Citizens' Issues
Cooperative housing societies: Common issues and solutions

Common issues in any cooperative housing societies or CHS can be resolved by discussion. If this does not solve the issue, the complainant may have to raise it to appropriate authorities, like municipal corporation, deputy registrar for cooperatives, consumer court and police

The recent Campa Cola episode shows that co-operative housing societies (CHS) must exercise due caution, when it comes to maintaining and ensuring that their buildings comply with the law. Sometimes, there are infractions between housing societies and individual apartment owners, as well as outsiders. However, many individual apartment owners are at a loss as far as grievance is concerned and do not know how to proceed with their complaint. There are several issues in a CHS, like car parking, leakages, fraudulent auditing, unauthorised construction (ala Campa Cola), and many other issues. Home owners need to know the right recourse to take action to ensure that their rights are maintained and upheld. Advocate Vinod Sampat who is the speaker at a seminar being hosted by Moneylife Foundation has given a brief of what you should do when you encounter various problems.
 

Register for the Moneylife Foundation Event by Vinod Sampat over here:
 

Some of the common problems related to co-operative societies and the solution to the same are produced as under
 

 

Problem

Suggestion Solution

A

AGAINST BUILDERS (ACT FAST BEFORE NEW ACT IS INTRODUCED!)

1

Sale of open parking space by builder, sale of pocket terrace by builder, not executing the conveyance, not giving statement of accounts, not obtaining occupation certificate, not obtaining building completion certificate, not handing over original documents of title of the property, not transferring the property card in favour of the legal entity

a) Approach Consumer Court for deficiency of service;

 

b) Approach the criminal court for cheating, criminal breach of trust, mischief, violations of the provisions of Sec. 11 & 13 of MOF Act;

 

c) Lodge  complaint  with  ULC  Department  as undertakings are given that conveyance will be executed within a stipulated period of time at the time of release of the plot from ULC;

 

d) Lodge complaint with ISO authorities if the builder has got an ISO certificate;

 

e) Lodge complaint with SEBI if the builder is going for a public issue and has not made the disclosures in the prospectus;

 

f)  Lodge complaint with BMC to black list the builder;

 

g) Lodge complaint with police seeking permission to take out morcha by peaceful means to protest against the acts of the builder.

2

Builder  not  sharing  the  amounts received from allotment of hoardings, installation of mobile tower on the societies terrace

a) Approach the consumer courts for deficiency of service;

 

b) Request police authorities to file an FIR;

 

c) Approach city civil court;

 

d) Approach High Court.

3

Builders developing adjacent plot and apprehension  is  there  that  the FSI/TDR of the society is being used

a) Write letters to BMC objecting to the same;

 

b) File a suit in High Court/ city civil court/ consumer courts praying for an injunction restraining the builder from utilizing the FSI/TDR of the plot of land for which the society has already been formed.

B

CO-OPERATIVE SOCIETY

1

Society not allowing visitors to park their vehicles in the building premises

a) Approach the police authorities stating that there is violation of the provisions of Table 15 READ WITH Regulation 36 of the Development Control Rules, read with Regulation 36 which stipulates that 10% (now 25%) of the parking space has to be kept vacant for the visitors;

 

b) Lodge a complaint with Bombay Municipal Corporation requesting the Corporation to cancel the occupation certificate as the terms and conditions pertaining to IOD have been violated.

2


Society not allotting car parking space to members

a) Draw the attention to the provisions of Table 15 Regulation 36 of Development Control Rules of Greater Mumbai;

 

b) Approach Consumer Forum for deficiency of service;

 

c) Approach Co-operative Court;

 

d) Approach Registrar’s office;

 

e) Note if you have other like minded members who are deprived of parking one each can approach different authorities;

 

f)  It will not make difference if the builder has sold car parking space to some other flat purchasers.

3

Co-operative Housing Society collecting exorbitant amounts at the time of transfer of flat, collecting exorbitant amount towards non occupancy charges

a) Approach consumer court for deficiency in service;

 

b) Approach police station for extortion, mischief against all the members of the managing committee with a specific request to lodge a First Information Report (FIR);

 

c) Approach metropolitan magistrates court;

 

d) Lodge complaint against auditor for professional misconduct.

4

a) Managing committee members not  issuing share certificate to members;

 

b) Co-operative Housing Society not taking action against the members of the managing committee who have misused the funds of the society;

 

c) Co-operative Housing Society not taking action against defaulters who are managing committee members

a) Approach Consumer Forum against society;

 

b) Approach Co-operative Court;

 

c) Approach the office of the registrar to remove the managing committee members;

 

d) If more complainants are there they can approach different authorities.

5

Co-operative Housing Society and its members employing minors

a) Lodge complaint for violations of Juvenile Workers Act, 1986, Bye law No 161(C), stipulates a punishment up to one year imprisonment and/or fine up to Rs20,000

 

b) Lodge complaint with labour & police authorities

C

CRITICS CORNER

1

Office bearers behaving as dictators.

Some members are having parties and disturbing the peace in the building

To lodge complaints with the registrar of co-operative societies, approach co-operative court or consumer forum;

 

For certain matters contact police authorities

2

Co-operative Housing Society not taking action against unauthorised construction

Lodge complaint with Bombay Municipal Corporation (BMC) for unauthorised construction

3

Co-operative Housing Society not responding to queries as regards payment of service tax

Do the correspondence with service tax department

4

Co-operative Housing Society not maintaining fire fighting equipments

As per section 3(1) Maharashtra Fire Prevention and Life Safety Measures Act 2006 read with rule 4(2) Maharashtra Fire Prevention and Life Safety Measures

Rules every society having a building of ground plus four floors and above have to submit / arrange to submit every half yearly a certificate to the fire authorities. I would like to have a copy of the same at my cost for the last three years. Take up such matters with fire authorities.

5

Co-operative Housing Society not showing records related to

various expenses being incurred by the society

Draw the attention of office bearers to the circular dated 10/3/1995 issued by co operative department.

6

Complaint  against  chartered accountant who has audited the accounts of the society

Write to Institute of Chartered Accountants of India highlighting provisions of act, rules and bye laws; Example: Exorbitant amount collected as donation, security not given by persons handling cash. Rule 107-B.

 

Money collected for car parking deposit, amounts of some members waived off, legal expenses recovered from only some members + action at consumer forum.

7

Complaint against auditor on the panel of registrar

Request the authorities to take disciplinary action against the auditor;

 

Request the authorities to remove the name of the auditor from the panel of auditors;

 

If it is a case of negligence approach the consumer forum for the losses caused with a prayer to recover the same from the auditor;

 

File criminal case. In our view permission to file criminal case from government authorities is required only if the person is appointed by the government;

 

If the employee is appointed by the head of the state then permission is not required.

8

Complaint against government officers for not giving the proper information

 

Always keep camera spy pen with you. It is not known when it can come handy

Approach the higher authorities;

 

Ask for the actions initiated against him in his earlier postings;

 

Ask the pending departmental proceedings going against him as of date;

 

Here RTI Act can be of help to you.

D

COURT MATTERS

1

Government officer not passing the order after the matter is kept closed for order.

 

 

Politely state that the judgment in the case has been reserved since a long time. Order XX Rule 1 of Code of Civil Procedure Code, 1908 fixes a model Time Limit of 30 for pronouncement of Judgment. Therefore please pronounce the judgment at an early date and do the real justice since ‘Justice Delayed is Justice Denied’ (You may also ask for all orders being passed by the said quasi judicial authority)

2

No track record as to the court case

Insist on roznamas of all the dates of the hearing

3

Reply received from advocates that

court is not sitting

Tell the advocate to take up the matter with the judge; who has got additional charge of the said court.

4

How to speed up court case

 

 

If you are a senior citizen you have a right to request the court to take up the matter for expeditious hearings in the light of the high court circular dated 3/08/2009. If a long date is given insist for a shorter date;

 

You can approach the higher court for directions to expedite the court case if there is urgency in the matter. File miscellaneous applications to get the necessary information.

5

How to protect ones interest in matters where there is possibility of litigation.

 

ALWAYS  CARRY  LATEST GADGETS AND RECORD

Use modern technologies like Google search and ask for help;

 

Tell your advocate to pray for ad interim injunction;

 

Tell the court for the appointment of court commissioner.

E

Right to Information -RTI

1

Despite writing no action is being initiated by government officers

Make an application under the Right to Information Act (RTI) to the public information officer.

2

Evasive replies are given by the public information officer. 4578 illegal cell towers in Mumbai. Action taken big zero. If a common man breaks the law will the BMC be lenient. What was our sleeping giant doing when such towers were installed? Why are criminal cases not being filed by BMC suo moto?

File an appeal. You may also file another application with the public information officer asking for information which may include copies of all the registers being maintained by the office, when the said registers are being updated, details of the registers which are incomplete, number of files in the office which are misplaced, not traceable, number of letters received per month by the office, details of the number of matters disposed of within one week, inspection of the files with specific reference to the files of the matters disposed of within one week. If you have asked for documents like certified true copy you can also approach the consumer forum as you are a consumer;

 

To put pressure you can tell your relative at say Gujarat to file a complaint from Gujarat in Gujarati. Section 11(c ) of the Consumer Protection Act, which stipulates that a case can be registered where the cause of action wholly or in part arises. (Samajnewale ko ishara kafi hai);

 

Ask for inspection and reply given to RTI queries in the last six months.

3

Society not getting copy of building plan

Write to the Bombay Municipal Corporation (BMC) authorities asking for the necessary information using  the Right to Information (RTI) act;

 

Also approach consumer forum for deficiency of services.

F

Police-related matters

 

Police not taking steps to lodge an FIR in case of a cognisable offence

Approach the magistrate u/s 154 of Criminal Procedure Code (CPC) to direct the police officers to register an FIR.

G

How to draft complaint letters

 

 

Letter to Co-operative Society/ Government authorities.

 

 

Address to society, managing committee members and various government authorities;

 

Follow up with email to various government authorities;

 

Take up the matter on Lokshahi Din;

 

Just do not stick to one subject. Highlight all the wrong things done in the society;

 

Dramatise the facts; For eg: Say that the collective value of the property is approx Rs50 crore. If it is government department like BMS say that the yearly budget is Rs2,800 crore and the same is not properly utilised. Ask for information which will result in time being spent by the opposite party which information may not be very important for you;

 

Highlight instances of corruption, inefficiency pointed out by government authorities eg. Anti corruption bureau, comptroller and auditor general;

 

Request the government authorities to download the orders as is stipulated in Right to Information act. It is common knowledge that authorities do not do all their jobs as per provisions of all in all cases, follow up with Right to Information application if the matter pertains to government department.

 

LASTLY reserve your right to take action as per due process of law.

H

Action against auditors

 

 

 

Stay tuned for the 2nd part which will be published tomorrow in the run up to Vinod Sampat’s seminar.

 

NOTE:
Those seeking help or advice on CHS issues can contact Moneylife Foundation’s Legal Resource Centre (LRC) ( http://moneylife.in/lrc.html )

 

(Adv Vinod Sampat is a practising lawyer since past 28 years. He has authored several articles on property-related matters and written 46 books on cooperative societies, transfer of flats, recovery of dues, registration and stamp duty matters. He has been an Hon. Patron member of the Estate Agents Association of India. He is also the Hon. Advisor of the Federation of Accommodation Industry of India and is an advisor to the Maharashtra Chamber of Housing Industry as well as the Federation of Accommodation Industry in India, apart from being part of many committees and winning several honours.)

User

COMMENTS

Anand Gangal

3 weeks ago

Dear Sir,
Ours is a small cooperative housing society. Our chairman, secretary and treasurer are not at all doing any work in the society. They are only paying the muncipal and other govt body bills. But no work is been carried out. They are not taking any written complaint. what to do

Narendra Sawant

3 weeks ago

Our Cooperative Housing Society is a wealthy society on its own premises there is another organisation called as Mandir Trust, This Mandir Trust needs to repair its Mandir for the very purpose our society through a resolution forwarding Rs.45 Lakhs to the concerned trust for Repairs. Is it legal to give away such large sum of money to other organisation in the name of help or donations

VARUN TALWAR

1 month ago

THE SOCIETY OFFICE HAS RAISED THE MAINTENANCE BILL AND HAVE MENTIONED DIFFERENT HEADERS LIKE "ADHOC CHARGES" AND "RENOVATION CHARGES".
PLEASE NOTE THAT THE ADHOC CHARGES ARE FOR STORING DEBRIS WHICH WAS DISPOSED BY US ONLY AND KEPT IN OUR PARKING AREA(THIS WAS 2 YEARS BACK)
AND ALSO THE RENOVATION CHARGES IS CHARGED NOW FOR WORK DONE 2 YEARS BACK AND THAT ALSO ON PER MONTH BASIS FOR 6 MONTHS WHEREAS THE WORK WAS COMPETED IN 1 MONTH.
PLEASE ADVICE AS TO WHAT ACTION CAN BE TAKEN FOR THE HIGH-HANDEDNESS OF THE MANAGING COMMITTEE

Wilfred Dsouza

1 month ago

we had purchased a flat in kalina area 425 carpet area on 1st December 2002 agreement for sale had been executed by both the parties stamp duty had been paid
society had transferred the flat on to my name (purchaser)
My problem is the document had not been registered at that time
The seller expired in 2014 is there any way i could get this document registered is there any problem in the near future
Thanks
wilfred.

Sachin Jain

2 months ago

dear sir,
planning to buy a plot in co-op society layout for residential use.
the society is formed in 1974. in the first sell the society has mentioned in sell deed that buyer has to take NOC at the time of selling the plot and he cannot sell the plot before completion of two years .
after that during these years four owners have sold the plot to different buyers ,
now i am planning to purchase that plot. my question is
1. is it mandatory to take NOC from Society for purchasing plot ?
2. the seller has purchased this plot in Aug 2016 ..so can he sell before completing one/two years of holding ?
3. if we do sale deed now will our saledeed be valid ?
requesting for fast reply please ...
thanks

Query Seek

2 months ago

Society is asking tenants to vacate the building in 3 years, they has created a rule that a tenant can not stay for more than 3 years in building and mandatorily vacate the building, even if the owner and tenants have no problem. Also the tenant can not move in any other flat in the same building.

Suess Dhasmana

2 months ago

Hi Sir
I purchased the flat on resale in august 2013 , at that time the society was not formed and I was issued noc by builder , the noc only says we have no objection to sale subject to dues paid by seller and does not mention any dues outstanding . Later when society was formed I was informed that dues are outstanding for a period when I was not the owner . I informed the society of the same and gave them whereabouts of the previous seller but no action was taken from the society . Now society has put me under defaulters list and asking me to pay dues and interest . Does the society have any right to do so ? What recourse do I have with the society
Thank you!

raju more

6 months ago

when maintenance charges start - before register or after register what is bylaw

raju more

6 months ago

if committee members arrogant answer, if ask common facility issue then can complaint whom ?

Dolphy Goveas

6 months ago

Dear Sir,
I have a stilt parking allotted by the builder and i have paid for the same. Since past 5 years i have moved overseas due to work and the flat has been rented out. Recently the society i the AGM has passed a resolution that tenants must pay Rs 1000/- per month for parking charges, this is applicable for open as well as stilt. I was not aware of the same as my earlier tenant was not having a car, hence no charges were levied to us. Now my new tenant is planning to occupy, the society manager informed that i must pay Rs 1000/- per month for parking charges. When i objected, it was informed that in the AGM it has been already passed. I am already paying high Non occupancy charges and now high parking charges. My query is that, whether the society can discriminate between tenants and owners, even the owner has the stilt parking. What legal steps i can take against the society. Thank you in advance for your kind assistance

makarand joshi

8 months ago

I am resident of one of the co-operative society in Thane, I purchase this flat in 2003 but not purchased a open parking because as per supreme court judgement, builder cannot sale open/stilt parking space as it comes under common amenities. The other members have paid a lumpsum amount of Rs.1.25 lacs for open parking and Rs.3 Lacs for stilt parking space. I took possession of this flat in the year 2006 and after that the society is formed. In the society AGM the resolution has been passed that the society will start charging parking charges to the members who does not have any parking or not paid to the builders so not got any parking allotment from builder and now wants to park the vehicle inside the society. These parking charges has been calculated based on the payment done by the other members to the builders but the other members who got parking allotment letter from builder will not pay any parking charges. As per the calculation the resolution has been passed to charge parking charges of Rs.1000/- per month, as we were in minority as we were only 19 members who has not got any parking allotment from builders so other members on majority got the resolution passed and then as per that we started paying monthly parking charges of Rs.1000/-
Now in resent AGM, the managing committee has proposed to increase parking charges from Rs.1000/- to Rs. 2000/- per month to the 1st parking lot members and from Rs.1000/- to Rs.1250/- to the members who has applied for the 2nd parking as they already got one parking space from builder.
We have protested on this descrimination and raised an objection and requested managing committee to give us the justification for this increase in parking charges. The chairman has given us the verbal justification that the parking price outside is Rs.5-7 lacs so we need to increase parking charges. We told him that you can not tell us what parking price is going on outside as you or anybody cannot sell open parking space as per law so you cannot increase the parking charges without any proper justification and that to increase to only 24 members. But even after this protest the resolution has been passed in majority as we were as usual in minority.
Now they already sent the bill for the current month but we are not going to pay the increased parking charges and maintain it by paying Rs.1000/- alongwith other maintainance charges and give them the protest letter stating that we are not going to pay the full amount of increased parking charges of Rs.2000/- but paying only Rs.1000/-
Now we want your advise on this whether on these grounds we can file a case against society on this descrimination of charges different parking charges to members under same head of Parking charges. We all the 24 members are even ready to pay the lumpsum amount of Rs.1.25 to the society, which other memebers paid to the builder
We will pay the same under the head of "CORPUS FUND"
We need to know whether we can pay the lumpsum amount to society as CORPUS FUND so that we get the matter resolved on mutually agreed terms instead of going on legal battle.
Appreciate your views and guidence on this matter.
Makarand Joshi

Sucheta Dalal

9 months ago

Many readers have been posting request for help here. This is to inform you that Mr Shirish Shanbagh spares his valuable time and expertise to answer queries at Moneylife Foundation's office at shivaji park, dadar, mumbai on Tuesday between 5pm to 7 pm. Alternatively, you can post your query at http://www.moneylife.in/lrc which is a FREE helpline. However, please note that you will have to make this minimal effort. Our NGO is able to help people free because some good organisation sponsors the helpline. You may also want to reciprocate, by helping others to discover Moneylife Foundation and its activities. Become a member -- it is free. Check out Events and information videos -- they are also FREE. Do explore foundation.moneylife.in best

Cma Srinivas Jahagirdar

9 months ago

We have elected members prior to issue of Election rules, which is still runs the society, how do we regularise the same.
2. Earlier committees have not taken over from the Developer and now they are blaming on existing committee on inefficiency.

Cma Srinivas Jahagirdar

9 months ago

We have elected members prior to issue of Election rules, which is still runs the society, how do we regularise the same.
2. Earlier committees have not taken over from the Developer and now they are blaming on existing committee on inefficiency.

REPLY

Sucheta Dalal

In Reply to Cma Srinivas Jahagirdar 9 months ago

You will need to make the effort of posting your query on http://www.moneylife.in/lrc where our expert will give you guidance . This is a FREE service provided by Moneylife Foundation, a Not-for-profit entity. But you will need to post the query there.
best

Cma Srinivas Jahagirdar

9 months ago

We have elected members prior to issue of Election rules, which is still runs the society, how do we regularise the same.
2. Earlier committees have not taken over from the Developer and now they are blaming on existing committee on inefficiency.

The individual and the woman – the largest Indian minority

Indian woman must step forward and claim what it rightfully theirs under the law, as they are “coparceners” along with their brothers.

In 2005, the Hindu Succession Act, 1956, was amended, Neil Armstrong style: “One small step for a man; a giant leap for mankind”. Women, along with their brothers and fathers, were made coparceners in Hindu Undivided Family (HUF) Property. A coparcener is a kind of co-heir; someone who inherits property along with others and is a sort of joint owner. In the HUF context, a coparcener has greater rights: the eldest is usually the karta (manager); without being questioned, the karta runs the HUF business, controls its affairs and only in the event of transfer or sale of immovable property are his hands tied down by considerations of legal necessity and benefit of the family; a coparcener can demand partition of his interest; and hitherto a coparcener just by being born a male (at the pain of a woman screaming) acquired an interest in Mitakshara HUF property.

 

Effectively, women (sisters) too can demand partition of HUF property by metes and bounds and walk away with their share, which may be as large or as small as their brother’s or father’s.

 

Yet, almost a decade later, a young lady asked my husband, at a recent Moneylife seminar, how her deceased father’s property would devolve since he died ‘without any heirs’.  Taken aback, she was asked to explain herself. Well, and so the story goes, the father died intestate leaving behind a widow and two daughters, but no male issues. There should not be any issues with that, for sure! Milady spoke perfect English. The Universal Declaration on Human Rights, The Constitution of India – the supreme law of the land – all evaporated in one fell swoop. The reasons follow.

 

The effect of being made a coparcener is far wider as it affects property rights not only in the event of a death within the family but during its existence.

 

The amendment comes coupled with another change i.e. ................

“Where a Hindu dies after the commencement of the Hindu Succession (Amendment) Act, 2005, his interest in the property of a Joint Hindu family governed by the Mitakshara law, shall devolve by testamentary or intestate succession, as the case may be, under this Act and not by survivorship, and the coparcenary property shall be deemed to have been divided as if a partition had taken place and,—

(a) the daughter is allotted the same share as is allotted to a son;”
 

Survivorship in the aforesaid context of Mitakshara HUF meant that the existing male coparceners acquired the property instead of the same devolving upon the female relatives of the deceased. The sons, grandsons and great-grandsons thus, just by being born, got a share in the HUF property. It is a sort of joint ownership as against co-ownership. The differences are subtle.

 

If A and B hold any property as joint owners the property ultimately vests in the survivor of the two. However, if the same property were to be held by A & B as co-owners it would then ultimately vest in either the heirs or legatees of A or B respectively. In co-ownership each party can separately deal with his share. But joint ownership comes heavily laden with shackles. The consent of the joint owner is a must in any dealings concerning the property. There is in law thus, until the contrary intention appears, a presumption in favour of co-ownership and against joint-ownership. Strangely, in a number of documents the two terms are used interchangeably, a fertile ground for endless litigation

 

The breakaway from the traditional coparcenary HUF rights is therefore twofold: (i) survivorship has been done away with and (ii) women given inheritance and greater property rights. A Hindu can further make a testamentary bequest, in favour of a complete stranger, of his undivided interest in the HUF property. 

 

All this and more, but 2005 still cannot be regarded as the watershed year. Way back in 1956 when Hindu laws were codified, under section 6, if a Hindu died leaving behind him inter alia a widow, son, daughter, child of a predeceased son or daughter etc. i.e. Class I heirs, his share / interest in HUF property would devolve not by survivorship but by intestate succession. A year short of half a century, the same principle was merely amplified.

 

The lady who asked the question above has the rights. Yet, she was unwilling to accept what is rightfully hers.

User

COMMENTS

Girish Patil

3 months ago

How many members required to register housing co operative society

Cairn India may spring a surprise

Cairn India can grow faster if the government policies are more sensible

Cairn India has come a long way in 20 years, having started with 3,000 barrels of oil a day, in Ravaa fields, to a current output of 180,000 barrels, representing 25% of India's needs, which are growing by the hour! They could notch to 300,000 barrels, a thousand leaps forward from the tiny step they took two decades ago. And, when they do, which is within their reach, they would be able to meet 35% of India's oil requirements.

 

Cairn India, along with its joint venture partner ONGC (Government of India company), holds 70% with the balance 30% stake held by the latter. They operate in four basins and have made 40 discoveries so far. Around 95% of its production is oil and the balance is gas, in which they have shown serious interest in recent times.

 

It may be recalled that the Rajasthan block initially covered an area of 11,108 sq kms but the licence was given to explore only 10,558 sq kms, as 550 sq km being the unexplored area, which was surrendered, by Cairn India, to the Government, in line with the norms laid down in the Barmer block. Now, once surrendered, it looks like it makes it obligatory for the government to go for an auction once again! This is what Veerappa Moily has recently mentioned in a statement.

 

It appears that Cairn India has now sought reinstatement of the block to the government and the appeal made by them to the Cabinet, if accepted, would be the right step in the right direction, as this would eliminate new processing cost and loss of time. In any case, we may bear in mind that it is now Cairn India is taking the risk in taking up the exploration costs that may or may not bear any oil or gas for that matter!  Why not give them the chance?

 

Another important issue that has come up is that the contract for the Rajasthan block is valid till May 2020, hardly seven years away from now, which is, practically small lead time in the oil industry. Cairn India have approached the government that the contract should be actually extended to the full life and economic potential of the block, which, they estimate may be for about 20 years or so. Such a move would enable them to plan their exploration work, investment plans and options which are likely to involve capital expenditure of millions of dollars.

 

It must be borne in mind that the Rajasthan block was awarded much before the establishment of the New Exploration Licensing Policy (NELP), which does not stipulate any "expiry" date as such. Since this is the case for new contracts, why not apply to all existing contracts the same rule?

 

While Cairn India investigates the prospects for oil and gas under the ground, they have, above on hand, clean cash reserves of over $3 billion! Thankfully, when the government permitted them to explore in existing, producing fields, Cairn India took expeditious action and have discovered oil and gas in Barmer basin in Rajasthan, and in Nagaylanka in Andhra Pradesh.

 

With these encouraging finds, Cairn India hope to invest a substantial portion of this cash reserves in Rajasthan initially, and with others to follow in due course.

 

Moneylife has carried stories on Cairn India on a regular basis. It may be recalled that Cairn India had sought government clearance to go in for a swap arrangement by which they may be permitted to export the crude oil and gas from Barmer to get a better price in the international market (currently Rajasthan oil is being sold at about 8% to 13% cheaper then Brent) and, in lieu, import cheaper crude that can be supplied to Indian refineries who are designed to handle them with ease. For this, Cairn India had suggested that they would use the service of Indian Oil (a Government of India company), so that everyone benefits.  For, at the moment, India imports crude and does not permit its export. Such a move would benefit refineries like Mangalore Refinery, which has been largely dependent upon Iranian crude.

 

A look at the web site of Cairn India is educative. The capital expenditure plans are on the anvil and it is apparent that they are awaiting government clearances to take major steps in the right direction.  From the Rajasthan block itself, they project a production of 200,000 to 250,000 barrels a day by 2013-14, just in the next few months.

 

In addition to their development and expansion plans in India, Cairn India has taken steps to explore in the neighbouring unexplored areas in Sri Lanka, which looks promising, and South Africa. The onshore discovery of oil and gas in Nagaylanka in Andhra Pradesh involves additional investment of about Rs500 crore in the next 2/3 years, details of which are expected.

 

On the whole, in the next few months, Cairn India, being an active member of the Vedanta family, may spring pleasant surprises for its share holders, considering its huge cash reserves, and the capex plans ahead for its future expansion and development.

 

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)

User

COMMENTS

Zulfikarali Abbasali Gabharani

4 months ago

I want to know that our society had taken a decision to repair their lift and we shop keepers are also charged for that although we are not allowed to use it because we have no concern with that.
So are we shopkeepers are liable to pay that charges for lift repairing.

nagesh kini

4 years ago

Great Mr. Ramdas.
If only the K-G basin was managed by Cairn, we'd have had more oil following instead of needless controversies and delays!

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)