Builders evade law by working behind facades

Builders evade law by working behind facades
DHARMENDRASINH CHAVDA

AHMEDABAD, MARCH 13: Builders of complexes that collapsed in the January 26 earthquake have found a new defence. Whenever any one of them is arrested, they simply deny that they ever constructed the building. They argue they were only hired by the co-operative housing society to supervise construction. This was the same argument they put forward when they were faced with proceedings in the fire-safety norms case in the Gujarat High Court six months ago.

With these builders taking full advantage of the loopholes in the law and making the most of them, it is no wonder that the Gujarat Co-operative Society Act, 1961, has been severely abused.

``Most builders form a co-operative housing society, whose office-bearers are their own staff members,'' says lawyer Ghanshyam Amin, who is also chairman of Gujarat State Co-operatives Union. These societies then buy land from the builders. Next, the societies sign agreements with the builders and hand over powers-of-attorney -- empowering the builders to take members, collect funds for construction, get the building plan passed, float tenders for work, take loans and hire other professionals like architects and engineers.

This is exactly what happened in the case of the ill-fated Shikhar Apartments. The chairman of the Geratpur Bhagyalaxmi Co-operative Housing Society, which constructed the high-rise apartment, was working as a driver with builder Chiman Agrawal. It was Agrawal and his brother Nandulal who took irrevocable powers-of-attorney from original the land-owner Pannaben Pravinchandra Shah.

The power of attorney mentioned that the land was to be sold to Geratpur Bhagyalaxmi Co-operative Housing Society and all procedures for seeking exemption under Section 20 of Urban Land Ceiling Act to sell the land and to execute all sale deeds would be done by Chiman Agrawal and his brother.

``Even the meetings of the housing society are not held. He (builder) takes the signatures of the office-bearers at one go,'' says Amin. Even the plan submitted for approval, though actually prepared by the builder, is signed by the chairman of the society.

While the builders cleverly misuse the law, they too have chinks in their armour. For instance, the books of accounts. ``All organisers do not disclose the true books of accounts of the society, which they have to do under Section 77 of the Act,'' says advocate Bharat Patel. Even when some members revolt and elect a new chairman, the builder refuses to hand over the records. ``Under Section 75 of the Act, the registrar of the co-operatives can procure the records and hand them over to the new chairman,'' Patel says. However, the registrar of co-operatives does not take any action in most cases.

Another big giveaway is the list of addresses of the housing societies' office-bearers. Though under the by-laws of the housing societies, the chairman and secretary have to be living in the housing scheme constructed by the society, in most cases they do not. In Shikhar's case, the address of the chairman of the society, who was shown as Mukesh R. Acharya, was the same as the old office address of Agrawal.

Amin says if the registrar of co-operatives properly audits the books of accounts, he can detect bogus members. But the registrar of co-operatives does nothing more than issuing notices. However, registrar R.M. Joshi denied this and said they took action whenever such cases came to their notice.