DSK Defaults: Now homebuyers getting notices from lenders to pay pre-EMIs
The financial anarchy at DS Kulkarni Enterprises is becoming messier day by day. After defaulting on repayments to thousands of investors, DS Kulkarni & Co, a subsidiary of DS Kulkarni Developers Ltd, had stopped paying all pre-monthly instalments as per agreement for the home loan taken by buyers in its projects. Since DS Kulkarni & Co has defaulted in repaying the instalments, buyers are being asked by the lenders to pay pre-EMIs within seven days that too when there is no guarantee that the project would be completed on time or no. 
 
Pune-based right to information (RTI) activist Vijay Kumbhar, who has been leading the fight of fixed deposit holders in DSK, shared one such notice with Moneylife. In the notice, Tata Capital Housing Finance Ltd, says, "Under the promotional scheme launched by the Developer (DS Kulkarni & Co- for its DSK Chaitraban project at Pirangut near Pune), the said Developer had offered to make payment of the pre-monthly instalment interest (MII) on your behalf to us with respect to the home loan facility availed by you. Notwithstanding such arrangement, you being the borrower under the home loan agreement are liable to make payment of such pre-MII/MI. This is to bring to your notice that the Developer has defaulted in making payment of the pre-MII. In view of the aforesaid default, we hereby call upon you to make payment of the outstanding pre-MII within a period of seven days from the date of this notice..."
 
 
Our mail sent to Mr Kulkarni remained unanswered till writing this story. We will update this story with his response as and when we receive it.
 
Earlier in June 2017, CARE Ratings reduced its rating to CARE D from CARE C with negative outlook on the non-convertible debentures worth Rs111.59 crore and fixed deposits of Rs33.86 crore issued by DS Kulkarni Developers. "The revision in the rating of instruments is on account of inability of the company to service its interest obligations on due date on Option I and Option IV of its Non- Convertible Debentures as per the company’s intimation to Stock Exchange. The likely delays are on account of deterioration in overall financial risk profile and stretched liquidity position of the company," the ratings agency had said, while explaining rational behind the downgrade. 
 
The issue here is not the lender calling to make payment, but the borrower being asked to make payment for a project that is under-construction or may never get completed due to the default of the developer. The most prominent reason in such cases is the builder or developer's inability to meet financial obligations for completing the project. Many a times, it was found that the developer had used the advance payment collected from buyers to purchase another land or to invest in other project. In addition, several developers are facing legal issues that make life difficult for ordinary buyers. 
 
Especially, those who had taken a home loan had no other option but to repay it irrespective of whether the project will be completed or no. Even when there is a delay in construction, the buyer has to keep paying EMIs without even knowing when it will be completed. This is double whammy for home loan borrowers as they are not sure if they will ever get possession of their dream house and yet had to meet to repayment obligations. 
 
The lender may be right claiming that as per the agreement, the borrower has to repay the loan along with interest. However, in cases like DSK where the developer has agreed to pay interest part or pre-EMIs, there could be a tri-party agreement between the developer, buyer and the lender. In such cases, why only the buyer is being made to pay the instalments for no fault of his/her? Why cannot the lender initiate action against the developer, who failed to meet its obligations?
 
There are thousands of borrower facing similar issues. Hope their voice reaches to the authorities soon and there is some action. 
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    COMMENTS

    Shrikant Jadhav

    2 years ago

    Dear Sir/Madam,

    Do you have any thoughts/solution about how the home buyer should approach to DSK and TATA Capital in this case.

    Abhishek Singh

    2 years ago

    The problem is the social pressure to buy a house at any cost. One wouldn't even buy clothes without having a look at final product but are ready to invest in under construction house. There must be much more restrictions on selling under construction houses.

    REPLY

    Pradeep Kumar M Sreedharan

    In Reply to Abhishek Singh 2 years ago

    It is beyond any common with one or even College degrees to figure out all the rules, regulations, tricks and cheating involved in a real estate game. One may please refrain from blaming the hapless home owning aspirant

    Pradeep Kumar M Sreedharan

    In Reply to Pradeep Kumar M Sreedharan 2 years ago

    Common man with one or more College degrees

    Ezeelok

    2 years ago

    DSK is a crook & criminal of the highest order. Aided , abetted and led by his equally criminal wife has cheated so many investors , lenders , friends & relatives alike. They have forged signatures , opened fake accounts , stolen money from partners , cheated many many in good faith. It's shocking that no Govt Agencies have taken cognizance of this family's naked cheating. DSK Bunty Bubbly Duo have probably been bribing Police & Bureaucrats for getting favours of not being arrested. Very soon a bigger scandal of DSK Family Business will surface involving thousands of Crorers falsified by them. Their intra-company ledgers must be seized , cash loan receipts on back-side of photos of Saptashringhi Vani Devi and Veer Savarkar etc will shock authorities for benami transactions. Many Govt orders have been forged & fabricated. Investor must act fast to get control of Prooerties through court receivers as the Family is at Final Stage of secret transaction with Few Sahukars by collecting cash for personal gain and allow Property control to Sahukars. Investors are folks to believe this Sweet Tongue Duo.

    REPLY

    Shirish Sadanand Shanbhag

    In Reply to Ezeelok 2 years ago

    Eazeelok ji, don't be so excited in making the complaint against any wrong doer or even criminals, unless you have proof to prove their wrong doings.
    Otherwise, these wrong doers will drag you to the court of law for defamation. They have good advocates to defend their side.

    Shirish Sadanand Shanbhag

    2 years ago

    Why flat buyers don't complain against D.S. Kulkarni Builder, to MahaRERA?

    REPLY

    Ezeelok

    In Reply to Shirish Sadanand Shanbhag 2 years ago

    That's baffling. Equally worrisome is no SuoMotto action by Govt. Looks like some politicians & Bureaucrats are shielding crooks for obvious reasons that their Benami & ill-gotten wealth may have been parked with this builder.

    Pradeep Kumar M Sreedharan

    2 years ago

    I wonder, how many home buyers rushing in to prepay (if at all any) know that even a fully paid for home will be lost, if the builder borrowed against the home first.

    ganesh babu

    2 years ago

    Big Investor Porinju has entered in the scrip in a bigway. Whether he is holding still or reduced his position?

    Dayananda

    2 years ago

    Whether RBI &NHB were sleeping when such schemes are being introduced. It is a clear case of misuse of lower interest for housing finance to individuals by builders,for which they are not entitled.
    So they are enjoying cheap credit in the name of flat purchaser,
    At least now they will ask every developers to prepay the instalments till the date of giving possession so that the scam can be stopped right now before it escalates. And a penalty is levied on all financial which have collaborated in this scam

    ROMIT KATDARE

    2 years ago

    This incident should serve as a warning to future investors against going for such innovative schemes floated by builders.

    Here is why China exports 1000 drones a day and India does not even produce 1000 a year
    There was a genuine expectation that with the Bharatiya Janata Party (BJP)-led government coming in at the Centre, there would be an effort to have clear and simple rules that would enable any company to get on with it’s primary tasks (product development, and sales). Instead the time and energy of most technology companies continues to be wasted on figuring out “what the rules are”, with no clear answers available anywhere. 
     
    Take a look at the drone industry and the problems it faces in India. I have highlighted the problems in various emails to myriad ministries, but there has been no effort to address them. It is worth noting that while India does not even produce 1000 drones a year, Chinese companies are exporting over 1000 drones a day. The largest company in this field, DJI is the world leader in consumer drones. This market domination by the Chinese has happened because it’s government did not actively sabotage it’s own industry by placing arbitrary restrictions on everything. This is what India does. Now in this season of heightened tensions with China, India is in an unenviable position of having no domestic drone of any significance and having to depend on a Chinese company, DJI, for commercial applications if and when the Indian commercial market is opened up. Primary problems faced by the industry are:
     
    • It is not possible to export drones from India without going through an inter-ministerial panel due to restrictions under the Special Chemicals, Organisms, Materials, Equipment and Technologies (SCOMET) list. This is completely unviable, in a rapidly evolving market where customers expect delivery in days not years
    • Sale of drones for commercial non-government applications is banned in India.
    • Government tenders have a very long gestation period (several years) and the proposals are framed very poorly, partly because the people framing such requirements have no idea of what is possible & what isn’t.
    • It is not possible to import components (motors, propellers, batteries) required to assemble a drone (even for demonstrations). When such components are imported, they invariably get seized by customs
    • The Directorate General of Civil Aviation (DGCA) is apparently working on draft guidelines for the last two years. They might take a few more years to release the same. (After all we live in a world without time!)
    • There is no clarity from the Department of Industrial Policy & Promotion (DIPP) on how to apply for a drone manufacturing license even though license seems to have been given to a couple of industries.
    • The drone industry is unlike any other industry. There is constant innovation, which requires testing and research and development (R&D). Otherwise the product becomes obsolete. Currently, flight-testing a drone always involves a risk of the product being seized.

     

    Due to all of the above self-imposed constraints, an industry that could have been a multi-billion dollar industry generating employment for tens of thousands has been hobbled and India is in the unenviable position of having to use Chinese technology in critical applications in the future. All the points mentioned above have been mentioned in various communications with the relevant ministries for the last several years, but there seems to be no resolution in sight. Here is what needs to be done…

    • Ask companies involved in the production of unmanned aerial vehicle (UAV) avionics to register themselves with one agency in a simple registration process. Care should be taken that this doesn’t degenerate into a license/quota raj type system
    • These companies have to maintain records of parts (motors, propellers) that they import for either demonstration pieces, research or for salesman samples. 
    • Allow these companies to fly in vast tracks of vacant land available with various Universities and public sector companies spread all over the country.
    • Inform the customs of the above procedures so that items may be procured hassle free
    • Allow sales of complete units to only authorized buyers, with the requisite flying licenses.

     

    The above steps will remove a large number of handicaps faced by industry. It is imperative that these steps are put in place immediately or the technology gap that needs to be overcome will be insurmountable. For the sales side, since the government has hobbled the industry for so long, the following incentives may be considered…

    • Companies with unique technologies and indigenous autopilots may be given exemption from goods and service tax (GST). They have been through enough without having to deal with this additional headache of classification etc. Besides, since most such sales will be business to business (B2B), there will be no net GST payable in any case.
    • Common facilities for small batch prototyping may be created and placed at the disposal of a pool of companies
    • Have a “safe list” of countries to which drones may be exported. If necessary, a geographical lock feature may be placed on the drones.
    • UAV companies should be treated on par with research organizations and avail research grants currently available only to Universities. This is necessary because the domestic market has been closed as a matter of govt policy.
     
    Globally the drone industry is moving ahead at a rapid pace and unlike other sectors, it is industry that is at the forefront of innovation. It is high time that our industry is unshackled so that we may compete on a level playing field.
     
    (Srinath Mallikarjunan is founder of Unmanned Dynamics, an advanced guidance system company)
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    User

    COMMENTS

    Deepak Narain

    2 years ago

    Govt should proceed as suggested in this article.

    MIKE

    2 years ago

    In India technology is limited to common people like us. If we had access to it then we might develop from scratch and even export. Alash! this can't be because it is not available in the market. They may be developed by a handful of people in this vast population with lots of talented peoples. Moreover for a starter nothing is not cheap when it comes to raw materials, equipments and machines all of this is so expensive in India. I guess manufacturing companies are trying to make profit rather than developing India. Now its time to realised ourself that we are sourrounded by enemies. You may survive with your wealth creation. But what about the rest of population? In such atmosphere we had no option to shunt our aspiring ideas and thoughts. We can do much better than them.

    suneel kumar gupta

    2 years ago

    Besides government's farsightedness, issue of labour is critical. Due to labour laws, people ,inspite of so much unemployment, people don't work to their full potential.

    SuchindranathAiyerS

    2 years ago

    India is nowhere because of it's "Reservations" (Divide to Rule) and Extortion (Shake the Pagoda Tree) Constitution and laws.

    In 1947, India had a tryst with disaster. The still unfolding colonial "Shake the Pagoda Tree" tyranny, and grotesque "Divide to Rule" Constitution. Aptly described by Bandit Jabberlal Neckscrew in the immortal words of his Harrow Master exiting the Staff Toilet: as, "Not fully, but substantially".

    The Government of India Act (1935) that was modified by Sir Maurice Gwyer for Nehru and Ambedkar to plagiarize into the Indian Constitution envisaged that the Governor General representing the British Crown would attend to Defense, National Security and Foreign Policy, while the Council of Princes (now known as Rajya Sabha) would maintain stability and cultural continuity. But with their abolition, India has enjoyed a vacuum in all these spheres since 1949.


    One symptom is that India looks to foreign countries for leadership and initiatives in these areas while focusing on Loot, Rape, and Persecution (including reservations) within the Country instead of on becoming powerful.

    The British were ruthless. They did everything the Nazis did before the Nazis did. But they won and the winners write History. But they did have certain redeeming features which is why they were able to get so many natives to build their empire for them. One such quality was a deep sense of fair play that had been inculcated in them since the days of Elizabeth the First, built on the much earlier foundation of the Magna Charta which not only helped them escape the rigours of proletariat revolutions that took place in Russia, or France but build a powerful nation.


    This is why, to weaken and enslave India, they induced the enshrinement of inequality under law, exceptions to the rule of law and "many nations" in India's Constitution, thus taking away their principal contribution that had stolen away men's hearts and minds from the Sultans and the Rajas, to risk and sacrifice their lives for them. In other words, with this one deft stroke of Constitutional legerdemain, they returned India to what they had found. A patch work quilt of raping, looting petty potentates.


    They accelerated the transformation by inspiring their stooges who ruled India after them with "Social Engineering" and turned the pyramid upside down to put power in the hands of those least capable and keep it away from merit and integrity. Thus it is that we see India today, a law less Nation in a constant state of Civil War, reduced to 135 out of 172 countries (and below Sub-Saharan Africa) in the Global Human and Social Development Index (UNDP – 2015) and 143 rd out of 172 countries in internal Peace and Stability (UNDP – 2015) , home to 30% of the World’s poor (World Bank 2016) and with the highest number of Bomb Blast in the World 2016) pushing Iraq to a lowly second place with just half as many; in just 67 years.

    When the British pushed "reservations" as part o their divide and rule policy into Mysore through the Maharaja, the Diwan, Sir M. Vishweshwaraya who has done more for ALL the people of Mysore than any man save Sir Mark Cubbon, resigned.


    The words in his resignation letter were as prophetic in its way as Sir Winston's prognosis for India. "Only the very best competence and integrity can help raise the wretched of the earth to the status of human beings. There is no short cut. You cannot elevate the wretched and expect them to do the work that the most talented and competent find arduous" Today Mysore has been more thoroughly trashed than any other state of the Indian Union because there was so much more to trash.

    REPLY

    Debashis Basu

    In Reply to SuchindranathAiyerS 2 years ago

    Fascinating

    Government asks 21 smartphone makers to share security information
    The Ministry of Electronics and Information Technology on Wednesday said it has asked 21 smartphone makers across the world -- of which majority are Chinese -- to share the security procedures and processes they have undertaken to ensure security of mobile phone devices.
     
    A senior official at the ministry said the government has taken this step to ensure that mobile phone users have assured data privacy in the wake of reports of data leakage and theft both domestically as well as abroad.
     
    The government has asked the companies to furnish the information by August 28 next.
     
    "There have been some reports that some mobile phones leak data. The government is taking all steps to see how that leakage of data can be prevented," the official said.
     
    "The first step in that direction is that we have asked the mobile companies to inform us what are the security procedures and processes that have been taken by them to ensure the security of the data of the users and their privacy... We want to make sure that any device that is sold in the country should be safe."
     
    The official mentioned that the scope of security measures verification will include the device, its operating system, the pre-loaded applications that it comes with, and also the browser of the device. 
     
    The IT ministry said there will be unlimited compensation depending on the extent of damage caused.
     
    According to the IT Act, Section 43(A), a ‘body corporate' is accountable to protect the privacy of data of the users and it is their responsibility to make sure that they take reasonable security measures and these provisions have to be complied with.
     
    The testing and verification of devices will be done in the country itself, the official said adding that the government is upgrading testing facilities in the existing labs and additional capabilities are being created for further testing.
     
    At present, there are around 20 crore units of mobile phones in circulation in the country. 
     
    Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
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