Manoj Gaur was unwilling to speak further on what the yawning gap between the number of people booking the properties and the actual number keen to register indicated.
The story of Jaiprakash Associates and its promoter Manoj Gaur is one of biting more than that can be chewed. Without any prior experience in real estate, he wanted to build almost 30,000 flats and villas in mid 2000. Now battling court cases at Supreme Court and the National Company Law Tribunal, Gaur is at pains to hard sell the fact that only 16 percent of buyers who were offered possession have paid the last installment and are now ready to register their property.
“Despite having handed over 6,800 units by March 2017 and the figure touching almost 13,500 by end of March 2018, only about 16 percent buyers have paid all their dues to register. It is due to this reason that Rs 250 crore has been held up,” he told Moneycontrol in an exclusive interview.
Gaur was referring to the last payment — usually 5 to 10 percent of the total cost of the house excluding stamp duty — that a buyer has to pay to the developer before proceeding for registration.
Gaur was unwilling to speak further on what the yawning gap between the number of people booking the properties and the actual number keen to register indicated. “The matter is in the court,” was his standard answer to many queries, the fear of crossing the line of the courts and the authorities weighing on his mind.
“Only genuine home-buyers are going in for registration,” was all he was willing to add on being prodded.
Industry experts say the main reason why majority of the buyers have not paid the last instalment is because of concerns about the company, which is now facing bankruptcy proceedings. Another reason is most likely buyers not being satisfied with the amenities delivered.
Even as he tried to insinuate and escape the blame, Gaur said it “must be the curse of those 3,000-4,000 genuine buyers” that had brought him all the troubles. He was owning up and he was not, all at once, the cynicism getting the better of him. Only 3,000 to 4,000 “genuine buyers” amongst nearly 30,000? Surely, with that fantastic claim, Gaur may need more than his fair share of luck at the courts.
It was the boom of the last decade where everything that Jaiprakash Associates’ Manoj Gaur touched turned into a power plant or a housing project or cement. The company’s subsidiary Jaypee Infratech owned hundreds of acres of land in Noida, a booming area adjoining Uttar Pradesh that hosted decent roads, good schools and a well-educated service class. All these ingredients provided the recipe for only more urbanization.
Gaur can justifiably claim to many ‘firsts and onlys’ in Indian corporate history. While his father started the business with a hotel in Delhi in late 1970s, he himself gained prominence in the last decade, his rise coinciding with that of former Chief Minister Mayawati and the boom in Noida.
He went on to build India’s largest hydel power plant in the private sector — a 1,000 MW run-of-the-river hydroelectric power station on the Sutlej in Himachal Pradesh’s Kinnaur district between the villages of Karcham and Wangtoo. Till four years, the group was the third largest cement player in India at close to 30 million tonne manufacturing capacity.
Anyone having travelled on the 165-km Delhi-Agra Expressway, built by Jaypee Infratech, would vouch for its quality and ‘developed world’ experience it provides. Such expressways are few in India. Gaur was also the man behind bringing Bernie Ecclestone’s Formula One to those very tracks, its owner withdrawing the event from India after just two editions due to high taxes.
The law of averages had to catch up at some point and how.
Adverse orders from the authorities halted construction in Noida and the prices slid, banks were unwilling to lend to the developers and to the buyers, villagers refused to hand over land for a power project and the slide seemed to be endless.
Most of his power assets are gone and his cement capacity is at a mere 4 million tonne, all of that sold to repay bank loans. Though unconfirmed, there are murmurs of a dissent between Gaur and other promoters — the manpower at various company offices crowded with relatives and acquaintances.
Clearly, Gaur is struggling. He gives time but doesn’t speak as much, his head bowing every few minutes to a photo frame of Sai Baba and Lord Ganesh hanging behind him. He narrates how he lost a coal block — linked to his company’s power unit — thanks to the scam, despite all due processes being adhered to.
Gaur often uses metaphors from cricket. His favourite is, well, Sachin Tendulkar.
“We are committed to completing the housing units. It is our responsibility. We had a liability of Rs 2,500 crore towards fixed deposit holders in 2013. All that had to be repaid and for that we had to sell certain assets. We sold the cement plant in June 2017 for Rs 1,500 crore. That money was utilized to repay 1.37 lakh fixed deposit holders,” he told Moneycontrol.
He said that there was “never an intention to dupe anybody but there has been a delay.”
In June last year too, he claims he had written to IDBI Bank authorizing it to square off the land mortgaged with it as per its valuations “to ensure that houses are completed on time and to ensure that bankers do not have to take a haircut.”
On being asked if the company would return the amount paid by those who have sought for a refund and also pay delayed penalty to those who are yet to receive possession, he said, “one lakh refund can complete five units.”
He also said that there was no irregularity in creating a charge on the “unemcumbered land” by Jaypee Infratech in favour of parent Jaiprakash Associates, a charge levelled by the insolvency resolution professional who is overseeing the debt resolution of the subsidiary.
“JAL had been providing support to JIL as a holding company and only a charge was created on the Jaypee Infratech land in favour of JAL’s lenders, which included lenders of Jaypee Infratech as well. Land was given with the consented approvals of lenders only. Valuations was done by the lenders. Everything was done as per rules prevailing at that point in time. Everything was done as per law,” he said.
Last week, the insolvency resolution professional moved the National Company Law Tribunal alleging irregularities in the mortgage of an 858-acre land to secure bank loans of the parent company. The two companies have several common lenders, including IDBI Bank, ICICI Bank and State Bank of India.
“Words used in the petition are objectionable and undesirable… the relationship between the lender and the borrower is a pious one. We have got time to respond to it,” said Gaur as he held back saying more.
He talks about how his employees, including the security guards at his plants and offices, came out to donate money to help him deposit money with the Supreme Court to secure the interests of the home buyers.
“All that money has been returned to the employees barring the senior level,” he said, visibly proud of his connect with even those at the bottom in hierarchy.
That his octogenarian father has had to go through so much at this stage of his life hurts him the most. Gaur is unrelenting, may be owing to his roots in western Uttar Pradesh. Pitch conditions, he hoped, would improve as time lapsed. He has promised his mother he would play on.
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