Multi-Crore Rupees Fraud Happens at Bhagwati CGHS of Dwarka

Members of Bhagwati CGHS of Dwarka complain that they are victims of corruption and fraud being committed by the Society MC members in connivance with Delhi government officials.

By Rakesh Raman

The shocking case of financial fraud and other irregularities at Bhagwati CGHS of Dwarka is just an example of extreme corruption that is happening in Delhi’s cooperative group housing societies (CGHSs). The members of Bhagwati CGHS complain that they are victims of fraud being committed by the management committee (MC) members of the Society in connivance with the builder and some government officials.

In their litany of woes, the suffering members allege that the contractor M/s Best Buildwell Pvt. Ltd. – in connivance with the MC members – has virtually usurped the Society and they are being deprived of their right to own their house. They add that the office of the Registrar Cooperative Societies (RCS) of Delhi Government – which is supposed to regulate the affairs of housing societies – has not been able to resolve the issue while their complaints have been falling on deaf ears.

In the slew of irregularities that have been happening at Bhagwati CGHS, it is learnt that the original members are being illegally expelled, the rates of flats are being arbitrarily increased, misleading advertisements are being issued by the MC to take new members with deep pockets, and bigger 5-bedroom flats are being constructed for which the MC had no approval.

With an estimated Rs. 600 crore at stake, this is said to be the biggest fraud in Delhi’s group housing societies. Worse, the fraud is happening right under the nose of the Registrar at the RCS office who is supposed to stop it.

As the journalist of this report has been trying to help Bhagwati CGHS members get justice, he has approached various government departments and law-enforcement agencies.

On September 24, 2018, the office of the Commissioner of Police Amulya Patnaik informed him that the case has been referred to the Joint Commissioner of Police – Western Range for necessary action.

Article in Newspaper

I had first written this article for Dwarka City newspaper where it was published on September 29, 2018. You can click the following picture of the article to read its printed version.

The Bhagwati CGHS members reveal that the RCS office with an order dated 15.05.2015 which is signed by Addl. RCS Raj Kumar had ordered an inspection at Bhagwati CGHS, but it failed to start and complete the inspection, and corruption has gone unchecked at the Society.

The said RCS order had sought an inspection into the constitution, working, and financial condition of Bhagwati CGHS on a range of issues. The inspection aimed to know the manner in which the contractor / architect was appointed and if the work was awarded to the contractor / architect on reasonable rates.

However, as the RCS office usually does, it did not start and complete the probe, although over 3 years have elapsed since the inspection was ordered in 2015. Members allege that the RCS officials have been bribed by the MC to get the inspection delayed.

They also complain that instead of helping the Bhagwati CGHS members whose money has been looted by the contractor and MC members, the RCS office – which is working hand in glove with the accused MC members – has wrongfully expelled dozens of members from the Society.

Research Report on Corruption

[ Support New Research Project on Corruption in India ]

“Their offences include cheating, fraud, criminal misappropriation of funds, criminal breach of trust, and criminal conspiracy against the members of the Society in order to usurp their hard-earned money, thereby causing wrongful loss to the members and wrongful gain to themselves,” the suffering members complained.

This is a case of extreme corruption committed by the RCS officials who must be prosecuted under the Prevention of Corruption Act, 1988, which is an Act of the Parliament of India enacted to combat corruption in government agencies and public sector outfits.

According to the Vigilance Manual 2017 of India’s top anti-corruption organization Central Vigilance Commission (CVC), corruption is manifested in various forms such as bribery, nepotism, willful action or willful inaction to benefit someone or to deny benefit to someone known or unknown.

It also states that corruption includes cases of favoritism and failure to follow laid down processes leading to unintended benefit to someone or denial of benefit to the deserving.

While the corruption laws are clear, the RCS officials are soon expected to be hauled up for their delinquency in Bhagwati CGHS case and other cases of cooperative group housing societies.

The Bhagwati CGHS members have complained to the Registrar (RCS) that the “tainted builder Sanjeev Malhotra” claims that “the RCS has been tackled and the RCS has ensured that all orders against the Society will be reversed.” The assertion indicates that the RCS officials have been sufficiently bribed to get the orders reversed.

That is quite visible in the ongoing fraud at Bhagwati CGHS. As the accused have presumably bribed the top RCS officials, they are openly defying the law and committing crimes. In December 2017, for example, the RCS office had released a newspaper advertisement to inform the public that the MC of Bhagwati CGHS has committed grave violations of DCS Act and Rules, and therefore the new membership in the Society is not permitted.

However, the accused MC blatantly released counter advertisement to invite new membership in the Society and demanded money from new members. The RCS office failed to restrain the accused MC which is openly breaking the law. Strangely, the RCS office has not handed over the case to the police that must arrest the accused to stop the fraud and illegal activities.

The Bhagwati CGHS members say they have learnt that instead of openly stopping the builder and MC members, the RCS officers have shared an official document with the accused on which they have secretly permitted the MC to take new affluent members who can pay more money. If this is the case, it is a total fraud committed by the RCS in connivance with the Bhagwati CGHS MC members and the builder.

“The present MC in collusion with the contractor M/s Best Buildwell Pvt. Ltd. is continuing to enroll new members and has issued public invitation for the enrollment of new members knowing well that the Society is already facing problems due to illegal and fraudulent excessive enrollment of members,” the suffering members said.

They add that as a result of fraud, the Society is facing claim petitions from 117 members and the Bhagwati CGHS MC is asking the existing members to pay Rs. 5 lakh each for an out-of-court deal to settle the claims of those 117 members. In this deal, the original members are being asked to surrender their membership in order to accommodate new members who can pay more money.

The journalist of this report wrote an email with a list of questions to Bhagwati CGHS MC members on September 24, 2018 to take their comments on this case. However, the MC did not respond.

Now the Society is giving misleading advertisements to rope in new members with the aim to fleece them while the existing members are being expelled deceptively by influencing the RCS office.

The Bhagwati CGHS members reveal that Society’s advertisements in newspapers claim that the covered area of 5-bedroom flat is 2910 sq. ft., but actually the total area is 2330 sq. ft. and the net area is only 1425 sq. ft. as per the maps submitted for approval in Delhi Development Authority (DDA).

Similarly, the members complain that in the minutes of a General Body Meeting (GBM) the covered area of 4-bedroom flat is shown as 2204 sq. ft. while in the DDA-approved map the total area is only 1550 sq. ft. and net area is 1045 sq. ft.

“The Society is making fool of innocent people. DDA is not responding to our complaints and out RTI queries are not being replied properly by DDA,” the Bhagwati CGHS members cried.

Since Bhagwati CGHS scam is poised to rattle the Delhi Government, the government decided to discuss the issue in the Delhi Assembly. The Committee on Petitions of Delhi Legislative Assembly had called a meeting on August 30 to discuss the irregularities of RCS pertaining to Bhagwati CGHS. However, it is learnt that the meeting was postponed because the RCS office could not produce relevant papers.

On September 10, the journalist of this report had approached chief minister Arvind Kejriwal and MLA Saurabh Bhardwaj who is the chairman of the Committee on Petitions to know the outcome of the meeting.

On September 13, the office of the Cooperative Minister Rajendra Pal Gautam sent the journalist’s request to the Registrar (RCS) asking the Registrar to respond. However, the RCS did not respond.

While the Delhi administration has completely failed to stop the ongoing fraud at Bhagwati CGHS, the aggrieved members have decided to form a group to fight this battle collectively.

By Rakesh Raman, who is a national award-winning journalist and social activist. He is the founder of the humanitarian organization RMN Foundation which is working in diverse areas to help the disadvantaged and distressed people in the society.

He also runs an exclusive community-driven free online social service under the banner “Clean House” to help the suffering residents of Delhi raise their voice against the growing corruption in cooperative group housing societies where millions of people live.