The Jalandhar Improvement Trust (JIT) seems to have found an easy way of making money — by delaying the draw of lots in its recently-launched housing project Surya Enclave Extension, it is earning interest on the earnest money deposit (EMD) submitted by applicants for allotment of residential plots.
September 7 was last day for submitting applications with EMD of 10% of the reserve price. But there is no news on when the draw of lots will take place.
The project offers 431 plots in various sizes — ranging from 100 square yards to 500 square yards — at a reserve price of Rs 17,000 per square yard. While applying, each applicant has to pay 10% of the total reserve price. With over 2,500 applicants applying for plots, it is learnt that JIT had collected between Rs 90 to Rs 100 crore as EMD.
Given the high interest rates prevailing on deposits, JIT can earn around Rs 80 lakh interest per month by just keeping this amount in the banks. And if the draw is not held in the next three to four months, as informed by sources in the JIT, applicants will be left poorer by Rs 4 to Rs 5 crore in the form of interest accruals.
The condition “number one” under the head “other conditions” of the JIT brochure pertaining to this plan says that “no interest will be paid to the applicant on the Earnest Money deposited”.
According to sources, around 70 per cent applicants have deposited the earnest amount after getting it financed from various banks. They will be double-charged in the sense that while they will have to pay the interest to the banks, the JIT will mint money as interest on EMD till the time the draw of lots is held. And even if the draw of lots takes place, JIT will take two more months to return the money to the unsuccessful applicants.