From a preferred retirement abode in the 1980s to a vibrant city populated by students and IT professionals, Pune is often a favoured residential destination. The 2018 ease of living index, compiled by the Ministry of Housing and Urban Affairs, ranked it as the most livable city in India.
Yet, all is not well. Over the last few years, a “builder mafia” has sprouted in Pune. According to realty market experts and the police, builders cheat thousands of people in the city every year. Out of 11,000 complaints filed with Pune's district consumer Court, 4,453 are against builders, according to officials at the Pune Consumer Forum. On average, about of complaints in the consumer court are related to housing.
The police are often reluctant to file cases against big builders, and the media, which depends on these companies for advertisements, holds back as well.
One of the largest housing frauds in recent times involved DS Kulkarni. The DSK Group, one of Pune’s most prestigious builders, is accused of cheating 33,000 investors and depositors of over Rs 2,000 crore. Kulkarni is currently in jail, but depositors still haven’t received their money.
Buying a house in Pune is no longer easy. For some, it’s a nightmare.
In 2016, a complaint against 30 Pune builders was submitted to Chief Minister Devendra Fadnavis and other ministers, alleging that around 15,000 flat owners across 41 housing projects had been cheated. The complaint was submitted by a consumer rights forum called Akhil Bharatiya Grahak Panchayat, which said it was approaching the chief minister directly because the police were not taking action against the builders, despite registering FIRs against them.
Vijay Sagar, president of the ABGP, said the flat buyers had been “duped” by the builders. They weren’t given possession of the flats even after paying the required deposits. “The flat buyer made complaints, in their individual capacities, against the builders in 2012 or so,” Sagar said. “Police complaints were registered against many of them but no action was taken. These flat buyers helplessly made rounds of police stations.”
The 30 builders include big names and small such as KUL Kumar Builders, Trishul Builders, Jalan Maple Shelter Group, Parmar Indus Associates, Bhujbal Brothers Construction Company, Kolte Patil, Mittal Brothers, Vijay Laxmi Developers. Newslaundry has a copy of the list of the 41 projects mentioned in the complaint.
After receiving the complaint, Fadnavis directed Praveen Dixit, Pune's police chief, to take action against the builders. “But nothing happened,” Sagar said.
A senior Bharatiya Janata Party leader, Kirit Somaiyya, got involved. He wrote to the anti-corruption department, the police chief, and the joint director of the Enforcement Directorate. Again, no action was taken.
Sagar said the builders defraud their customers in multiple ways. They do not hand over possession of the flats, reduce the total area, overcharge for electric meters and such. “Sometimes they charge Rs 75,000 for installing an electric meter, which actually costs Rs 6,000-7,000,” he said.
According to Sagar, many builders are hand-in-glove with the “water mafia”. “While sanctioning the building plan, the city corporation asks the developer or builder to submit an affidavit if there’s water shortage in the area,” he explained. “The affidavit says it is the builder's responsibility to provide water and the prospective buyers should not ask the corporation to supply water. But the affidavits aren’t shown to buyers.”
Once the buyer takes possession of the flat, Sagar claimed, they are forced to pay for water tankers, which are often owned by local politicians. A big apartment complex needs 10-20 water tankers a day — more in summer — and the buyers are usually overcharged for the water.
Based on testimonies from experts and investors, here’s a summary of the various ways in which Pune’s builders cheat their customers. The list is not exhaustive.
1. Utilising the funds of one real estate project for another, thereby hampering the progress of the first project.
2. The space between the floor and ceiling of a flat is usually 10 feet. Some builders reduce it to 9.25 feet. This allows them to construct extra floors in the building to earn more money.
3. Sanctioning revised plans without the buyer’s knowledge. The master layout and floor plan of the flat is sometimes changed without intimation.
4. Purposely delaying the conveyance deed, which transfers the right of ownership to the buyer.
5. The brochure of the building will have an approach road, like a driveway to the building. However, the constructed building won’t have an approach road.
6. Issuing sales deeds and agreements that are disadvantageous to the buyer, then using them as leverage if there is a court case. For example, the agreement might include a force majeure clause specifying that “unforeseeable circumstances” could prevent the fulfillment of the contract. This is widely used to delay projects.
7. Selling the same flat to multiple buyers.
8. Taking exorbitant maintenance fees from the buyer — usually Rs 5 per square foot of built-up area — for years without doing any maintenance work.
9. Using low-quality materials for construction. This leads to recurring issues for buyers once they take possession, like water leakage, shoddy sanitary fittings, and poorly designed treatment plants for waste, sewage, and water.
10. Selling parking spaces in the building to buyers even though this was by the Supreme Court in 2010.
And this is just the tip of the iceberg.
Kishori Agrawal is one of the 15,000 flat owners on whose behalf the 2016 complaint was submitted to the chief minister.
In 2011-12, Agrawal booked a rowhouse in a project called Srushti Regency by WS Developers in Wadebolhai near Wagholi. It was supposed to have 18 buildings of 10 floors each, 36 rowhouses, and 40 shops. She paid Rs 16 lakh and was told she would get possession by 2015.
Nearly nine years later, Agrawal still hasn’t got her rowhouse, or her money back. In the meantime, at least 450 cases have been filed, including one by Agrawal, against WS Developers in various consumer courts.
“An FIR was filed and the builder was arrested, but released on bail. Since then, we haven’t been able to locate them,” Agrawal told Newslaundry. “A few days ago, I saw a public notice in a Marathi newspaper that said WS Developers is selling the land of the Srushti Regency project. I have not been able to get a single penny back from them.”
Aditya Kumar Gupta, 40, an IT professional, booked a flat by Teerth Realties in Pashan in 2008. The project was titled Arohi Building. He paid Rs 19.65 lakh and was supposed to get possession in 2010. He still hasn’t.
“Instead, the builder used the money invested in Arohi Building for another project called Teerth Towers,” Gupta said. “The builder used the force majeure clause for the delay, his reasons being swine flu and unavailability of cement.”
Gupta waited two years. In 2012, he approached the district consumer court. The court took nearly a year to decide on the case’s jurisdiction, and finally told him to approach the state forum.
“I approached the state forum in 2013. In 2015, they told me the case is ready for final hearing, which I have been waiting for since then,” said Gupta. “In 2017, I went to the police. They took almost a year to register an FIR.”
According to him, there are 60 other cases against Teerth Realties with respect to the same project.
Then there’s Sameer Patil, who bought a flat in a project by Siddharth Properties. The building society was registered in 2013. The Maharashtra Ownership Flats Act says a builder’s right ends once the society is registered. “But even after the registration, the builder revised the society plans twice,” Patil claimed. “The conveyance deed was purposely delayed. And even after we got the deed in 2016, the builder grabbed about 85 percent of the society land with the help of the District Deputy Registrar of Cooperative Societies.”
The society has filed complaints with the deputy registrar's office and the Lokayukta, the anti-corruption ombudsman. The society plans to approach the high court if the Lokayukta does not respond within a month. Two cases have also been filed in the Mumbai High Court against Siddharth Properties, asking for the cancellation of the plan approved by the builder after the society’s registration.
Most flat buyers in Pune work with private sector companies, Patil said. “They barely have the time to chase this crooked system,” he pointed out. “They prefer to stay away from the police…It’s a Pandora’s box of bad practices in the real estate industry. The laws exist on paper, but buyers are made to surrender. Those who fight, they keep fighting in the courts for a long time.”
In Dhanori, about 60 flat owners in Palladium Grand haven't been able to use their building's amenities for the last 10 years.
"For his vested interests, the builder didn't let us form a cooperative housing society that would have provided more rights to the flat buyers," said Arun Nair, one of the residents. "According to the Maharashtra Ownership Flats Act, a housing society has to be formed within four months of the sale of 60 percent of flats in the building."
Nair bought his flat in 2009. The society still hasn't been formed, he said. "We tried to form it in 2014 but the builder filed a case in the cooperative department, saying he can't form it since it's a 'landowner society' so he can't include the flat owners," he explained. "Later, we approached the authorities...but instead of forming a housing society, the builder form a body of apartment condominiums -- even though 80 percent of the flat buyers opposed this."
A group of the buyers filed a case in the Madras High Court, which is ongoing.
Nair said the builder took possession of Palladium Grand's amenities, like its amphitheatre and clubhouse, on the pretext of "renovating" them, and then locked them down. "We have made repeated complaints to the Vishrantwadi police station and the commissioner of police, but nothing happened."
Ashok Morale, additional police commissioner, crime, Pune, said about 30 cases are filed against city builders every year under the Maharashtra Ownership Flats Act. “In some cases, out of fear, the builder fulfills their promise, but most of the cases of cheating remain pending in court,” Morale said. “It’s become very important for a flat buyer to physically see the property they want to buy, and make sure the builder has followed all provisions under the Real Estate Regulation and Development Act.”
In 2015, Padmashree Ghanghale and her husband decided they had saved enough money to buy a house. Ghanghale had grown up in a Mumbai chawl, and owning her own house was her big dream.
She saw an advertisement in a newspaper for Kalpataru Serenity in Manjari, Pune, an upcoming real estate project by the Kalpataru Group. Possession was promised in four years and over that period of time, Ghangale paid about Rs 58 lakh to the builder.
The flat she booked had a carpet area of 781 square feet, including two bedroom balconies, a kitchen balcony and a small terrace. This square footage was detailed in a cost sheet she was emailed. She saw a sample flat in February 2015.
In February 2016, the sale agreement for the flat was signed in front of the registrar. “At that time, they downsized the carpet area to 678 square feet,” Ghangale said. “By then, I had paid Rs 20 lakh. I pointed it out but I was told I didn't have to worry about it. I would get the flat with a carpet area of 781 square feet.”
But when Ghangale was finally given possession of the flat, the area was 575 square feet, nearly 36 percent less. The three balconies in the plan weren’t there.
The process to get possession was also painful. The builder had told her the flat would be ready in September 2018. The flat wasn’t completed by then, and she was told she could take possession in January 2019.
“In January, when I contacted them to see the flat, they told me I have to pay Rs 8 lakh to see it, for infrastructure, electricity and parking charges. I made the payment immediately,” she said. “When I visited the flat in February 2019 with my husband, we were shocked.”
According to her, the work was “very shoddy”. “The plans and layouts did not comply with what was mentioned in the sale agreement. Tiles were cracked, floors were unlevelled, the doors were of poor quality, window frames were scratched. The list was endless.”
She was also concerned with the flat’s area, and noticed that the balconies were missing. “We were told by the sales representative that all the issues will be sorted.”
Ghangale made half a dozen visits to the flat, but nothing changed. Finally, she visited the Kalpataru Group’s head office, enumerated the issues, and asked for a reimbursement due to the delays and shoddy work. She also asked for blueprints, but was refused. When she tried to complain to the police, they didn’t get involved.
On March 13, 2019, Ghangale took an architect to inspect the flat. The Kalpataru staff refused to hand over the keys. Again, she called the police but no action was taken. The next day, the builder sent her an email saying her issues would be resolved in 20 days. Still, nothing changed. Ghangale finally saw the flat on April 4 and measured it, only to discover the carpet area had been reduced by 206 square feet.
A visit to the Pune Metropolitan Region Development Authority allowed her to see the building’s sanctioned plan, which showed the balconies had been removed and the carpet area reduced. Newslaundry has a copy of this sanctioned plan.
She also found out that the PMRDA had approved Kalpataru Serenity’s plan only in December 2015. But a copy of the plan they had shown the buyers was dated February 2015. Ghangale had paid them Rs 10 lakh in May 2015, before the plan had even been approved by the authorities.
Ghangale approached the police stations in Hadapsar and Shivaji Nagar but no FIR was filed. “I also went to the office of the Pune police commissioner but they didn’t take cognisance of my complaint,” she said. “Kalpataru cheated us, forged government documents, we were threatened, we weren’t allowed to enter the house which we bought with our hard-earned money, but the police didn’t register a single FIR.”
Then, in a bizarre twist, Slovenian authorities stepped in.
Ghangale now lives in Slovenia with her husband, Miha Hribar, a Slovenian national.
Hribar approached the office of the Slovenian prime minister, asking for help. He was told the Slovenian foreign ministry and its embassy in India would help within the scope of their power and authority. Newslaundry has a copy of the letter from the Slovenian prime minister’s cabinet.
This, coupled with a social media campaign by Ghangale, led to the Kalpataru Group finally returning their money in August 2019. But not before sending them a defamation notice over their social media posts alleging fraud.
“India hasn’t lost her glory in my eyes because of this incident," Hribar told Newslaundry. "However, the rampant corruption, the disrespect for the law, and the complete apathy of the Indian government towards economic crimes will make me think twice before investing again.”
Newslaundry reached out to Jaibal Naduvath, vice president of public relations at Kalpataru, to ask about Ghangale’s experience. He said our queries would be answered by the “appropriate channel” and put us in touch with an agency. The agency has not responded to Newslaundry’s questionnaire.
Several senior citizens told Newslaundry they were cheated by builders just because they wanted to make Pune their home.
Athashri Condominium, a project by Paranjape Builders, was built in 2004 as an exclusive housing community for senior citizens. With 300 flats, it offered exclusive services for older people, like medical services, meals, domestic help, doorstep banking, and shuttle services. “Life starts at 55” was one of its slogans.
Unsurprisingly, buyers found that several of these amenities were missing, including a common dining room, a doctor’s room, guestrooms, a common theatre, two libraries, and 11 common toilets.
One of the buyers is Suhas Panse, 72, a former employee of the Indian Oil corporation who moved from Baroda to Pune in 2004 to make Athashri his home. Panse is partially handicapped, and he was “lured” by the specific facilities the project offered for older people.
“I realised many facilities and amenities were not there,” Panse said. “I studied the papers for almost two years and discovered contradicting claims by the builder.”
The community, for example, promised 20 guestrooms but the builder rented out some of the guestrooms, like it was a hotel, Panse claimed. “There are no doctor rooms or doctors on call, and that’s one of the most important aspects that brought me here. The common area was sold off as a parking area. Amenities like common dining room, library and common theatre weren’t there, though all senior citizens paid for it.”
Panse also claimed Paranjape Builders collected between Rs 75,000 and Rs 3 lakh from each of the 325 residents as “maintenance” — a total of Rs 3.8 crore — but used the amount for its own purposes.
In May 2018, Panse and a few other residents went to Chaturshringi police station to file an FIR against Paranjape Builders.
“The police was reluctant to file and made us wait six hours,” Panse said. “But we didn’t give in, and they finally registered the FIR. But they’ve not taken any action against the builder. The Pune police is not concerned about our complaint; they think ‘how long will these senior citizens pursue this case’. But I am not going to give up.”
To add to their woes, Panse said, the municipal corporation served the society a notice eight months ago, saying several structures — amphitheatres, two dining halls, a kitchen — in the building were “unauthorised”.
Not surprisingly, older residents of Athashri are dejected. “The people who registered the FIR are in the age group of 75 years and above,” said one resident, on the condition of anonymity. “Whenever we go to the police station, they make us sit for hours, or ask us to go meet some other officer. Two years is a long time. Why can’t they take a single action against the builder in two years?”
Another resident, who is 80, said the district government pleader told them there was “strong proof” against the builder and asked the police to take action. “But still, they are not doing anything. They are purposely making delays as they hope we’ll die in a year or two.”
Manohar Bodas, 81, a former pilot with Indian Airlines and a resident of Athashri, met with an assistant commissioner of police who is investigating the case. “When I asked him for updates, he told me he will take action as per his convenience. He said there’s no timeline to take action in the case.”
The police officer Bodas met is Laxman Borate, the ACP of Khadki division. When Newslaundry asked him about action taken in the case, Borate said, “Nobody can ask what action is taken. We are doing our investigation and we cannot say how long it will take to finish it.”
K Venkatesham, the commissioner of police, echoed this line. “I will look into the matter,” he said, “and will take appropriate action.”
Newslaundry sent a questionnaire to Paranjape Builders. Shashank Paranjape responded: "We, as a developer, have provided each and every amenity at Athashri right from the beginning. In fact, all the seniors are availing and enjoying all these amenities. A couple of disgruntled customers keep spreading false information."
In 2009, Vijay Kharmale booked a flat in an upcoming project by KDS Builders in Charholi. He was told he would get possession within two years.
“The builder couldn’t keep his promise, he cited some financial problem,” Kharmala told Newslaundry. “But later we discovered he had built just two sample flats, and sold the land to a third party.”
Kharmale and 131 other flat buyers had each paid about Rs 1 lakh as booking amount. KDS refused to refund their money. In 2012, the buyers approached the National Consumer Disputes Redressal Commission, which passed an order in 2017 that KDS had to refund Rs 1.34 crore — with 18 percent annual interest — to the 132 buyers. The commission also directed the builder to pay each buyer Rs 4 lakh as damages.
KDS then approached the Supreme Court, challenging the order, but the appeal was dismissed. When the buyers still weren’t given their money, Kharmale said, the NCDRC issued a non-bailable warrant against the owners of the company, Maruti Kadale, Abhijit Kadale, and Bhupendra Singh Dhillon.
Nearly three years later, the police haven’t arrested them. And the buyers haven’t got their money.
On January 16 this year, the NCDRC pulled up the Pune police for its inaction, saying there was “less than full cooperation on the part of the police in carrying out the issuance of a non-bailable warrant”. The police have been given one more opportunity, Kharmale explained. If they fail to serve the warrant through the deputy commissioner of police, a report needs to be furnished in court.
However, fraudulent builders aren’t limited to Pune. They operate with impunity across the country.
“These builders have identified critical loopholes in the system which they’re taking advantage of,” said Krishnaraj Rao, an RTI activist who is well known for campaigning against fraudulent builders.
When someone is buying a flat, Rao said, their focus is on decisions such as location and size, less so on financial decisions. “Builders lure people into a trap to encourage them to make these decisions. They will talk about special offers, discounts, and their representatives play psychological games with the customers,” Rao said. “Once the person makes the payment, he becomes a puppet in their hands. The builder changes specifications of the flat swiftly, without the buyer even realising.”
Builders often conceal details of the flat specifications in documents, Rao explained. There have been instances where the flat shown in a project’s brochure is very different from the one they are finally purchasing.
“They will make you sign an application form with hidden clauses that say you forfeit your money if you cancel the deal,” he continued. “Instead of detailing the flat’s features, they will distract you with details like its proximity to schools, hotels, hospitals, and malls. Basically, what you are told is not what you are sold.”
Builders often have two different plans for the same building: one for government authorities like the PMRDA and the other for customers.
“While buying a flat, it’s important for a customer to make a decision based on the agreement format of the flat on the Real Estate Regulatory Authority website,” said Rao. “They should not go by what’s shown in a brochure, or said by a sales representative.”
Vijay Kumbhar, a Pune-based activist who has spotlighted corruption by real estate developers in the city, agreed. “There are over one lakh cases of fraud and cheating committed by builders in Pune,” he told Newslaundry. “The law that regulates real estate is not very strong. It’s a slow and long procedure. Besides, people don’t pay attention while buying flats or plots. The new generation mostly works in the IT sector; they have been abroad and don’t get into the nitty-gritties while investing in property here.”
Another issue, Kumbhar said, is a lot of buyers don’t come forward after they have been cheated because they are wary of confronting builders. “But things will improve once the Land Title Act, which will bring more transparency in real estate deals, comes into effect,” he said.
Newslaundry sent a questionnaire to several Pune-based builders, including Kalpataru Group and Suresh Tingre. The report will be updated if any response is received.