The consumer organisation wants the UPA government to take corrective steps against the “one address-one connection” rule and re-issue a fresh set of guidelines, keeping in view the joint family set-up in the country
Ahmedabad-based Consumer Education and Research Centre (CERC) has opposed the anomalies in the implementation of the decision to reduce the number of LPG cylinders per connection. While questioning the recent ruling of the government that only one connection at the same address is eligible for six LPG cylinders per year under the subsidized quota, the CERC said, “This rule could hit the joint family culture in India as it will impose an additional financial burden of purchasing cooking gas at premium rates for big families that will be unable to survive on the limited quota.”
The joint family system is a deep-rooted trait in the Indian culture, CERC pointed out and appealed to the Centre to resolve the plight of thousands of such consumers who are part of joint families and will now have to bear an additional financial burden. CERC has outlined the threat that this “one kitchen one connection” rule will pose to the social fabric of the country.
In a letter to M Veerappa Moily, Union minister for petroleum and natural gas, the CERC, cited the example of a retired civil servant who will have to let go his LPG connection to stay with his 45-year-old son and daughter-in-law, both of whom have shown the same address at the gas office and are, therefore, entitled to only one subsidized connection.
CERC has also suggested ways through which the government can verify the number of people staying in a house and accordingly allot the subsidized connection. These methods include checking the municipal corporation bill, election card, telephone bill of the same address, which will help the authorities to avoid the misuse of this criterion.
CERC has asked the authorities concerned to take the required corrective steps against the “one address-one connection” rule and re-issue a fresh set of guidelines, keeping in view the joint family set-up in India. Else the consumer organization has also threatened legal action against the bodies concerned.
Last week, bowing to public pressure, the Cabinet Committee on Political Affairs (CCPA) chaired by prime minister Manmohan Singh raised the cap on subsidised LPG cylinders to nine cylinders per household from six.
In September, the Centre had decided that each household will get six cylinders of 14.2-kg per annum at the subsidised rate and any requirement beyond that would have to be procured at market rate.
Subsidised LPG costs Rs410.50 per 14.2-kg cylinder and any household requirement beyond the new cap of nine cylinders will have to be bought at Rs942 per bottle.
RS Butola, chairman, Indian Oil Corporation said consumers will get five subsidised cylinders instead of previously mandated three till 31 March 2013. From 1 April onwards they will get nine cylinders in a year, he said.
In a rare use of Section 8 (2) of the RTI Act, the CIC ordered disclosure of information as a larger public interest would be served by it. This is the 23rd in a series of important judgements given by Shailesh Gandhi, former CIC, that can be used or quoted in a RTI application
The Central Information Commission (CIC) while agreeing that the information sought was exempt under Section 8 (1)(e) of the Right to Information (RTI) Act ordered disclosure as per Section 8 (2) of the Act since a larger public interest would be served by the disclosure. While giving this important judgement, Shailesh Gandhi, former Central Information Commissioner, invoked Section 8 (2) that is rarely used.
“Given the fact that Jiwan Jyoti Co-operative Group Housing Society (Jiwan Jyoti) has defaulted for many years on its loan payment and a large amount of over Rs12 crore is outstanding, it is reasonable to argue that there is a large public interest in knowing the details and nature of such a loan,” the CIC said in its order issued on 10 June 2009.
MG Menghaney, a resident of Delhi on 16 January 2009 sought information about non-payment of loan by Jiwan Jyoti from the Delhi Co-operative Housing Finance Corporation (DCHFC). He sought the following information on:
1. Total amount taken by the society with amount
2. Total amount paid by the society from Day One till 31.12.2008
3. Copy of the agreement entered with … the society with date registration details
4. The date on which the above name society became defaulter with details
5. List of members who have taken the loan with amount taken which the society has submitted to you in repeat of disbursement of the loan
6. Has the society submitted any form and or request for granting loan by the individual member with enclosures
7. List of members who have directly paid the loan amount in full or part to you for which you have issued the receipts with date and amount receive with name of the members
8. Details members who have not paid in part/or full the 31 Dec 2008 to enable you to asses the amount yet to recovered vice versa the amount due to you.
9. Do you have any worksheet prepared by you of the total amount due to you and the members with amount due as on 31.12.2008. What is the amount payable by all the defaulting members?
10. Please provide details of recovery of loan amount from the above-named society which have initiated as to the recovery steps taken from the … of default by the society
11. Please confirm that you had sent notices to the individual members of the society who have taken loans and have defaulted in many payments
12. At any stage did you direct the society not to allow sell their flats as they were defaulters of loan amount
13. Copy of one such no dues certificate issued by the society to the members, which has been communicated to you by the by the society, please confirm
14. At any stage you were informed that the promoters the society or managing committee of the society has utilized any amount of loan amounts recovered from the members has been used for any other purpose than repayment to you
15. Please advise any specific reason that your corporation has not been pursuing recovery loan amount from the society
16. Please provide copies of loan confirmation issued by the society to your corporation as every financial year and if you stationary Auditors remark to the extant the loan amount recoverable as otherwise
17. Please provide copies of the Auditors Report in respect the loan of the society
18. Please allow inspection of file and records pertaining to the above-mentioned loan
The Public Information Officer (PIO) of the DCHFC denied the information sought under para 1 to 5 and 7,10,16,17 claiming exemption from disclosure under Section 8 (1)(d) and Section 8(1)(e).
Section 8(1)(d) says:
"notwithstanding anything contained in this Act, there shall be no obligation to give any citizen the information including commercial confidence, trade secrets or intellectual property, the disclosure of which would harm the competitive position of a third party, unless the competent authority is satisfied that large public interest warrants the disclosure of such information”.
Section 8(1)(e) says:
“Notwithstanding anything contained in this Act, there shall be no obligation to give any citizen- information available to a person in his fiduciary relationship, unless the competent authority is satisfied that a large public interest warrants the disclosure of such information" under Right to Information Act, 2005”.
The PIO said, “The information sought by the applicant under para 4, 6, 8, 9 and 11 to 15 are not covered under the definition of information as defined in Section 2 (f) of the RTI Act, 2005.”
There was no mention of the order or reply by the First Appellate Authority (FAA). Mr Menghaney then filed second appeal before the Commission.
During a hearing before the CIC, he said, “...there is a loan outstanding against my flat taken by me from DCHFC, the entire loan amount was Rs1.95 crore, which has amounted to Rs12.54 crore as per the information gathered by me from various sources. The defaulters are merely 25 to 26, therefore it is apparent that there is something wrong in account maintained by the society as well as DCHFC.”
“As a citizen I must know the status of my loan account so that the steps are taken to look at the same. As well as there is a dispute between the society and DCHFC as such both are not providing any information. It suits DCHFC as they have been debiting interest and penal interest therefore it does not affect DCHFC directly but it certainly effects the person who had taken loan,” Mr Menghaney told the Commission.
The PIO stated that the loan was given to Jiwan Jyoti by DCHFC after executing loan agreement and mortgage deed. “Since the loan was given to the society, DCHFC has been maintaining single loan account in the name of the society. The appellant is claiming to be the member of the said society and we are unable to work out his individual loan liability. However, the appellant may get the same information directly from the management of the said society under provision of Delhi Cooperative Society Act 2003 under Section 139,” he said.
“Since the information sought by the appellant pertains to loan transaction the same information is held in its fiduciary relationship, commercial confidence, trade secrets, etc and the same is exempted from the disclosure under Section 8 of the RTI Act,” the PIO claimed.
The PIO also admitted that there is a large default in the case. He stated that there is a consistent default for many years and the present outstanding (of Jiwan Jyoti) is over Rs12 crore. The Commission then reserved its order.
Mr Gandhi, in an order issued on 10 June 2009, said the Commission considered the PIO’s claim for exemption under Section 8 (1)(d) and was not able to see any justification how its commercial confidence or trade secrets would suffer by disclosing this information.
Under Section 8(1)(e), the traditional definition of a fiduciary is a person who occupies a position of trust in relation to someone else, therefore requiring him to act for the latter's benefit within the scope of that relationship. “An equally important characteristic for the relationship to qualify as a fiduciary relationship is that the provider of information gives the information for using it for the benefit of the giver. Hence the Commission agrees that the public authority has a fiduciary relationship with the Cooperative Society which has taken a loan from it,” Mr Gandhi noted.
He, however, said that given the fact that that the cooperative society has defaulted for many years on its loan payment and a large amount of over Rs12 crore is outstanding, it is reasonable to argue that there is a large public interest in knowing the details and nature of such a loan. “In matters where public financial institution which is a public authority, large and continuous defaults in loans could be the result of corruption or gross mismanagement and citizens have a right to know the details so that this acts as a check on such public authorities,” the Commission said.
Mr Gandhi said, “In view of this the Commission feels that as per Section 8 (2) public interest in disclosure outweighs the harm to the protected interest and hence the information must be disclosed.”
While allowing the appeal, the CIC asked the PIO to provide information sought by Mr Menghaney before 25 June 2009.
CENTRAL INFORMATION COMMISSION
Decision No. CIC/SG/A/2009/000898/3651
Appeal No. CIC/SG/A/2009/000898
Appellant : MG Menghaney,
Respondent : LR Garg, SPIO
Delhi Co-operative Housing Finance Corporation Ltd,
3/6 Shri Fort Institutional Area,
August Kranti Marg, New Delhi-110049
Most builders provide one of the four options—Down-Payment Plan, Construction-Linked Plan, Flexi-Payment Plan and Time-Linked Payment Plan. Calculate the benefits that the builder gives you and weigh them against the costs/penalties that would be levied if you do not make timely payments
Buying a home is perhaps the biggest decision you take in your life. The amount involved is huge, EMIs (equated monthly instalments) take away a large chunk of your monthly salary and go on for a long time, if you take a loan. Thus, the repayment should be a well-thought out, structured plan. Since payment may be a cause of worry for many buyers and may turn them away from buying homes, builders, these days have come up with options that would encourage buyers to take loans and book properties, even before construction starts, let alone possession. When buying home, keep these payment options also in mind, other than factors such as distance from the office, amenities offered, surrounding infrastructure, built-up area, etc. While applying for a home loan, calculate the benefits that your builder gives you and weigh them against the costs/penalties that would be levied if you do not make timely payments.
When buying a home seems unaffordable because of shooting property prices combined with high interest rates, these options come in handy for you. Thus, most builders provide one of the four options—Down-Payment Plan (DPP), Construction-Linked Plan (CLP), Flexi-Payment Plan (FLP) and Time-Linked Payment Plan (TLPP). Under these options, flats are booked even before construction starts. It is a win-win situation for both the builders and the buyers, since buyers lock-in their prices much before they actually buy it, and builders get funds for construction.
Traditional down payment plans require you pay 10%-15% of the purchase price when you book your property, another 80%-90% within a given time-frame, say 45-60 days and the rest, at the time of possession. This remaining amount will include the balance amount of the cost of property and all charges levied by different authorities including Stamp Duty and Registration Fee, around 5% of the value of the property; the initial property tax, society maintenance charges; other charges of using society facilities such as gymnasium, swimming pool, parking, etc.
Risks involved in such cases include delay in construction and delivery of property that has happened in most cases, actual delivered property differing from what was shown in the sample, different constructed area, and increase in property prices by the time property is delivered to you. All these problems discourage buyers from buying property,
To avoid these problems, builders have come to with EMI sharing options. EMI sharing is advertised saying “no EMI till possession” but it actually works differently for loan borrowers. Under the “full sharing of EMI” option, the builder pays the interest component of your each EMI while under the “partial EMI sharing” option, the builder will pay a proportion of your EMI interest component. EMI sharing option is applicable for a certain period of time with the complete EMI to be paid by you thereafter. Some builders introduce an additional clause of paying at a fixed rate of interest, which could be challenging for floating rate borrowers.
Construction-linked plans require you paying a booking amount—around 10%-12% of the purchase price upfront while the rest is linked to construction milestones, 20% with each floor constructed, for example.
Flexi payment option, on the other hand, is a combination of both the above options, where the buyer has to pay about one-third of the price while booking and another one-third linked to milestones, while the remaining amount would be paid at the time of possession.
In comparison to one another, the construction-linked payment plan is more suitable than the other two since the risk is the least, if the payment is not timed and completely linked to construction completed. Moreover, the builder would also want to complete construction fast in a bid to get cash flowing in. That said, the track record of the builder is an important parameter to be taken into consideration.
From the loan perspective, construction linked loans are more expensive of the two, since they have a longer tenure; only interest payment is due till the property in under construction, principal repayment starts after possession.
Time linked-repayment plans
Repayment of these loans has to be made at a pre-decided point in time and in pre-decided proportion and are therefore riskier in terms of combating delay of construction. In case you pay 10% of the total amount at the time of booking and the rest at regular intervals of say, one year each, in three equal instalments, your payments are not in tandem with the construction of the property. And according to the agreement, in case you fail to pay on time you are saddled with huge penalties that you accepted to pay it the time of signing the agreement. Home purchase agreements explicitly state, “That if the seller makes default in the performance of any of the conditions of this agreement, he shall pay Rs…… by way of compensation to the purchaser for such default; and if the purchaser makes default in the performance of any of the conditions to be performed by him under this agreement, then the seller shall be entitled to forfeit the whole of the earnest money of Rs…….paid to him; and that the party not in default shall be further entitled at his discretion either to annul this agreement or to specifically enforce it, in addition to any remedy that may be open to him”.
To take a decision in case of delay in construction, calculate how much interest costs you save on late disbursement of loan versus the penalties imposed on late payment.
What you should look at
Go through the EMI sharing clause in documents to find out what is applicable to you. Pay consideration to the fact that EMI sharing means sharing only the interest amount.
For self-financed property, find out what the document holds for you. With almost all the markets, there is a difference between prices of homes when paying through different payment options. Flexi-payment option is usually cheaper so you must go through that route.
For homes financed through loans, you must calculate the interest cost of your loan and find out the EMI sharing options available with your builder. For homes under construction, you would pay only interest cost till construction carries on, and them start paying the principal.
While booking under-construction flats, research well about the track record of the builder, the timeline within which it has historically delivered, the reason for delayed delivery, if so, and the number of ongoing projects, which should not, ideally, be too high.
You should carefully scrutinise all charges applicable and if possible consult a lawyer for hidden charges and other anomalies, if any. And if extra charges have been altered ask the builder for a sanction letter provided by the government for all such alterations.
For ensuring carpet area, negotiate with the builder to add a clause of the minimum and maximum size beyond which the builder would not increase or decrease the size and ensure that the contract gets terminated if the builder crosses threshold limits.
Another good idea is to form a society or a group of all those buyers who booked their property with you. This gives gravity to your voice and it gets heard much more speedily than if you voice out alone. When taking possession, make sure your builder gives you the completion certificate as well, that is issued by the municipal authorities, saying that the building complies with the approved plan.