Friday, 30 March 2018

Victims are about to get fooled by Bhagtanis again

Mumbai, 31st March, 2018: The Bhagtani family and their henchmen have in-depth understanding of the flaws in our psychology, such as (1) financial illiteracy (2) blind trust in builders (3) habitual distrust of authorities including police (4) reluctance to go to court (5) penny-wise pound-foolishness (6) tendency for needless arguments, gossip-mongering and petty politics (7) herd mentality. Bhagtanis have a decade of experience in exploiting these weaknesses and repeatedly milking the same people over and over again. Bhagtanis have unfailingly made flat-buyers sign legal paperwork that is against their own interests, and make terrible choices that make them feel good in the short run and make them poorer in the long run.

Just because Mukesh and Lakshman Bhagtani are absconding and their office is closed, people wrongly believe that Bhagtanis are no longer active. A small and determined band of Bhagtani henchmen are still active, busily laying out their nets for catching their old victims unawares yet again. They know that some people never learn from their mistakes.

Playing on the victims' psychological need for safety in numbers and their urge to feel reassured that all will be well, Bhagtani henchmen are holding meetings and forming associations. The plan is (a) to take the victims' signatures on papers that will weaken the cases against Bhagtanis (b) to take lakhs of rupees from people who have already been fooled, based on false assurances. 

Yes, some genuine people are also making a push for forming associations. The line of distinction between the two is that genuine people are keeping expectations realistic, whereas Bhagtani henchmen are painting a rosy and unrealistic picture of the future!

How many times have Bhagtanis have fooled people?
  • First time. Bhagtanis fooled 2,500 people by getting them to book flats in Riyo, Sapphire, Serenity and Savannah, quoting prices well below the market rate, and further slashing rates for paying 30, 50, 70 or even 100% of the consideration amount up front, without any scrutiny, security or legal paperwork! Bhagtanis gave people an allotment letter full of fraudulent clauses that deprived them of their remedies. Read this consumer court judgment to understand how such wordings harmed the case of the victims.
  • Second. Those who wanted their money back were fooled into signing the "cancellation deed", returning their allotment letters and receipts, surrendering their right to a flat and accepting long-term post-dated cheques that would inevitably bounce.
  • Third time. Bhagtanis many victims into keeping quiet even after they came to know about the scam, by quoting lock-in periods mentioned in clause nos 11 and 16 of the allotment letter. Many Bhagtani victims are still holding their breath because they are waiting for the lock-in period of 18 months or 24 months to get over!
  • Fourth. Although almost all the cheques bounced, only a tiny percentage of people filed cheque-bouncing cases. Bhagtanis fooled most people into returning their bounced cheques in return for more post-dated cheques, credit-notes and false promises.
  • Fifth time. Bhagtanis convinced many victims to opt for transfer option i.e. "transfering their investment" to Shubh Atika of Ravi Group, Forresta of Oyster Living, etc. In this way, victims were fooled into coughing up even more money, and also giving a clean chit to the Bhagtanis.
  • Sixth. A majority of victims keep getting false assurances and subtle threats from Mukesh and Lakshman Bhagtani and their henchmen. They are still hesitant to approach EOW to register an FIR, in the fear that if they complain, Bhagtani will not return their money. Who will explain to the victims that Bhagtanis will not repay their money anyway?
  • Eighth. Diipesh Bhagtani fooled the judiciary by filing false affidavits saying that he would soon deposit Rs 22 crore for refunding complainants and intervenors, and claiming that he was director in only three entities viz. JVPD Properties Pvt Ltd, MD Devcon Pvt Ltd and Jaycee Construction Co. Bhagtanis' lawyers kept the courts ignorant of the fact that Mukesh and Lakshman had already fled the country!
  • Ninth time. Diipesh Bhagtani fooled hundreds of victims and their lawyers to sign a "settlement" on 16th December that gave him six months time to sell everything and run away. He nearly succeeded in getting away with it!

And yes, Bhagtanis will fool many of their victims (and the Indian legal system too) a tenth, eleventh and twelfth time! They are following well-established principles of psychology! Bhagtani victims keep falling victim to "groupthink"; it happened before, it still happens now. 

A very large majority of Bhagtani's 2,500 victims continue to nurture hopes that they are merely "passing through a bad period". They have hopes that, even if most people don't get repaid, they will be among the select group whom Bhagtanis will choose to repay. They don't understand the tough choices for fighting  for their own money. They have a sense of entitlement; they believe that the Indian powers-that-be owe it to them to somehow catch the crooks and recover their money, and refund the entire principal amount with interest and even compensation!

People cannot mentally process their current situation. They aren't able to comprehend the cross-currents of the present situation. They aren't asking the right questions. And because of this, a new tragedy is unfolding.

This atmosphere of financial and legal illiteracy makes people easy prey for Bhagtani's gang members, who have great experience of fishing in troubled waters. So many victims will get fooled again and again... and yet again. Instead of using their money to give a tough fight in courts, many people will end up giving lakhs of rupees to Bhagtani in return for empty dreams. It's a tragedy, an endless, repetitive tragedy.

Krishnaraj Rao

Wednesday, 28 March 2018

Does RERA order to Xander safeguard Serenity Victims?

Mumbai, 28th March, 2018: It appears on the face of it, that MahaRERA order on Xander's interest in Bhagtani Serenity dated 16th March safeguards the interests of Serenity allottees. Mumbai Mirror interpreted the order in a positive way, and said, "Maharashtra Real Estate Regulatory Authority... ruled that Xander Finance... will have to protect the interests of the home buyers." Is this positive interpretation 100% correct, 50% correct, or only 10% correct?

Before we start searching for answers to this question, let us acknowledge the efforts of Trivesh Pooniwala and other Serenity victims, and Adv Tanuj Lodha who ably represents them. This article is not intended to belittle their efforts and achievements; indeed, it is meant to support them in their quest for justice.

It appears that on the face of it, RERA judge BD Kapadnis has passed an order in the interests of Serenity allotees. But bear in mind that jo dikhta hai, woh hai nahin, aur jo hai, woh dikhta nahin hai. In the legal world, impeccable people like Dharmaraj Yudhisthir make dubious pronouncements that sound like, "Ashwattama hato -- narova kunjarova, Aswattama is dead -- be it man or elephant."

Serenity matter will almost certainly land before the High Court in the near future, and this order will almost certainly be cited. So we need to worry about the possibility that this MahaRERA order can be interpreted in ways that are favourable to Xander Finance and/or the builder who buys Serenity project in an auction or direct sale.

How things can play out -- a pessimistic picture

Imagine that two months later, a builder called Mogambo Constructions acquires Serenity through a transaction with Xander that MahaRERA clearly doesn't want to look into, as per the present order. Mogambo issues a public notice in a prominent newspaper inviting any persons having interest in Serenity project to contact them with all necessary documents within one month. Naturally, all Serenity victims will submit their allotment letters and proof of payment to Xander, and they will assume that Mogambo will soon approach RERA and declare that he has 389 allotees who he will allocate a flat. But imagine their astonishment when Mogambo declares, quite truthfully, that not even one single registered agreement has been presented to him, and therefore, he will complete the Serenity project exactly as it stands on the MahaRERA website today, i.e. with one building consisting of 86 flats and zero allottees! He can then proceed to sell the 86 flats at the current market price, and make a neat profit! Mogambo khush hua! And MahaRERA will flatly refuse to issue any injunctions against such transactions, arguing that there are absolutely no legal grounds for doing so!

You may ask: Is this possible? Yes sir, it is entirely possible. Because the present order of MahaRERA and Circular no 11 of 2017 can be read and interpreted in ways that would enable such a scenario!

Such a scenario is not inevitable, but Serenity victims should take adequate legal steps to prevent it from happening. Therefore, you need to understand what exactly Mr Kapadnis has said in his order.

In his order, Mr Kapadnis says: 

"7.... I am convinced that since the transfer of the ownership of the project has not taken place, it is not necessary for respondent no. 2 to make application for correction in the existing registration details. Respondent no. 2 cannot be restrained from exercising their legal rights conferred by section 13 of SARFAESI. Therefore, no injunction at this stage can be passed against them.

"8. I hope and trust that when the ownership of the project shall be transferred under sec. 13 to a third party or if it is retained by respondent no. 2 themselves, they shall follow the procedure laid down by Circular No. 11 of 2017. It is needless to mention that the new promoter acquiring assets will acquire the assets with all the legal liabilities of the promoter attached to the said project. Therefore the interest of complainants created in secured assets by the promoter will have to be protected by such third party or respondent no. 2 as the case may be. With this clarification, the following order: ORDER
"Complainants' prayer for interim reliefs including injunction is hereby rejected. The respondent no. 2 being interested in the project property, is a proper party. They may continue in the matter as the respondent no. 2, if they so desire."

Now let us dissect the order phrase by phrase. Let us understand what part of this order is actually "order" i.e. the operative part, and what parts are just introductory. And let us understand what interpretations can possibly emerge.

Reading between the lines

1) "With this clarification, the following order... ORDER..." Interpretation: Whatever is written BEFORE these words has no force in law. You can neither go in appeal against what is written in those words, nor press for execution of those words in any judicial forum, nor file a case of civil contempt if those words are not obeyed or complied by Xander Finance or any other party. Those words are only there for showing the High Court that Kapadnis has applied his mind to the particulars of this case, so that no one can allege that he has passed an unreasoned order.

2) "Complainants' prayer for interim reliefs including injunction is hereby rejected." This operative part is with reference to these lines in the second paragraph of the order, "The complainants have been praying relief for restraining the respondent No.2 from transferring the said properties pending the complaint as the respondent No.2 has not taken the consent of 2/3rd allottees and approval of MahaRERA as required by Section.l5 of RERA." Interpretation: (a) all contentions of the complainants are rejected (b) Xander is not restrained in any respect, it is free to take any action whatsoever.

3) "The respondent no. 2 being interested in the project property, is a proper party."  This part of the order is arguably the only tangible gain for allottees in the entire order. Interpretation: MahaRERA has jurisdiction over Xander in the matter of Serenity, even if no directions are passed against Xander for the time being.

4) "They may continue in the matter as the respondent no. 2, if they so desire." Interpretation: It is not necessary for Xander to send a lawyer henceforth, as no further arguments concerning Xander will be entertained. Future hearings in this case will only be about seeking refund of booking amounts from Bhagtani.

5)  "I am convinced that since the transfer of the ownership of the project has not taken place, it is not necessary for respondent no. 2 to make application for correction in the existing registration details." Interpretation: (a) MahaRERA isn't necessarily acknowledging that the registration details of Serenity on its website are wrong and misleading, and it is saying that even if wrong details were given by Bhagtani, Xander need not and should not correct them. (b) MahaRERA is saying that the present description on the website will be allowed to stand uncorrected until after Serenity is transferred or sold. The RERA website currently shows this:

According to RERA website, Serenity project has only one building consisting of 86 flats and zero allottees, although Bhagtani's affidavit before High Court talks about 389 allottees. (c) This line of the order may enable the project's buyer (i.e. a builder) to claim that he purchased Serenity land with permissions for 86 flats and zero allottees, and therefore no legal liabilities towards 389 allottees. (d) On the other hand, Adv Tanuj Lodha argues that this order is itself a future safeguard against any builder being able to claim this. Through this RERA case and its order, Xander has been forced to adopt a legal position that there are at least 21 allottees, if not many more.

6) "Respondent no. 2 cannot be restrained from exercising their legal rights conferred by section 13 of SARFAESI. Therefore, no injunction at this stage can be passed against them." Interpretation: MahaRERA is not imposing any conditions on Xander for taking over, transfering or disposing off the Serenity property in any way it likes. If allotees are deprived of their rights through this process, MahaRERA will wake up only after the fact.

7) "I hope and trust that when the ownership of the project shall be transferred under sec. 13 to a third party or if it is retained by respondent no. 2 themselves, they shall follow the procedure laid down by Circular No. 11 of 2017" Interpretation: (a) This line should not be mistaken for an order or injunction, it is only a hope expressed by Kapadnis. (b) The "third party" or Xander can ignore the circular with no adverse legal consequences, as it is merely a procedure, not a law or a rule. Kapadnis appears to be going out of his way to stress that his direction has no force of law. 

8) "It is needless to mention that the new promoter acquiring assets will acquire the assets with all the legal liabilities of the promoter attached to the said project." Interpretation: (a) This should also not be mistaken for an order, it is just a casual observation. (b) The term "legal liabilities" is pregnant with meaning. A registered sales agreement would have created a legal liability, whereas a letter of allotment creates a liability with doubtful legal enforceability.

9) "Therefore the interest of complainants created in secured assets by the promoter will have to be protected by such third party or respondent no. 2 as the case may be."  Interpretation: (a) If this line were in the operative part of the order, it might possibly have created a legally enforceable protection. Unfortunately, it is in the clarificatory part, not the operative part. (b) This statement may give a false sense of security to Serenity allottees. If they are lulled into inaction, they may face a rude awakening after the property is sold to a builder.

Key difference between registered agreement and allotment letter

One may argue that the legal validity of an allotment letter accompanied with proof of payment is almost the same as that of a registered agreement. But ask yourself: Will the rights of a flat buyer who has paid nothing to the government stand at par with another who has paid stamp duty of 5% plus registration charges? If so, it amounts to devaluing the importance of stamp duty and registration in the scheme of things. In law and judiciary, a registered agreement is like a proper registered marriage, and an allotment letter is like an engagement. A divorced wife will get maintenance and alimony  whereas a cheated fiancee will not, even if both women are equally fucked-up! In the famous words of Paro the prostitute in Devdas, "Ek chutki sindoor ki keemat aap kya jaano, Ramesh babu?"

What exactly does the circular say?

Circular no 11 of 2017 outlines the "Procedure for transferring or assigning promoter's rights and liabilities to a third party". It says, "Within seven days of the transfer being effected by the Financial institution or creditors, such Financial institution or creditor shall intimate to each of the Allottee(s) and Secretary MahaRERA on in of enforcement of the security which has resulted in the transfer of the ownership of the promoter organization or transfer ol the project. The Financial Institution or creditors (acting as new promoter) or new promoter (appointed by such financial institution or creditors) shall then apply for necessary corrections in the existing registration details. New Promoter shall also upload required supporting documents in its name like land title, building plan approval etc., upon obtaining the same from time to time. While making such application for correction, the new promoter shall upload on the website of RERA, a registered undertaking stating that they shall comply with all the obligations under agreement of sale executed by the erstwhile promoter with respect to the Allottee(s) of the project and has assumed all the obligations of the erstwhile promoter under the Act."

This circular clearly mentions "agreement of sale executed by the erstwhile promoter with respect to the allottees. The lawyers of Xander Finance or Mogambo Constructions can interpret this as meaning that they need not comply with allotment letters issued by the erstwhile promoter.
Yes, the circular also mentions "all the obligation of the erstwhile promoter under the Act", but it is necessary to remember that such broad phrases are subject to endless interpretations and judicial haggling. It can be argued that the term "obligations" refers to the entire Chapter III of RERA Act, and nothing else! Please try to pinpoint the exact section that requires Mogambo Constructions to give flats to the cheated victims of JVPD Properties, and you may discover, with shock and horror, that there isn't such a section!

And that is why we are saying, Darna zaroori hai
Krishnaraj Rao

Friday, 23 March 2018

Bhagtani Riyo's Dismissed Case for MPID: Should You Appeal?

Mumbai, 24th March, 2018: Bhagtani Riyo victims' efforts to compel EOW to apply MPID Act got a setback last week as the special judge rejected their application. After initial disappointment, the victims' reaction was: "We must appeal!" But the question arises: Is appealing likely to be fruitful? Let us apply our mind without sentimental attachment to past decisions and actions.

First, let us remember why we filed the application under MPID.


The full name of MPID Act is "Maharashtra Protection of Interests of Depositors (in Financial Establishments) Act, 1999". It is designed to protect "depositors in financial establishments". We had three challenges: (1) People who paid Bhagtani money are not exactly "depositors". (2) JVPD Properties Pvt Ltd is not exactly a "financial establishment" (3) Section 2(c)(iv)(a) of the MPID Act explicitly excludes "advance against order for goods or services" from the term "deposits". Booking amounts are arguably advance against order of flats.

In spite of this, Bhagtani Riyo victims made an effort to get MPID Act sections applied in FIRs filed by EOW, based on the argument that Riyo is a ponzi scheme, as the project land is "gurcharan land" that can never be lawfully available for construction. (Read MoU between Bhagtani and Mhatre family trust.)

It was argued that Riyo -- more than other Bhagtani projects -- was a get-rich-quick scheme i.e. Ponzi scheme with its promise of 15% interest. (More analysis of the Ponzi-like features here.)

MPID was definitely worth a try because:

1) Action against employees. MPID could give the police sweeping powers under Section 3. Section 3 of MPID Act says, "Any Financial Establishment, which fraudulently defaults any repayment of deposit on maturity along with any benefit in the form of interest, bonus, profit or in any other form as promised or fraudulently fails to render service as assured against the deposit, every person including the promoter partner, director, manager or any other person or an employee responsible for the management of or conducting of the business or affairs of such Financial Establishment shall, on conviction, be punished with imprisonment for a term which may extend to six years and with fine..." It would have enabled EOW to scrutinize very closely the role played by Bhagtani employees.

2) Attachment of Bhagtani properties bought with collected booking amounts. Section 4(ii) of MPID Act says, "where the Government has reason to believe that any Financial Establishment is acting in a calculated manner detrimental to the interest of the depositors with an intention to defraud them; and if the Government is satisfied that such Financial Establishment is not likely to return the deposits or make payment of interest or other benefits assured or to provide the services against which the deposit is received, the Government may, in order to protect the interest of the depositors of such Financial Establishment, after recording reasons in writing, issue an order by publishing it in the Official Gazette, attaching the money or the property believed to have been acquired by such Financial Establishment either in its own name or in the name of any other person from out of the deposits, collected by the Financial Establishment, or if it transpires that such money or other property is not available for attachment or not sufficient for repayment of the deposits, such other property of the said Financial Establishment or the promoter, director, partner or manager or member of the said Financial Establishment as the Government may think fit."

3) MPID application was free-of-charge for Adv Shraddha Dubepatil's intervenors. Riyo victims who became intervenors in ABA no 1533 of 2017 with Adv Shraddha weren't charged any additional amount by her for the MPID application; only for the fees charged by counsel Nitin Pradhan were collected from them. So these intervenors felt encouraged to go ahead with this option after the ABA ended. 

Why appealing isn't necessarily a good idea
The main purpose of the Criminal Procedure Code (CrPC) section 156(3) is to enable people to get directions from a magistrate for the police to register FIR and investigate a particular case, if the police refused to do so. CrPC section 156 says, “156. Police officer’s power to investigate cognizable case.— (1) Any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable case... (3) Any Magistrate... may order such an investigation as above mentioned.
The function of a magistrate u/s CrPC 156(3) was clearly explained by the Supreme Court in the case of Sakiri Vasu v. State of U.P., (2008) 2 SCC 409 : AIR 2008 SC 907. The Supreme Court observed that: “…if a person has a grievance that the police station is not registering his FIR under Section 154 CrPC, then he can approach the Superintendent of Police under Section 154(3) CrPC by an application in writing. Even if that does not yield any satisfactory result in the sense that either the FIR is still not registered, or that even after registering it no proper investigation is held, it is open to the aggrieved person to file an application under Section 156(3) CrPC before the learned Magistrate concerned. If such an application under Section 156(3) is filed before the Magistrate, the Magistrate can direct the FIR to be registered and also can direct a proper investigation to be made, in a case where, according to the aggrieved person, no proper investigation was made. The Magistrate can also under the same provision monitor the investigation to ensure a proper investigation.” 

Please note that it is not compulsory for the Magistrate to direct the FIR to be registered. The law only requires that the magistrate should apply his mind properly as to whether or not the police should register the FIR and investigate the case of cognizable offense. If we appeal before the High Court, does the law require the High Court judge to apply his mind afresh to the facts of our MPID application u/s CrPC 156(3)? The answer is: No. The High Court judge will only apply his mind to one thing alone: Did the magistrate (or, in our case, special judge of the designated MPID court) apply his mind to the facts of the case? The order of the special judge will be overturned by the High Court only if the special judge's order discloses a failure to apply his mind properly.

Now let us read the special judge's order dated 14 March 2018. The main part of the order is: 

"6. Legal principles stated in the citation are not in dispute. The only point to be considered in the application is that whether u/s 156 (3) of the Cr.P.C., the Court is empowered to issue direction to investigating agency to add specific section of the specific Act in the offence and that too when FIRs are registered against non­-applicants regarding same transactions of which investigation is going on and is in progress.   

7. It is to be noted that this Court is not meant for recovery of amount of investors only. The case must be one under the purview of the MPID Act. Advocate for the applicant failed to convince the Court how the matter comes under the purview of the MPID Act. Case of the applicant is about not adding section 3 of the MPID Act in the offence but not of non­registration of the FIR in spite disclosing cognizable offence. Investigation is the statutory powers of the police and the Court has no power to interfere with such investigation. The function of the judiciary and police are complementary, not overlapping, and the combination of individual liberty with due observance of law and order only to be obtained by leaving each to exercise its own function. If during investigation of the offence, police finds application of section 3 of the MPID Act, they can alter the section of the law in the offence."
The judge's grounds for rejecting the MPID application

a) CrPC 156(3) may be used when police is refusing to register an FIR and investigate a particular cognizable offense. In our case, however, we are trying to use 156(3) to compel EOW to add MPID section 3 to the FIR that is already registered under many other sections of law, and is currently under investigation. The judge opines that he does not have the jurisdiction to do so, and also that passing such an order would amount to an interference in the functioning of the police.

b) The judge was not convinced that the case was within the purview of MPID Act. 

So, did the judge fail to apply his mind?
Can we convincingly argue that the MPID judge failed to apply his mind to the particulars of the Bhagtani Riyo victims' case? If the answer to this question is a YES, then file an appeal and move heaven and earth to get a favourable order!

But if the answer to this key question is NO, then Riyo victims should forget MPID and look at other legal remedies. Stubbornly barking up the wrong tree will not achieve desired results.
Krishnaraj Rao
98215 88114

Friday, 16 March 2018

Do Bhagtani's allotment letters have any real value?

Mumbai, 17th March, 2018: Some years ago, you gave Bhagtani lakhs of rupees in exchange for what you thought was a legally-enforceable contract. But is it a contract, or just worthless pieces of paper? Let us take a close look at your transaction. Possession, they say, is nine-tenths of the law, meaning that your ownership of something is easy to maintain if your have possession of it, and difficult when not. When your money was in your own bank account, it was entirely yours. It was your "today-money".

Then you put your money into JVPD Properties, Jaycee Homes or MD Devcon, and thereby renounced your possession and diluted your ownership of the money. In the company accounts, your money became aggregated with other people's and Bhagtani's money. It was treated by Bhagtani family as their own money, to lend or spend as they pleased, without any financial discipline. It flowed into places hard to track, such as unregistered partnerships and proprietorship accounts, and maybe bank accounts abroad. Much of it flowed to the accounts of other associated builders (such as Oyster Living) and it was money-laundered beyond recognition.

In exchange for your today-money, you were given an unregistered, cunningly-drafted document called allotment letter. It came in different flavours, namely Riyo, Sapphire, Serenity, Savannah, Horizon, Executive, etc. It stated that Bhagtani would give you a flat in Riyo, Sapphire, etc, if those  projects got built. It emphasized that the "if" was a big IF. In the event that the flats failed to materialize, it promised you refund with 15% rate of interest. In this way, your today-money became "tomorrow-money". Actually, it became "maybe-tomorrow-money", diluted with ifs-and-buts, but you chose to ignore the "maybe" part.

Yes, people paid money to Bhagtani, but did they get any valuable thing in exchange?

Those of you who had second thoughts demanded your money back, but Bhagtanis did not comply. Instead, they imposed more terms and conditions, forcing you to exchange your allotment letter for a cunningly-worded cancellation deed accompanied by post-dated cheques or a credit-note. Instead of refunding your today-money, Bhagtanis gave you "day-after-tomorrow-money".

When day-after-tomorrow came, Bhagtanis claimed they had a liquidity-crisis, and bounced the PDCs and pushed the day-after-tomorrows into the indefinite future. After many, many postponements, some of you figured out that in the Bhagtani universe, tomorrow never comes!

And that was why you started filing police complaints and taking legal actions.

And this brings us to our current situation, which has more question-marks than answers.

Some Inconvenient Questions:

Q1: Is allotment letter a legally enforceable contract? 
If your allotment letter is an enforceable contract, then enforcement should be a no-brainer! Just file a civil suit for specific performance and get a decree for execution!

Q2: If it is enforceable, then why is legal remedy such a big challenge? 
Why are different lawyers performing so many judicial gymnastics i.e. Adv Tanuj Lodha trying to get RERA directions to Xander, Adv Shraddha Dubepatil trying to get MPID at sessions court, Vigil Juris filing representative civil cases in High Court? 

Q3: If it is NOT enforceable, then is there any remedy at all?
Punishing Bhagtanis for giving you an empty piece of paper is absolutely necessary. However, if your allotment letter isn't a contract, then its terms cannot be enforced. Bhagtanis can be punished, but your money cannot be brought back. In this case, your today-money becomes gone-money.

Q4: Maybe some allotment letters are enforceable, and others aren't?
The allotment letter for Serenity is based on land that Bhagtanis actually owned, whereas that of Riyo is based on gurcharan (government-owned pasture) land. The legal definition of "contract" is "an agreement having a lawful object entered into voluntarily by two or more parties, each of whom intends to create one or more legal obligations between them". Constructing on privately-owned land is a lawful object and can be a "legal obligation"; constructing on gurcharan land is not a lawful object. Bhagtani's Horizon project is based on redevelopment of an existing cooperative housing society. This society has withdrawn the development rights from Bhagtani, and appointed another builder, arguably making the Horizon allotment letter a worthless piece of paper.

Q5: Is cancellation deed at par with allotment letter?
Commonsense suggests that a cancellation deed should confer the same right as an allotment letter. However, the law often defies commonsense. Till date, the difference between Bhagtani's allotment letter and cancellation deed hasn't been adjudicated by any legal forum. Until that happens, we don't know for sure.


Monetizing the allotment letter or cancellation deed is the key. Monetization can happen only by liquidating Bhagtani's properties, whether held in their personal names, or in the names of their companies.

But can it be monetized?

Yes, you paid pots of money for this piece of paper. But that in itself is no guarantee that it can be monetized by any legal process.

Krishnaraj Rao

Thursday, 15 March 2018

Keep fighting, don't buy Bhagtani's "khayali pulao"

Mumbai, 16th March, 2018: Yes, legal battles are tough, time-consuming, exhausting and costly. You win some and you lose some; that is the nature of the beast. Riyo victims' MPID application at sessions court was rejected on technical grounds, making it necessary for the group to approach high court. Serenity victims' RERA application seeking to have Xander declared a co-promoter appears a bit shaky; whether it will be accepted or rejected by RERA judge Kapadnis will be seen in a few days.

Yes, legal battles require patience and alertness. It took 3-4 months of hard work for Riyo victims who were complainants and intervenors to put Diipesh Bhagtani in prison; he almost succeeded in fooling the judiciary, getting anticipatory bail and flying to Dubai like his father and brother. In the end, people managed to get his bail application rejected. It took group effort and enterprise, and yes, it cost the victims about Rs 10,000/- per head.

Going forward, getting a high court order for initiating MPID proceedings, or getting suitable orders from RERA, will undoubtedly be a tough uphill path with many twists and turns, and much anxiety. But because you have made the mistake of putting your trust and your life-savings in Bhagtani's projects, legal battles are a bitter fact of life for you. Live with it! 

Legal battles are unappetizing to 80% Bhagtanis' victims -- especially those who haven't complained to the EOW or made any other legal effort. They don't like to accept the bitter taste of truth. Bhagtani's khayali pulao smells very appetizing to them!

Khayali pulao is a favourite dish of a majority of the victims. Such people derive great comfort by phoning Mukesh and Laxman Bhagtani in Dubai. They go home and tell their wife, "I called up Mukesh today. He didn't pick up at first, but later, he returned my call. He said he will start refunding our money after August 2018. He told me to return the bounced cheques and promised to send fresh post-dated cheques. This proves that his intentions are good." Think how easy it is to go home and tell this to your wife! (And think how pleasant her mood will be at bedtime!)

By contrast, see how difficult it is to go home and say, "The sessions court rejected our MPID application. Now we have to appeal in High Court. If our appeal succeeds, the police will investigate Bhagtani's asset position, and after some months, hopefully, Bhagtani's properties will be auctioned and we will get partial repayment." (Mister, you are not getting any action tonight!)

Is it surprising that most men go home to their wife with a fresh serving of Bhagtani's khayali pulao?

Ingredients of Bhagtani's khayali pulfao:

a) Bhagtanis are "temporarily" unable to repay people because "EOW has frozen our bank accounts". (Otherwise, they would definitely have refunded everybody with full interest).

b) People's support is needed to overcome these "temporary legal issues".

c) "Temporary legal issues" can be solved if flat-buyers form an association under the leadership of "good people", and sign affidavits that they believe in Bhagtani family.

d) Associations should convince the authorities to defreeze the assets and bank accounts.

e) Association members should sign NOCs allowing Bhagtanis to sell their properties/development rights.

f) A trust will be formed for the welfare of the buyers, and Bhagtani's assets (including "development rights of various projects, worth hundreds of crores) will be transferred to this trust!

Why khayali pulao sells

Bhagtanis and their stooges are experts at giving a glimpse of hope to the hopeless. Many people are financially illiterate, and many others, though educated and brainy, don't want to spare the time and energy for logically processing unpleasant information, and sifting facts from propaganda, illusions and false beliefs. They are extremely gullible towards anybody who give them a tiny ray of hope. Scam victims are tired of thinking for themselves; they want "a strong leadership" to take all decisions for them. They wake up everyday wondering when this financial nightmare will end, and they want someone to convince them that they will get lakhs of rupees tomorrow.

People don't want to exercise their own mind. "Why do we have to analyze or understand anything? Let our group leaders and/or lawyers understand and guide us!" they say.

This mindset makes them vulnerable to Bhagtani's stooges who confidently say they have a win-win solution, and trick them again.
BOTTOMLINE: Your first mistake was to trust Bhagtanis' tall claims and give them pots of money. Your second, third, fourth and fifth mistake was to sign their cancellation deed, accept their post-dated cheques, return the bounced cheques in exchange for their letter-of-credit, take their transfer-option, etc. etc. Yes, fighting legal battles is difficult, and yes, being a gullible moron is super-easy, comes naturally, and is almost second-nature. All the more reason to break that habit and for once in your life, think straight!

Krishnaraj Rao

Friday, 9 March 2018

Tomorrow's Protest will Unite 725 Bhagtani Savannah Victims

Mumbai, 10th March, 2018: Hundreds of victims of Bhagtani builder's Savannah project will come together tomorrow (Sunday) to stage a protest at the project site at Kanjurmarg East. Between 2014 and 2016, MD Devcon Pvt Ltd, a group company of Bhagtani's Jaycee Homes, aggressively advertised the Savannah project, and collected booking amounts of roughly Rs 170 crore from 725 flat-purchasers, without any intention of completing the project and delivering flats. The funds were diverted and misappropriated by the builders.

Diipesh Bhagtani, the mastermind of the scam, has been in judicial custody since 11th January due to multiple FIRs registered by Economic Offenses Wing (EOW) for similar offenses committed in four other projects, viz. Riyo (Mira Road), Sapphire (Dahisar), Serenity and Krishaang (Powai). Meanwhile, Diipesh Bhagtani's elder brother Mukesh and father Laxman, who have also played major roles in the scam, have been absconding for many months, and are believed to be in Dubai. None of the employees and business associates of Bhagtani have so far been interrogated by the police.

The protesters' demands are: 
1) Police EOW should fast-track the investigations of their case.
2) Mantralaya must ensure a thorough investigation and prosecution, and take proactive steps for protecting the flat-purchasers' rights.
3) Bombay High Court should fast-track their case
4) Government, police and judiciary should act in a coordinated manner to ensure the extradition of Mukesh and Laxman Bhagtani to stand trial.
5) Employees, business associates or bank managers involved in the case should be interrogated and prosecuted.

Photos taken at a gathering of victims last week at the Bhagtani Savannah
project site at Kanjurmarg, give a glimpse of the protest that will happen
tomorrow. Many more agitated people from various groups are expected
to participate in the Sunday protest.

MD Devcon acquired the development rights for the project site (about nine acres of land at CTS no. 1285 A/E, Kanjur Marg East) through a power of attorney and development agreement executed by the land owners, namely Harmohan Singh Chandok Rabinder Kaur Chandok and M/s Babu Builders.

Protest banner demanding the return of absconders
Laxman and Mukesh Bhagtani.

Savannah project envisaged that six towers would be built, with 1 BHK flats ranging from 380 to 428 sq.ft. and 2BHK flats ranging from  550 to 650 sq. ft carpet area. Lavish world-class amenities, including club house, swimming pool, tennis court, basketball court, golf course and jaccuzzi were promised, to attract investors from India and abroad.

One of the posters prepared for the protest  tomorrow,
demanding the active involvement of the BJP government.

Poster demanding that the government should not remain
silent and passive regarding the Savannah scam.
Contact Persons:
Ravindra Singh: +9167990730
Jagruti Patankar: +918424046900
Vivek Katyayan:+918600028607
Sandeep Singh Sandhu:+9869541971
Rupesh Bangre: +9920621671

Krishnaraj Rao