Wednesday, 11 July 2018

Bhagtani victims: Unite with Cash-and-Carry principle

12th July, 2018, Mumbai: My blog criticizing the consent terms of Sapphire Welfare Association (SWA) with Bhagtanis raised a hornet's nest. Some angry people asked whether I had any solution for getting their money back. If I didn't, I should just shut up, they said. (They also said a whole bunch of other things, but let us focus on the constructive part.)

Yes, since you ask, I have specific ideas about how to get your money back. My proposed method is: Cash-and-carry (CAC). If a party's credit-worthiness is zero and he is already deep in debt, trade with them on CAC terms. Stop extending credit! 

What Bhagtanis want from you now is quashing of FIR and withdrawal of complaints. What you want is your money. So you should aim to get what you want at the same time as (or before) Bhagtanis what they want -- not a day later! Like they say in movies, "Ek haath se do, ek haath se lo". Shopkeepers call it cash-and-carry. Everything else can be negotiated, but for heaven's sake, stop trading with Bhagtanis on credit! Learn your lesson already!

Ek haath se do, ek haath se lo.
Why barter is a terrible idea

While Diipesh is in custody, Mukesh and Lakshman Bhagtani are in control of substantial wealth. The Rs 427 crore that they admit to having collected from various projects did not vanish like a tub of water poured on desert sand! Although absconding and abroad for many months, Bhagtanis are able to sustain themselves, pay expensive lawyers and organize their employees who continue to do their bidding. Don't assume that Bhagtanis are unable to pay you actual money in exchange for what they want i.e. withdrawal of complaints and quashing of FIRs.

Doing barter trade is a bad idea because the actual value of the trade goods they offer (such as Sapphire land) is totally unknown and unassessed, and the amount of time before you will get its value in your bank account is totally uncertain. If you barter, there is every likelihood that the builders or the association will make you shell out huge amounts of money in future -- and how much money is impossible to estimate. So, opting for conveyance of land is a formula for exploiting you for an indefinite amount of time.  You will remain indefinitely mired in this mess if you keep making these bad choices!

So, don't barter like a stone-age man. Trade like a civilized person. Ask for refund of your money even if it appears less, because, unlike trade goods,  you know the exact value of money, and it is immediately useful for your family. Money is the only acceptable trade also because it gives you an immediate and clean exit from this whole jhamela!

Don't trade deliverables for promises

My main criticism of SWA consent terms is that withdrawal of complaints and quashing of FIR etc. will happen first (i.e. they are deliverables), whereas land conveyance etc. is supposed to follow later on (i.e. they are promises). Also, the land will be in the association's hands, and not in yours.

Please read the questionable wordings of the consent terms, and note how the allegations and complaints against Bhagtanis stand immediately withdrawn, unconditionally. Read this:

These consent terms are a clean chit which you are giving
before Bhagtanis fulfill any commitment.
On what basis are you giving this clean chit?

Why should you trust Bhagtanis' promises? Were their allotment letters and cancellation deeds honoured? Were their post-dated cheques and credit notes honoured? Were their promises of transfer of investment honoured? No, no, no, and again, no!

Did Bhagtani deposit Rs 22 crore as per his commitment in his affidavit? NO. Did Bhagtani disclose all true facts in his two affidavits? NO. (Read this article about affidavits.) So, what makes you believe that they will honour the consent terms? Blind faith or herd mentality?

Complaints, FIRs, cheque-bouncing cases etc are your only grip on the builders. If they get freedom from criminal and civil proceedings, they have successfully escaped!

1) Unite under Cash-and-Carry principle. All Bhagtani victims who believe in the principle of Ek haath se do, ek haath se lo should unite in a single Whatsapp group (Click here to join: ). This group can work in harmony with existing groups/associations and leaderships, provided the leaders publicly resolve to work on CAC principle only. It will have project-wise subdivisions e.g. Sapphire CAC group, Savannah CAC group, etc. You can be members of other groups and associations, as long as you accept the CAC principle. Anybody who rejects the CAC principle in speech and actions will be gently urged to leave the group, or expelled. Within the space of CAC principle, anything and everything can be discussed and debated.

2) Increase the number of criminal complaints and civil cases against Bhagtanis. CAC group should aggressively aim to facilitate more people to file FIRs -- either directly with police EOW, or through magistrate (private complaints), as well as cheque-bouncing cases and other proceedings. EOW's habit of filing one FIR per project by listing most victims as witnesses, is arguably unlawful and a misuse of their powers; let us challenge this malpractice in all possible ways, including moving High Court through a writ petition after making all other efforts. Every additional FIR and/or civil case will increase the pressure on Bhagtani.

3) Become intervenors in existing civil cases and file caveats against quashing petitions. The objective is to prevent "soft" consent terms from being signed, and thereby prevent Bhagtanis from getting a soft and easy exit. If you are a member of a group leaning towards soft consent terms, then generate opinion in favour of CAC principle!

4) Energetic action and no free lunches. Members should participate in regular morchas, frequent visits to Mantralaya and EOW, and at least two meetings with political leaders of various parties to highlight our grievances per month. Ideally, one meeting and/or photo-op should be happen every week, even if it is as trivial as a meeting with a local Shiv Sena shakha pramukh or local journalist! We need to lobby vigourously, not only with Mantralaya, but with every politico who will give us a hearing. By doing so, we should provide regular material for Twitter feeds and Facebook shares, and keeping Bhagtanis in the public eye through such constant meetings. Creating a continuous social media drumbeat is a key part of this entire activity. Non-participating members, who are unable to attend or substantially help in organizing these events, will be asked to pay costs (say Rs 500/- per morcha/meeting/event). This amount will be distributed among group members who stay active at the ground-level, and who organize/attend the morcha/meeting. And while we are on this topic, yes, I will personally charge Rs 300/- per group member per month; if the work I am doing isn't worth ten bucks per day in your eyes, then guys, I should die of shame.

5) If or when Bhagtanis enter into negotiations with CAC group for withdrawal of cases, there is only one basis for negotiations: Money in the accounts of all group members. The key point is that money has to be actually deposited in your accounts through RTGS. We will agree to withdraw some complaints or allow quashing of some FIRs, but only against receipt of bank transfers to the accounts of all current group members. Be clear in your mind that we may willingly write off substantial part of the debt to be repaid, rather than hold on to large notional figures that include principal, interest, compensation etc. For example, we may show willingness to settle for 50% payment. Whatever repayment is decided after discussions and negotiations with Bhagtanis, that amount has to be actually delivered by RTGS to your individual accounts before any complaint is withdrawn. At the very outset, we emphatically reject proposals to pay in kind, e.g. by conveyance of land, transfer of investment to other projects, etc.

6) This is a reality-check. It is a make-or-break decision. Either recover money or inflict punishments by vigourously prosecuting the builders. Say no to easy escape-routes for Bhagtanis where they get away scot-free by giving you a lollipop.

Of course, not everybody needs to subscribe to the CAC principle. It's okay even if a majority of people prefer lollipops to CAC. We don't need to be a majority; even being a sizeable minority will serve the same purpose.

Am I making sense here? Then click on, and embrace the CAC group.

Krishnaraj Rao

Saturday, 7 July 2018

Great escape for Bhagtani builders, lollipops for flat-buyers in Sapphire consent terms

Mumbai, 7th July, 2018: I wrote an article yesterday disclosing the consent terms signed by Sapphire Welfare Association (SWA) with Bhagtani bulders. *(In case you haven't read it, click here and read it first.) Until we got our hands on these consent terms two days ago and placed it in the public domain, it was a closely guarded secret. 

If consent terms is a straightforward deal, why didn't SWA announce their achievement immediately? Why were there only cryptic references such as "It is time to buy the mithai, but don't distribute it". Why keep it secret? The reason is: the consent terms are a great escape for Bhagtanis. They seek to give a clean chit and easy exit from the Sapphire cases to the absconding builders.

Obvious issues in the consent terms:

1) If fugitives evading Indian judiciary sign an agreement in India through their power-of-attorney, what is its legal validity?  The consent terms signed by Diipesh Bhagtani in jail, on behalf of Jaycee Construction Co, a partnership firm that includes Mukesh and Lakshman Bhagtani, is legally questionable. Can the Indian judiciary bless an agreement with a partnership firm where majority of partners are fugitive economic offenders, hiding in a foreign country while being wanted by Indian law enforcement agencies? Does the law allow absconders to enter into fresh contracts through a power-of-attorney? And that too in respect of police investigations in the same project for which they are absconding? That doesn't sound right. 

2) In return for consent terms, it is ok to withdraw the suit petition; but why withdraw the FIR? SWA's suit petition in High Court had nothing to do with FIR no 507 of 2017, or the cases under Negotiable Instruments Act for cheque bouncing. SWA did not file these cases; in fact, SWA was not even formed when these cases were filed. The suit petition is a "civil remedy", whereas FIR is a "criminal remedy". It is not within the domain of SWA to use withdrawal of these cases as a bargaining counter to negotiate any terms with Bhagtanis.

3) Unfair trade: you give Bhagtani actual deliverables, they give you promises. According to the consent terms, you will give Bhagtanis immediate deliverables, and in return, they will give you promises of future performance -- promises that are difficult to legally enforce, promises that are easily broken. This pattern has been repeated many times: First you gave them lakhs of rupees, and they gave you a promise of refunding it with 15% interest, and then you waited for some years before discovering that they had broken the promise. Then you went back to them, they replaced the earlier promise with a new promise but they took something more in return (e.g. you agreed to write off the interest plus paid them a few lakhs extra, and in return, they promised to transfer your principal amount to Horizon, Shubh Atika, Serena, after some weeks or months.) AFTER EVERY BROKEN DEAL, YOU HELPLESSLY GO AND ACCEPT A NEW DEAL FOR RECOVERING YOUR LOSS. A KEY FEATURE OF EVERY NEW DEAL IS THAT YOU INCUR FRESH LOSSES! The consent terms have the same pattern. SWA has committed to giving what that Bhagtanis badly need immediately, i.e. withdrawal of FIR and cheque-bouncing cases. In return, Bhagtanis have promised to transfer the title over the potential SRA project land. In fact, the consent terms are similar to the deal struck by Jadugar Diipesh at the amazing Rang Sharda meeting of 16th December 2017, which people later rejected, thereby sending the jadugar to jail.

4) Only SWA can go to court against non-fulfillment of consent terms; not you, the flat-buyer. SWA is controlled by people close to Bhagtanis; so, how will you, Sapphire allottees, force SWA to go to court if you are aggrieved? Even if you are members of the association, you can't force the office-bearers to sue Bhagtanis for non-performance of their side of the deal. So, the consent terms renders you, the Sapphire flat-buyer, completely powerless.

5) SRA slumdwellers are not members of SWA. Bhagtanis are promising to execute the deed of conveyance for the SRA project land in favour of SWA, and then SWA is supposed to take the SRA project forward by inviting bids from other builders. The big questions arising from this are: (a) As the slumdwellers are not signatories to these consent terms, they are not bound by it in any manner. Nobody knows what agreements Bhagtanis have entered with the slumdwellers' association or cooperative society, and what promises Bhagtanis have given to the slumdwellers in return for their consent. On what basis will SWA invite the bids? SWA cannot represent the slumdwellers, who are a necessary party. And the new bidders will not consent to be bound by Bhagtanis possibly-unrealistic promises to the slumdwellers. If Bhagtanis promised slumdwellers the moon and stars, the new builder will not be bound to fulfill those promises. Therefore, there is every likelihood that the whole deal will collapse.

6) All Sapphire allottees are not equal; how to give them justice if Bhagtani is allowed to exit Sapphire project? Some allottees have paid relatively small amounts  to Bhagtanis e.g. Rs 10 lakh, while others  have paid huge amounts, e.g. Rs 90 lakh. In a hypothetical scenario, if a new builder agrees to construct a small flat costing Rs 1 crore for every Sapphire allottee, he can easily do it for allottees who have paid Rs 10 lakhs, because he can demand Rs 90 lakh from them to cover the construction costs and maybe make a small profit. But the new builder will be unwilling to give the same flats to those who had paid Rs 90 lakh to Bhagtani, because he can demand only Rs 10 lakh from them. So, those who have a greater claim will suffer discrimination under SWA's consent terms, whereas those whose claim is the least (e.g. Mr Sambit Roy's Rs 11,000/-) would benefit the most. This arithmetic is also another factor why a satisfactory deal with any new bidder-builder is not doable.

There are many more legal issues with the consent terms -- so many, in fact, that it would be relatively easy to challenge the consent terms in court and have them declared as unenforceable and bad-in-law. 

It appears evident that the main intention in floating this association and filing this suit petition is not to solve the problems of flat-buyers, but to give Bhagtani builders a clean chit and easy exit from the Sapphire project and the civil and criminal liabilities arising from it.

The way forward for Sapphire victims is to seek proper legal advice and take timely legal steps to have the consent terms nullified. Your first step should be to prevent quashing of Sapphire FIR by High Court. Please file a caveat in High Court that if a quashing petition is moved, you should be heard before disposal of the matter.

Krishnaraj Rao

Also read:

Bhagtani Sapphire Consent Terms signed: good or bad omen for victims?

Friday, 6 July 2018

Bhagtani Sapphire Consent Terms signed: good or bad omen for victims?

Mumbai, 6th July, 2018: When the Sapphire Welfare Association (SWA) enrolled members and filed its Civil Suit/Plaint in Bombay High Court in a rush-rush hush-hush manner, the victims of Bhagtani Sapphire were split into two groups: (1) those who believed that their intent was genuinely to help the victims and (2) those who believed that their intent was to help the Bhagtanis get their criminal cases quashed, by giving the victims a lollipop. 

My personal belief (based on my one year's experience of how Bhagtani's stooges manipulate people's minds through Whatsapp groups) is that the intention was solely to help Bhagtanis to come out of their legal troubles. I believe that gullible victims were drawn into the association by showing them them false hopes and dreams. And I believe that the consent terms signed between Bhagtani and SWA on 26th July, based on which the plaint before Bombay High Court was withdrawn, is fraudulent.  Through these consent terms, Bhagtani's stooges have tricked and exploited about 140 victims once again. 

Victims who agree that they are being cheated through these consent terms should come together in the rival association (Dahisar Sapphire Flat Owners Welfare Association) and take steps immediately to oppose these consent terms. 

Even those who are currently members of SWA but feel cheated by their leaders, should join this association and fight for their rights. 

Don't believe those who tell you that there is no legal remedy for these consent terms. Don't be convinced by those who tell you that these consent terms are "full and final". There are always some legal remedies and appeals available, if you act in a timely way. Never accept defeat prematurely!

Carefully read the plaint and consent terms, and decide for yourselves whether the settlement is a genuine one, or whether the Sapphire victims got cheated. Also understand the legal weak points of these consent terms. (Just because it cursorily passed under the nose of Justice SJ Kathawala does not make it a perfect, sacrosanct document! Even if the good judge thought it suspicious, he had no grounds to reject it because Miya bibi raazi toh kya karega kaazi? Since the complainant association and the defendant had signed the consent terms, and there were no intervenors present to raise objections, how could any judge stop it from going through?)

SWA's Notice of Motion:

SWA's  Civil Suit:

Bombay High Court order dated 28th June:

Consent Terms:

In another article, we will analyse the pros and cons of the consent terms. In the meantime, please read, think and understand what has just happened. 

The proceedings and consent terms of Sapphire should serve a warning to Bhagtani victims of other projects like Riyo, Serenity and Savannah -- especially those who unthinkingly join associations floated by Bhagtani's stooges. Please try and understand how easily you can be misled in the name of "unity", "proactive action" and "civil suit". Kindly introspect and start course-correction.

Krishnaraj Rao