Moneylife Events
‘Put Pressure on builders informally for the society’s interest’

Advocate and property expert Mr Vinod C Sampat sorts out issues related to conveyance and redevelopment of cooperative housing societies

“Not a single case of deemed conveyance has happened successfully in Maharashtra, so don’t go for it,”Said Mr Vinod C Sampat, advocate and expert on property matters, speaking at a seminar organized by Moneylife Foundation on cooperative housing societies.

Not many people are familiar with the workings of the cooperative housing societies, and are left confused while dealing with a variety of civic and legal compliances. Mr Sampat spoke on several issues like conveyance and re-development. He said, “Unfortunately, the real estate sector is unregulated, and few people have knowledge about its various laws. And even fewer can stand up to the powerful builders’ lobby.”

 He pointed out that most cooperative housing society members do not check the several financial aspects related to cooperative housing societies; and end up paying extra charges for several things, and at times, defaulting on necessary payments. He said, “It is important to know what and how much to pay, and to submit audits and necessary statements to the authorities concerned,” So, the best thing to do is to insist on documentation for every step, and make the builders list every laws/conditions/liabilities  involved and complies with laws. He said that a statute will always prevail over contracts, and consumers must approach consumer courts if any unfair conditions are imposed on him.

 He later talked about many landmark judgments related to cooperative societies and explained new rules which have been framed and laws which have been struck down. He said, “However, in many cases, court rulings have little bearing. Once, it was ruled that permission of registrar is not required~ but we all know registrar will insist on the same for redevelopment projects.” He also talked about several laws by virtue of which officers concerned can be made accountable for delays and even be penalized.

Mr Sampat also offered tips to the audience on selecting developers for redevelopment  projects. He insisted that the process should be transparent, and advised that members should have legal and technical consultants to interact with the builder. Also, it is important to check the builder’s credentials and financial conditions.

“You should be alert about what is going on, and must visit other projects that the builder has undertaken, and interact with the residents to get a fair idea. Include people who can ask hard-hitting questions, and who can negotiate with them about repayment/penalties in case of delays or other complaints. Also, there is nothing wrong with informally pressurizing the builder for the society’s interests; and don’t allow the builders to take loan on these properties. Involve women who can put forward their demands about height of ceilings, storage space of washrooms. Some say it is emotional blackmailing; I would call it smart bargaining,” he said.

He said, “The best tip I can offer is that don’t allow the builder to sell a part of the property before he has complied with laws and have provided necessary clearances for those who have booked the property.” About management committees and responsibilities and rights of residents, he said, “Use video recording for each meetings. Take advantage of technology to put a cap on the powers of the managing committee. Also, societies can’t make you shut down your shop or beauty parlour you are running in your flat. Lastly, make a will about your property; so that your heir and relatives can get their due.”



Stock markets headed nowhere: Weekly Report

Friday’s high a benchmark for uptrend to resume

The market was weighed down in the truncated week by negative domestic triggers and European debt concerns. A downgrade of the Indian banking sector by Moody’s and industrial output for September coming in at a two-year low and issues related to Italian bond yields were the main reasons for the market settling 2% lower in the week.
Finally, the Sensex closed the week at 17,193, down 370 points and the Nifty finished 115 points lower at 5,169. The Nifty will have to sustain itself above Friday’s high for the uptrend to resume.

Opening higher after an extended weekend on Tuesday, the market pared most of its gains in early trade itself and closed flat. Moody’s downgrade of the Indian banking sector to ‘negative’ from ‘stable’ and a 2.04% increase in State Bank of India’s non-performing assets for the September quarter exerted pressure on the banking sector, resulting in the market closing with a deep cut on Wednesday. The market closed at its 11-day closing low on Friday on the dismal showing the industrial sector in September.

The BSE Fast Moving Consumer Goods index gained 1% while the BSE IT index settled flat. On the losers’ side, the BSE Realty index tumbled 6% and the BSE Bankex declined 5%.

The top Sensex gainers in the week were Hindustan Unilever (up 5%), TCS, Wipro, Hero MotoCorp (up 3% each) and ITC (up 1%). The major losers were State Bank of India, Tata Steel (down 8%) each, DLF, Hindalco Industries and ICICI Bank (down 7% each).

Among Nifty stocks, HUL (up 4%), TCS, Hero MotoCorp, Wipro and Cairn India (up 3% each) were the top performers. Bharat Petroleum Corporation (down 11%), SBI (down 11%), DLF, Tata Steel and IDFC (down 8% each) settled at the bottom of the index.

While downgrading the Indian banking sector, Moody’s said that given the tightening environment, asset quality will deteriorate over the next 12-18 months, thereby increasing provisioning needs for banks in FY11-12 and FY12-13.

Differing with the downgrade accorded by Moody’s, leading ratings agency Standard & Poor's (S&P) has upgraded the Indian banking sector saying its domestic regulations are in line with international standards. “In our view, banking regulations in India are in line with international standards and the regulator Reserve Bank of India (RBI) has a moderately successful track record,” S&P said while upgrading the risk profile (BICRA) a notch higher to ‘Group 5’.

Continuing its dismal performance, industrial output sank to 1.9% in September compared to 6.1% in September last year and 4.1% in August this year. The government attributed the decline to the poor showing of the manufacturing sector, which grew at 2.1% for the month versus 6.9% same period last year. The data confirmed the fears of a slowdown in the Indian economy as the fall was visible across sectors.

Food inflation declined marginally to 11.81 % in the week ended 29th October from 12.21% in the previous week. Despite the marginal moderation in the rate of price rise provided consumers were burdened by high prices of essential kitchen staples like vegetables and pulses.

In international news, bad news from Europe reached a climax mid-week when yields on Italian 10-year bonds shot up over 7%, however, the news of the resignation of Italian and Greek prime minister provided some solace to the global markets.


DoT slaps Rs50 crore penalty on Airtel, Tatas for ILD licence violation

Earlier, DoT had pulled up SingTel for violating ILD licence norms by acquiring and billing customers in India without a licence between 2005 and 2009, and had given a clean chit to Bharti Airtel and Tatas which had provided international private lease circuits to the foreign firm

New Delhi: The telecom ministry is understood to have imposed a penalty of Rs50 crore each on Bharti Airtel and Tata Communications for providing international private lease circuits to foreign company SingTel in violation of International Long Distance (ILD) licence terms and conditions, reports PTI.

Sources in the Department of Telecom (DoT) said notices in this regard have been sent to respective companies for violating the terms and conditions of ILD licence.

This is in contrast with the ministry's earlier stance.

DoT had pulled up SingTel for violating ILD licence norms by acquiring and billing customers in India without a licence between 2005 and 2009, and had given a clean chit to Bharti Airtel and Tatas which had provided international private lease circuits to the foreign firm.

Sources in Bharti and Tata Communications said that they have not received any such notice.

The DoT had set up a committee to examine and suggest the amount of penalty to be imposed on Tata Communications and Bharti Airtel for the violation of ILD licence norms.

As per the licensing norms, Indian ILD operators are authorised to provide Indian circuits to a foreign carrier (like SingTel in this case) so that they are able to provide end-to-end services to their customers in their territories.

The committee found, from submissions made by Bharti that the company had raised the invoice to SingTel at its Singapore address for the portion of circuit provided by Bharti Airtel.

Airtel paid the applicable licence fee on the revenue earned by providing the Indian half circuit.

While Tata Communications (erstwhile VSNL) had said in its reply that SingTel has not submitted any document showing that the customer was acquired outside India and Tatas have not felt any need to check this because as per the agreement, SingTel can acquire customers only in its own licensed territory and not in India.

Tatas have, however, taken immediate corrective steps and took confirmation from all foreign carriers that they are neither contracting nor billing the customers in India under such agreements.

The committee had also observed that Tatas, too, have paid the licence fee on revenues earned by them for providing half leased circuits to Singapore Telecommunications and observed that the Tata Communications is not liable to pay any penalty in response to the show cause notice issued by the DoT.


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