Probe into Tata Housing Arm’s Alleged Fraud on Homebuyers Stays Stalled

On August 7, an official of the Tata Group company, Tata Housing Development Company Limited, appeared in person in a courtroom to respond to claims made by whistleblower Nityanand Sinha in 2015. Sanjeev Suri, the company’s Gurgaon-based project director and Vice President, engineering, appeared in the Delhi High Court in a case relating to Sinha’s complaint that he was wrongfully terminated from his position at a Tata Housing subsidiary company after he had highlighted irregularities and alleged fraud and cheating in a housing project the company was building in Bahadurgarh, Haryana.

Since mid-2015, when he first went public with his claims, Sinha has been waging a lone battle with his erstwhile employer on several fronts. The company filed two defamation claims against him, in Mumbai and in Gurgaon. An interim order by the Bombay High Court has gagged him from speaking to journalists. An official inquiry based on his allegations, that has been taking place in the Haryana Government’s Jhajjar District Administration, has been stalled for over a year due to non-cooperation by the company. 

Meanwhile, a labour dispute filed by Sinha under the Industrial Disputes Act was dismissed by a Delhi Labour Court at the preliminary stage, without looking at the facts and merits of his case. It is in the proceedings of hearing an appeal filed by Sinha against the labour court’s order before the Delhi High Court that Suri appeared in person after the court ordered on May 28,  that a “competent officer” of the company be present at the next hearing.

The Whistleblower’s Battle

In a report in the Economic and Political Weekly, published in July 2017, this author had detailed the allegations made by Sinha in public regarding the “New Haven” project that Tata Housing’s then subsidiary, Tata Value Homes, was developing in Bahadurgarh, Haryana. The two companies are in the process of being merged as another Tata group company – Tata Realty and Infrastructure Ltd. – in a reorganisation exercise of the Tata group’s real estate business. 

To summarise the story, his claim was that the company had presented inflated calculations of saleable floor space area to buyers of apartments in this project and thereby stood to allegedly wrongfully gain up to Rs 60 crore. As an engineer involved in the project, he had received two sets of final area statements for the apartments in February-March 2015, one corresponding to the true measurements, and the other with inflated figures, and it was the inflated values that were represented on the project’s website and the promotional material launched for attracting buyers, he alleged.

Sinha had first attempted to escalate the issue within the Tata Group’s internal hierarchy, writing to Brotin Banerjee, Tata Housing’s then Managing Director in May 2015. Soon afterward, in June 2015, he was served a termination letter by the company, following which Sinha wrote to Cyrus Mistry, the then Chairman of Tata Sons, seeking resolution of the issue. Sinha had refused to accept the termination letter and has claimed in a complaint filed to the police that he was manhandled by a group of men at the behest of his employer at his worksite the day after he wrote to Mistry.

Tata Housing filed a defamation case against Sinha in October 2015 after Sinha had made public comments on social media pages held by the company, detailing his allegations. On October 8, 2015, hearing the defamation case against him, the Bombay High Court issued an injunction against Sinha barring him from speaking to the press about this matter.

Meanwhile, Sinha himself pursued different lines of action against Tata Housing. He submitted complaints regarding his allegations about the New Haven project to the Delhi Police’s Economic Offences Wing and to the office of the Chief Minister of Haryana. As far as his own alleged ill-treatment by the company was concerned, Sinha initiated a labour dispute under the provisions of the Industrial Disputes Act claiming wrongful termination.

Sinha’s labour dispute with his employer, HL Promoters Private Limited – a subsidiary company of Tata Value Homes that had been incorporated to execute the New Haven project – was heard by Delhi’s Labour Court-X at the District Court Complex in Dwarka, New Delhi. In his complaint, Sinha detailed the sequence of events in mid-2015, from him discovering the alleged fraud, to escalating the matter internally, to his termination and the filing of police complaints.

In response, the Tata Group company claimed a preliminary objection, focusing on whether Sinha qualified as a “workman” under the definition of the Industrial Disputes Act, and stating that he did not, asked for his claim to be dismissed. Rakesh Kumar, the labour court’s presiding officer, accepted the company’s objection, and agreeing that Sinha did not qualify as a “workman”, dismissed his claim in an order issued on May 31, 2018.

Sinha appealed the Labour Court’s order before the Delhi High Court. In its order issued after the first hearing on September 18, 2018, the High Court admitted the case and issued notice to HL Promoters, stating “this is a case in which the Labour Court has arrived at a finding that the petitioner [Sinha] is not a workman, without calling for evidence, solely on the basis of the statement of claim. The issue of whether the petitioner is a workman is essentially an issue of fact, which would depend on the nature of duties discharged. The writ petition relies on judgments which hold that nomenclature of the post is not decisive in this regard. Prima facie, such an issue could not have been decided by the Labour Court in a summary manner without even calling for evidence.”

The High Court’s Justice J R Midha has completed hearing the arguments in the case, and reserved his judgement, according to the court’s order issued on August 7.

Haryana Government Enquiry

In an article published in NewsClick on January 21, 2019, the non-cooperation by Tata Housing with the inquiry into Sinha’s allegations by the Haryana government’s Additional Deputy Commissioner (ADC), Jhajjar had been reported.                                                         

A shakeup in the company’s management in mid-2018 in which Banerjee had been removed from his position and the merger of Tata Value Homes as well as its parent company Tata Housing to Tata Realty and Infrastructure, had raised hopes that the company’s conduct in several issues that have arisen with regards to various projects across the country, including New Haven, Bahadurgarh, would change. As reported in Newsclick, the company continued to not cooperate in the inquiry in the manner requested by the Haryana government resulting in the inquiry still stalled.

After his termination from the company, Sinha had, in March 2016, filed a detailed complaint with the Delhi Police, attaching as evidence multiple documents, including internal email messages and sales drawings. A copy of his complaint had also been sent to the Haryana Chief Minister’s Office. This complaint was fowarded for inquiry to the District Town Planner in Jhajjar, under whose jurisdiction the New Haven project falls.

In the intial stages of the inquiry, the District Town Planner’s office had requested from the company copies of all relevant documents, including copies of the licence, the plans, the detailed area statements mentioning the carpet area, saleable area and any other relevant material. In its response, the company did not comply with these directions, instead submitting an excel file with area numbers, instead of marking them on the Government approved plans as it had been directed to. This was in February 2017. Since then the inquiry was passed on to the Additional Deputy Commissioner, Jhajjar (in May 2017), and letters have been sent from this office from time to time directing the company to comply completely with the request made to it, but to no avail resulting in the inquiry remaining stalled since then.

NewsClick understands that in recent months, corporate executives from Tata Housing’s Mumbai headquarters have been attending inquiry meetings chaired by the ADC, Jhajjar, and in both this inquiry as well as in other legal forums, including at the Delhi High Court, advocates from the renowned law firm Shardul Amarchand Mangaldas have appeared for Tata Housing.

In the report published in NewsClick in January 2019, the record of the inquiry had been covered up to November 2018. Following a series of letters sent to the company demanding that it submit the requested material, the company’s representatives had been ordered to appear before the ADC, Jhajjar on November 15, 2018. With the company failing to appear, another letter was sent on November 21, 2018 ordering their appearance at the next meeting. 

Since then, according to a record of proceedings of the inquiry seen by NewsClick, the company’s representatives appeared before the ADC, Jhajjar on March 18, 2019. On this date they were again presented with copies of four prior reminders sent to them and ordered to furnish the requested material. With the officials busy on election duty, the next hearing could only take place on June 26, 2019. The record for this date states that the requested material has not been handed over to the ADC.

No Response From Tata

Questionnaires were sent to the Tata group’s media spokespersons’ and to the Chairman’s office by NewsClick on September 2, asking for confirmation that Sanjeev Suri appeared before the Delhi High Court, and asking for its position on the inquiry by the ADC, Jhajjar where its subsidiary company has not yet submitted the documentation that it has been ordered to.

No response was received from the Tata group by the time of publication. This article will be updated with any response that is received.

Abir Dasgupta is an independent journalist.