Meet the man who took on realty giant DLF

The man whose efforts brought realty giant DLF on its knees wishes he never had to do all this

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Puja Bhattacharjee | May 18, 2013




It took Mr Biswas a lifetime of hard work to have a house of his own in VS Naipual’s 1961 classic novel, ‘A House for Mr Biswas’. In real life, however, not getting a house of his own ensured a lifetime of hard work for Mr Jain. His reward: he brought the mighty builder on his knees. Well almost.
Amit Jain, now 40 years of age, came back from the US in 2005. He was working as the senior vice-president for a Texas-based IT company which was establishing an offshore development facility. Gurgaon being the IT hub seemed an ideal location. He decided to purchase an apartment in Belaire, a project launched by the realty giant DLF.

In 2006, he bought a 4+1 bedroom apartment in Belaire. “The Belaire site was just opposite my office complex. I had the advantage of monitoring the progress of the construction on a day-to-day basis,” says Jain.
He purchased the apartment under a time-bound plan. “For a period of two years, we would be paying them 90 percent of the money. At possession we make the final 5 percent payment,” he says.

The scam
“Without even beginning the excavation, DLF had asked for two to three instalments. I could see that nothing was happening. DLF kept sending me letters promising to finish the construction within the stipulated time and in the meanwhile asked me to keep paying the instalments. Agreements were sent to me five months after I had started paying the instalments,” Jain says.

“Every time I would enquire about the starting of the project, I would be sent a threatening letter, saying they would be forced to cancel my apartment if the instalments were not paid,” he adds. In March 2007, after collecting 30 percent of the total payment, DLF stopped asking for payments and a legal agreement was sent to the allottees.

“On October 22, 2007, DLF sent out a letter saying that they were beginning the construction and had made changes in the building plan. Now instead of 19 floors, there would be 29 floors. And they continued to promise that they would deliver it within the stipulated time,” he says.

By the time the construction was only 33 percent complete, Jain had paid almost 65 percent of the total price of the apartment. Finally, Jain stopped paying them in 2008. “I was calling them every day, asking them to tell me the truth. In response they started sending out letters to the owners saying that they will get possession at the right time. This was only few months prior to the promised possession date. I could see that there was no way the construction would be finished in another six months,” he says.

In April 2010, when he came back to India from the US after six months, he had little clue as to what awaited him. “I came back to find a cheque lying on my desk along with a letter which said that my apartment (allocation) had been cancelled. A sum of '48 lakh, of the total '1 crore I had paid, was gone. It did not matter that they (DLF) failed to fulfil their obligation,” Jain says.

The fight
In May 2010, Jain received a letter from Sanjay Bhasin and Ravinder Kumar Gupta who were also the victims of DLF manipulations and had started reaching out to the other Belaire flat owners. “We formed the Belaire owners’ association and only eight of us went to the competition commission of India (CCI, the market watchdog),” he says.

“In CCI, through various submissions, DLF claimed that when we had stopped paying them, they had to borrow money from the market to keep the construction going. They were charging interest for the money borrowed from the market. In 2010, when my apartment was cancelled, they were charging 18 percent interest. But when I went to see the ‘construction’, there was no apartment. Where did they spend all the money? If they had borrowed the money, why did they not construct?” he asks.

“I realised that the DLF employees who the flat buyers communicated with had no authority. Every single decision was taken by the top bosses. Talking to the employees was like banging our heads against the wall,” Jain says. “I was squarely told by the DLF employees that their bosses wielded considerable influence,” he adds.

However, their hard work started showing results when the competition watchdog came down heavily on DLF in August 2011. The CCI pronounced DLF guilty for grossly abusing its dominant market position in the relevant market and imposing unfair conditions in the sale of apartments to home buyers in contravention of the provisions of the Competition Act, 2002. The CCI also imposed a penalty of whopping '630 crore, at the rate of 7 percent of the average turnover of DLF for the last three financial years and issued a ‘cease and desist’ order against DLF from imposing such unfair conditions in its agreements with buyers for residential buildings to be constructed in Gurgaon.

Despite this victory, Jain feels that the damage to DLF so far has been nil. “Ever since the order came out, DLF has paid zero to CCI. Not only that. They have launched four different projects since then, despite of our continued objections to the CCI,” he says. DLF had filed an appeal against the CCI order at the competition appellate tribunal (COMPAT). The last date of hearing was scheduled for April 22. “It has been postponed till July as the judge has gone off to Poland and the directorate of town and country planning (DTCP) lawyer did not show up,” he adds.

A life-changing experience
While Jain’s crusade might not have the desired effect on the functioning of the realty giant, it has changed his own life’s course. “Understanding of this scam required a lot of research. There were very few people who wanted to take the initiative. From IT, I went into understanding the real estate and land laws and how the land mafia play around with them. I met scores of people who helped me in my fight and enhanced my knowledge of the realty affairs. There were people who taught me about DLF — their resources, power and reaction,” Jain says.

In November 2012, Jain along with other apartment owners formed the federation of apartment owner’s association (FAOA) with the objective of protecting the interests of apartment owners. According to him, in their fight against DLF, they realised that one of them had to start spending more time on research than others. And eventually, it was him.

“Every day was a new revelation for us. I was deeply moved by Neelam Tejpal’s story. She had bought an apartment in Regency Park 1 (another of DLF’s projects) in 1993. DLF claims that they got the sanction for the building plan late. But the truth is they had applied for it in 1995, two years later than they were supposed to. It took the government only six months to sanction the building plans. The construction was finished in 1998. At that time they asked Tejpal to pay 80 percent of the escalated price,” Jain says.

Tejpal went to the monopolies and restrictive trade practices commission (MRTPC, the CCI’s predecessor) and won the case in 2006. When she approached DLF and asked for possession of her apartment, she was told that DLF was moving the supreme court. The DLF employees requested her to pay 80 percent escalated cost along with the interest and told her pointblank she would never get possession of her flat and that she would die without a house. There was no way DLF was going to back down. “She had two small children. She could have easily moved into her own house in 1995. DLF had promised to deliver her apartment in just two years,” Jain says. “There were a total of 144 people who won at the MRTPC against DLF. Other than three persons, all the rest reached a compromise with DLF because they did not want to die without a house.  

His campaigns
FAOA’s green letter campaign which was initiated to protest the unlawful charging of parking area had garnered considerable attention. “Our efforts have borne fruits. DLF is not charging for parking areas anymore,” he informs us.

Then there is another campaign coming up soon: the zero maintenance programme. The basic idea is that according to the prevailing law, whatever profit a group housing society makes from leasing of community centre facilities, schools, shops, parking space and various other common facilities has to be equally distributed among residents. “Only residents’ welfare associations (RWAs) can lease out the common area services. Builders have nothing to do with it. We help our member group housing societies to take charge of common area facilities from builders,” he says.

“At present, FAOA does not have surplus funds. We are working on subscriptions from the member group housing societies. We have patrons and sponsors for our programme,” he says.

When Jain looks back at all that has happened in his life, he is amazed. “Today, I am the director general of an NGO doing an honorary job. But just three years ago, I was an IT guy working for an MNC, who wanted to live in a community with like minded people and spend his time with his extended family in India,” he says. Perhaps, that was not to be. And he does not have a house of his own yet.

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