Haryana IAS officer Ashok Khemka, who has advocated transparency in procedures governing grant of colony licences and change of land use (CLU) permissions, had in 2011 himself facilitated the grant of a CLU permission for a company in which his father-in-law is a director.
Khemka had approached then director general, town and country planning department (TCPD), TC Gupta to push the case of Royal Credits Private Limited, a company in which his father-in-law Ram Niwas Jain, is a director, for grant of CLU permission.
When asked, Gupta, who is the principal secretary, TCPD, said Khemka had indeed approached him to expedite the grant of CLU for a company in which his (Khemka's) father-in-law is a director.
While there is nothing wrong in one applying for CLU permission, there are several questions which need to be answered in the case of Royal Credits Private Limited.
Khemka's father-in-law Ram Niwas Jain, who as per the ministry of corporate affairs, is a Delhi resident, became the director of Royal Credits Private Limited on October 1, 2010. The company was originally incorporated (formed) in March 1995. Its two other directors are Vivek Aggarwal, who was appointed on January 16, 2007, and Mukesh Choudhary, appointed on October 1, 2010.
Within a month of Jain becoming the director of Royal Credits, the company bought 2,756 square metre (0.68 acre) of land in Kundli in Sonepat on November 8, 2010. The mutation of the land took place on December 10, 2010.
On March 3, 2011, three months after the mutation, the company applied for CLU permission for conversion of land from agriculture to commercial to set up a restaurant. Subsequently, Khemka approached Gupta, the then DG, TCPD, to expedite the grant of CLU permission.
The department got a site inspection report on April 27, 2011. The CLU was approved on May 23, 2011, and a letter of intent was given to the company on June 9, 2011. The final CLU permission was issued on September 16, 2011, for 1,369.13 square metre (0.33 acre) to set up a restaurant in Kundli.
No construction even after two years
The company has not started any construction on the 1,369.13 square metre even after the completion of the mandatory two-year period. The Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Rules under which CLU is granted say that the applicant has to start construction within six months and complete it within two years from the date of issue of CLU. The TCPD director is, however, empowered to grant one-year extension of CLU if he is satisfied that the delay in execution of works was for reasons beyond the control of the applicant.
Question mark on firm's financial capability
As per the March 2012 audited balance sheet of Royal Credits, the company has share holder's fund to the tune of about R 1 crore out of which the non-current investments are R 99.28 lakh.
Of this R 99.28 lakh, the company has invested R 82.88 lakh in Kundli property for which it has taken CLU and invested R 16.4 lakh in equity instruments. Audit experts say that the balance sheet indicates the company does not have the financial wherewithal to execute the restaurant project. "The company would have to take loan to implement the project,'' said a Chandigarh-based chartered accountant. When the company applied for the CLU, its certified net worth was R 76.11 lakh.
Land cost appreciation
The price of 0.68 acre on national highway 1 bought by the company for R 54.5 lakh in 2010 has gone up after the grant of CLU. TCPD officials said the applicant cannot sell the land or a portion of it unless it has been put to use permitted by the director. The stake holders in the company, however, could still make a kill by changing the company's directors.
Haryana IAS officer denies role
When contacted for his reaction, Ashok Khemka sent an SMS saying, "It is scurrilous and denied. He (TC Gupta) is trying to disrepute me to cover up the corruption in the department. He is free to take action if there is any wrongdoing. I am not responsible for what others do."