3rd Land Enhancement – Ready to burn a hole in your pocket

Sandeep
  1. HUDA had raised a demand of Rs 6,83,83,120/-on account of 3rd Land Enhancement for Sandeep Vihar vide letter No Z0004/E0012/UE020/DELET/0000000093 dated 14/01/2016 addressed to MD, AWHO. It was stipulated that the amount be paid within 30 days, failing which interest at 15% per annum would be levied till the date of payment.
  2. The Society unofficially learnt from HUDA staff about the demand and requested AWHO, vide letter dated 22 Jan 2016 , to clear the payment by the due date and recover the amount from allottees, as had been done in the case of earlier land enhancements.
  3. The request was reiterated vide letter No 1005/GHS 79/ELS/2015-16 dated 3 Feb 2016 , wherein AWHO was again requested to make the payment on schedule. It was pointed out that the Society was not in apposition to do so for the following reasons:-

(a)       Only about 150 residents reside in the complex.

(b)       Addresses of remaining officers are not known to the Society.

(c)       Society cannot take a bank loan, since the Title of the land rests with AWHO.

(d)       HUDA deals with AWHO as the owner and not with RWA.

  1. AWHO, vide letter No B/03003/59/AWHO (PKL-20) dated 10 Feb 2016 , expressed inability to make the payment on the grounds that all members had not paid back the dues on account of second land enhancement and also due to insufficiency of funds with AWHO to do the needful.
  2. During the period, numerous telephonic requests were also made to concerned officers at HQ AWHO to have the payment made by due date, in order to avoid addition of interest. However, the payment was not made by AWHO.
  3. AWHO was again requested, vide letter No 1004/RWA/ghs-79 dated 15 Feb 2016 , to make the payment by arranging a bank loan, as had been done earlier and in case this was not possible, then to transfer the Title of the Land to the Society to enable it do the needful.
  4. In response, AWHO forwarded a list giving breakdown of dues from each owner vide letter No B/03015/7/Misc/F&A/AWHO dated 10 March 2016 . There has been no further response since then.
  5. At this time, the issue was discussed amongst those living within the Society and aware of the future ramifications of any delay in payment of the amount. One view point was that the demand was not fully tenable and should not be paid and instead we should join the Joint Action Committee of 20 Sector Societies to fight the demand. Another view point was that the payment should be payment under protest by due date. This view was based on the premise that in the absence of payment, interest payable would continue to accrue at 15 % pa and in the case of any future refund from HUDA, interest would be receivable at 15% pa. Most Societies of Sector 20, including the second larges, PGI Society chose to make the payment
  6. In their wisdom, the Collegium on the advice of  the management of the day decided the additional payment not be made. Extracts of GBM dated 6 March 2016 are placed below.

Minutes of GBM dated 6 March 2016

“18.     3rd Land Enhancement Cost demanded by HUDA.    The President informed to the House that the instant increase in LEC is an off-shoot of the refund amt plus intt thereon which was wrongly refunded to the Societies by HUDA in 2012.   The general members however demanded that the General Secretary should explain the issue elaborately.  Threreupon Sh Subhash C Pathania, General Secretary after reading the relevant paras of Speaking Order of CCF HUDA explained that instant LEC has got no relevance with the refund of overcharged amt in Aug 2012 but HUDA has now changed its stand that GHS-108, 109, 110 & 111 comprising 3.95 acre area fall under Part II Sector-20 Pkl and their LC load has to be borne by GH Societies (including GHS-79) falling in Part I of Sec-20 Pkl. The General Secretary however lamented that good work done by certain members of joint action committee/our members have not be appreciated by our Management and thus the de-motivating attitude is not a healthy sign of resolving the issues. The General Secretary further informed the House that Lt Col GS Jeryal and GS himself have consulted the old members of  erstwhile Joint Action Committee of Sector-20 GHS who are of the view to postpone the payment of 2nd Addl (3rd) LEC to HUDA as they are in constant touch with concerned echelons of Adm etc to resolve this issue to the possible extent.  House thereupon unanimously resolved that our Society should also not pay the addl 2nd  (3rd) LEC for the present and rather should join other Societies in this endeavour. Alternatively the GS has written two letters (under the signatures of Vice-President) to AWHO New Delhi to make lump-sum payment to HUDA as was done by them in 2010-11 followed by another letter by President and verbal comn by him with the MD but all in vain as AWHO has now refused to do that for want of funds on our accounts with them.  Some of the members opined that our Society should file a suit in the Court of Law against AWHO that the latter should transfer the land/other assets on the name of our Society (GHS-79) so that our Society Management could take bank loan in such an eventuality and make lump-sum payment to HUDA subject to recovery from respective DU owners later on to avoid 15% interest liability on the members.”

 

  1. The same decision continued to be maintained during the subsequent 18 months.

 

GBM dated 23 Oct 2016

 

“12. Land Enhancement Cost Sh. Subhash C Pathania, General Secretary explained that a number of letters have been written to HUDA on the subject that the LEC demand is irrational/incorrect. A Team of Mgt also met HUDA officials but in view of the Court Case filed by certain pers of another GHS – coming up for hearing on 24th Oct 2016, no reliable response was forthcoming from HUDA. However, local Mayor has also been apprised of this issue who has written a suitable letter to concerned authorities highlighting the plight of residents of affected societies. Though Court hearing has been again adjourned, but Joint Action Committee shall be meeting with the concerned authy on 4th Nov 2016 again. GS averred that Mgt is seized of the mounting interest burden on a/c of delaying the issue, but we have to wait for some more time since it was decided during the last AGM that we should follow the decision of JAC who are of the firm opinion that the captioned Demand Notice of HUDA is grossly incorrect”

 

GBM dated 19 Feb 2017

 

“Additional 2nd Land Enhancement Cost as demanded by HUDA. Sh. Subhash C Pathania, General Secretary explained to the House that reminders have been sent to HUDA on the subject matter for taking final call.   He informed the House that GHS-103 & GHS-104 had filed a “contempt of Court case” against HUDA whereby its certain officials have been summoned to remain personally present in the Court during the next hearing on the said issue. Though the case is sub-judice, the Management is in constant touch with functionaries of local Joint Action Committee also to hammer out a viable out-of-Court settlement. Its next date of meeting with HUDA officials is fixed for 06th March 2017.   Gen Secy apprised the House that from the preliminary deliberations it has emerged that HUDA is at its back-foot and shall certainly review the Demand Notice.” 

 

  1. It is to be noted that, the amount due to be paid to HUDA, now stands at Rs 8,29,14,533, after application of interest at 15% pa. It is increasing at the rate of Rs1,02,57,468 annually or Rs 8,54,789 monthly. This translates to approximately Rs 1,500 per month for each owner.
  2. The Present Management, 0n assuming office on 18 August assessed this  as the most important issue facing us today. An early solution was  required to avoid continuing huge financial loss to the owners. Accordingly, as a first step, a letter was written to HQ Western Command seeking their intervention in resolving the imbroglio with AWHO (Click to open). The rationale in support of our request is as under:-

(a)       Why it is the Responsibility of AWHO to coordinate Payment.

(i)      AWHO is the Title holder of the land.

(ii)     HUDA deals directly with AWHO and not with our Society, because we are only an RWA. All its                        correspondence is addressed to AWHO and AWHO remains the owner in their             records.

(iii)    AWHO has allotted the Flats to all the owners and is entitled to revoke the     allotment for                                  noncompliance with its orders .

(iv)    AWHO has taken a commitment from all owners, at the time of allotment,     making them                                liable to pay future enhancements. (Para 68 of Master Brochure, click to open)

(v)     All financial dealings in respect of the Flats are between the AWHO and    owners. Only AWHO                         has records of the proportionate liability of each allottee

(vi)    AWHO controls the sale /resale of Flats and thus has complete control over allottees. (Para 80                          and 84 of Master Brochure ,click to open).

(vii)   Dealing with collections of money in Crores of Rupees is beyond the charter of duties of the                               Welfare Maintenance Society, as specified in the AWHO Master Brochure (para 77 of Master                                       Brochure, click to open)

(viii)  AWHO  has taken necessary action on the previous two Land Enhancements. The first, prior to                        the handing over and the second after the handing over.

(ix)    AWHO can take a bank  loan  to clear the dues and recover the same from the allottees.

(x)     In case some owners have not paid the previous land enhancement, then legal action to cancel                          their allotment should be initiated. This should not be used as an excuse to relieve itself of its                                      responsibility and cause continuing financial loss to the allottees who have made previous payments                          on time.

(b)       Why this cannot be undertaken by the Society.

(i)      The Society cannot take a bank loan in absence of Title of the Land.

(ii)     The Society has no records of the current address of 400 plus members staying outside the                                 Society.

(iii)    The Society does not have the details of financial liability of each individual.

.                     (iv)   Furthermore, the Welfare and Maintenance Society does not have the wherewithal and                                        capabilities to handle such large financial collections, being a body of volunteer veterans.

(v)     HUDA does not accept part payment from some owners. It requires complete payment, which t                         he Society incapable of making.

13.  Thereafter, a meeting was sought with the MD, AWHO to resolve the issue. During this meeting on 11 Sep at Delhi, between Offg MD, AWHO and Brig D K Mohan,SM (Retd), the responsibility of AWHO to organise the payment was highlighted. On behalf of AWHO, it was conveyed that the experience of the 2nd Land Enhancement ( in which 12 members had still not paid their dues ) and shortage of funds precluded their financial involvement. A proposal which emerged to meet the requirements of  both  parties was that AWHO collect the money directly from Members (as opposed to taking a bank loan) and settle the dues with HUDA. Those members who do not pay at this time, will continue to have the interest liability increase at 15% pa. AWHO has promised to examine the proposal and will revert back shortly.

14. At the same time a meeting has been sought with GOC-in-C Western Command, in his capacity as a member of the Board of Governors to use his good offices tor resolve the issue.

15. Your management assures you that a solution to this problem will be found.

16. Many members have asked as to why they were not kept informed about the implications of this decision, due to which their interest liability has increased by more than 25 % of the Principal amount . We have no answer for that. Others have asked as to what is the status of the activities of the Joint Action Committee. Again, we have nothing after that statement in the GBM

Where does the interest of Members lie

17.  Payment of the 3rd (and hopefully last) Land Enhancement has to be done by all members. The earlier it is done , the better. Delay is adding interest at 15%pa. A big hole has already been burnt into your pockets. We will try to ensure that the modalities for payment are worked out at the earliest. Do keep your money ready in a 60 to 90 day time frame.

18.  The approx amounts due for each type of Flat are being worked out and will be posted shortly.

Later Developments

  1. Erstwhile owners of acquired land can seek enhancement of compensation thrice. The First Enhancement was paid by AWHO prior to handing over the flats and was recovered from allottees along with the final payment. The Second Enhancement was paid by AWHO after taking a bank loan to avoid delay in payment and recovered the dues from allottees. However, 22 allottees did not pay their dues.
  2. HUDA had raised a demand of Rs 6,83,83,120/- on account of 3rdLand Enhancement for Sandeep Vihar vide letter dated 14/01/2016 addressed to MD, AWHO. It was stipulated that the amount be paid within 30 days, failing which interest at 15% per annum would be levied till the date of payment.
  3. The then Management requested AWHO to make payment of the due amount immediately and recover the same from allottees, as had been done for the Second Land Enhancement. AWHO declined to get involved in making the payment due to the liability still held by them after the Second Land Enhancement. They, however, provided the detailsof individual dues to enable the Society to collect and deposit the dues directly with HUDA.
  4. At this time the Joint Action Committee of Sector 20 decided to contest the demand. The issue was discussed during the GBM of the Collegium held on 6 March 2016, wherein a view was expressed that payment should be made immediately to avoid accumulation of interest and in case of any future reduction in enhancementamount, the same would be refunded with interest at 15% pa. However, the Collegium on the advice of the management of the day decided that the additional payment should not be made. The Minutes record that the “House there upon unanimously resolved that our Society should also not pay the additional 2nd  (3rd) LEC for the present and rather should join other Societies in this endeavour.” This stance was reiterated during the GBMs held on 23 Oct 2016 and 19 Feb 2017.
  5. The Present Management, on assuming office on 18 Aug assessed this  as the most important issue facing the Society. In order to avoid continuing huge financial loss to the owners an early solution was deemed necessary . Accordingly, as a first step, a letter was written to HQ Western Command seeking their intervention in resolving the imbroglio with AWHO. Simultaneouly, a meeting was sought with the MD, AWHO to resolve the issue. During this meeting on 11 Sep 17 at Delhi, between Offg MD, AWHO and Brig D K Mohan,SM (Retd), on behalf of the Society, the responsibility of AWHO to organise the payment was highlighted. On behalf of AWHO, it was conveyed that the experience of the 2nd Land Enhancement ( in which 22 members had still not paid their dues ) and shortage of funds precluded their financial involvement. A proposal which emerged to meet the requirements of  both  parties was that AWHO collect the money directly from Members (as opposed to taking a bank loan) and settle the dues with HUDA. Those members who did not pay at this time, would continue to have the interest liability increase at 15% pa. AWHO promised to examine the proposal.
  6. AWHO has now intimated that they will not get involved in collection of the Third Land Enhancement and this is to be organised by the Society. They have provided the details of dues of allottees as on 31 Dec 2107. The total amount now due has increased by Rs 2,01,49,602/- (approx. 29.5%) from the original Rs 6,83,83,120/- to Rs 8,85,32,722/-.
  7. Accordingly, the issue has been examined by the Managing Committee and it has been decided to collect payment from owners, in case AWHO continues to decline involvement,  and deposit the same with HUDA, in order to avoid further accumulation of dues. The guidelines for the same will be as under:-

(a)      The dues will be deposited with HUDA on 28 Dec 2017.

(b)      All owners will be required to deposit their dues in the designated bank account by 10 Dec 2017. A                  separate bank account will be opened for this purpose.

(c)      The amount stipulated for the flat will have to be paid in full. In case of            lesser           amount                    being deposited, the same will not be accepted.

(d)      Any charges incurred due to bank transactions/returned cheque          charges will be borne by the                  owner.

  1. Members who do not make payment at this time, will be responsible to settle their dues with HUDA, in due course, with the added interest liability. They will also be responsible to bear any expenses that may be incurred by the Society in responding to litigation arising from non-payment. Such members will also not be able to get their flats registered/transferred on sale/succession. They would also be liable to any other measures which the General Body may decide, since there is a collective interest involved.
  2. This note is meant to serve as an advance notice to all owners to be prepared to make payment. The detailed modalities will be intimated very shortly through email, website and post at the last postal address held in the Society Office and AWHO.
  3. A number of queries have been received from members about the reasons for delay in payment and consequent increase in interest liability. This Management is not in a position to offer any clarification. The same can be raised in the forthcoming AGM.