Flat Buyers’ Woes, Who Will Wipe the Tears of NCR's Cheated Flat Buyers?

The buyers look for, desperately from a distance, the doors to their apartments in the half-built towers but they show no signs of hope for them because they are just bare skeletons. Other buyers do not have even this much opportunity for their dream homes as the promised burz are nowhere to be seen. They have gulped their life savings with banks deducting their EMIs from their accounts, no matter whether the builders are fulfilling their promises to deliver them flats within the stipulated time.

The defaulters’ list is long. They are who’s who of the real estate world. Amrapali, Unitech and Supertech. There are as many as 103 stalled projects involving 41, 438 units and thousands of cheated buyers. What has brought the buyers to this pass? The Supreme Court says it is the nexus between the builders and the banks which left them high and dry.

Both– banks that have financed these projects and the builders– are enjoying their share of the cake, leaving the buyers to move from one authority to another to get their promised homes.  But justice has eluded them for years now. Now, they have knocked at the doors of the Supreme which has suggested that CBI must investigate the nexus between the builders and banks.

Observing that the connivance between the builders and banks has led to the financial carnage of the lakhs of the buyers, the Supreme Court is of the opinion that it is not its job to monitor this monumental injustice of the system to deliver homes to the buyers.

So, the federal probe agency must probe them to get to the bottom of this sordid story and bring the culprits to justice, the apex Court says.

“We will definitely have a CBI probe. That is clear. Thousands of people are crying. We can’t wipe their tears but we can address their issues. Something very effective has to be done in a time-bound manner,” the court says.

However, the buyers’ main concern is either delivery homes to them or refund of their hard-earned money. But the apex court says it was unable to ensure that the cheated buyers get either delivery of the two. In this dark scenario, the buyers have the defrauded past and face a cu-de-sac future. There is no light at the end of the tunnel for them.

The builders with a quid pro quo arrangement with banks in their halcyon days had sold to their buyers the dream of having their own homes with designer advertisements in the sleek pages of newspapers. This visual hypnotism along with hassle-free financing seemed to these buyers that soon the woes of their rented houses would end. But at the end of the day, they are slapped double whammy, the nagging landlords and the financing banks breathing down their necks.

Pankaj Singh who is one of such buyers who ten years back booked a flat in a much-publicised project of a builder with the Punjab National Bank providing the finance. He is still waiting for his dream flat, and the bank is sucking its EMIs without any moral qualms from his account. 

The hidden hand of the classical economists instead of benefitting the buyers ironically have destroyed them. The economic neo-liberalism of less and less control on businesses and free hands to banks in lending money has created havoc in the economy as well in society.

The ranks of billionaires in the country are swelling every year, while the middle classes are losing jobs and the poor opportunities to eke out two squares of meals. And the NCR flat buyers find themselves between the devil and the deep sea. How come banks kept on releasing loan instalments to the builders even when the construction was not going as per the schedule? 

Harish Kumar Arora, a retired officer of the State Bank of India says that before approving a loan to a project, banks go through its entire papers. There is a dedicated team that is tasked to see that no lacuna escapes its lens. The team also keeps a close eye on the progress of construction at the project.

The mechanism seems fool-proof. But there is a twist in the tail in this whole story. The builders and the banks play tricks with the buyers. As builders get money through the banks, the builders feel assured of the flow of it, while the banks bound the buyers in such a way by keeping their papers in their custody that the latter has no option but to keep on paying the installments even if the progress of construction is far behind the schedules.

Citing the example of NOIDA Extension where builders were allotted lands very cheap on ten-year instalments during the chief ministership of Mayawati, lawyer Viral Jain, who deals with consumer cases, says that these builders put only a part the flat buyers’ money in their projects, the remaining money they invested somewhere else or bought land with it.

There could not have been a better arrangement for the builders and the banks: the builders got money for projects’ lands from the banks via the buyers, the banks earned handsome money on the lent money, while the buyers were left to fend for themselves. Neither the land allotment authority nor the government coming to their rescue.

The buyers remained in limbo for a long time as they feared approaching the court keeping in view the pace at which cases move there. Finding no responses to their cries for help from any quarters, they ultimately moved the apex court seeking a way to their promised homes.

Amid this scenario, the land allotment authorities and the governments appeared in the matter and agreed to a plan to get stalled projects going to complete them. But the moot question is not the prosecution of these builders but whether the hapless buyers will get their dream homes in their lifetime? Hope is their only hope as so far, they have faced hopelessness.

But there is now some hope for future buyers as according to The Real Estate (Regulation and Development) Act, every builder has to put the project related money in an escrow account so that the funds are not diverted for purposes other than the projects. By this mechanism, the builders can be kept under surveillance, says lawyer Viral Jain. And people are taking interest in such projects.

We can only hope for a better future for the buyers. Rest is in the hands of the system which is worked to benefit those who operate it.