Sunday, April 19, 2009

Financial implications of the mail sent by Society

Dear Fellow Members

 

Greetings for the day

 

I wish to bring your attention to my e-mail dated 13.04.2009. I had raised my concerns and had requested the Secretary to respond thereto. Mr. Rajbir Singh and Mr. S.S. Kaushik also requested alike. I am disappointed that there has been no response.

 

2.   No one wishes to have uncomfortable questions. But it is important for all of us to understand the financial implications of the contents of the mail forwarded by Mr. Amarjit Singh.

 

3.     In his mail, Mr. Singh has stated as under:

 

“The roads, electricity sub station transformers, club house, amphitheatre, shopping complex, parks, green belt all need an urgent decision and funds to start completing them. I have already requested the Secretary to dig out all the old decisions, issues, future plans and I will shortly communicate to you all the present state and plans so that we can jointly address these common facilities”.

 

4.   It was interesting to see the photographs sent by Mr. Singh. I would have been happy had the photographs matched the contents of the text. The text clearly outlines that the roads are incomplete, the sub station and transformers are yet to be put up, the amphitheater is yet to be completed, the parks and green belt are in a state of neglect.

 

5.   More than the physical state of the site, what worries me is the financial implication of the state of affairs. There is a clear admission on the part of Mr. Singh that the Bank Balance of the Society is in precarious state. I appreciate his admission of the poor state of affairs of the Society.

 

6.   The enormity of the financial implications of this incomplete state of affairs shall wake up some of our members from the deep slumber they are in.

 

7.   I have dug up the old files and traced out the letter which was sent to the members in September, 2003. (Copy enclosed as PDF) The aggregate cost was then estimated to be Rs. 369.72 Lacs. Based thereon the Society had demanded a sum of Rs. 3,89,500/- per member which has been paid by all of us. The Society demanded additional Rs. 50,000 per member which was paid by all of us in December, 2005. The work that we see on the internal development front had been completed by the Society before the allotment of plots in September, 2005 and no work on the common pool account has been done by the society after that.

 

8.   If you carefully read through the letter of Mr. Singh, the Electricity Sub Station and Transformers are yet to be put up. Roads need to be laid. Amphitheater needs to be put up. The costs estimated by the Architects towards these heads in 2003 were as under:

 

Electricity Sub Station and Transformers

19.05 Lacs

Roads

57.23 Lacs

Amphitheater

Included in the sum of Rs. 53.30 Lacs

 

9.     From these figures you and I can easily estimate the actual sums sum that the society may have incurred under the respective heads and we will have the sums which still need to be incurred. My estimate is that it will be an enormous sum and Mr. Singh was just preparing us for the bad news. The situation becomes alarming since there will be many heads which Mr. Singh may not have touched at all, such as external lighting, pavements, and landscaping.

 

10.  I would like the Society to circulate to the members without any delay a headwise detailed sheet of costs estimated, costs incurred and costs still to be incurred under each head.

 

11.  Even pending the receipt of that sheet from the society, it is clear to me that If the Society had collected all the money that was required for the completion of the internal development work, that money should have been spent actually for that work. Now if you correlate that statement with the precarious state of affairs remark, it is clear to me that the sums collected for internal development have been spent elsewhere which I demand that the Society should explain.

      12. The Society collected these sums in advance which were deployed in Fixed Deposit                          before the allotment of plots. The rate of interest was also attractive. The interest                                  earning  was also handsome. The interest also belongs to members.  

  

13.  Could it be that these funds have been paid to the Contractors for the construction of individual units? Could it be that these funds have been deployed elsewhere? If not why would the financial situation of the Society be termed precarious?

 

14.  The Society should have given an account of the funds collected to the members on its own. Otherwise what is the purpose of having paid staff at all? The Society has not even forwarded the annual accounts for the year ended 31.03.2008 even after elapse of 1 year since the close of the financial year.

 

15.  Mr. Singh has stated that a sum of Rs. 5.00 Lacs is due from the defaulting members. The obvious question is whether that default is to the society or whether that is a default of a member vis –a-vis the contractor? The payments were last demanded by the Society in December, 2005. Does that mean that this money was due for 3 years and the previous management did nothing about this? Why should the names of defaulting members be not published? Why were their names included in the list of members prepared for the elections?

 

16.  In the EGM that was held in 2008 it was openly claimed that a particular member owes to a contractor a sum of Rs. 6.00 Lacs. I know for sure that many more members have received demands from the Society for payment of sums ranging from 2-4 Lacs to the contractors. The aggregate sums that way would not be less than Rs. 30 Lacs. If that is so, I sometimes wonder why the contractors are NOT demanding money from the members concerned.

 

17.  In his mail Mr. Singh is simultaneously talking of completing the Club house and shopping complex. I do not know why did he not talk about the swimming pool. What will be the cost of these? If we did not get what we have already paid for, can we trust that the additional sums that we may be asked to pay will be deployed rightfully?

 

I now realise why the mail of 9th March, 2009 was not sent to me in the first place.

 

I will be happy if we can have a response to these questions, howsoever difficult they may be.

 

Regards

 

Sandeep Khurana