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Amidst the development and booming tourism industry in Gorakhpur, the home district of Uttar Pradesh Chief Minister Yogi Adityanath, a big and sensational fraud related to real estate and construction sector has been exposed. Due to the rejuvenation of Ramgarhtal, proximity to AIIMS, Fertilizer and Kushinagar International Airport, in the last few years, Gorakhpur has emerged as the biggest hospitality and commercial hub of Purvanchal. In this golden business environment, by showing the promise of making a reputed local businessman the owner of a three star hotel, the cunning contractors associated with a construction firm of Lucknow grabbed a huge amount of Rs 1 crore 18 lakh. The height of the fraud was that despite extorting crores of rupees, only one pit was dug in the name of foundation at the construction site and after that the work was completely stopped. Not only this, when the victim businessman asked for an account of his money, the accused made a fake agreement and demanded additional extortion money of Rs 50 lakh and even threatened to kill the entire family if the amount was not paid. Following the intervention of Police Officer (CO) Gorakhnath in this high-profile case, a case has been registered against the accused under serious criminal sections at Shahpur police station.
This entire matter is related to Ram Avtar Singh, a resident of Pragati Vihar Colony located in Dharampur under Shahpur police station area of Gorakhpur metropolis and partner of M/s Singhal Ventures. Ram Avtar Singh owns valuable land in Basharatpur area, on which he wanted to build a three-star hotel equipped with modern facilities. For the construction work of the hotel, he had contacted a real estate and construction company located in Adil Nagar, Tedhi Pulia of the capital Lucknow. Company representatives and contractors Mohammad Farid Kidwai, Faikullah Khan and Naseem Ahmed won the trust of Ram Avtar Singh by claiming themselves to be experienced builders of big projects. After this, on 23 August 2021, a formal contract for the construction of the hotel was executed between the two parties. Under the contract, timelines for different phases of construction were fixed. After this, in the name of starting the work and collecting material, a total of Rs 85 lakh 27 thousand were transferred from the victim’s bank accounts on different dates through RTGS and online medium. Apart from this, Rs 32 lakh 73 thousand in cash was also obtained citing labor expenses and urgent purchases on the site. In this way the contractors took into their possession a total of Rs 1 crore 18 lakh.
After receiving payment of crores of rupees, the real intentions of the contractors started coming to light. Instead of erecting the grand structure of the hotel by bringing heavy machinery to the construction site in Basharatpur, the contractors merely dug a big pit on the ground. When the businessman raised questions on the slow pace of work, the accused contractors kept misleading him by showing fake bills and bogus receipts in the name of purchase of cement, steel, bars and construction materials. The construction work came to a complete standstill for a long time and the contractors started shying away from coming to Gorakhpur. With the passage of time, the huge pit dug started filling with rain water, posing a threat to the safety of the surrounding settlements and land. Ultimately, the victim businessman had to spend an additional amount of about Rs 10 lakh from his own pocket to safely fill the pit with soil. It was then that the businessman realized that a well-planned financial fraud had been committed against him in the name of construction.
The matter was not limited to embezzlement and fraud only, but the fraudsters hatched a dangerous conspiracy to completely trap and blackmail the victim. On April 9, the accused sent a legal notice to the victim businessman through a Lucknow-based advocate. The victim was shocked to see the agreement that was attached with this notice. Para No. 18 of the original contract letter was crossed out and signed with the consent of both the parties, but in the said copy sent in the notice, a fake condition was added to the same Para 18 by fraudulent means. On the basis of this fraudulent condition, the contractors imposed an additional demand of Rs 50 lakh on the victim. When the businessman strongly protested against this fraud and talked about legal action, the accused abused him over the phone and clearly threatened that if Rs 50 lakh was not paid, he and his entire family would be killed.
Hurt by the constant death threats and being cheated of crores, businessman Ram Avtar Singh approached the top police officials for justice. He submitted a detailed application to Police Regional Officer (CO) Gorakhnath Ravi Singh along with receipts of all bank transactions, original contract letters, evidence of fake bills and a copy of the notice sent by the accused. Seeing the seriousness of the matter and concrete evidence of financial embezzlement, CO Gorakhnath immediately ordered Shahpur police to register an FIR. Taking prompt action, Shahpur police station has registered a case against the three main accused – Mohammad Farid Kidwai, Faikullah Khan and Naseem Ahmed, associated with the construction firm located in Adil Nagar, Tedhi Pulia, Lucknow, under serious sections including fraud, breach of trust, forgery (preparing fake documents) and criminal conspiracy. According to the investigating officer, a police team is investigating the bank account transactions of the accused and their locations in Lucknow and a raid will soon be launched to arrest them.
This case of Gorakhpur is a big lesson for all those investors and landowners who are planning to develop hotels, resorts or big commercial projects on their properties. According to legal experts and experienced chartered accountants, one should not rely only on paper promises in any major construction contract. The first and most important rule is that payments should always be ‘milestone-based’, i.e. large funds should not be released until actual work is seen on the ground at the site. It should be mandatory to obtain certification from an independent chartered engineer or architect for evaluation of the construction. Secondly, each page of any contract document must have full signatures of both the parties and any deleted or amended points must be notarized and confirmed by witnesses. Additionally, a thorough verification of the track record, RERA registration and Corporate Identification Number (CIN) of the contractor or construction company at the district level can safeguard it from major financial mishaps in the future.