With 80 lakh stuck in PMC bank, Sion residents have no funds for building repairs

Updated: Oct 02, 2019, 08:34 IST | Vinod Kumar Menon | Mumbai

With Rs 80 lakh locked in scam-hit PMC Bank, and their building needing urgent repairs, a housing society of 160 working-class families has nowhere to go

Secretary Kashinath Rokade says the scaffolding has already been put up, but work simply cannot continue as their funds are stuck at PMC Bank. Pics/Pradeep Dhivar
Secretary Kashinath Rokade says the scaffolding has already been put up, but work simply cannot continue as their funds are stuck at PMC Bank. Pics/Pradeep Dhivar

Residents of Shiv Sneh housing society in Pratiksha Nagar, Sion, are stuck with scaffolding surrounding their premises. After structural auditors found that the building needed urgent repairs, the residents decided to use the Rs 80 lakh it had collected over 11 years, but it is now stuck at PMC Bank. With the money out of reach, the extremely critical repairs that the building requires may not happen.

The auditors had advised the residents to carry out structural repairs at the earliest to avoid anything untoward happening, society chairman Mahesh Adate said. "The building, which has 166 members over four wings, including 8-9 shops, was to undergo repairs for the first time since it was handed over by MHADA in 2008. The society had been collecting repair funds under monthly maintenance of Rs 1,800 from each member since then. A huge corpus of nearly R80 lakh was collected in the form of fixed deposits and other savings at PMC's Sion branch."

Members at an emergency meeting on Tuesday evening, where residents were informed of the crisis
Members at an emergency meeting on Tuesday evening, where residents were informed of the crisis

The society had even issued a work order to M/s Viswakarma from Thane after paying an advance of Rs 5 lakh. Since August 15, the scaffolding had been erected, and work on removing the old plaster was in process. As per the contract, the entire work was to be completed within four months.

"We had no worries, as the funds were readily available at PMC Bank," said Kashinath Rokade, secretary of the building. Adate said, "We were taken by surprise on learning about the directives from RBI putting restrictions on PMC Bank. We had to arrange for funds as the contractor had already sent a letter seeking clearance of additional funds for carrying out the work, and we are left in the lurch. With no clarity on when the crisis will end and uncertainty looming, we have no idea what will happen to the repair work."

Secretary Kashinath Rokade said work on removal of plaster had already been started
Secretary Kashinath Rokade said work on removal of plaster had already been started

He said, "We understand that the contractor cannot proceed without being paid. The contractor may have spent over a lakh on erecting the scaffolding and will have to shell out a similar amount to remove it," the chairman said.

When asked why the society did not have any other bank account, the office-bearers said, "We had been told that housing societies should mandatorily have accounts with co-operative banks, hence we abided by the rules."

Adate said the office bearers would have to speak to the other residents to find a solution. "Only a handful of flat owners are aware about the financial crisis at PMC Bank, so we called for a special meeting on Tuesday to discuss the situation," Adate said.

The other problem is that it would be practically impossible for the society to gather additional funds from members, that, too, such a large amount as most residents were working-class people.

Lodging police complaint

"We have decided to file a written complaint with Wadala Truck Terminal Police station against PMC Bank management. We don't know what we will do if any untoward incident happens, as the structural auditor had suggested urgent repairs. The police should be taking action against the PMC Bank management," Adate said. When asked if the society has insurance for the building, Adate said the structure did, but life and property of individual flat owners was obviously not covered.

2008
Year since the society had been collecting funds for repairs

'Society must find solution fast'

M/s Acme Consultants had carried out the structural audit of Shiv Sneh a few months ago and had directed the society to carry out urgent repairs. Satish Suvarna, of Acme, said, "The onus is now on the society office bearers to reply to the BMC directly in case of any untoward happening." When asked about the audit findings, Suvarna said, "The building falls under C2B category (repairable) and we had advised them to carry out urgent repairs." When asked if they can seek any concession in time due to PMC's financial crises, Suvarna said no, stating that the society office bearers would need to find a solution fast.

'Shiv Sneh should conduct only the urgent repairs for now'

Property lawyer Vinod Sampat said co-operative societies whose funds are stuck in PMC Bank will need to make some change in plan. About Shiv Sneh, Sampat said, they should conduct the urgent repair work for now and can postpone refurbishing plans. Also, members will have to contribute for the urgent repairs again, which can be refunded once the PMC Bank issue gets sorted out. However, Sampat is not very optimistic about PMC Bank's future. His advice to co-operative societies is to not deposit all funds in one bank, but spread out major funds, such as those for repairs, over multiple banks.

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