Some years ago, I wrote this open letter, with my husband, to the Chief Justice of India. No news paper was willing to publish it. So I decided to publish it on my own. This website was borne as much out of that need for catharsis as to raise a voice against a fraud committed by a greedy business house. Setting up the website was taking time, as I was learning by doing it myself. So, I posted this letter on a WhatsApp group of aggrieved people like me, from where it found it’s way to other social media and then many more readers. I am posting it here and giving it the place long due to it. So many questions we raised back then, sadly though not surprisingly, still remain unanswered.
Victims of Law
An Open Letter to The Custodian of not just Law but Justice and Sanity too
The Chief Justice Of India
New Delhi, India
It’s with a very heavy heart and as a last resort that I am writing this letter to you on behalf of not just those Jaypee Wish Town Home buyers who are shocked and anguished beyond belief, but also all the future home buyers too, who are working their way through school and college and will slog throughout their youth to save enough or will mortgage their future income to home loans, to buy their dream homes.
With one stroke of a pen, the NCLT has shaken our faith in the legal system of the country by passing an order that has set wheels in motion for a legal process that leads to a possible liquidation of the assets where the money of home buyers is invested. This almost absolves the company involved, namely, Jaypee Infratech Ltd from the need to account for what it did with the money collected from the buyers. It’s like extending a helping hand to those who have defrauded tens of thousands of hapless buyers in the elusive Jaypee Wish Town project. The Law, as evidenced in this case, is definitely blind. How could the esteemed judge not see the obvious? Jaypee Associates Limited JAL (hereinafter referred to as Jack), JIL (hereinafter referred to as Jill) and the banks, they all had a commitment to serve their respective customers who trusted them with their hard earned money. The land for the project was free from encumbrances to begin with. There was no ‘act of god’ in this period of 2010-present to change anything adversely. A substantial amount, ranging between 50-100% of the total cost of the promised home, had been collected from almost all the buyers between 2012-14. Now RERA rules that 70% of the collected funds from buyers are required to be put in an escrow account and can’t be diverted for anything other than the promised purpose of construction. Even without this rule being in force back then, it’s a reasonable expectation that the same principle would have been applied and caution exercised in managing our funds. With all the conditions being favorable, why couldn’t the company complete and deliver? Where did the money go? Clearly it was misappropriated or misused or mismanaged. Shouldn’t somebody take responsibility for this and pay for it?
Did the esteemed judge, before passing this highly distressing order initiating Jill’s insolvency process, delve deep into the accounts of the company to see how it had spent all the money it had collected from the buyers and the banks? It is easy to comprehend if a builder is unable to deliver 5-10 per cent of the units on time. Did it not appear suspicious to the Judge that a company is filing for insolvency after completing less than 10-20 per cent of the project? I mean, seriously, a robbery of humongous proportions is taking place right under the nose of the Judge and it doesn’t raise suspicion? I have no doubt that he admitted the insolvency plea within the letter of the law. What he missed was the spirit. That his decision was impacting the lives of thousands of innocent people, was probably not considered. So an order is passed that prohibits those being robbed from even seeking justice. Sadly, for the nation, when the law becomes an inadvertent facilitator to criminals, citizens become victims not just of the criminals but also of ‘the law’.
As far as the criminals are concerned, the less said the better. Jack and Jill, always were hand in gloves, right from the days of the nursery rhyme! But they forget that when Jill fell down, Jack came tumbling after (or was it the other way round?). They issued allotment letters signed by Jack and co-signed by Jill. Funnily enough, they even sent a letter from Jack saying the project cannot be completed on time. And now they are liquidating Jill. I’m sure their highly paid lawyers would have created enough safeguards and fine print to hoodwink not just the buyers but also “the law”. So buyers who were made to believe that Jack and Jill were in this together, are now left scratching their heads as to why liquidation of Jill should require them to file claims with some bloke who refuses to even clarify what forms should be filled and keeps changing his mind about the need for the same. But this takes the cake – unsolicited advice from a section of lawyers and media alike suggests that we all file our claims or else following liquidation, we may not get anything! I don’t know whether to laugh or to cry. Why are buyers being asked to fill out a form whose implications neither Jack, Jill, IRP or the Court have bothered to explicitly state? Why should we listen to them? It sounds like a very high pressure sales pitch of a dubious product. And shouldn’t they be asking the very fundamental million-dollar question – where did the millions go? Why aren’t they putting their heads together to find an answer to that? We all know about Jack and Jill being in this together. It’s there in our allotment letters and on the bank loan papers. It’s the same set of people. Information collated from open sources like their annual reports alone suggests how intertwined they are. Why wasn’t Jack enjoined in the lawsuit? Even a child knows that Jack and Jill are inseparable, that’s why Jill came tumbling after.
And the bank, the bank! Now why did it go only after Jill? Does it want its money back or not? It must be absurdly insane to believe that 34,000 people will allow it to take away what rightfully belongs to the them. Something they have paid for in crossed cheques. If the bank has lost so much money as bad debt, someone in the bank must be held responsible for poor decisions. Is the bank trying to collude with Jack and Jill here, to spare them the fate of the Mallayas and Subroto Roys? And if this is the government’s plan to recapitalize the bank, with tax paid money stolen from home buyers, then God save us all !
Now, what exactly was the bank thinking here? Even if we talk about just a little over half of the buyers, then 20,000 buyers have already paid an average of Rs 50 lacs, by very conservative estimates, to Jack and Jill, which adds up to Rs10,000 crores before interest/penalties against the Rs 526 crores owed to IDBI before interest. The double whammy is that the buyers have paid an additional nearly a third of the loaned amount in interest to banks on home loans against a property that doesn’t even exist in some cases. If, just 5000 buyers with loans decide to stop paying EMIs on an average loan of Rs 20 lacs, you are looking at an NPA of a Rs 1000 crores within three months. How smart is jumping from one NPA into another twice its size? Who are the banks protecting? Not even the banks’ interests it seems. Even these back of the envelope calculations make one dizzy, how could it escape the notice of the honorable Judge? Does it not merit scrutiny by those investigating financial crimes?
The perpetrators of this fraud of historic proportions have banked upon the desperation and the disorganization of the public whose instinctive response would be to make the best of a bad situation. They are law-abiding, mostly salaried, mostly tax paying citizens being taken for a ride by “the law”. So they will end up filing their claims and eventually take whatever they are dished out. By the time they get their apartments or refund, they would be ready to cut their losses, lick their wounds, or whatever it is that they do. Buyers will be driven into such desperation that they’ll feel lucky to just get their flats without even the penalties and other dues. Will anybody be held accountable for the money lost in interest, EMI’s paid for a property that doesn’t even exist in some cases, delayed possession, erosion of capital, etc?
Sir, we have often been made to feel proud by the judicial activism of the Hon’ble Supreme Court. Once again we expect that this esteemed institution will take cognizance of the human tragedy and take matters in its hands. The Law is not intended to embroil people in legalese and technicalities, it is expected to serve the people and provide them relief. We appeal to your esteemed office to intervene on behalf of “the people” and quash the NCLT’s decision. It not only absolves JIL of its need to be accountable, but also pushes us home buyers into a hopeless situation. We expect a full-fledged criminal investigation with forensic audit to find out where thousands of crores of rupees has disappeared. We urge you to tell the world that the law cannot be used or abused to provide relief to wrong doers. Jack and Jill have all the records of the payments made by buyers and now IRP also has all our claims duly filled and notarized. This itself is testimony to the quantum of defaults committed by the company in question. We have already lost a lot of time and money to these cheats, please spare us from spending more on lawyers and lawsuits. Don’t let these thugs threaten the victims with possible loss of their hard earned money to make them comply with something whose implications are not clear even to lawyers. This landmark case isn’t about just more than 30000 home buyers at Jaypee, it will affect our children, the future home buyers and the industry alike. If thousands of people lose money and the criminals go scot free, inadvertently aided and abetted by law, no Indian would ever make any advance payment for a home, bringing down even the honest builders (if there are any left after this case). Only criminal charges of fraud against the owners of Jack and Jill and potential jail time will make them cough up the money. If you allow this builder to cheat us out of our flats and penalties due to us, you’ll be opening flood gates for multitude of bad practices that our children in a few years, the youth and the retiring couples will be paying for when they go out house shopping.
Sir, rhetoric aside, all of us aggrieved people, beg you to take required actions to get us our homes with the penalties and other dues, to get us relief and justice and to restore our faith in the system. This is the ‘union carbide’ of the housing sector in India. Sincerely believe you’ll ensure that it ends differently and won’t destroy the lives of the common, vulnerable and unprotected people this time.
A very harassed and frustrated Jaypee victim.