Torturous road to justice against corrupt

This is really fast ” said Mr Pandit ( name changed ) one of the resident owners. He was commenting on my impatience with the speed of prosecution. I have currently taken up a big battle to unmask massive corruption in my residential society. Distt Deputy Registrar ( DDR) and Deputy Registrar of society Pune City for societies are exchanging letters to bring the corrupt to the book. He further elaborated – ”   The first step here should be to totally insulate them; take away their right to spend our hard earned money.  “.   I had been following up with Registrar of societies ( RoS )  for last 3 months and now the formal investigation on grounds of financial crime is about to begin. The office bearers in  our  society office had illegally done spending of  our maintenance fund without General body approval. Read the original story here

Why should  this  concern all of us ?

We all probably live in or will be living in residential societies where corruption /misappropriation/ can occur. A typical residential society of 400 apartments can have a fund of 1 crore+. The so called volunteers to selflessly serve the society can have their morals taking long vacation when they smell so much money. This may lead to huge leakage of your cash and dilapidated state of your residential society.  Either you can accept that corruption  citing various reasons ( from lack of time, awareness, intent or chalta hai etc) or will have an urge to fight this disease. Its when you decide to fight, will need to know how to proceed. The path to justice is long and torturous. The officers who tried to prosecute Laloo Yadav spent 17 yrs to send the scoundrel to jail.  You may need to be mentally prepared to fight for months, if not years.  I am already in my 4th month 🙂

How often is this kind of fight done ?

Very rarely.  99.9% of such cases of corruption either go unnoticed or people forget about it. Often they are too lazy to even confront the corrupt. The govt procedures of addressing these crimes is too slow and tests your patience and tenacity to extremes.

Why people do not raise voices ?

Its excruciating to fight against corrupt both at lower and higher levels.    For example, if some scoundrel makes a backdoor entry into society office position, its very tedious to throw the him out. They have society funds to hire legal advisors, crook accountants and 5 to 6 partners in crime. You may have to initially hack it all relentlessly

Why is it difficult to throw scoundrels out ?

Most of the people in societies either are not aware about implications of corruption or take it as a part of their ordinary lives. They seldom rise against the corrupt. most believe, its somebody else’s job to fight corruption. Those who rise against corruption have to fight a machinery ( Administration, Sympathisers of corrupt, security employed and inertia of people ).  The cases of illegal committees ( Folks who get into office without getting elected ) of society offices are not dislodged by Registrars any more. One has to go to Co Operative court to challenge that. Going to court means hiring a co operative lawyer and paying his fee. This is enough to give an ordinary citizen jitters. While the crusader has to pay legal charges from her own pocket, the scoundrels have war chest of maintenance fund at their disposal which they utilize to engage legal advisor, bribe civic officials, forge documents with help of corrupt chartered accountants and circulate false justification using society resources.

Alternate method of throwing  illicit and corrupt committee out is by calling an Extra ordinary general meeting ( EOGM)expressing no confidence against the dishonest and corrupt.

Why  EOGM method  is a difficult thing ?

Calling an EOGM for no confidence requires written signature of 33 % of members  (  As a norm only  less than 25% of resident owners attend society meetings ). This means if you have 100 members in society and you want to throw the corrupt out , while you need 33 signatures, you can only reach out only 25 people. Often out of the 25 active members 10 to 12 may already  be huddled in crime. Further, to boot the corrupt out, you need 2/3rd people voting them out.  This means in a society of 100 apartments, you need 67 people voting out . Or if its permissible 2/3rd of attending members. This means if 25 attend the meeting you need 17 people to vote the corrupt out. If the committee comprises 10 members,  mathematically , it may never happen. Its a scenario like no matter how much you hate Congress and its crimes you cant throw it out for 5 yrs because they manage the floor using Mayas, Mulayams, Karunanidhis and Sharad Pawars.

What is the way out ?

Society is like a cell of democracy and none of the provisions work unless there is large participation from all the owners. With 25% or less voting and participation, crooks invariably win . We, thus have the state of society like that of the nation where the ugliest crooks float to the top. Its important that there is large voting turn out ( >75% ) to select people . Also it must be ensured that only the members who are elected through voting become the office bearers. There needs to be an internal lokpal in all societies with power to suspend Chairmen/President/ Secretary/ Treasurer if there are sufficient grounds for dishonesty , corruption or procedural impropriety.

This is what I have done in my society till date in my fight against corruption :

Its been 3.5 months now since I first started it all.  This is how the pieces on chessboard look like

  1. The accused  still disgrace the office . Few  or many steps away from check mate ( I do not know)
  2. The District Deputy Registrar has requested an  eight point response ( In hard core Marathi even difficult for Marathi professor to understand ) for detailed inquiry to  proceed. This  moved some of my pieces into central square
  3.  The evidences which justify detailed inquiry are ready with me.
  4. The thick skinned refuse to vacate the office. In professional chess, no player waits for the check mate. They resign when they have some irrecoverable disadvantage like a major piece loss or a vulnerability.  However in real life, the shameless till they are driven out with force cling on. Fools die hard, crooks die harder
  5. A lot of paper crimes, dishonesty has been perpetrated example : showing an audit report on a date it didn’t exist.  Falsifying the minutes of meeting of AGM, misusing office staff for personal service, etc. When people who are cheats get caught and are incriminated, they try to be even bigger cheats.
  6. As per Maharashtra Co op act, 15 clear days before AGM, the committee needs to circulate audited books of accounts to the members. The crooks in my society sent unaudited balance sheet and asked for approval for audited report which no one had seen. In layman’s term its like taking an approval of financial crimes without even you knowing that crime has happened
  7.  The counter move from those seeking justice has been to submit a written  request from over 30 residents to Dy Registrar that AGM held was illegal.
  8. Momentum often works against the weak.  Approx 70% of people voting in AGM have given in writing that they  want the corrupt to be dismissed.
  9. The partners in crime have gone into a huddle trying to delay the incrimination. Some stooges croak in between on trivial issues to  divert attention from the main issue of corruption
  10. The society and its residents suffer as the apartments get the least resale and rental values in its area.
  11.  The wheel of justice though slow,  is moving in a right direction to ensure that guilty gets exemplary punishment.

If however you persist with right process there is always hope for justice : Watch Shawshank Redemption  to understand it 🙂

Ray of hope

Keep soldiering

Asaram and enjoying general body pleasures without consent or approval

The girl is suffering from a chronic mental state which draws her close to the men ” farted out the great Ram Jethmalani trying to defend his client Asaram. Read the defense

Asaram, the revered Guru fell from grace and is in jail now for raping a girl. It has come out that he raped not only one complainant but myriad of others too.

Lets look at this perspective from Asaram’s angle and analyze this incident with respect to other crimes people in certain honorable positions do . ( Previous posts on fraud accounting by splitting expenses)

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  1.  Enjoying faith and respect out of sainthood :  Asaram  enjoys a faith and following because of his beard, long hair, sanskrit mantra he chants.  Masses can hear those mantras but can barely understand them . There are some  souls around us who grow long hair, repeat how great and holi company they work in. They chant Baaai laaaa..j which you have never read or will never have time to read.  Beware of these wolves around. In India, we are conditioned to respect those who look like sadhus but respect should be given on behaviour. Read this
  2.  Stooges and chants on Acts of good faith : Asaram has greed, lust and arrogance because of his large following. There are and were his stooges who treat/ treated him like god’s incarnation. They feel its their Dharma to defend all his Kaam + Karma. The group around Asaram believed, the charges against him were false, baseless, of malafide intent. The charges were driven by a hidden agenda of the girl because the girl wanted to do something illegal and unauthorized or become famous. At one point Asaram claimed he cant rape because he cant have erections ( The potency test got the snake out of the hole ).  Some real wise men told the girl that going open with charges against Asaram will have ” HUGE REPERCUSSIONS “, the girl will be destroyed. You will have similar people in your society who are equivalent. These when talked about the misconduct of criminals will say , “We trust him “,  “Reporting this will have repercussions” and finally without getting the facts declare that – “X has done an act of good faith, he is a jolly good fellow “. One person said, its irregularity but not criminality.

This Act of good faith is what amuses me most and I want to discuss this deeper in this article.  Advocate Jethmalani is trying to build a theory that the girl was in a great need to get Bapu’s proximity.  Bapu was always benevolent , he figured out this particular girl and many others who needed his bodily blessings. He wanted to do Uddhar for the girl. Bapu also believed that he didnt need the consent of general body of the girl( Or even her general mind) to go ahead with the act.  Bapu was convinced that once he is done with his act, he will be able to justify the little cost and benefits of rape to the girl for approval . She will keep quiet. In fact many girls have kept a total quiet.  The gratuitous act done by Bapu in his opinion and opinion of his stooges has cured the hapless girls of all the biggest problem they were having in their lives.

We now know where the great Bapu has landed up with his great assumptions, convictions and where the stooges defending will end up.

Now I show you the excerpt of justification given in  writing to the Deputy Registrar of societies , Pune , by the Chairman of my society. This was in response to the complaint I submitted for spending 2.75 lakhs on CCTV where we gave an approval of 75K only.

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Now, put the General body of my society in place of that girl. The girl probably gave consent to let the Bapu put his fingers on her head. What Bapu with his fingers did, is now a matter of criminal investigation. What  consent girl gave and what Bapu  does have a difference of 4x and above.  There is little to guess whether it was benign to girl or gratuitous to his great HOLI libido.  The well wishers of Bapu are screaming hell on the girl who was raped.  The dharmadhikaris are  shouting, this will damage the fabric of sainthood. Somebody just said that its hidden agenda of Congress to malign the great Swamis. There are some monkeys who are jumping up and down not on the lecherous act of Bapu but on unsubstantiated  nymphomania of the girl . There are stooges who are attacking the police officers who are fighting to prosecute the rapist Bapu.

I have expereinced this kind of babagiri in very close proximity.  Just like Bapu’s sympathizers some sympathizers are asking me why I am raising these issues of corruption in my society now?

There is a time for everything.  Its important for people to understand facts, take sides  and understand the wolverines

Splitting the expenses and fraud accounting

2 weeks ago, I wrote a post on how people with questionable values lead  to collapse of propriety in a housing society. How it affects the citizen mindset in the whole country.

I had 2 options to deal with this ugly situation :

1. Crib at the errant and ugly behavior of office holders. // Easy and practiced by many.

2. Do some concrete action to restore propriety and my own faith in the system. // Its was as difficult or as instinctive to me as confronting a drunk molester in a running bus. The  story of confronting molester is here

The majority in my society exercised option 1.

The option 2, I exercised put me up fighting against a group of people ensconced and fortified on a hill ( Just like Kargil intruders ). They have a war chest of society resources (  Maintenance money worth lakhs, legal advisors, security, accountants etc)  to harass me.

As always, its unnerving for most individual crusaders to fight the alligators in pond.  A rational man is advised by friends to give up under provocations.

Look at one suggestion from a well wisher on facebook :

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I accepted the suggestion to be an Aam aadmi , An aam aadami , today is frustrated with the corruption and willing to take to streets.  Many of the aam aadamis may fail, bleed during the trsyst  but their is light at the end of tunnel.  There are some glorious instances where a single guy brought down an entire army of crooks by following the right path of truth example  J . B Patel of Panchwati society,  Andheri Bombay :http://articles.economictimes.indiatimes.com/2012-10-15/news/34473028_1_society-office-bearers-jayant-patel

Even without knowing his inspiring story, I  had gone ahead on the confrontational path.  The following is what I did.

  1.  Filed a complaint with Dy Registrar of society, Pune. Explained how there is a possibility of serious SCAM and immediate inquiry should begin . The inquiry should begin with sacking of office holders.
  2.  Sent a copy to Joint Registrar of Society. He manages Dy Registrar.
  3. Sent an email to CM office of Maharashtra . He forwarded the case to Secretary of state ( Co operatives)
  4. Demanded from office holders full life cycle documents of questionable transactions and a detailed list of bank transactions.
  5. Engaged a top ranking CA to investigate all documents.

Why I did this ?

Sometimes, its easy for accused to bribe/influence/threaten a small officer. Its however, beyond their capacity to buy 3 levels of high officials in the system. I tightened accountability at three levels to prevent this. Further, demanding and getting full lifecycle documents upto the current date leaves very little to accused to manipulate the documents at later stage.

Fraud

What were the results ?

The Ad Hoc committee went vengeful. It complained not against me but against my little startup.

  • Electricity Deptt : Inspectors came, searched my startup, searched my entire home and said, I just need to readjust the tarriff to commercial rate.
  • Corporation license Deptt : Inspector came and told me to get a license to operate business in municipal area. He asked me the intent of why society secretary did a written complaint. I showed him the cases they are embroiled and how even the CM office has acknowledged the complaint. He understood and said, we wont harass you at all.  Apply for a license, it just costs Rs 1000/= he said and we will fully co-operate with you. I smiled and said, I will do it.
  • Police Deptt : Local chowki summoned me to police station. I went with my wife to the police station. I was asked about illegality of my startup in residential area. I showed them Maharashtra IT act of 2010 which allows IT companies to work from residential areas. They didnt ask me any further. Read the blog on how IT companies can legally operate from residential complexes : http://www.wicfy.com/blog/working-from-apartment-is-legal-for-it-companies-startups/
  • Society Security    The Secretary  told the security to harass the employees of startup by. Not letting them park their bikes in authorized parking area.Sometimes they even prevented their bikes from entering the society. They made them to sign register everytime they came in an out of society. 

Thus, the accused were exhausted of their arsenal. The amount of harassment was coming to an end. My business just emerged stronger from all these harassment. The employees rallied around me in these tough situation because I kept everything transparent.  The values I hold, the fight I take and the possible consequences.

Now comes the funniest part.  When, the accused had little to defend themselves, they resorted to dirtiest tricks which crooks in  Govt or Corporate world resort to i.e Splitting of expenses.

Please see the image of response given to me by the Society secretary.

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Also, the accused, thinking the residents to be Dumb and weird, appointed their sympathizers to do an investigation and award them a clean chit. Recall how Gadkari had got himself a clean chit by  a person he appointed to investigate his own crimes ?

This also reminded me of my days in central govt.  Procurement in such large organization happens either centrally or locally. There is huge amount of money made by some people at central level but its more interesting at local level

At local levels for any transaction above Rs 5000/= needs a CLPC approval ( Central logistics purchase committee ). This CLPC comprises 3 independent officers and give approvals for any purchase above limit. Also they examine all the quotations.

Now if everything  goes through CLPC How do people at local levels misappropriate public money ?

Ans: Splitting of expenses. Any thing which is to be bought for 9900/= is split in two purchases of 4950/= each and can be bought with or without quotations.  At one stage I saw that there were 350 transactions, all between 4900 and 4999/=. This is how  people with corrupt intent try to loot public money.

I realized that people do not bring in good things of their experience in large systems to the society but ugly , dirty and corrupt practices are rapidly brought in . Even  in such small theater as housing society, this disease of splitting of expenses is brought in. Though the annual budget is as low as 40 lakhs.

Whats the way to rein in such ugly practice?

I consulted the Registrar and he suggested requesting a govt audit of all books of accounts and processes under section 89 of Mah CHS act. This independent inquiry by a govt auditor may reveal a lot more irregularity and doesnt cost much.  For a society its Rs 37/member/year of audit requested.  So for my society of 200 members, it would cost me Rs 7400/= approx.

We had seen creative accounting done by Ramalingam Raju ( Satyam Fame ) and how the reputed CA Pricewater house Coopers was party to crime of splitting salary expenses of ghost employees .  Well that was a 1000 crore + scam and this is worth a few lakhs.  The efforts to expose and prove the crime is more challenging till the accused are thrown out of office.

What will you do if you see such financial misconduct in your society ?

Are you aware that corruption is not just in govt, its a cancer which eats housing societies as well ?

How can you establish a clean system in your society ?

Please do share your experiences of taking the accused head on.

Iron/ Steel fabrication work in India

 

 

 

                             The Fabrication Advance

I recently encountered the faudulent practice of metal fabricator in Pune .My relative was overseeing all contract work for my home and tried to fix up iron work with a fabricator called Mr Bhadke who had come to our place with a reference from society electrician. He when asked to quote for a work told us  a lump sum. This was Rs 16000/= for a grill outside a kitchen balcony and safety door outside the other balcony. Once we  agreed on scope of work and gave him the design. He  asked for material purchase advance. Normally the cost of material is the bulk cost of article to be made for home viz. security door, window grills etc. We gave him an advance  to buy  Rs 8000/= worth.

 

 

 

 

 

 

 

The Cheating

 He began the work and completed the grill work for kitchen. When we asked him for thesecurity door he sheepishly said that it was being fabricated at his workshop. When we questioned him more about the gate he started avoiding us. After 3 reminders he stopped taking our calls. When we confronted and tracked him down, he said the entire money was consumed in the kitchen grill and he would do no more work.  This was outrageous and brough us to question what was the value of work done by him ? We tried to weigh the grill he had made and found it weighed not more than 70kgs. Going by the most expensive fabrication rate of Rs 60/kg of finished Iron work it was not worth more than Ts 70*6o = Rs 4200/=  . he shamelessly duped us of Rs 3800/= . This brought me to the fore of this problem of how to deal with the Iron fabricators.

The Thumb  Economics of Fabrication

About 2 yrs back when i was looking after a Product Dev company in Noida we had found that the running rate of all Iron woerks including ,raw material, cutting, welding, grinding, primer and spray painted finished goods was Rs45/kg. The cost of iron then was Rs 35/kg. roughly 30% was the cost of job work on the total cost of material.  Now the cost of Iron is approx 45-50/ Kg ( Mild steel) and this is how I negotiated with a new fabricator who offered to make safety door for me.

Wrestling the Iron Fabricator

  1. When he came to me I asked how he would do it. He said for the fully finished door he will charge Rs 6500/= . THis was Rs 1500/= more than what my friend had paid for a similar door 2 months back.
  2. My question to him was how much will be the weight of the door. He was hesitant to tell. But on persisting, he said 70 kg.
  3. Going by his quote he was trying to sell Iron finished work @ Rs 92.85/kg.
  4. I asked him what was thwe runnning rate of Iron raw material . He said Rs 47/=// This he tried to cover up buy quoting highest rate.. The actual rate is Rs 42/kg.
  5. The figures showed that he was trying to get 100 % billing on the cost of material .This was heavily unjustified.
  6. I told him , I had got work worth Rs 2,00,000 on wood and ply at 30% of RM cost. THis wood work was of very high quality and involved greater skill than metal. He said he would do the wood work @ 22%. Now I was seeing that he was coming to real wages term.
  7. Since he agreed on labor charges if material was bought by us I cajoled him to quote the metal fabrication labor charges as % of raw material.
  8. He quickly changed stance and said , it will be 35 % of total RM cost.
  9. A quick argument and rational basis had brought this fabricator to agree to cut down labor charges from 100% to meager 35 %.
  10. I tried to bring him down to a standar 30 % but he held on to relatively handsome margin of 35 %.

The Wisdom in dealing with Fabrication works

This incident brings me to following findings :

  • Never ever buy a finished Iron good without checking its weight.
  • The processing cost varies between 20% for just ok work to 35 % for very complicated work having highest degree of finish.
  • The cost of iron work is between Rs 55 to Rs 65/kg if the mild steel rates are between Rs 42 -47/kg 
  • Never ever release more money to a fabricator than the value he is delivering to you.
  • As far as possible inspect the factory / workshop before you finally place the order.
  • Before placing the order work out an agreement on benchmarking the  thickness of metal used, quality of paint, quality of weld seams and grinding quality. Keep samples to compare the finished product.
  • Be very articulate in releasing money to fabricators. Keep at least 20 % in hold for final performance check.
  • While the fabricator will try to eliminate all his risk by taking huge advances , for the work . He takes possession of all raw material etc. Its the buyer who foots maximum risk of fabricator not delivering at all to doing partial delivery.
  • The art of negotiation and general rule is : See who stands to gain/profit in the deal. She should be the one who takes the risk. As a customer you will only conceed profit , so you should bear minimum risk if at all. 

10 Wisdom Pearls on Buying housing space

The visit to Mumbai was an enormously enriching one . The major gains wisdom earned is as follows :

1. Appreciation:Housing is one sector which will always appreciate in cities of opportunities. THe coast of housing inMumbai have almost doubled up in Mumbai and Pune in last one year. Its has gone up 4 times in areas adjoining IT parks in Pune.

2.Time to buy: The best time to buy a house to live in is now. Later the decision, greater is the price you pay. Historically and even in current times, real estate always moves in upward spirals
3. Demand and Supply:Land is shrinking. People looking for house are fast multiplying. The demand for good quality housing will outpace supply in prime cities atleast for next 10 years

4. Stocks VS Real estate:Thumb rule for investment gains. Keep churning the stocks and stay invested in real estate. Stocks are vulnerable to factors beyond your control. They catch cold when any body influential sneezes or barks.

5. Over heated estates : Land and real estate is still undervalued . With economy on a roll, these will continue to grow . There will be no slowdown, stagnation in Mumbai, Pune, Bangalore, Delhi, Hyderabad.

6. Why buy when jobs are mobile :One must establish relation with land to be professionally stable. Anchor yourself in a city and then persist with your growth plans.Find yourself a city where opportunities related to your skills are aplenty. Move in there, anchor and then climb the ladders there only.

7. Rent Indicators : Global thumb rule is : 20 to 25 years of accumulated current rent values shows the intrinsic value of a property. Example for a 2 room house fetching a rent of 10k, the intrinsic property values is 24 to 30 lakhs. Bit in India ofr booming economies , rentals are not the truest indicator of value of a property. To preclude risks people go for higher deposits and lesser rentals. Some times people give their property on rent to see that its sustained. I currently am staying on Rent of 12K in a house valued at 65 lacs . In the same city , a property valued @ 42lacs in established locale is also fetching 12K

8. Residential address :There is a self esteem involved with where you stay. Do not go too far from basic necessities to get cheaper house. Pay a premium to live in established areas with school , shops, temple, pubilc conveyance etc. The appreciation in a premium locale will be higher in the long run.This will also provide easier resaleability.Also look for a more respectable address. Avoid Basti, Chawl improperly defined addresses.

9. Buying land or commercial property : Whenever possible, buy land, commercial property . IT will fetch better rentals and appreciation as corporates will buy them in long term and will give you better prices.

10. Business ventures or housing :On an average, 3rd Business ventures for individuals click . Dont postpone buying a flat or house to invest in your first venture. You will learn a lot in the first two venture and sink money. Debutante star businesses are less to find

11. Accumulate money to buy house ?Idle , uninvested money is vulnerable to vagaries of spendings, loan seekers and mood impulses. Constraining yourself with house is a good idea. Upgrades in lifestyle equipments, gadgets give you transient pleasure. The royalty of a good living space is one which you enjoy and relish on a daily basis.