India at 70: Taking a test
India at 70 has to be better than it was a year or years before. Tomorrow should be better than today. Otherwise there is no purpose to human endeavor. But that’s not how home buyers at Jaypee wish town, who are being cheated out of their life time investment, are feeling right now. No, don’t feel smug if you are sitting in your living rooms sipping tea, thinking it has nothing to do with you. No, you aren’t done buying. Soon your children will be home buyers. And if we let these builders get away with this fraud, we are paving way for a truckload of bad practices by setting a dangerous precedent. By emboldening them. By telling them that it is all right to cheat, the law can be taken advantage of because custodians of law can’t see the forest for the trees, the spirit of the law for the letters. It’s a question of the rights of all consumers, present and future. Without their protective rights, consumers are just hostages to the corporates.
All my fellow citizens, take it as your battle too on behalf of all our children and youth who will soon make that mandatory trip to the builder’s office where they sell this dream of owning a pretty house by showing those glossy brochures. We are house proud people. We don’t make a trip to Antarctica or go skiing on Carpathian mountain slopes first thing with our money. We buy our dream home. It’s an aspiration of the entire middle class to improve their lives and a home plays a central part in this dream. So, nobody has immunity here. Nobody.
The Jaypee home buyers’ case is a test for all of us at 70 to see how strong our democratic institutions are: the legislature, the government, the judiciary, the law enforcers, the corporates, the banks, the resident citizenry and the Indian diaspora. It’s a test for legislators, whether they will amend the laws, if required, to protect the interests of vulnerable public or serve the corporates who fund their election campaigns. It’s test case for the government’s intention as to what kind of growth story they are going to write. Are they going to write this story with the amputated spirit of the hard working middle class from whom the money and homes are being snatched away to replenish the banks? Are they going to protect the interests of Indian consumers and hold them supreme or will they just look the other way and offer sympathies? Is it even a growth story of India at all? For what growth story could be complete that does not include all of us consumers as willing partners?
It’s a test case for the judiciary whether they are going to go with the principles of natural justice or just wrap us up in legal intricacies that may or may not be sufficient to protect our interests best. We are not the ones who draft the agreements. It’s the builders and big corporates with their battery of competent lawyers who choose every word carefully to protect them from all eventualities, including, like this one. We don’t get our agreements vetted by supreme court lawyers before signing them to buy a house. But now our documentation will be dissected word by word by them. Again the best lawyers will be hired by the builder to find grey areas that may help them. Most of us do not have legal literacy. Many of us, despite being fluent in English, can’t even understand a legal document, much less draft it. But then, point is, not knowing legal jargon is not a crime. Knowing it and using it to shield bad, greed driven decisions and duping people of their hard earned money is. We’ll see in the coming days whether the insolvency laws are for justice or an all-powerful instrument for the corporates to hide behind and dodge accountability and liability of penalties. We’ll see in the coming days whether NOIDA authority will own up why they kept clearing new projects for Jaypee Associates Ltd. and Jaypee Infratech Ltd. when work hadn’t even started on the older ones. We’ll see in the coming days whether JAL and JIL accounts are held to scrutiny by the law enforcers or wrong-doers allowed to flee the coop with the people’s money. What happens in this case will indicate what kind of nation are we building.
Look at the paradox. The company that’s going insolvent can still afford to hire the most expensive lawyers while the defrauded public that is actually on the verge of losing its life’s savings is scurrying around, collecting paltry contributions to find an affordable lawyer to represent them in court. And they are trying so hard to prove the obvious, that they have been cheated, that they are the victims. But, here’s the thing. If they go ahead with the insolvency proceedings, it will be equally hard for the courts and the government to convince the public how it is justified to declare a company insolvent, possibly bankrupt later, whose leadership continues to live in the lap of luxury and carry on with all its businesses as usual, without this financial catastrophe making any dent on their wealth and businesses while home buyers just go bust. The corporates will laugh all their way to the bank if the law helps them to shake off their liabilities. How does this exercise restore ‘public confidence’ in the system? And what about the other pillar of success of the insolvency law – ‘business ethics’ or ‘commercial morality’? Won’t that take a nose dive too? Won’t this insolvency pave the way for other builders who have been stretching their businesses beyond sane limits and delaying delivery of homes all across the country?
It’s a test case for the Indian diaspora who still invest in Indian real estate – whether they will stand by the rest of us here or cash out and not look back.
And above all it’s a test case for the corporate leaders. We don’t disparage your wealth. We don’t hate you for being rich. We admire you. We aspire to be you, to be success stories. We have nothing but admiration for entrepreneurs whether some of us admit it or not. They are the risk takers who step out of the comfort zone to reach for the stars. They think differently, do differently. But here’s the thing. An entrepreneur also has the integrity to take responsibility for bad decisions that go awry and incur losses. An entrepreneur has the courage to take a hit, own it, stand up, brush the dirt off and rebuild. If you hide behind some loop holes in the law to dump losses incurred because of your bad decisions on the very people that reposed their faith in you, you are nothing but a cheat. That’s what sets an entrepreneur apart from a fraud. Both can make money, but frauds won’t get our admiration and respect. Lack of commercial morality will destroy public confidence in you and in the system you abused.
To cut a long story short, we have a situation here in which there is this company playing the hijacker, the home buyers are the hostages sitting in an airplane called a township, the implied ransom is shake off of penalties and dues liable to the buyers. The dire consequence is liquidation where hostages probably get nothing. The government can either negotiate with the hijackers or just offer sympathy saying it was a fly by night operator not a national carrier flight. But the court here is the commando team that can ambush the hijacker, bring him to book and ensure release of hostages, to restore order and public confidence. Fingers crossed!