The trustees of an upcoming school in Nasik have been looking for land to set up the school. The proposed school will be affiliated with the Central Board of Secondary Education based out of Delhi. The board has a requirement of 2 acres of land. The budgets are very limited – and the strategy for land location has been to get as close to the city as possible in the limited budget, in this case Rs. 60 lakh.
After having surveyed many sites they have finally found one which seems to be fitting in. A broker has just shown them a plot about 25 km from the city center (in case of Nasik it is the Central Bus Stand or CBS) – located on a state highway going towards Valsad, a town in Gujarat. The road is called Peth Road – and it is proposed to be converted in future to a 4 lane highway. The plot is 6.5 acres, and the broker has conveyed that he will be able to sell a minimum plot size of 3 acres. The asking rate is close to 27 lakhs an acre. The papers of the land have been received, and a search report by a lawyer has been done. The title is clear and the plot has only one legal owner – Ganesh Joshi. Althought his amounts to stretching the budget, the trustees have agreed to a meeting with the owner.
In March 2012, the broker called the trustees with the seller. The meeting was convened at a restaurant in the Panchvati area at noon. The seller arrived to the meeting 3 hours late accompanied with 5-6 more people who were introduced as other brokers in this deal. He was introduced as Sachin Joshi – a nephew of the land owner – and quickly got down to the nitty gritiy of negotiation. Half an hour later the parties agreed to a rate of 24.5 lakh per acre. An advance was offered by the trustees, but was refused by Sachin Joshi, who insisted that the deal should close as soon as possible. It was agreed that 3 months was an adequate time for the trustees to raise the finance for the land purchase. A public notice of sale was immediately published in the local newspaper by the seller as an indication of good faith to take the deal forward.
15 days later the trustees got a call from Sachin asking if an advance can be given for the land purchase. One of the two trustees had to sell a piece of land to raise the funds on his part, so it was decided that the other trustee would contribute his share early. The internal discussion between the trustee led to a decision that they would ask Sachin Joshi to transfer 1.5 acres of land in the name of trustee no. 2 after accepting 50% of the payment. It was decided to meet in Nasik on 5-Apr to consummate this deal.
Arrving in Nasik on 4-Apr, the outstation trustee was informed that Sachin Joshi had not accepted the terms for a land transfer. Discussions with some of the trustee’s broker friends indicated that it would be a good idea to either ask to pay the advance and register this transaction with the government by paying adequate stamp duty. The other option was to bluff Sachin Joshi by saying that the entire funds have been raised, and then ask for the entire set of documents that are required for a land purchase.
On the morning of 5-Apr the buyer and seller met at Peth road. Measurements were done on GPS to confirm the land area – and the buyers were satisfied that it matched with what was shown on the government survey papers. The buyers proposed to give the advance and do a registered agreement. The seller insisted on taking an opinion from his lawyer before taking a decision. The meeting shifted to the lawyer’s office in Nasik, where consultation was done with Ganesh Joshi, who refused to register the advance document, saying that it was almost like a sale if it would be registered. He made a counter offer of doing the registry after receiving 70% of the payment. That offer was refused by the trustees, because they did not have that money. The trustees then made a counter offer, paying an advance of 25% based on a notarized document. This was accepted by the seller after increasing the advance expected to 33%. A document was made by the seller’s lawyer and was handed over to the buyer for scrutiny. The document was a joint deed for the entire 6.5 acres between Ganesh Joshi, the trustees and one Mr Deshmukh, the buyer of the remaining 3.5 acres. It was decided to meet on the morning of 5-Apr with Ganesh Joshi.
On 5-Apr early morning the trustees went to meet their lawyer. He rejected the notary draft made by the seller lawyer – and recommended 2 changes. One to have separate agreement, not a joint one involving Deshmukh. The other was to add a clause which specified that the money should be returned to the buyers in case they were not able to raise the funds in the requisite time, and in case they were able to raise funds and the seller refused, the buyers had right to take legal action on the seller. This draft was presented to Sachin, who had some objection to the second point, but it was decided that the final decision would be taken by Ganesh Joshi.
In the evening a meeting was arranged with Ganesh Joshi, where Deshmukh and the notary would also be present. On arriving at the meeting, the trustees did not find any notary present. Ganesh Joshi had some reservations about the repayment clause, but by introducing an additional penalty clause for the buyers in case they are not able to come up with the money in time, he was ready to sign the agreement. In a casual discussion with Ganesh the trustees discovered that Sachin Joshi is not Sachin Joshi but is actually Sachin Deshmukh, the son of the other buyer of the land. And he is not related in any way to the Joshis. But Joshi insisted that any dealings that the trustees had to do had to be done with Sachin Deshmukh. The trustees, who had come to the meeting, ready with the cash are now in a quandary: Should they give the advance?