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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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NINE WAYS THE BUILDER SCREWED YOU:

  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.

ISSUED IN PUBLIC INTEREST BY

Krishnaraj Rao

9821588114

krish.kkphoto@gmail.com

3

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).

ISSUED IN PUBLIC INTEREST BY

Krishnaraj Rao

9821588114

krish.kkphoto@gmail.com

 Links of articles related to RNA Corp. Misdeeds

 

Press Release: Slippages & Shrinkages in RNA Exotica, Oshiwara

19th June, 2016: Welcome to RNA Exotica, a premium building project by Skyline Construction Co, owned by Saranga Anil Aggarwal, where deadlines keep slipping and the number of flats to be constructed keeps shrinking year after year. The number of flats to be constructed has dropped by at least 80 since the March 2011, and the project completion date has slipped by six years. Further shrinkages may lie ahead, and slippages in possession date are definitely forecast. Also, visible manipulation of facts and figures in official documents should make investors sit up and wonder what is going on behind the scenes.
 
The gory details: 
  1. In Axis Bank's first mortgage deed registered in March 2011, RNA Exotica's project completion date was mentioned as September 2012. Given the amount of work that had to be completed within 18 months by Skyline Construction Co, the deadline was obviously a bare-faced lie. Axis Bank's first loan to RNA's Skyline Construction Co for the project was of Rs 75 crore. At that time, 459 flats were to be constructed i.e. 30 floors of 16 flats each, plus 11 floors of common amenities such as parking etc. Unsold flats and future receivables of RNA Exotica were offered as mortgage. The number of sold flats was mentioned as being 168 (2,41,350 sq. ft.), and purchasers' names and flat numbers were mentioned in tabular form.
  1. In March 2013, Skyline got the mortgage released and immediately took a fresh loan of Rs 100 crore from Axis Bank for the same project. In the second mortgage deed registered in March 2013, the project completion date mentioned is March 2016-- which turned out to be another lie, causing anxiety and financial distress to many of the investors. In the 2013 mortgage deed, the project parameters changed quite dramatically. The total number of flats to be built in RNA Exotica were reduced by 35 (i.e. height reduction of two or three floors), and the number of sold flats miraculously dropped down to 66 (94,951 sq. ft.) only. (How? Did RNA Corp buy back flats from its investors?) Particulars of sold and unsold flats were not mentioned in this mortgage deed.
  1. After a meeting with angry investors on 5th May 2016, RNA Corp issued a statement signed by some unnamed spokesperson, that flats' possession will be given in December 2017. Judging from the present progress of RNA Exotica's construction, this also is a lie. Also, further reduction of the building's height is a high probability. According to MMRDA sources, the sanctioned number of floors currently is 11+21 floors. Will it go up to 25 floors? Possibly, but not necessarily. This height reduction reflects in registered agreements. Producer Kushan Pritish Nandy's flat purchase agreement registered in 2014 said 30 upper floors.Actor Arif Zakaria's purchase agreement registered in August 2015 said 25 upper floors. Reduction of even five floors (30 minus 5) means approximately 80 flats less than earlier planned, and the top floor would be the 36th floor (11 plus 25). So what will happen to sale-purchase agreements registered for flats on 40th floor etc?
  2. SRi SRI is popular for Art of Living, RNA Corp. is popular and infamous for Art of Lying and Art of Selling Non Existing Floors in the air (Hawa Mahal)
    Many twists and turns lie ahead. Dekhte rahye iss dhaaravahik ki UGLY kadee!
(Deep gratitude and appreciation to Sulaiman Bhimani (9323642081) for tracking this case over the past six years, digging up documents and interviewing sources.)
ISSUED IN PUBLIC INTEREST BY

Krishnaraj Rao
9821588114