Homebuyers seek forensic audit of delayed projects

FPCE’s demand for a forensic audit stems from the apex court’s Amrapali Group ruling that directed the government to take appropriate steps on a time-bound basis.


MUMBAI: Homebuyers’ body Forum for People’s Collective Efforts (FPCE), based on the Supreme Court’s recent ruling in the matter of Amrapali Group, has approached the Prime Minister’s office to order forensic audits of all the housing projects that have been delayed for more than three years across the country. 

FPCE’s demand for a forensic audit stems from the apex court’s Amrapali Group ruling that directed the government to take appropriate steps on a time-bound basis to do the needful to resolve the home buyers’ issues related to delayed delivery. While the court’s direction was more in generic nature, FPCE has used that for offering specific suggestions to government for a quick resolution to home buyers’ woes. 

FPCE in its letter to the Prime Minister’s office said that in view of the fact that in every case where forensic audit has been ordered including in the Amrapali case, large scale wrong doing and fund diversion has been found. Hence, it is also necessary that for forensic audit should be ordered for all such projects which are delayed by more than 3 years. Accordingly, as per the forensic audit report, action should be initiated against auditors and also other persons who have failed in their duty or were part of collusion with the builders.

It has suggested making a separate cell within the Ministry of Housing to deal with, coordinate and pursue matters relating to delayed projects pan India with all concerned stakeholders including state governments, builders, authorities, banks and home buyers. It has also suggested that a process needs to be started to identify all projects delayed 1 year and their respective promoters with the help and involvement of state governments within a time period of 1 month. 

Following this, a task force under the guidance of ministry consisting representative of home buyers, the ministry itself, state governments, financial institutions, independent persons of repute, industry experts other than builders may be constituted to identify projects nearing completion that can be taken up first for completion. 

The task force should also, in consultation with state governments and other agencies, identify all such officers who colluded with promoters and failed to discharge their duties knowingly with intention to help and encourage promoters in continuation of their wrong doings. 

The task force should identify such banks and their officials who colluded with promoters and helped them in wrong disbursal of funds and helped them in siphoning their funds for purpose other than projects or abroad, FPCE said in its letter. 

Abhay Upadhyay, President, FPCE, said that for the long-term benefit of the sector and to instill confidence among homebuyers, FPCE is hoping that the government will sincerely consider the suggestions.

The home-buyers’ body has suggested identifying a public-sector enterprise that may be asked to complete the job in supervision of the said task force. The task force should prepare timelines for completion of all such delayed projects and assign due priority according to completion status of each project. Depending upon the magnitude, multiple task forces may be constituted representing each zone. 

The letter which has also been sent to chief ministers of all the states said that It should be ensured that no builder is a part of such task force since the entire exercise will be primarily against their misdeeds and hence they may use their influence to derail the whole process. 

To financially support such projects’ completion, the home-buyers’ body has suggested that the task force can estimate the seed capital needed for completion of all such delayed projects for which a separate ‘ stress fund’ may be created and its utilization should be strictly monitored by the said task force. 

The homebuyers body, in its letter to PMO, has also raised the issue of RERA orders not getting enforced. It has suggested formulating appropriate guidelines by states in consultation with the ministry, state regulators, state revenue officers and other concerned officer. 

FPCE has also pointed out that the Central Advisory Council has not held its meeting for the last over one year. It has also voiced its concern over dilution of rules by the state culminating in taking the sting out of RERA. 

The home-buyers’ body has pointed out that as per RERA provisions, Interim Regulators cannot continue beyond one year and their continuation is legally not tenable. States like Assam, Goa, Himachal Pradesh, Kerala, Manipur, Mizoram, Telangana, Tripura and Puducherry and union territories are still continuing with their Interim Regulators. 

Source: The Economic Times