March 16, 2017

Do you know Rs.1,500 Crore biggest real estate scam of Bangalore?

Do you know the biggest real estate scam of Bangalore? It’s in the name of companies like Dreamz Infra India Ltd, Gruh Kalyan and TGS Properties.

Why am I writing about these scams? How I personally interested about these companies? Let me tell you in detail about this. Way back I think in 2015, there used to huge advertise in newspapers, TV, and other media about the real estate company called TGS Constructions Pvt Ltd. Because at that time this company was the official partner of the IPL Team of Bangalore Royal Challengers. See the below offers of the same.

biggest real estate scam of Bangalore

Even I too surprised with the price they quoted. Who doesn’t want to own a flat in Bangalore at such damn cheap price? I and my brother went to the Kengeri Office of TGS Construction Pvt Ltd. They showed the property which is nearest to the Global Village IT Park Rajarajeshwari Nagar.

They showed us some vacant areas where they will construct these flats. Forced us to book and promised us that they will deliver the project within promised date.

However, I simply asked the cross question to the executive about their completed project. He nodded his head and told as of now they have not completed a single project. This surprised me a bit. However, while returning from that company provided cab, the driver revealed the real truth.

He advised me and my brother that not to believe in this company. He revealed that if there are around 100 flats or sites, then they are booking more than that with a promise to register all those who book. Also, once we book then we have to bend like what they say.

He revealed all these and advised us that not to buy. That actually shocked both of us. So we dropped the idea of going with them.

Now recently I came to know that the men behind this company cheated many of buyers and now are under arrest.

What prompted the public to invest in this biggest real estate scam of Bangalore?

# Cheap Price

The price quoted by these companies are so cheap that you are forced to buy. This led to many middle-class or upper-middle-class people to invest. Because owning a house is a dream for many of us. Also if such dream is at lowest rate, then who will hesitate?

But many forgot to cross check the builder’s claims and legality.

# Lot of advertisement through stars

These companies advertised using the IPL sportsmen. Hence, all started to believe that the companies financials are unquestionable. Because if they hire international sportsmen then how can they cheat us?

# Booming real estate

We Indians are of strong belief that GOLD and REAL ESTATE prices never fall. Also, the booking real estate of Bangalore prompted these investors to go ahead and invest.

When did the trouble start?

These companies as per news reports booked the flats and sites from around 5,000 people and the money involved is around Rs.1,500 Crore. The trouble started when the promised date of handover the property or registration of sites did not go smoothly.

Customers started to force the company to return their booked amount. Proof of this is in below video.

As per news reports, the owner of the company Mr.Sachin Naik issued cheque to all those customers who requested for refund of money. However, customers shocked when their all cheques bounced which in total the worth of Rs.50 Crore.

After examining the property records of this company, it is found that land is still registered with the developer but not in the name of buyers.

Who is the mastermind of this biggest real estate scam of Bangalore?

As per news reports, the mastermind is Mr.Sachin Naik and his team. This team involves his wives and also other associates. It is alleged that he changed his name and identity and hatched this scam.

Also, along with few associates, he launched many companies in real estate and other business and conned many people. Their history starts from way back of 2008.

What do the investors now?

As per this news report, Karnataka Chief Minister ordered the CID Probe into the multi-crore biggest real estate scam of Bangalore. Therefore, the big battle and long wait is the only option left with all those who invested in this company.

What can we all learn from this biggest real estate scam of Bangalore?

# Never rely on big claims of developers

Cross check each and every point of what your developers claim. Especially if they are claiming orally, then you have to be more cautious. Cross verify the agreement documents properly for the claim they are committing orally.

Also, never rely on the employees of the company. Usually, the employees who work in such companies never stay more than few years. Hence, investing based on these employees claims may be dangerous.

# Real Estate is the biggest Non-Regulated Industry

The biggest risk is the industry itself not regulated. Even though Government ready to implement the Real Estate Bill into reality, but still I feel this bill not protect buyers to the maximum extent. Also, if the builder breached the law, then are you ready to fight against him by going off from your regular work? No right? This is well known by these developers.

# Stars associated with these builders will not rescue YOU

If you invested in any product by the advertiser from the stars, then keep in mind that they are doing so for the sake of their OWN earning. They will never come to your rescue when you are in such difficulties.

Hence, never rely on advertising or tall claims of such these stars do.

Note-Request all of you to share this post as much as possible. Also, request all those cheated investors to come forward and share their story by commenting on this post. 

41 Comments

  1. Eager to know if there is any organization / forum that helps people who have suffered in frauds like these?

    Reply
  2. I feel extremely sorry for these people who are victims of this scam but as a consumer, it’s your duty to take care of all the paperwork, and whether it is properly done or not.
    to avoid such frauds it is always advisable to buy from trustworthy brands like Godrej, prestige etc.

    Reply
  3. Hi Basu,
    I have also invested in TGS projects in April 16 , and been hearing the fraud news.
    Any update on this issues.
    Please guide and help us to get back the money invested.
    Sudhakar

    Reply
    • Sudhakar-As of now no news after I published this post. Better to be in touch with concerned Police Officials.

      Reply
    • Hi Sudhakar,

      3 years before I invested in TGS Vinayak property , which was supposed to come up near Ravishankar’s Ashram. As everyone writes, same fraud. Last few weeks I called few of their nos , but nothing is reachable. Today I had been to HSR layout , I could not locate their office. Can you give me any of their no , or inform me if their office is still in HSR or closed or shifted etc .,

      Reply
  4. Extremely pitiful to hear such a significant number of individuals lost their well deserved cash taking a gander at the charm required with cricket stars and the false guarantee given by these land mafias. Somebody ought to help out these land mafias to be placed in prison and take away all their genuine bequests.

    Reply
  5. Hello Basavaraj,

    I would request you to also look into Mantri Webcity Project in which a section of ppl like me have invested in Buy Back scheme rendered through Pre-EMI scheme primarily in collusion with PNB and AXIS banks.

    There has been a lag of min 3- 5 months of the pre-emi that Mantri has to give to its customers (The bank in which the customers have taken loan religiously deducts money every month whether Mantri pays to customer or not).

    As per the scheme, the customer has to instruct Mantri 6 months before possession date (mine was Mar 2017) if the former wishes to surrender the apartment and subsequently mantri will close the bank loan and take over the apartment APART FROM giving the customer the PROMISED 2 times the down payment amount.

    There have been ppl with buy backs scheduled in last year 2016 itself but all in vain. Customers are struggling with this. Its not the point of greed here for me at least. Its a costly mistake I did.

    As of now formed an association to fight against this massive issue.

    Regards,
    Balaji PS

    Reply
    • Balaji-Sad to hear this. Surely, let me dig into this and come up with a post.

      Reply
  6. Hi Basu,

    I have purchased a flat in an apartment for Rs. 50 lakhs from landlord share. In the Agreement of Sale, it was mentioned that “The Vendors agreed to purchase the said property for a sale consideration of Rs. 33 lakhs and that the construction cost for this flats is Rs. 17 lakhs including car parking space, BWSSB, BESCOM, VAT, Service Tax.”
    I have done Franklin for Rs. 5000/- which is 1% Rs. 50 lakhs.

    But in the SALE DEED, I did not find the BWSSB, BESCOM, VAT, Service Tax except the Car parking. Does this also need to be included in the SALE DEED as well or Is the Agreement of Sales is also a valid document? I heard that if the landlord did not pay the VAT and Service Tax, I have to pay it from my pocket. Also I am not sure of the TDS. Please suggest me the next steps.

    Reply
    • Bharath-Yes, such cost must be mentioned in sale deed for better clarity.

      Reply
      • Hi Basu,

        It was not mentioned in the sale deed.Is the Agreement of sale document also a below document to question him.?
        My land owner saying that he paid the vat and service tax.
        How can I know whether the VAT and Service tax was paid or not..? Is there any link or process to check the vat or service tax paid..?

        Thanks,
        Bharath

        Reply
        • Bharath-What I am saying is let all expenses should be mentioned properly in sale deed. Also, if he already paid the VAT and Service Tax, then let him show the proof of that. Sadly, you can’t check someone else tax paid status.

          Reply
          • Hi Basu,

            How much is the VAT and service tax applicable for my flat cost.? Will it be calculated on the Construction cost of Rs. 17 lakhs or will it be on the entire Rs. 50 lakh.? Property registered in the month of May, 2017. I got the NOC certificate from the builder. I will be receiving OC certificate in another two month. Please tell me how to calculate VAT and Service tax for Bangalore region.

            Thanks,
            Bharath

            Reply
            • Bharath-Now there is no VAT but GST. It is on the sale deed cost.

              Reply
              • Hi Basu,

                But I registered the property in the month of May 2017. Which one is applicable VAT + Service Tax or GST..?

                Thanks,
                Bharath

                Reply
  7. Hi Mr. Basu,

    How GST and RERA is going to affect real estate in Bangalore from end user perspective.

    Regards,
    Amit

    Reply
    • Amit-Let us wait for clarity. There are many theories. But no clear one.

      Reply
  8. Is TGS and TG Developers the same. TG Developers corporate office is No 3/5, Devàrachikahalli Main Road , Bannerghatta Rd. Please provide this information as I was planning to invest. Your advice will be vital.

    Reply
    • Akshay-In my view, they MAY be different. But still I suggest you to cross check with a builder and the papers before proceeding.

      Reply
  9. basavraj ji realy this scam is again the middle or lower middle class. when did we expect money back sir

    Reply
    • Dwarakanath-Not sure of when you get the money back. Yes, indeed it is a sad story.

      Reply
  10. Impressive?Thanks for the post

    Reply
  11. In India, everyone is an expert in 3 things. 1. Politics 2. Real Estate 3. Stock Markets. So, they feel it is easy to talk about politics and invest in RE or stocks. Dreamzinfra has been in news since 2 weeks but for those who are knowledged about real estate knows well that’s this company is a fraud company. Rs. 24 lakh for a 2 BHK in HSR, Bellandur, 3 BHK for Rs. 32 lakh in JP Nagar etc.? The problem with people is that they don’t believe unless something appears on media and they believe everything that appears on media – “cognitive bias”.

    I want to blame the Financial advisors also for creating ‘fake’ sense of security in real estate by psychologically pushing people towards huge debts in the form of loans. So, when something comes cheap people grab it. Probably, next would be the Layouts. A Latin saying states “The world wants to be cheated, cheat it”. It’s easy to say, jail the builders, murder them, make the laws stronger. But no law can teach “common sense”. Who asked anyone to give money to a builder even without checking approval documents? I just want to ask when do people stop blaming someone else for their ignorance. The world doesn’t owe you any lesson, learn yourself.

    Reply
  12. Thanks for such informative Post

    Reply
  13. Dear Basu
    Thanks for great posting.
    I was almost became a Bakraa but God saved me.I had finalised two properties through Gruha kalyan one opp to Manyata tech park another one on Hennur road behind Manyata.The executive claimed it’s a start up company n all rosy talks.When asked about completed project he said that from real estate agent to converting to start up with associates like TGS and showed IPL ads.But then on they were so aggressive in marketing that they sent one guy to collect cheque to my home stating it’s a last day for the offer.Luckily my father in law advised me against this and prefers a ready to move rather than booking and waiting.
    God saved me!

    Reply
  14. Thanks for sharing. If it is too good to be true then it’s not true.

    Reply
  15. Thanks Basavaraj ji for such great post. It’s true that anyone can makes us fool very easily by offering very cheap rates or great returns (ponzi scheme). We rush towards it without using our mind to judge how it is possible ? Surprisingly the Indian authorities are very aware of all these scams. So we need to be careful.

    Reply
  16. Basu, Sir, hats off.once again to your bravery..It would have been nice, if you had published this as soon as you came to know about the issue.

    I am sure in this case you need to worry about any trouble, but in future it would be nice if you write more from a generic perspective like..”things to check before buying a property” and not blame anyone directly and then probably give these scams as a example without involving your opinions directly.

    Off course, it doesn’t require great financial acumen or real estate knowledge when someone plans on buying a home, they just had to use some common sense..so partly we people are also to be blamed..but as a sincere fan of yours, my request is you to only write in such way to create awareness and not blame anyone directly..and keep up the good work.

    Reply
    • Ashok-Thanks for your inputs. I hold it until Govt act. I received that news 2 days back. Hence, wrote now.

      Reply
  17. The word real estate in India in itself is a scam. All real estate companies are scam No. 1 and the size of it varies and like the above one with 1500 crores who might have diverted the fund and now just spend some time in jail and come out and enjoy their loot.

    And this real estate combined with another biggest scam in independent india (either cricket or IPL) means we should have stayed away and glad to hear that you have done it.

    Very sad to hear so many people lost their hard earned money looking at the glamour involved with cricket stars and the false promise given by these real estate mafias. Someone should do something for these real estate mafias to be put in jail and take away all their real estates.

    Reply
    • Shiva-Thanks for your views. But sad part of this scam is again the middle or lower middle class.

      Reply

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