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Mumbai, 30 June 2016: Hundreds of savvy and well-educated flat buyers have purchased "luxurious" flats in RNA Exotica without noticing what their sale-purchase agreements clearly says: that RNA Exotica is actually a large and shabby slum rehabilitation scheme with a tiny island of rich flat-buyers. The rich people's housing project is married and tied to the rehab component in the same undivided compound -- a marriage made in hell! Not just RNA Exotica's sale-purchase agreement, but also project layouts and plans presented to MOEF, give a birds-eye-view of this nightmarish neighbourhood. With clever advertizing, a tight-lipped sales staff, and several clauses in the sale-purchase agreements that forbid investors from asking the right questions, RNA Corp has been consistently misleading its investors for many years. A prospective home-buyer never gets to read the true facts before he is inside the builder's trap!

So let us take a close look at all the ugly truths that the sale-purchase agreement reveals. As a specimen, take the sale-purchase agreement of actor Arif Zakaria (Flat no. 1903, D-Wing).

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  1. RNA Exotica is a Apartment and Slum Rehab Project in a single compound, so you can't object to general public and outsiders in your compound. The agreement makes sure that flat-buyers will have no right in future to object to the rehab building and car park constructed adjoining RNA Exotica, in the same compound. This clause tells flat-buyers in no uncertain terms that the public parking being constructed on the rehab building is not available for their cars. Read this on page 13 and this on page 21 of the registered agreement. So, the proud flat purchasers should know from this clause that their building compound is only semi-private, unlike most of the apartment compounds that are completely private.

  2. RNA Corp can construct anything on top of your flats, so keep quiet and mind your business. The agreement gives the builder the unlimited right to build anything on top of the "top floor" flat, and the flat-purchaser must keep mum about it. In other words, the builder can continue to commercially exploit any increase in FSI or any changes in rules, even if it causes great delay, inconvenience and losses to the flat-buyers, and the only thing that they can do is smile and feel privileged about owning a luxury flat in RNA Exotica.

  3. RNA Corp can construct servants' toilets, septic tanks, electric sub-stations, closed garages, etc. etc. anywhere in the compound or in the building, so shut your nose, mouth and ears.The ground plans or floor plans shown in the agreement can and will be extensively changed to suit the builder's requirements, and this is plainly stated in the agreement itself. All kind of noisy, smelly or intrusive structures can and will be constructed in various parts of the building and compound where you live, including the same floor where you live, but you cannot object on any grounds because you have signed on an agreement that ties your hands. Your rights as a flat-buyer are restricted to the premises that you have purchased, and not, as is the case in other building projects, the common amenities.

  4. RNA Corp can and will create third-party rights and entitlements to various parts of your building and compound, including clubhouse and various parts that you may mistakenly consider as your common amenities. Read this point carefully again, and you will see that this clause is not just a routinely-drafted formality, but is cleverly drafted to take away all your legal rights.

  5. RNA Corp can decrease the common areas and facilities in your building, and you waived your right to raise any objections.People book luxury apartments not just because of spacious flats, but because of spacious and well-designed common amenities and facilities. These amenities and common spaces are factored into the price of the flat as "super-built-up area". But, after paying lakhs of rupees up front to book a flat in RNA Exotica, buyers are informed by their registered agreement on page 37 that the common areas cannot be taken for granted, and they have no right to object!

  6. You unknowingly gave a power-of-attorney to RNA Corp to sign legal waivers on your behalf before all government authorities, without even informing you. According to this clause, the developer need not consult you or even inform before making big or small changes in the plans, because he can always sign an indemnity or undertaking on your behalf to tell the government that you are OK with anything that he does!

  7. You have surrendered your right to independently verify title and ownership of the plot of land on which RNA Exotica is built... because agreement says you have already verified it and satisfied yourself! Mr flat-buyer, when you signed on every page of the agreement in the Stamp Duty Registrar's office, you definitely were not looking for tricky clauses like this one. But here is a clause on page 17 and another on page 25 that says that you have already verified the title and satisfied yourself, and now you have agreed not to investigate any further, or raise any objections.

  8. Possession date is deliberately left blank. Therefore, you have no way of holding RNA Corp accountable for delay of several years, although there is technically a clause for delays. Read this clause on page 37 and its continuation on page 39.

  9. RNA Corp can allot you car parking according to their own sweep pleasure, and you cannot object. The builder may allot you a really shitty parking in the basement, podium or stilt, and the builder may sell favourably-positioned parkings to others. You have no right to object. Read this clause on page 41.

So, Mr and Mrs Flat Purchaser, it is only in theory that you bought a luxury apartment in RNA Exotica. Your luxury apartment exists only in pretty advertisements. The fact is, you just bought a 2BHK or 3BHK in a shitty slum rehab neighbourhood overlooking the railway tracks, and you signed up on a document that says that you have no right to keep the people of your neighbourhood and sundry public from accessing your compound... and you have no right to object to this entire scheme of things. The only thing you can say now is, "It was nice being screwed by you, Mr Anil Aggarwal."

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Sincere thanks to Sulaiman "Superman" Bhimani (9323642081) for his continuous detective work, which enabled and motivated me to write this article.


Krishnaraj Rao




Media Release: RNA Corp teaches Exotic Arithmetic to Axis Bank! "One-two-ka-four, four-two-ka-one, my name is Lakhan"

22nd June, 2016: When builder Anil Aggarwal's Skyline Construction Co approached Axis Bank for a project loan for RNA Exotica in 2011, the bankers forgot simple arithmetic. On two separate instances -- in 2011 and in 2013 -- Axis Bank's SME loans division gave loans of Rs 75 crore and Rs 100 crore against hugely inflated mortgages of floor space in RNA Exotica. The flat size was inflated by 500 to 700 square feet per flat, and the number of unsold flats mortgaged was inflated by a couple of hundred flats in 2013. Anil Aggarwal, like Anil Kapoor (you know, the chap who sang, "One-two-ka-four, four-two-ka-one, my name is Lakhan") sang a seductive song to Axis Bank executives, who were more than willing to be seduced.

The late Anil Aggarwal's version of one-two-ka-four sounds like this: "770 square feet flat ka 1299 and 979 sq. ft. ka 1650... My name is RNA Corp! Jadoogar Anil Agarwal said 168 sold flats in 2011, but 66 sold flats in 2013. Numbers mein kya rakha hai? Now gimme your money, sweetheart."  The sweethearts at Axis Bank gave the builder a Rs 75 cr line of credit in March 2011, and beefed it up to Rs 100 crore in March 2013, even as the value of the collateral fell sharply!

RNA Exotica's Flat Sizes are on Steroids:

  • Skyline Construction Co's registered mortgage deeds in 2011 (and 2013) based on inflated and unverifiable figures, viz. 1299, 1650 and 1699 sq. ft. The correct sizes i.e. carpet areas, viz 770 and 979 sq. ft. are readily available through the flats' sale agreements.
  • The sale deed of flat no. D-1903 booked by actor Arif Zakaria shows 979 sq. ft. whereas the mortgage deed shows 1650 sq. ft. So, RNA Corp has represented to Axis Bank that this flat is 671 sq. ft. larger than its actual carpet area! And Axis Bank has unquestioningly accepted this figure as a basis for its mortgage!

This raises the question whether Axis Bank has double-standards – one for people like you and me, and another for people like Anil Aggarwal. Would Axis Bank have sanctioned a loan against our flats if you and I cited Super Built Up area instead of the carpet area?

Axis Bank loan was Supersized while RNA Exotica was Downsized:

  • RNA's Skyline Construction Co.'s March 2011 loan was of Rs 75 crore. In March 2013, Skyline prepaid the RNA Exotica project loan and got the mortgage released, and immediately took a fresh loan of Rs 100 crore. Unsold flats of RNA Exotica were mortgaged to Axis Bank. The 2011 mortgage deed shows the number of sold flats as 168 (2,41,350 sq. ft.), with a table of flat-buyers' names and flat numbers. The 2013 mortgage deed claims that the number of sold flats supposedly dropped down to 66 (i.e. 94,951 sq. ft.). How? Did Skyline sales staff spend two years buying back over 100 flats from investors, instead of selling additional flats? There is no table of sold and unsold flats in the March 2013 mortgage deed.
  • Why this reduction in the number of sold flats? Because RNA Corp, which had gone to town in 2010 claiming that RNA Exotica would be a 48-storey tower, (i.e. 10 floors podium parking, one floor E-deck, plus 37 upper floors) was not getting MMRDA's permission for building that many floors.
  • The March 2011 mortgage deed is based on calcuations of 30 upper floors (i.e. 459 flats, 16 flats per floor). In March 2013, there is reduction of 35 flats. That means roughly two floors less, bringing the total to about 28 upper floors. But is that final? NO!
  • According to a source at MMRDA, RNA Corp in June 2016 has permission to build only 21 upper floors. Frantic efforts are being made by the builder to get this raised to 25 upper floors. Even if such efforts succeed, further reduction of 48 flats will happen – i.e. a total reduction of about 80 flats. The top floor will be 36th floor (i.e. 10+1+25).
  • The falling expectations show in the sale agreements. Whereas Kushan Pritish Nandy's sale agreement registered in October 2014 said 30 upper floors, Arif Zakaria's sale agreement in August 2015 mentioned 25 upper floors!

One two ka four 1

Why Financial Jugglery was done:

In 2013, Anil Aggarwal's big problem was: How to get a higher loan amount sanctioned from Axis Bank against a much smaller mortgage? The solution was: by reducing the number of sold flats, the "stock" of mortgagable unsold flats would appear higher. (So, what is the real number of sold flats? My guesstimate is: if 168 flats were already sold in March 2011, then 100 more flats in the next 24 months @ four flats per month. So, 268 sold flats were falsely declared as 66 flats. If each flat is valued at Rs 1.5 cr on average, the property mortgaged to Axis Bank was worth Rs 300 cr less than claimed!)

If the building is of only 36 floors including podium, what will happen to flats such as these where sale agreements have been registered for flats on the 40th floor etc? Will the investors be compensated by RNA Corp for not delivering of the promised flats after paying money and waiting for several years?

All this financial jugglery for downplaying the risk of RNA Exotica becoming a Stressed Asset! RNA Corp has defaulted on smaller loans from Bank of India and State Bank of India. This auction notice says that RNA Corporate Park defaulted on SBI for Rs 61.50 crore, for which mortgaged land parcels in Palghar district will be auctioned. And this letter from Bank Of India to the secretary of RNA Royal Park, Kandivali, tells a similar story of default and bank recovery proceedings.

SBI is struggling to recover an amount of Rs 61.5 cr by auctioning land plots that turned out to be under CRZ, and therefore valued at a fraction of the original projected values. Will the one-two-ka-four loan transaction of RNA Exotica and Axis Bank have a similar ending? Wait and watch.

This story is based on inputs from RTI activist Sulaiman Bhimani 

(9323642081, sulaimanbhimani11@gmail.com).


Krishnaraj Rao



 Links of articles related to RNA Corp. Misdeeds



It is all over the media. Unsuspecting, well educated residents of an upscale locality are losing their homes over something that is "not their fault". The builder didn't tell them that their flats were illegal, etc. Media loves this shit. More! Plight of people like us sells!!! More importantly, plight of people like us is registered as plight, instead of "municipal administration problem".

The residents have run campaigns, done protests, parked their vehicles to obstruct the BMC, and at last news, rioted. Political parties have bridged their differences and come to the need of their voters, led by Milind Deora, who is convincing people that illegal construction is really not such a big deal, and like all other illegal constructions, this one must be allowed too.

Over 90% of the articles fail to mention the name of the builder who built the illegal floors, "Yusuf Patel", so let's get that mentioned upfront, because this part of the issue is not disputed at all.

And now the Supreme Court has extended the demolition date to 31st May 2014.

And we also give media sound bytes on request that we want a corruption-free society, and how it is up to each one of us to fight corruption. Wondering if Campa Cola residents joined any protest march themselves.

No one is debating that the building is illegal. It was build on industrial land by Yusuf Patel, who also happened to have major clout and underground connections (also supplied silver ingots for smuggling that were adulterated with lead to underworld don Haji Mastan). Then the FSI was for five floors, but he went ahead and kept building up (and not for the first time). One building Midtown is 20 floors, the other, Orchid is 17 floors. No one is disputing that this is illegal.

The residents have ignored a Supreme Court order to vacate 102 flats within a 41 day period provided and barricaded themselves in the compound.

protesters from campa cola building facing demolition
Campa Cola compound residents protest - Image: Indian Express

This is a method. Builder builds an illegal building. Political connections keep it from being demolished. Builder sells flats cheap. People buy illegal housing because it is cheap and because it is practically tradition to get the government to regularize it for "humanitarian considerations". This does not change the fact that it is illegal. The idea that you buy cheap flats in a posh locality and get them converted into extremely high priced real estate on regularization is neither new nor something you can count on the government catering to. Illegal is illegal. Asking for leniency because you counted on government inaction is absurd. Political parties supporting such a demand is even more absurd.

The real question comes in the role of our upright citizens who are pleading innocence now. The claim is that they did not know the building is illegal and are now being evicted. They have been fighting for their "rights" since 2005.

Here's the deal. No one has a right to live in an illegal construction. So the "fight" was essentially to get an illegal construction regularized by getting the state to make an exception for them from the law. Milind Deora goes ahead and helpfully points out how this is routinely done, since the concept of politicians upholding the law is usually seen as inferior to the concept of politicians doing whatever people ask them to and earn goodwill (read votes) at the cost of laws.

Except for some reason it is not working, and the case went to the Supreme Court and the Supreme Court too ordered the demolition.

But how true is this melodrama?

The Supreme Court verdict on the case states that the residents knew that the building was illegal.

"Although the members of the housing societies knew that the construction had been raised in violation of the sanctioned plan and permission for occupation of the buildings had not been issued by the competent authority, a large number of them occupied the illegally constructed buildings."

Architect Jayant Tipnis testified in court that he had warned the residents several times. He has also confirmed this in media (our real courts) and said that the BMC could have halted the construction too.

"The construction of the building and the six units started without a commencement certificate. I was brought in to ensure that plans were approved and the FSI allowed. The BMC did issue stop-work notices. But it stopped at that, so the constructions continued and the developers even covered the stilt area and sold it to a reputed advertising agency who then wanted me to get it regularised, Of course it could not be done," recalled Tipnis.

As engineers, on an average, had a three-year tenure at the building proposals department, they preferred to look the other way rather than take up demolition of illegal constructions in the city, said Tipnis.

The 70-year-old architect was already working with Patel handling his other building sites at Nagpada when he was called to take up the Campa Cola project. "Patel had turned a new leaf. He was no longer in the smuggling business, but his reputation remained. Had the BMC not been afraid of his reputation and carried out some demolition, the illegal floors would not have been constructed,"

Chandrashekhar Prabhu, urban expert (whatever that means) told CNN-IBN

“This was an industrial plot. Industrial plots were not being permitted to be used for residential purpose. The developer was an underworld don and he managed his way through the government and the politicians. Even in 1986-90, this was a sham and this building ought not to come there. The water came from tankers and there was no water connection…and the residents were aware of that."

But the basic thing is that the residents had the opportunity to present arguments about their innocence several times in court and they failed to convince. D Jeykar, representative of the residents admits she knew the flat was not legal, but says that buying under construction flats is legal, so they thought it was okay. This seems to imply that investing in any under construction project is potentially illegal, which is not true.

Apart from this, even if they knew the building was constructed illegally, their moving into the flat without Occupation Certificates was still illegal and done with full knowledge, no?

The residents allege that their society is being singled out for demolition out of the many illegal buildings because it is a conspiracy:

“Krishna developers which has bought over the rights from Pure Drinks, wants to construct a five-star hotel here. He wants us out. Another plush residential complex is coming up around 500 metres from here and that builder wants a stretch of our land to construct a good approach road,” said Mr. Sacheti.

Knowing India, this is probably true as well, though it is a bit unbelievable that any investor will want to raze residential accommodation for a road.

Equally concerning is the complete lack of action against the builders. The residents are fighting to get a property purchased illegally at cheaper rates (one third of the price, going by some reports) converted into legal prime real estate in Mumbai. There does not seem to be any attempt by the residents to charge the builder for fraud and demand their investment back - which would be logical. One has to wonder why they must insist on an illegal structure being made legal instead of getting their rightful money back and investing in a legal structure? Obvious thought comes to mind is that it may be tough if they knowingly purchased an illegal structure. It is also a little difficult to imagine educated people purchasing a property at a third of the price and not finding out why it is on sale so cheap. Not like people who buy flats look at only one flat and buy it, so difference in rates, even if not advertised, would be evident.

Why are the government authorities not taking action against the builder?

Deafening silence. Not even aware of reporters asking these questions to anyone. It seems the underworld "of the past" is alive and well.

Nor is anyone asking for official answers on:

“We do not agree that the floors are illegal. We have been paying property tax for years now. At best, there is irregularity. Why did the government accept tax from us if our structures were illegal?” asked 42-year-old resident Vijay Mirani.

It is the natural process of occupying illegal accommodation. Get a lot of papers "proving" it is legal. The question is how is proof of residence done? How does the first piece, that gets used for "proving" other things made? We come right back to corruption in the system that can allow you to do these things. Or perhaps simple greed that waives verifications when it comes to getting money. "If someone is paying, they must be legal, right?"

Everyone seems to agree that it is important to punish the builder and not the buyer, but no one seems to have touched the builder at all. Residents have not tried to get him to refund their fraudulently obtained investment, politicians aren't saying anything on what they will do to the builder, even as they are wiping the tears of the residents.

In my view, regularizing the building will be a very bad precedent for dealing with the illegal construction in the city. It will make the BMC's job more difficult. I also abhor this practice of overturning Supreme Court decisions on the streets.

It is a tough situation and one of many we will face with a past of rampant lawlessness and attempting to move to a law abiding future. Many things seeded in the past will result in people doing illegal things fully expecting that they are "all right". The question is if we hold firm, or if we make exceptions when people engineer them. If we make exceptions, there remains no ethical basis for not making exceptions for those who cannot command massive attention. Which brings us back to the lawless 1980s.

The only hope seems to be to stay firm, but also prevent a sense of "being targeted by the law".

In my view, nothing can fix the loss of losing prime real estate you had hoped to get (but had no real right to) and it is a loss that comes with gambles like this. But what needs to be done is to take a more robust view of this situation and ensure that the residents are not the only wrongdoers paying the price simply because they are living where the law strikes.

There is a need to take legal actions against the builders (who have constructed many such buildings). There is a need to pull up the BMC on why it did not stop the construction itself instead of merely issuing a few notices and shutting up. It is important to note that engineers in musical chair transfers may not want to risk going up against powerful people and prefer to simply kick the can down the street for someone else to handle when they are transferred. This can be prevented with proper procedures and time directives so that BMC is legally required to act on illegal construction within a certain period of it coming to their attention.

The BMC should also be forced to compensate the residents for their role in perpetuating the myth that the illegal building was okay to live in. This likely cannot exceed the "legal" land rates in the area, which will be another insight on the black market around property dealings, which is for another day.

The BMC also needs to immediately start moving on the other illegal constructions and ensure that this is established as a clear process rather than a one off targeting of a society because they asked for more water or some builder the BMC is in cohoots with wanted to build a project and they were in the way.

Now that the Supreme Court has stayed the demolition, it may perhaps be an opportunity for the government to mitigate the sense of targeting around the demolition and take concrete actions that make the loss bearable to the citizens in the sense of being a part of history of a new era of legal accommodation in Mumbai.

Note: Several people have pointed out that the builder Yusuf Patel is dead and his sons are avoiding. i don't see how this is relevant to the story, since the building business didn't die with him. The liability of the builders should still be there. At least the Supreme Court thinks so, since its elaboration of its stay on the demolition includes a directive to prosecute the builders.