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Kashish Developers, a real estate blackhole in small town India

People invest here for future rental income and appreciation of property but it cannot be ignored that scams and frauds have created a sense of fear in people who want to invest in these sectors. Despite investing their money in these projects, people are not getting the desired outcome. There are so many cases of frauds disclosed in the past few years where the invested money has been siphoned off or misused.

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By Neil Terrance Haslam @neilhaslam90

In India, the real estate sector maybe losing pace due to the Covid-19 pandemic but before the pandemic came knocking and knocked out the Indian economy’s door, people invested their hard-earned money in this sector with the hope of a higher return in the long term.

People invest here for future rental income and appreciation of property but it cannot be ignored that scams and frauds have created a sense of fear in people who want to invest in these sectors. Despite investing their money in these projects, people are not getting the desired outcome. There are so many cases of frauds disclosed in the past few years where the invested money has been siphoned off or misused.

On many occasions, investors fall into the trap of scammers and fraudsters who come up with lucrative offers and ultimately leave them empty handed and the investment dream of financial security becomes the worst nightmare for them. Many instances are there when people are being robbed by builders, leading many to commit suicide as they run out options.

In 2017, about 100 home buyers who were affected due to the delayed possession gathered at the Jantar Mantar for strike against another renowned builder. The home buyers threatened to commit suicide if their complaints were not redressed.

The investors desired to see their new homes but they are left with the burden of EMIs and additional spending on rent.

In a recent verdict of Supreme Court, the division bench comprising Justice Dr Dhananjaya Y. Chandrachud and Justice K.M. Joseph had held,

 “Flat purchasers suffer agony and harassment, as a result of the default of the developer. Flat purchasers make legitimate assessments in regard to the future course of their lives based on the flat which has been purchased being available for use and occupation.”

We are shining a light on an identical scam by a builder who operates in small states and mostly targets uneducated persons.

Kashish Developers Limited, the builder, has committed fraud amounting to 100s of crores along with its group of Companies Vinman Constructions Limited and Manor Infraprojects Private Limited. Kashish Developers Limited is a public limited company incorporated on December 31, 2001 which is classified as non-govt Company registered at Registrar of Companies, Jharkhand.

Manor One is the major Housing Project of Kashish Developers along with Vinman Constructions and Elite Villas situated at Sector 111, Gurugram.

The details about this joint venture available at the official website of RERA is given below

To finance the construction cost of the aforementioned project, funds have been borrowed by Kashish Developers Limited in the name of Manor One project from various banks and financial institutions. According to the cash flow statement of Manor One project, the sources of funds were receipts from allottees of apartments/plots, loan sanctioned by the banks/other financial institutions against the property and from other sources.

The Cash Flow Statement submitted by developers for the project –

The company has borrowed funds from Dewan Housing Finance Limited (DHFL) amounting to Rs 725 crore for the purpose of meeting the cost of construction. The said project was constructed with the loan assistance from DHFL. The statement from the agreement between the developer and DHFL-

The fraud begins when the funds taken from DHFL have been siphoned off and has not been used for construction purpose. The company dishonestly took money from DHFL and used it for a purpose of which it was not intended. Consequently, the customers did not get their promised residential unit despite of their hard-earned money spent on this project.

The company has borrowed funds from DHFL amounting to Rs 725 crore for the purpose of meeting the cost of construction but the actual utilization of the loan funds are not the one stated in the loan document.

The actual utilization of Rs 725 crore sanctioned by DHFL to Kashish Developers can be seen by the table given below-

Analysis of the Actual utilization of Rs 725 crore sanctioned by DHFL to Kashish Developers-

Company Loan Amount (In crores) Closure Date
Elite Villas 20009 August 2018
Manor Infraprojects14009 August 2018
Vinman Constructions (other advances)100
Struc- Mech Engineers10009 August 2018
No utilization stated185

Above given table clearly shows that Rs. 200 crores from the loan amount has been utilized for Elite Villas and 100-100 crores are being utilized in Vinman Constructions and Struc-Mech Engineers. The amount of Rs. 140 crores has been utilized for Manor Infraprojects. For rest 185 crores no utilization is stated.

There are many cases that are going on Kashish Developers and group companies and many complaints are registered to RERA. For Instance-

In 2019 a case was filed against Kashish developer’s ltd, Vinman Construction Pvt.Ltd and Elite Vilas Pvt.Ltd. on the project namely Manor One in National consumer disputes redressal commission (NCDRC). The grievance of the complainant is that the possession of the allotted flats has not been offered to them and the construction is also not even complete, for which they have made the substantial payment of Rs. 1,13,01,621/- to the Developers. 

The complainants were before the said commission seeking refund of the said amount with compensation.

The financial observation of Kashish Developers-

Shareholders-

S.No.NameAddressAmount per shareNumber of sharesTotal Amount
1.Sunil ChoudharyOLD AG Co- Operative, Kadru, Ranchi 834002, Jharkhand1007,99,7677,99,76,700
2.Sushil Kumar ChoudharyRatna Priya, 87 Old A.g colony, Kadru, Ranchi 834002, Jharkhand10088,52788,52,700
3.Saroj DeviRatna Priya, 87 Old A.g colony, Kadru, Ranchi 834002, Jharkhand1005,6615,66,100
4.Sujit Kumar ChoudharyRatna Priya, 87 Old A.g colony, Kadru, Ranchi 834002, Jharkhand10054,96954,96,900
5.Ajit Kumar ChoudharyHouse No. 87 Old A.g colony, Kadru, Ranchi 834002, Jharkhand10010,52310,52,300
6.Rani ChoudharyOLD AG Co- Operative, Kadru, Ranchi 834002, Jharkhand10026,02126,02,100
7.Surbhi ShreeOLD AG Co- Operative, Kadru, Ranchi 834002, Jharkhand1008,1278,12,700
8.Ratan Priya OLD AG Co- Operative, Kadru, Ranchi 834002, Jharkhand10046346,300
9.Arun Kumar MishraEWS – 142, Harmu Housing Colony, harmu, Doranda1002,4832,48,300

Equity Shares are issued at a premium of INR 3,433 per share details are as under-

NameNo. of sharesFace Value  Premium   Total Amount  Date
Ram Shankar Choudhary3,198₹ 100₹ 3,433₹ 1,12,98,53420-Dec-16
Shiv Shankar Choudhary3,114₹ 100₹ 3,433₹ 1,10,01,76220-Dec-16
Bisawanath Mandal2,406₹ 100₹ 3,433₹ 85,00,39820-Dec-16
Rinku Mahto2,293₹ 100₹ 3,433₹ 81,01,16920-Dec-16
Uday Kant Jha3,283₹ 100₹ 3,433₹ 1,15,98,83920-Dec-16
Manoj Thakur3,255₹ 100₹ 3,433₹ 1,14,99,91520-Dec-16
Arun Kumar Jha3,170₹ 100₹ 3,433₹ 1,11,99,61020-Dec-16
Govind Ji Jha3,227₹ 100₹ 3,433₹ 1,14,00,99120-Dec-16
Amit Choudhary2,321₹ 100₹ 3,433₹ 82,00,09320-Dec-16
Ashok Kumar Sada2,378₹ 100₹ 3,433₹ 84,01,47420-Dec-16
Badri Nath Jha3,255₹ 100₹ 3,433₹ 1,14,99,91520-Dec-16
Sanjeev Kumar Jha3,170₹ 100₹ 3,433₹ 1,11,99,61020-Dec-16
Prabhakar Mishra2,491₹ 100₹ 3,433₹ 88,00,70320-Dec-16
Nandu Kamti2,010₹ 100₹ 3,433₹ 71,01,33020-Dec-16
Sanjeet Mahto2,095₹ 100₹ 3,433₹ 74,01,63520-Dec-16
Veer Bahadra Choudhary HUF)4,246₹ 100₹ 3,433₹ 1,50,01,11820-Dec-16
Sushil Kumar Choudhary4,246₹ 100₹ 3,433₹ 1,50,01,11820-Dec-16
Sujit Kr. Choudhary4,246₹ 100₹ 3,433₹ 1,50,01,11820-Dec-16
Abantika Kumari1,156₹ 100₹ 3,433₹ 40,84,14820-Dec-16
Kumar Gaurav1,261₹ 100₹ 3,433₹ 44,55,11320-Dec-16
Puja Kumari741₹ 100₹ 3,433₹ 26,17,95320-Dec-16
Pinku Devi1,191₹ 100₹ 3,433₹ 42,07,80320-Dec-16
58,753₹ 20,75,74,349

Directors-

S.No.Name Appointment dateCessation Date
1.Dhananjay Kumar Singh08 August 2019NA
2.Mukesh Kumar30 March 2019NA
3.Ajit Choudhary 30 September 2015NA
4.Sujit Kumar Choudhary 29 March 201030 March 2019
5.Rajeev Kumar30 March 201909 August 2019
6.Trilok Nath Jha29 March 201630 March 2019
7.Sushil Kumar Choudhary 31 December 200130 March 2019
8.Yogendra Jain25 March 201529 March 2019
9.Sanjeev Kumar Singh12 February 201512 February 2015
10.Sunil Choudhary31 December 200101 October 2015

Investments-

Company Amount Remarks 
Elite Villas98,000
Vinman Constructions Private Limited98,000
Kashish Media & Communications Limited4,75,37,910Under Strike Off – No financials filed.

Intercorporate Loans & Advances (common directors and shareholders)-

Company Amount remark
Callisto Laboratries 1,11,36,550
Kashish Tradecom Limited1,59,99,836
Kashish Utility Services Limited31,07,048
SH Tech Park Developers Private Limited16,04,200
Struc- Mech Engineers Private Limited*57,50,000Interest Free loan
Manor Infra Projects Limited1,66,07,66,088No Information available – as documents are still pending with ROC

DHFL has total disbursed loan of Rs 1,140 crore to Kashish Developers and other company details are here as under – 

Charge Id  Date of Creation Modification ClosureAmount (in crores)Security
Kashish Developers Limited
1039149809/11/201211/11/201309/08/2018200
10001937931/03/201609/08/201870Immovable Property, Guarantee
10018796924/03/2018725Corporate Guarantee
10012093331/03/201709/08/201870Immovable Property, Guarantee
10017920707/04/201875Immovable Property.
Vinman Constructions Limited
1039149909/11/201211/11/201309/08/2018200
10017892424/03/2018725Immovable Property
Manor Infraprojects Limited
10001948131/03/201609/08/201870Immovable Property
10012093631/03/201709/08/201870Immovable Property
Elite Villas Limited
10017892924/03/2018725Immovable Property
1039149609/11/201211/11/201309/08/2018200

Some observations are-

Sunil Kumar Choudhary is taking remuneration of INR 1.2 crores from Kashish Developers but no TDS has been deducted on the payments, as auditor has already qualified the report as the company has failed to deduct Tax Deducted at Source.

No Related Party transactions disclosed.

Sunil Choudhary has taken followings payments in the form of salary from Kashish Developers but Kashish Developers have not disclosed the payments in the financials.

YearAmount
2008-0911,00,000
2009-1042,00,000
2009-107,50,000Rent Income
2010-1172,00,000
2010-1112,00,000Rent Income
2011-1272,00,000
2011-1213,00,000Rent Income
2012-1359,40,020
2012-1312,00,000Rent Income
2013-144,86,00,000
2013-145,50,000Rent Income
2014-154,86,00,000
2014-156,00,000Rent Income
2015-166,00,000
2015-163,00,000Rent Income

The above table depicts the flow of money to Sunil Choudhary that is concealed by Kashish Developers Limited.

Struc – Mech Engineers Private Limited

This Company is registered with the same address on which the Kashish Developers and group of companies are registered. The Paid up capital of the company is only INR 1,00,000. Past two Directors of this Company were Sunil Choudhary and Ajit Choudhary. Sunil Choudhary was also the managing director of Kashish developers. The company has a borrowing of INR 100 crores which was repaid on the same day when Kashish Developers and group got loan from DHFL i.e. on 09/08/2018, which clearly proves that the amount of INR 725 crores disbursed to settle the dues.

Sunil Choudhary has received following payments from Struc- Mech Engineers Private Limited.

YearAmount (in Rs.)
2008-096,00,000
2009-1024,00,000
2010-111,20,00,000
2011-121,20,00,000
2012-131,05,00,000
2013-1460,00,000

Vinman Constructions Limited 

A Vinman construction Limited is a public company incorporated on 5 December 1994. It is registered at Jharkhand via CIN No. U74899JH1994PLC001806. Its authorized share capital is INR 5,00,000 and paid up capital is INR 5,00,000.

Shareholders list-

S.No.NameAddressAmount per shareNumber of sharesTotal Amount
1.Kashish Deveopers LimitedOLD AG Co- Operative, Kadru, Ranchi 834002, Jharkhand109,80098,000
2.Rajeev Kumar JhaMandir Marg H.No.224, New A G Cooperative Colony, Argora Ranchi 8340021021,0002,10,000
3.Narayan Ji JhaSouth Tola Raghopur Darbanga 847239, BR In105,00050,000
4.Manoranjan DasVill- Tunjo P.O Baredih, P.S – Bundu Ranchi 835204, JH, IN104,20042,000
5.Raghav Kumar ThakurVillage – Post – Parari, P.S Biraul, Padri, Darbhanga, Bihar 102,00020,000
6.Sunil MishraRz- 813, Gali No. 5, Main Sagar Pur, South West Delhi 110046, DL , IN102,00020,000
7.Arun Kumar MishraEWS – 142, Harmu Housing Colony, harmu, Doranda1006,00060,000

Directors-

S.No.Name Appointment dateCessation Date
1.Manoranjan Das25 July 2019NA
2.Sunil Kumar Mishra25 July 2019NA
3.Narayan Ji Jha 25 July 2019NA
4.Naved Ahmed  01 January 201815 October 2018
5.Ajit Choudhary30 September 201525 July 2019
6.Manish Gupta01 January 201815 October 2018
7.Sushil Kumar Choudhary 01 October 201225 July 2019
8.Pranav Mittal08 May 201101 December 2012
9.Sujit Kumar Choudhary 27 January 201425 July 2019
10.Sunil Choudhary01 October 201201 October 2015
11.Shadab Khan01 January 201815 October 2018
12.Ved Kumar Mittal09 August 200808 May 2011
13.Dwarka Das Mittal04 November 199609 August 2008
14.Vinod Mittal05 December 199401 December 2012

The Financial Statement of Vinman construction Limited is tabled below-

2018-192017-182016-17Remarks 
Cash Inflow
DHFL Loan5,03,76,42,3594,15,00,00,00088 crores term loan in current FY.
Advances From Cosmo Infra Engineering (India) Private Limited15,25,00,00015,25,00,00015,25,00,000Not verifiable – Auditor Qualifications
Other Advances (Details not disclosed)98,55,00,000Repaid out of DHFLloan.
Cash Outflow
Loans to Elite Villas60,23,24,75060,23,24,75060,23,24,750Interest free loan
Kashish Developers Private Ltd.2,87,59,93,6002,43,69,23,490Not disclosed by Kashish Developers 
Advance to BCL Realcon 15,00,00,00015,00,00,00015,00,00,000Not verifiable – Auditor Qualifications
Upendra Dalal25,00,00025,00,00025,00,000Not verifiable – Auditor Qualifications
Paratus Real Estate Pvt. Ltd. 7,96,00,0001,00,00,000Undisclosed by Paratus
Earthcon Realty Pvt. Ltd.7,74,00,00020,00,000
Noorsons International 1,50,00,0001,50,00,000
Other Advances55,87,12,602Not verifiable – Auditor Qualifications
Inventories 42,75,83,65442,75,83,65442,75,83,654Not verifiable – Auditor Qualifications

These are the observations-

Elite Villas Limited

Elite Villas was incorporated on 2 September 2006. It is registered at Jharkhand via CIN No. U70109JH2006PLC001366. 

Directors- 

S.No.Name Appointment dateCessation Date
1.Manoranjan Das25 July 2019NA
2.Sunil Kumar Mishra25 July 2019NA
3.Narayan Ji Jha 25 July 2019NA
4.Naved Ahmed  01 January 201815 October 2018
5.Ajit Choudhary30 September 201525 July 2019
6.Manish Gupta01 January 201815 October 2018
7.Sushil Kumar Choudhary 30 July 201225 July 2019
8.Sujit Kumar Choudhary 27 January 201425 July 2019
9.Sunil Choudhary28 July 201201 October 2015
10.Shadab Khan01 January 201815 October 2018
11.Jwala Prasad Agarwal28 November 200928 July 2012
12.Navneet Kumar02 September 200630 July 2012

Shareholder-

S.No.NameAddressAmount per shareNumber of sharesTotal Amount
1.Kashish Deveopers LimitedOLD AG Co- Operative, Kadru, Ranchi 834002, Jharkhand109,80098,000
2.Rajeev Kumar JhaMandir Marg H.No.224, New A G Cooperative Colony, Argora Ranchi 8340021021,0002,10,000
3.Narayan Ji JhaSouth Tola Raghopur Darbanga 847239, BR In105,00050,000
4.Manoranjan DasVill- Tunjo P.O Baredih, P.S – Bundu Ranchi 835204, JH, IN104,20042,000
5.Raghav Kumar ThakurVillage – Post – Parari, P.S Biraul, Padri, Darbhanga, Bihar 102,00020,000
6.Sunil MishraRz- 813, Gali No. 5, Main Sagar Pur, South West Delhi 110046, DL , IN102,00020,000
7.Arun Kumar MishraEWS – 142, Harmu Housing Colony, harmu, Doranda1006,00060,000

The Financial Observations of Elite Villas Limited is as follows-

2018-192017-182016-17Remarks 
Current Liabilities
Vinman Constructions Limited60,23,24,75060,23,24,750Verified with Vinman Constructions 
Short Term Loans and Advances
Share Application Money Given 27,12,03,17927,12,03,17927,12,03,179
Inventories (Land at Gurgaon)28,02,27,03028,02,27,03028,02,27,030

Elite Villas Ltd. has borrowed sum of INR 200 crores from DHFL but the utilization of the said amount could not be ascertained as the financials of Elite Villas does not disclose any detailed transactions nor any party wise transactions. Further no details have been provided regarding Share Application Money given as per the balance sheet for last 3 years amounting to INR 27 crores and no Party related Transactions have been disclosed. 

Paratus Real Estates Private Limited 

NameAddressLoan by Vinman Constructions (2018-19)
Paratus Real Estate Private LimitedT-70, Sector – 7, Jasola Vihar Extn., Delhi – 1100257,96,00,000 
Earthcon Constructions Private LimitedT-70, Sector – 7, Jasola Vihar Extn., Delhi – 1100257,74,00,000

The Company is engaged in real estate activities, registered at T-17 , DDA Flats , Sector – 7, Jasola Vihar Extention., Delhi South.

Read Also: New management finds old owners engaged in fraud, Delhi HC asks relevant ministry to take action

The company is subsidiary of Earthcon Constructions private Limited which is also registered at same address i.e  T-17 , DDA Flats , Sector – 7, Jasola Vihar Extn., Delhi South.

Diretors 

NameAddressDate of Appointment
Shadab KhanT-70, Sector – 7, Jasola Vihar Extn., Delhi – 11002520 May 2013
Mukarram AliT-70, Sector – 7, Jasola Vihar Extn., Delhi – 11002522 November 2014

Financial Irregularities

  • Paratus Real Estate has not disclosed any related party transaction.
  • Company is a loss making, with total shareholders’ funds as INR 7.8 crores and even the loan provided by Vinman is more than the total shareholders’ funds.

In the FY 2017-18 , the loan by Vinman Constructions is as follows – 

NameAddressLoan by Vinman Constructions (2017-18)
Paratus Real Estate Private LimitedT-70, Sector – 7, Jasola Vihar Extn., Delhi – 1100251,00,00,000 
Earthcon Constructions Private LimitedT-70, Sector – 7, Jasola Vihar Extn., Delhi – 11002520,00,000

The loan amount has increased by a substantial amount i.e from 1 crores to 8 crores approximately and from 20 lakhs to 7.7 crores.

Now, as per the analysis, the provisions of various Acts under which the offences committed by aforementioned companies are governed are as follows-

Companies Act, 2013, RERA 2016, Indian Penal Code, 1860, SEBI Act, 1992and Income Tax Act, 1961. The violated provisions of the given acts are as follows-

Diversion and Siphoning off Money-
The company has borrowed funds from DHFL amounting to INR 725 crores for the purpose of meeting the cost of construction but the actual utilization of the loan funds is not the one stated in the loan document.
Fraud u/s 447 of Companies Act 2013 and Section 1 2 of SEBI and Cheating u/s 420 of Indian Penal Code 1860– The financials of the company does not represent the true and fair view of the company affairs , as for instance – 
The financials of Vinman Constructions have various items like inventory, loans and advances of which amount is just a brought forward from previous years and no verification or justification is provided.
Section 177,184 of Companies Act, 2013 along with section 129 and 133 of the Companies Act, 2013Companies are required to report the related party transactions but no Related Party Disclosures have been made anywhere, all companies have tried to conceal the related party transactions to cheat the stakeholders as well as public at large, for which Directors can be held responsible can attract provisions of disqualifications.
Section 60 of RERASection 60 of RERA says if the promoter has submitted false information to the RERA authorities, he shall be liable to a penalty which may extend up to 5 % of the estimated cost of the real estate project, as determined by the authority.
Tax Evasion (Section 276C of Income Tax Act)As the companies have not disclosed any inter-corporate loans received from Vinman Constructions Limited, the huge inter-corporate loans for instance loan of INR 300 crores given by Vinman Constructions Private Limited to Kashish Builders Limited would have been treated as deemed dividend u/s 2(22)(e) and would have been taxable @ 30% .Above all the Kashish Developers Limited and Struc Mech Engineers Private limited has concealed the amount of remuneration given to Director Sunil Choudhary (Politician as well) amounting to INR 20 crores.

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