanis, projecting the theory that the builders are well-intentioned and genuinely helpless to refund your money. Some others gather groups of investors by taking aggressive stances against Bhagtanis, but they fulfill their purpose by setting up meetings with the Bhagtanis or their office staff. The true objective behind these meetings is to convince people to accept terms and conditions, withdraw complaints, sign on cancellation deeds, opt for exchange offers, etc. Another group of dirty-tricks team members organize Whatsapp groups for various projects like Savannah, Riyo, etc. and dilute everybody's actions by talking about the importance of "maintaining unity", or hiring a "good and effective lawyer", etc. Mr Investor, don't fall for such mind games. 

5) SAD STORIES OF BHAGTANI BUILDER'S "BAD LUCK":  People who invested in Riyo are told that the project was stalled because the land-owners cheated the Bhagtanis. Sapphire investors are told that their project ran into troubles concerning SRA component. Savannah investors are told that their project did not get dumping ground permissions. Others are told that Bhagtanis lost a huge amount of money in a bad property deal, and so they are in a mess. But Mr Investor, Bhagtanis are driving posh cars, living a lavish lifestyle and frequently flying to Dubai and London; you and your family are the ones in a mess!


When you file a complaint before any forum, you run the risk of being rejected due the terms and conditions that Bhagtanis have cunningly inserted in allotment letter and cancellation deed for diverting attention from the real issues. Clause 10, 11 and 12 of your allotment letters, say that you knowingly accepted the risk of Bhagtani's failure to get all the necessary approvals, that you are "investors" and not flat-buyers, and that amounts to be repaid to you will be treated as "loans" i.e. they will be repaid at the builder's sweet will and convenience! Mr Investor, we all know that you did not knowingly accept these onerous conditions, and that you were tricked into accepting these documents by a lot of fuzzy oral commitments which were said or implied; but how will the courts know you were tricked, unless you create the necessary documents to inform them about this?

For example, National Consumer Disputes Redressal Commission (NCDRC) was sidetracked by Bhagtani's clever usage of the term, "Investor". Read this judgment in favour of the Bhagtanis. Although the consumer forum dismissed the plaint stating that it does not have jurisdiction in this matter, it upheld Bhagtani's untruthful narrative, resulting in a technical victory for the cunning builder. Thje police often refuse to register FIR because Bhagtani's slippery documents like Allotment Letter and Cancellation Deed make it look like you have given a clean chit to Bhagtani!

Bhagtanis have put you in this mess by confusing you and making you accept, silently and without protest, many illegal documents, particularly (a) Allotment Letter and (b) Cancellation Deed. These documents present a distorted version of the reality to any court that you present your case. For instance, most investors gave lakhs of rupees to Bhagtani many months BEFORE he sent them the allotment letter; but the cunningly-worded allotment letter suggests that you paid the money at the time of accepting the allotment letter. Similarly, the cancellation deed that is forced upon you by Bhagtani's office makes you falsely state that you are cancelling your flat booking for your own personal reasons. But the fact is that you cancelled the flat booking because the builder wrote you a letter clearly stating that he cannot complete the project in the foreseeable future!

So, you should create correspondence bringing the true facts of your case on record, and demand your money back unconditionally. Whether Bhagtani's office responds or not, you should follow this up with a couple of letters. Then you should send a well-drafted legal notice bringing all the true facts of your case on record, and highlighting the contradictions in the builder's stand. Last but not least, create proper sworn statements (affidavits) which sets the record straight regarding the actual nature of your relationship with Bhagtani. All these documents should aim at establishing that the allotment letter and cancellation deed were thrust upon you using devious methods, and therefore, they don't reveal the true nature of your contract with Bhagtani!

This paperwork will create the traction needed to counteract the slipperiness of Bhagtani's paperwork. Only after this remedial paperwork should you attempt to file a criminal complaint or any other complaint. This is like spreading sand on an oily road before driving on it!


Till now, Bhagtani has defeated you by tricking or forcing you to accept paperwork drafted by his clever lawyers, to project illusions that help his case and harm yours. Now it is time for you to set the record straight by creating paperwork that present facts the way they really are, so that police and courts can see the clear picture i.e. that Bhagtani completely violated the heart of his contract and still does not repay you, and continues to impose all kinds of terms and conditions on you. Presenting this picture clearly before all authorities and judicial forums is necessary for getting justice.

In order to take appropriate legal action against the Bhagtanis, you should first address carefully-worded letters and legal notices to the Bhagtanis, and also create clear sworn statements i.e. affidavits before you land up in before the police or in court. If you don't do this sort of planning and methodical preparation, you run a very high risk of letting Bhagtani win the court battle for technical reasons!

Monday, 25 September 2017

Good News Bhagtani Riyo Investors! Hearing on Friday

25th September, 2017, Mumbai: Good news for Bhagtani Riyo flat-purchasers. Our Adv. Shraddha Dubepatil mentioned our case before Justice Revati Mohite Dere today 11 am and got it preponed to Friday, 29th September. It was earlier scheduled for hearing on 13th October.

As you know, Advocate Shraddha Dubepatil has filed intervention application on behalf of 75 flat-buyers. Two other advocates have also filed, bringing the total to over 200 intervenors. The door is still open till Wednesday evening, if more investors wish to join.

How to join?

Below items are to be hand delivered by the flat allottee (or their Power-Of-Attorney holder) to Adv. Ankur at Office no. 8, Ground Floor, Raj Mahal Building, Near Ambassador Hotel, Veer Nariman Road, Churchgate. Mobile nos. of Adv. Ankur are 9075537627 and 9657071710.
  • ·         Allotment Letter
  • ·         Cancellation Deed if any
  • ·         Details of payments made / claim amount i.e amount paid plus interest.
  • ·         Details of booking amount and subsequent installments paid if any.
  • ·         Cheque/cash Rs 5,000/- towards legal expenses
 You will sign the following documents at the office:
  • ·         Vakalatnama
  • ·         Intervention Application
The above actions MUST be carried out before 5.30 pm, Wednesday, 27th September i.e. next 48 hours, so that the intervention application can be filed on Thursday. 

Additional Info
  1. The same counsel will be appointed by both Shraddha and Ankur to represent the intervention applications, namely Adv. Shrey Fatarpekar.
  2. We cannot submit the names of new interveners to the builder’s lawyer, unless our counsel convinces the judge to issue fresh directions, over and above the directions issued on Friday, 15th September.
  3. If any relief is granted to the old interveners (i.e. the 75 persons on whose behalf Adv. Shraddha filed intervention last Monday), then new interveners may also be eligible to get the same relief.
  4. The builder’s lawyer will naturally oppose all interveners. Our counsel will argue to procure justice for interveners. We are optimistic. The judge showed a positive attitude and clear understanding today morning when Adv. Shraddha mentioned our case.
In case of queries, contact Adv. Shraddha Dubepatil on 9920187873. All the best!

Krishnaraj Rao

Friday, 22 September 2017

Why you must name Bhagtani's Employees in FIR

22/09/2017, Mumbai: Recently, I wrote an article about the need to name & shame Bhagtani's employees in case you are a victim of the Riyo, Savannah, Sapphire and Serenity scams. So let me refresh your memory with the images of some prominent employees in Bhagtanis office -- people with whom many of you interacted, and then you got scammed.

Annie Cornel Lobo and Srinivas Erlapelli
Upkar Anand, in his old and new avatar

RK Kamath

Vinay Shukla
Khushboo Khanna

Besides these, there are Abhishek Varma, Indranil Das, Dilip Ochani, Vijit Ghosh, Sunil Vaswani, Mukesh Tiwari, Sagar Malwade, Uttkarsh Gandhi, Yogita Sakpal, and Esther, and several others.

Indranil Das and Others

Sagar Malwade and others

Am I being petty-minded, vengeful or vexatious? Would it be morally wrong to name them in your FIR? The emphatic answer is, NO. So, why am I asking you to name these people while registering your FIR with Santacruz police station?


1) POLICE STATEMENT REQUIRES YOU TO GIVE EXACT DETAILS. Before the police register a First Information Report (FIR), they will take down your statement. A police statement is a datewise and precise reconstruction of the entire dealing between you and the persons being accused. A police statement sounds a bit like this: "I read an advertisement in July 2013, and went to the office of Accused no. 1 (Dipesh Bhagtani) and Accused no. 2 (Lakshman Bhagtani). In the office, I met one Mr Sunil Vaswani, who gave me a brochure to read, and a form to fill up. On my next visit to the office of Accused no. 1 and 2, I was asked to meet Accused no. 3 (Mr Upkar Anand). Accused no. 3 told me that if I paid a smaller booking amount (10% of total consideration), then I would have to pay a higher consideration for the flat i.e. Rs 65 lakhs, whereas, if I was willing to pay a bigger booking amount (40% of the consideration amount) at the time of booking, I would have to pay a lower price for the flat i.e. Rs 62 lakh. Although I argued that the maximum booking amount permissible under MOFA Act is 20%, Accused no. 3 convinced me that our dealings were exempted from MOFA. Convinced by his arguments, I paid 40% of the consideration amount as booking advance on 01/09/2013..." In a police statement, you are required to narrate the names, designations and contact details of the persons you met, whose various statements and dealings with you led you into your present predicament. The police "writer" will painstakingly type your story in Marathi. The FIR is based on this statement.

2) WITHOUT MENTIONING THE NAMES OF EMPLOYEES, YOUR STORY BEFORE THE POLICE BECOMES WEAK. Most flat buyers have never met the Bhagtanis, and even the few who have met them, barely spent 5% of their total amount of time with them. Over 95% of your time was spent interacting with employees, and your decisions were based on their teamwork of the employees. For example, in the words of one investor: "Khusbhoo Khanna is their Vice President of Sales. She aggressively peddled their toxic projects alongwith Upkar Anand and convinced people that it would take only another 3-4 months to get all approvals. She is also their last line of defence, before the Bhagtani brothers, if the Customer Sales Managers cannot handle 'explanations' as to why the projects are not taking off. RK Kamath and Vinay Shukla are from Jaycee 'Customer Relations' Team. They threaten defamation lawsuits against anyone who wants to disclose their dubious business tactics. Upkar Anand was VP as well, but, believe he left Jaycee and started his own company: He now refuses to acknowledge any investors he had sold projects too and cannot 'recall' any of his work at Jaycee." If interrogated about your case, the Bhagtanis may say, quite factually, that they have never met you in their whole life! Unless the employees are mentioned as accused no. 3, 4, 5 etc, the police investigation will not be possible, and your complaint will not result in an FIR; it will be dismissed as "unsubstantiated" due to lack of substance and evidence, because there will be nobody to interrogate. The employees are the connecting thread between you and the Bhagtanis!

3) THE POLICE WILL NEED EMPLOYEES TO PLAY THE ROLE OF "APPROVER"..Employees know the day-to-day working and the inside story of Bhagtani's overall organization, spanning various companies like Jaycee Homes, JVPD Properties, MD Devcon, etc. If made co-accused, they will spill the beans during police interrogation. If some employees offer to become approvers i.e. disclose the inside story to the police in return for reduced prison sentences, the true story will come out and your money may be recovered.

4) EMPLOYEES ARE NOT INNOCENT. Every adult is legally responsible for everything that he/she does, whether it is for a salary or for personal reasons. All the employees would have known that their actions deprived you of your life savings and your legal rights. Even assuming that their individual acts may not necessarily be a crime, they collectively add up to cheating, breach of trust, etc. These employees made a career out of systematic cheating, lying and deceiving. The present FIR against the Bhagtanis (CR no. 399 of 2017) was registered under IPC section 420 (cheating and dishonestly inducing delivery of property) read with section 34 (Acts done by several persons in furtherance of common intention). These sections are also applicable to many of their employees.

5) ORGANIZED CRIME CANNOT BE CONDUCTED WITHOUT EMPLOYEES. When you look at the big picture, it becomes evident that the Bhagtanis' objective to collect huge amounts of money on the pretext of flats. The enormous scale of their day-to-day activities would not be possible without employees. Therefore, many (if not all) of the employees are conspirators in a large-scale financial scam.

Krishnaraj Rao

Related articles --

1) Bhagtani's Gigantic Engine of Bad-Debt 

2) Bhagtani Builder’s Trick: Collect Rs 600 cr and Don’t build a single flat!

Bhagtani Riyo Investors get second chance to become interveners in High Court

 22/09/2017, Mumbai: There’s good news and bad news for Bhagtani Riyo flat-purchasers. First the bad news: Our hearing in Bombay HC did not happen today as the judge -- Justice Revati Mohite Dere -- was absent today and is scheduled to resume only on Monday. So, our matter (anticipatory bail application no. 1533 of 2017 held yesterday evening for extension of pre-arrest bail granted to Dipesh, Mukesh and Lakshman Bhagtani) was rescheduled for hearing on 13th October as per High Court causelist. Advocate Shraddha Dubepatil, who has filed her intervention application on behalf of 75 flat-buyers, will try to have it heard on Tuesday by mentioning the case before the judge on Monday morning.

Now the good news: This unexpected delay may give many other flat-buyers of Riyo to file their intervention application. People who could not include their names in the application which Adv. Shraddha filed this week, can now file their intervention with Adv. Ankur Pahade (Mobile no. 9075537627). (Why not Adv. Shraddha, you may ask. The answer is: One intervention application filed by Adv. Shraddha is already pending, and therefore, she cannot file another.) 

So Adv. Ankur Pahade will file the intervention on behalf of the new interveners on Monday, 25th September, and also seek hearing on the very next day i.e. Tuesday.

Please note:
  1. The same counsel will be appointed by both these advocates to represent both the intervention applications, old and new, at the hearings. Last time, we were represented by Counsel Shrey Fatarpekar, and probably, he will continue to represent the interveners.
  2. We cannot include the names of the new interveners in the list submitted to the builder’s lawyer, as Bombay High Court directed him to take the Riyo victims’ names with him as on Monday, 18th Sept. He is likely to reject any names submitted to him after that date as he is strictly not required to accept them, unless our counsel succeeds in convincing the judge to give him fresh directions to accept.
  3. However (even if the builder’s lawyer doesn’t accept it), the intervention application of the new names will be on record. If asked to explain, our counsel can say that these investors were unaware about the court’s directions issued last Friday or they were out-of-station, etc. and hence they delayed in filing intervention. If relief is granted to the old interveners (i.e. the 75 persons who have already filed their intervention application on Monday), then these new applicants will also have a good chance of getting the same relief under the court’s protection.
  4. The builder’s lawyer will naturally oppose all intervener applicants, new and old. Our counsel will have to argue on our behalf, to procure justice for all intervener applicants. The outcome will depend on the decision of the judge. We are optimistic because we believe that this is a favourable bench for us.
  5. Remember, judges don’t necessarily give favourable directions according to our desires and our efforts. Sometimes they give more than anticipated, and sometimes they give less.
  6. Please consider all the above points, and take an informed decision whether you want to take this second chance to become an intervener.
How to become an intervener:

Below are the things to be hand delivered by the flat allottee (or their Power-Of-Attorney holder) to Adv. Ankur at Office no. 8, Ground Floor, Raj Mahal Building, Near Ambassador Hotel, Veer Nariman Road, Churchgate.
  • ·         Allotment Letter
  • ·         Cancellation Deed if any
  • ·         Details of payments made / claim amount i.e amount paid plus interest.
  • ·         Details of booking amount and subsequent installments paid if any.
  • ·         Cheque/cash Rs 5,000/- towards legal expenses
 You will have to sign on the following documents at the office:
  • ·         Vakalatnama
  • ·         Intervention Application
The above actions MUST be carried out before 6 pm Sunday 24th September i.e. next two days, so that the intervention application can be filed on Monday and we can request hearing on Tuesday.  
The mobile nos. of Adv. Ankur Pahade are 9075537627 and 9657071710.

In case of any difficulties, Riyo investors may also contact Adv. Shraddha Dubepatil on 9920187873.

All the best!

Krishnaraj Rao

Tuesday, 19 September 2017

Name & Shame Bhagtani Builder's Employees & Bankers

20th September, 2017, Mumbai: During the past 3-4 days, the victims of Bhagtani builders from various projects such as (Savannah, Sapphire, Serenity and Riyo) have started going in groups to Santacruz Police Station and giving their statements. Hopefully, we will see more FIRs being registered against the Dipesh, Mukesh and Lakshman Bhagtani for cheating. It may not be long before they are arrested and interrogated by police.


1) Will investors get back their money? Will the courts and/or other authorities recover the money from wherever the Bhagtanis have siphoned it off? Will they start recovery proceedings and get the money back within a reasonable timeframe, and return it pro-rata to investors? One hopes so; it is necessary for all of us to work towards that objective. If our system fails to deliver some kind of justice and payback, a couple of hundred NRIs who invested in Bhagtani projects may lose faith in the Indian system, and may spread the word that India isn't a reliable investment destination. The authorities should remember that our nation's reputation is at stake here.


2) Will victims name Bhagtani's office staff? Most investors forget that the work of cheating them was mostly done by salaried staff -- Customer Relationship Managers, Sales Manager, etc. Victims were (and still are) interacting with and following up with office staff. The staff has been shielding the Bhagtanis from angry victims for years, by giving various false assurances and wrong facts on their behalf. Every few months, the employee changes, and the victims have to frustratingly start all over again by updating the new one about the commitments made by his predecessor! Please name and shame the staff members on social media, and also put their names in your FIR as conspirators. Remember, they earned their salaries by cheating you of the money that rightfully belongs to your wife and children! For many years, the only work done in Bhagtani's staff is cheating and misleading customers after calling them to the office! Bhagtani builder's office has wiped out not only the life savings of individual families, but also over 100 extended families, consisting of parents, brothers, sisters, in-laws etc, who were persuaded by the main victims to book a flat!

3) Will the bank branch (and branch managers) be shamed? The Bhagtani builders bounced over 1000 cheques in the last few years i.e. an average of at least two per day! This isn't normal and acceptable by banking standards! So, did the bank officers, particularly branch manager, initiate any action against Bhagtani? Did the branch manager take steps to close the accounts of the Bhagtanis for violating banking norms? One doubts it! Remember, bouncing the cheques was a not an accident that happened only with you; it was a regular modus operandi for Bhagtani builders, and it happened with hundreds of investors! Bouncing post-dated-cheques repeatedly was an important part of Bhagtani's strategy. So, please name and shame the bank branch that aided and abetted Bhagtanis in cheating you!

Even if these people quit their jobs and go to work elsewhere, they should carry the bad reputation that they earned while working for Bhagtanis! The employees and bankers were Bhagtani's collaborators, who aided and abetted in the cheating. So let us create a database of the names of Bhagtanis crooked employees, and also the dishonoured cheques. Please email or whatsapp me the name and designation of the employees (along with their photo and/or photo of their visiting card), and clearly mention the role that they played in cheating you. Also email or whatsapp photos of the dishonoured cheques. I would like to publish these details as a database, and it may be useful for our case in High Court also.

Krishnaraj Rao
816 947 1229 (Whatsapp)

Friday, 15 September 2017

Lodha Fiorenza – Misleading RERA, Blindfolding Flat Buyers

Mumbai, 16th September, 2017: If you are a flat-buyer looking for a new home for your family, or an property investor looking for good returns, be warned; Lodha Fiorenza is a trap. If you sign any papers or swipe your credit card at the Lodha Fiorenza sales office, you will be liable to forfeit lakhs of rupees very quickly, or make a regrettable investment from which there are only loss-making exits. The branding message of “interiors by Jade Jagger for Yoo” is a giant façade that hides an ugly mess of unverifiable claims, unfair dealings and badly planned towers that will prove extremely costly to maintain in the long run. 

The advertising claims portray a stylish premium property, which is far from the ground reality. The designer interiors are flashy, mediocre and gimmicky. Half the flats have a view of the greenery of Aarey Colony, Goregaon, but this is marred by the continuous bass droning of day-and-night traffic on the Western Express Highway that permeates through doors, windows and even walls. Smooth-talking sales office staffers lure you to swipe your credit card and sign papers that will suck you into a financial decision that may cause you to forfeit pots of money. How much money can you lose? Over 50 lakh rupees, if you signed up for a modest five crore rupees flat! Many toxic clauses are written in the terms and conditions of a barely-legal document called “Application Form”, which you are expected to fill up and sign at the first or second meeting at the sales office, before negotiating the final price or asking for detailed information about the project.

This Application Form is a top-secret document, not allowed to go out of the office in any form – whether photocopied or electronic. You get to read the Application Form only when you are about to sign it. Customers may sign it in an unwary mood because the sales staffers give them verbal reassurances, such as, “That clause does not apply to you, Sir,” or “Madam, this form is just a formality to show that you are interested”. If you sign, you are expected to pay a token amount of a few lakhs; Rs 8.10 lakhs is the minimum booking amount expected, but they will initially accept far less. 

Did you sign and did you pay? Congratulations, Sir/Madam, you are now like a fish that swallowed the bait; the hook is now lodged firmly in your throat.  

Lodha Group uses the same modus operandi for taking bookings at two dozen registered projects which you can view on the MahaRERA site by typing “Lodha” and hitting the Search button. Lodha Group is an established brand in the property market, and the group’s patriarch, Mangal Prabhat Lodha, is a ruling party MLA with a generally clean reputation. However, its disclosures to the Real Estate Regulatory Authority (RERA) and other public authorities such as the Municipal Corporation and Mumbai Fire Brigade, leave much to be desired. The dirty work of misleading customers is done by the staff sitting in the plush sales office; higher-ups stay out of sight, and customers are routinely misled without leaving any documentary evidence that can be used in a court of law.  

Buying a flat in Fiorenza and such other Lodha properties typically means making an investment decision of amount ranging between about Rs 2.5 to 25 crores. Such investments should be made after careful consideration and proper legal paperwork. But, instead of providing reliable information, Lodha Group deprives the potential customer of all information, and makes him cough up some money in exchange for even small bits of information. 

The Lodha customer is typically a wealthy person with surplus investable income but deficit of time and mindspace; he/she is too busy making money to be careful about how he spends it. Quite often, NRIs on a short visit to India or young couples having huge corporate salaries and equally high responsibilities land up at Lodha Fiorenza looking for investment opportunities. The plush corporate environment at the sales office confuses customers, and they make the mistake of thinking that rule-bound behaviour is law-abiding behaviour.

Open Space and Fire Norms Violations

Hidden behind the plush, five-star façade of Lodha Fiorenza are numerous false and misleading declarations to RERA and MCGM, brazen open space violations and rampant fire safety norms violations. Lodha Fiorenza consists of four residential towers of about 40 storeys on top of a massive seven-storeyed parking podium, of which 50% is a municipal parking lot. Towers Roma and Milano are mentioned in detail in the RERA declaration, but two other towers – Venezia and Sienna – are not mentioned; as far is RERA has been informed, only two residential towers exist on top of the parking podium! The gigantic structure of Lodha Fiorenza stands squarely on a service road of Western Express Highway, towering over the popular Hub mall. It offers no access to fire-fighting vehicles on three sides, and limited access on one side only – the service road in front. There are no open spaces around the parking podium for a fire-brigade vehicle to circumnavigate the structure. There is no way for the fire-brigade vehicles to climb up to the amenities level on the seventh floor of the podium – the only part of this residential complex that offers a tiny bit of open green unrestricted space to the 500-odd households. Access to fire exits is restricted by doors kept permanently locked. Even the residents of this complex are given restricted access; the swipe card of a resident gives him access only to his own tower, but not to the neighbouring towers. The security guards exist to safeguard Lodha’s property and restrict the residents.

Investors who bought exorbitantly-priced flats in Venezia and Sienna towers some years ago are now struggling offload it, even at a loss. They are facing fierce competition from Lodha’s sales office, which readily enters into a price-cutting war with them. Security guards give estate agents and investors and owners a hard time, posing obstacles and restricting them for showing flats to prospective purchasers. 

You won’t get Conveyance of Land

The flat buyers are told that Lodha Fiorenza stands on “freehold land” which will be readily conveyed to them after the cooperative societies and federation of societies are formed. That is untrue. The Title Verification document uploaded on RERA website may give investors sleepless nights. It says:

  • “… there are no material changes taken place with regards to the title of Nirlon as an Owner and Lodha Pranik Landmark Developers Private Limited as a developer of the said property subject to always mortgage referred therein.”
  • “Suit no. 2496 has been filed by the Hub Mall Premises Cooperative Society Limited (Plaintiff) against the Company and Others before the City Civil Court, Dindoshi. In the said suit, the plaintiff has sought to allege inter alia that the development of the Lodha Fiorenza Project by Company is contrary to the provisions of law and that the defendants be statutorily prohibited from carrying on development of the Lodha Fiorenza project contrary to the sanctioned layout plan in as much as no consent of the purchasers of the units of Hub Mall was obtained for the development of the Lodha Fiorenza project and that the loading of TDR on the project to be declared illegal.” This matter is currently stuck in appeal before Bombay High Court.

The RERA declaration cryptically mentions four litigations pending in the city civil court and Bombay High Court. Details and documents of these are withheld from RERA and from home buyers.

Club & gym are bones of contention

There is inherent discrimination in the distribution of recreational facilities, which is not only unlawful, but will also lead to quarrels between the separate cooperative societies that will be formed for the maintenance of the towers. There is one common club, gymnasium and swimming pool for about 460 residents of Venezia, Sienna and Roma towers, and there is a separate equal-sized special club, gym and swimming pool exclusively for the 45 residents of Milano tower. Both the clubs and gymnasiums are located within Milano tower. The cost-sharing ratio for sharing the maintenance costs between the towers will inevitably be a huge bone of contention for years and decades to come.
Even outsiders may be allowed to use the club, swimming pool etc, according to Lodha Group. The draft registered agreement defines club very cleverly. Clause 1.15 says, “”Club” shall mean any recreation facility constructed for the use of the purchasers of units in the Project or the Larger Property.” Clause 1.32 of the draft registered agreement states, ““Larger Property” means the land with details as described in Annexure 1 (Description of Larger Property). For clarity, there may be other building(s) and / or project(s) which will be constructed on the Larger Property.” Larger Property means the land plot occupied by Lodha Fiorenza plus Raheja Sherwood plus Hub Mall, and other land owned by Nirlon.

The term Common Areas and Amenities is usually understood as meaning Common Areas as defined in the Real Estate Regulatory Act section 2(n), including staircase, terrace, club, recreational open spaces, etc. However, Lodha’s draft registered agreement robs this term of its meaning by defining Common Areas and Amenities in Annexure 7 as things that are provided within the flats, such as “iPad controlled homes with lighting and AC control; ‘Digital Hollywood’ in each residence with access to central database with 1000’s of movies, shows and games; Italian marble flooring in living/dining, puja, passage and master bedroom,” etc. etc.

Common parking for outsiders’ vehicles and Fiorenza residents

The bottom three floors of the six-storey parking podium are a public parking facility built for MCGM. The upper three floors are for the 1000-odd cars belonging to the 500-odd residents. The two share a common entry and exit ramp. When fully occupied by 2000 vehicles, there will be a traffic jam every morning and evening!

A further cause of disputes and unhappiness will be the building maintenance. The bottom three floors will presumably be maintained by the Municipal Corporation, while the upper ramps will have to be maintained by the federation of cooperative societies. Deficiencies in maintenance quality will impact the condition and life of the entire six-story podium structure, and the four towers built on it.

Super-Built-Up Area is being sold

Real Estate Regulatory Authority’s efforts to compel builders to sell only on carpet area basis have been reduced to nought. Lodha Group is openly charging for “super-built-up”, now termed as “EBVT”, standing for Exclusive Balcony, Verandah and Terrace. 

Lodha does not accept RERA as Authority

Clause 1.5 of the draft registered agreement defines “Authority” as “(i) any nation or government or any province, state or any other political subdivision thereof; (ii) any entity, authority or body exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, including any governmental authority, agency, department, board, commission or instrumentality; or (iii) any court, tribunal or arbitrator.” Clause 1.43 defines RERA as “Real Estate (Regulation and Development) Act 2016 and the rules framed by the relevant State Government thereto and any amendments to the Act or the rules.” Both definitions omit to mention the Real Estate Regulatory Authority appointed by the State Government.

The draft registered agreement and other documents uploaded (or omitted to be uploaded) by Lodha Group are a complete basket of monkeys. They merit a separate article. So, let us now focus on the Application Form for the remainder this article.

Web of deceitful clauses in Application Letter

1. The customer fills up the dimensions of the flat without any proofs, and undertakes to be bound by the details that he fills up. At the outset of this form, the Lodha Group customer is required to state, "I hereby apply for the allotment of the abovementioned units. I confirm that all the details have been filled up by me or at my instance, and I have thereafter signed the Application Form. I confirm that the details provided by me are true and correct. I have read the terms and conditions and agree to be bound by the same." And this statement will be signed by the customer and his co-applicant, if any. Not only the details of applicant and co-applicant are to be filled up by the customer, but the Carpet Area in Square Ft. and Sq. Metres, and the dimensions of the Exclusive Verandah / Balcony / Open Terrace ("EVBT") of the flat are also to be filled up by the customer in his own handwriting. One may ask, based on what does the customer fill out these details about the flat? The answer is, based on a simple computer printout on a plain white paper without a letterhead or signature, which is given to the customer. How can you know that these dimensions are correctly mentioned in the laser printout? And the answer is, blind faith. Even after persistent and written requests, Lodha Group flatly refuses to provide any certificate or drawing signed by a civil engineer or architect etc. stating the dimensions of a particular flat. The sales staffers insist that even they are not authorized to part with any document, or send an email stating anything at all. 

2. The customer fills up the "Date of Offer of Possession". The sales staff verbally inform you of the “tentative” date, but don’t give you anything in writing. 

3. The customer effectively undertakes not to deduct TDS on his payments to Lodha Group, and “authorizes the Company to deduct applicable TDS and make the necessary payments to the relevant authorities on behalf of the Applicant." Income Tax law casts a duty on the flat-buyer to deduct TDS and remit the deducted amount to the department. Does signing the Allotment Letter of Lodha Group free the customer from his statutory obligation to deduct TDS on large property transactions? NO. But Lodha Group will not delete this misleading clause.
5. Detailed payment schedule or "Milestones" enables customer-relation staff to tighten the screws. Annexure A of the Application Form has a detailed schedule stating that the customer will be required to pay Rs 8.10 lakhs upon booking and 9.9% less booking amount within 21 days of booking. In subsequent points, the milestones specify payment of 10.10% within 42 days of booking, 20% within 90 days of booking, 20% within 144 days of booking, and the remaining 40% "on initiation of possession". (The sales team verbally assures you that this schedule is “not applicable to you”, but insists nevertheless that you must sign on that page also, “because it is just a formality” and “we are not authorized to change the draft of Application Letter” and also, “we follow this format for all Lodha projects”.) The customer is required to stake large amounts in the region of Rs 25 lakhs to 2.5 cr, or even higher, on the basis of zero information about Lodha Fiorenza and its individual towers. Sales office personnel tell you that “you have to give us something to show your seriousness”, but they refuse send you an email about mundane project details! 

On a separate page, under the heading "Booking Amounts", the Terms & Conditions state that “I, the applicant, undertake to make payments in accordance with the Schedule of Payments, time being of essence”. The term Booking Amounts means the amount that the applicant pays prior to the registration of Agreement to Sell (i.e. the two initial payments totalling 9.9% of the total consideration amount). The terms & conditions mention that if there is non-receipt of Booking Amounts or any part of the payment, or if there is any breach of the terms and conditions by the applicant, Booking Amount 1 and 2 (or 10% of total consideration, whichever is higher) shall be forfeited. This means, if the customer pays any money to show his seriousness in buying a flat, it will never be refunded under any circumstances, and if he happens to pay a larger amount, even exceeding 10%, prior to registration of Agreement, the entire amount can be forfeited for a wide variety of reasons!

6. The consideration amount can be unilaterally increased! Under the heading "Schedule of Payments", point no. 7.5 of the Terms & Conditions says, "The Consideration Value shall remain fixed as stated in the Application form, save and except for proportionate share (in ration of Carpet Area) of any increase in costs/charges levied by any statutory authority... and on account of any increase in the cost of construction due to depreciation of the Rupee by more than 5% beyond the prevailing exchange rate with US Dollar as on the date of construction of the building. The applicant shall pay such proportionate share as demanded." Why? Why does the rupee-dollar exchange rate have anything to do with the price of Lodha Fiorenza? In what way does the dollar exchange rate affect the construction or maintenance costs of Lodha Fiorenza in Mumbai? Is the raw material or labour sourced from the USA? The sales office reassures you that this clause is not applicable currently (“unless war breaks out with Pakistan or China”) but they and their higher-ups bluntly refuse to delete it! They insist on you accepting and signing the Application Form in its entirety, and reassure you that none of those “standard clauses” will be misused to your detriment. Can you trust them?

7. Not all building approvals have been obtained, and the customer waives his right to raise any objection. Under the heading, "Plans & Specifications", the Terms & Conditions say, "The Applicant is aware that while the Company has obtained some of the approvals, certain other approvals (or amendments to current approvals) may be received from time to time. Having regard to the above position, the Applicant has applied for the unit, and agrees to abide by the terms without any objection of demur, and waives his right to raise any objection in that regard." The question is: Exactly which approvals are referred to in this clause? Lodha Group has not uploaded Commencement Certificate on the RERA website; could it be that the all-important CC was not received by this project? Doesn’t it lend credence to the allegations that development of the Lodha Fiorenza Project by Company is contrary to the provisions of law and contrary to the sanctioned layout plan?

8. Builder is allowed to make all sorts of amendments to the plans and layouts, and customer gives consent! The terms & conditions say, "The applicant hereby confirms that the Company may make amendments to the plans or layouts of the Project, the Building or Unit as required... This may include any change wherein the Company, if permitted by the relevant authorities, tranferring the construction permissible on the property on which the Project is being developed (Property) to any other property or transferring to the Property the construction permissible on any other property at any time prior to conveyance of the Property to the Federation / Ultimate Organization... The applicant gives his consent for such changes." What one understands from this is that Lodha Group may intend to either take the FSI from the land plot on which Lodha Fiorenza is built and exploit this FSI to construct somewhere else (i.e. Transfer of Development Right i.e. TDR of Lodha Fiorenza being used on some other Lodha project), OR alternatively, utilize the FSI or TDR taken from some other project site and use it at Lodha Fiorenza project. Lodha Group insists that you sign this waiver!

It must be stressed that Real Estate Regulatory Act does not allow allow unilateral forfeiting of booking amounts, etc., nor does it allow builders to keep the customers in the dark and bind their hands and feet with discriminatory clauses. This method of dealing with customers amounts to unfair trade practices, punishable not only under RERA but also under the Competition Act 2002, which defines such acts as “abuse of dominant position”.

More articles will follow, focusing on issues in Lodha Fiorenza’s RERA declarations, Allotment Letter and Registered Agreement format, etc. 

Krishnaraj Rao

REBUTTAL: Lodha Group was approached for their say on various points of this article on two separate occasions. They have not reverted with any rebuttal so far.