Is the “Gurgaon Arbitration Council” a sincere attempt by Administration to provide a trapdoor to the buyers, or is a trap that is being laid by the builder lobby? This is a issue worth examining in detail for it entails issues spanning from legal, to ethical, to financial, to moral, to social, to financial, to constitutional, to division of powers, to kangaroo courts ….
One of the Key Figures from the builders side (over 100 builders are part of REDCO) is Mr Navin Raheja. Even as all the public servants like District Commissioner TL Satyaprakash, DCP Nazneen Bhasin, MCG Commissioner Vikas Gupta, sit on the same table with Mr Navin Raheja and talk about the “good builders,” buyers of Raheja projects are suing the builder in droves.
Three groups (around 40 buyers each) headed by Wg Cdr Alok Verma, Mukesh Sinha, and Nikhil Raheja have already sued Raheja Developers, and a call has gone out for the next batch to sue this builder …. This is in Raheja Atharva. Buyers have also sued Mr Navin Raheja in Raheja Atlantis, Raheja Vedaanta, and Raheja Navodaya. And IT IS THIS MR NAVIN RAHEJA OF RAHEJA DEVELOPERS WHO IS SUPPOSED TO RUN THE DC’s “GURGAON ARBITRATION COUNCIL??”
It was very interesting to see this in the Press Release about the GAC:
The formation of Gurgaon Arbitration Council (Ombudsman) breaks fresh ground in encouraging Public- Private Partnership by liberating the private sector from the fear of law in cases of dispute referred to the Council by the District Commissioner is providing a platform for rapid resolution of cases at district level.
LIBERATING THE PRIVATE SECTOR FROM THE FEAR OF LAW …. Great. The EXECUTIVE has FAILED. THE LEGISLATURE HAS FAILED. The only thing working in favour of the aggrieved buyers is the JUDICIARY (esp. the National and State Consumer Commissions), and the EXECUTIVE in collusion with the PRIVATE BUILDERS wants to protect themselves from the JUDICIARY … there should be no fear of law for the private sector … This is not very encouraging from the buyers point of view.
And why do the private builders not want to subject themselves to the JUDICIARY?? Maybe it is because the National Consumer Commission has been recently giving orders that level the playing field for the buyers. If the project is delayed, then the Agreement To Sell is no longer binding. The judges have awarded 12% pa compensation rather than the Rs 5 psf pm that the builders offered if buyers want to take delayed possession of the property. And if the buyer is not willing to wait to take possession, the judges have given 18% pa compensation to the buyers. THIS IS WHY THE BUILDERS ARE TRYING TO PREVENT THE BUYERS FROM APPROACHING THE COURTS, because in almost all cases of excessive delay, the builders will have to pay 12% or 18% compensation. There are judgments against Unitech and Parsvnath that set the precedence.
So, instead of guiding buyers to the JUDICIAL option, REDCO and the builder lobby, in collaboration with the Public Servants, are giving a convoluted justification for trying to avoid the legal process, and say in their press release for GAC, (and our comments highlighted.)
The Buyer/ complainant approach the Consumer forum for solving their grievances. This normally involves engagement of a lawyer by the buyer/ complainant. (You could fight your own case in the Consumer Courts, but most people do chose a lawyer. And, with time there is a good breed of lawyers emerging who are knowledgeable about real estate, and are not easily compromised by the builders. That is why the builders now fear them.) The Forum fixes hearings which may get prolonged and several dates are fixed and the case lingers on. (The case lingers on because the Builder and his/her lawyers play games. They conspire to keep on getting new dates. The GAC should advise its members not to play this delaying game.) Sometimes the opposite party does not honor the Forum decision and the case has again to be referred back and forth resulting in further delays. (The opposite party that does not honor the forum is generally the builder. And, the EXECUTIVE is so weak in Gurgaon that many times they are not even able to execute the orders against some of these builders. So, GAC should advise its members to honor the forum orders.) All this involves inconvenience and expense on the part of the aggrieved party. (Since when have the builders and REDCO become responsive to the expenses that they buyers have to bear? Given that in most cases buyers approach courts because the builders are fleecing them. So, GAC should advise their members to be sensitive to the buyers pockets so that the conflicts and disputes do not arise in the first place.) Therefore, the administration decided that such disputes be resolved expeditiously by the Arbitration Council (different from the procedure under the Arbitration Act). The concept behind the formation of the council was that it will be more like an Ombudsman/ a family court for reconciliation of grievances. (This takes the cake, because this Gurgaon Arbitration Council does not follow the Indian Arbitration and Conciliation Act. It may turn out to be just a Kangaroo court.)
And the cake is taken by Mr. Rohit Malik, President, REDCO, Haryana, who briefed about the mechanism of GAC to the gathering and said “GAC will not only fulfill the Supreme Courts direction of clearing the clogged legal system…” Pray, Mr Malik, please let us when the Supreme Court gave you directions to clear these “clogged” legal system with your kangaroo courts?
What is the constitution of this “Gurgaon Arbitration Council?” What are the roles, responsibilities, and powers of the various parties in this GAC? What is it that gives them legal legitimacy? And more important, why are the public servants like District Commissioner, DCP Police, MCG Commissioner, etc abdicating their immense lawful power into the hands of a builder-lobby like REDCO? What are the credentials of REDCO that show it will be fair to the buyers, when all it has done is train real estate brokers. What are the credentials of Col Prithvi Nath, and what onhis resume indicates that he will be able to run this mammoth task of resolving “conflicts” and “disputes” between builders and buyers.
Instead of giving orders to the builders or buyers, why are the DC, DCP, and MCG Commissioner abdicating their lawful power into the hands of this “informal” platform called “Gurgaon Arbitration Council.” Why are they inserting into the execution of their powers (against builders, buyers, or other public servants) this step of referring complaints to the GAC? Is this informal GAC a method to help the buyers as much as it is to help their own kind. Allegations have been made against senior IAS officers like Mr Anurag Rastogi (ex Director General of Directorate of Town & Country Planning) for giving false and premature Occupation Certificates to builders like Raheja Developers and DLF? Allegations have been made against the FIRE DEPARTMENT for giving false fitness certificates, when there fire and safety systems were non-functional in projects like Raheja Shilas, Raheja Atharva, and Raheja Vedaanta. In fact, in Raheja Vedaanta there is only a 11 feet wide connecting road – on which a fire tender cannot even enter the premises. How was it given FIRE NOC? And HOW was it given an OCCUPATION CERTIFICATE in the absence of a sufficiently wide connecting road? These and many other questions are coming up regarding the behaviour of public servants, for which a CBI enquiry might someday be required. Should the public servants in power today not be a little more careful in allowing the builder-lobby dominated REDCO, and hence GAC, to handle such delicate matters.
You can see the original press release about the DC’s Launching of “Gurgaon Arbitration Council” in all its glory here http://firstreport.in/gurgaon-arbitration-council-gac-ombudsman-formed-under-the-pioneering-initiative-of-deputy-commissioner-gurgaon/ (archived here https://archive.is/r1r6g) and a collection of the various news items on GAC here https://www.rebelmouse.com/GurgaonArbitrationCouncil/