The Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) has decided not to impose any penalty on Reliance Ventures Ltd (RVL), in terms of clause 20 of joint venture agreement, while working out the modalities for return of 1,383 acre of government land in Gurgaon.
The matter will come up for the approval of Haryana Cabinet on Friday. Reliance had offered to return the contentious tract in 2012 following its failure to set up a special economic zone (SEZ) project on it.
The HSIIDC, a joint venture partner of Reliance in the abortive SEZ project, has based its decision of not invoking the penal clause on the legal opinion tendered by Haryana advocate general (AG).
The AG in his opinion said: "A deep and thorough analysis of clause 20 showed that on failure to comply with two sub-clauses the land shall revert back to HSIIDC and penalty can be recovered from RVL. The two sub clauses are - procurement of 1,105 acre additional land by the special purpose vehicle (SPV) so as to achieve the minimum land benchmark of 2,500 acre for operating a multi-product SEZ as per norms of the government of India and procurement of about 4,100 acres (equivalent to 75% with regards to 1,383 acres of govt land).
Though Reliance has failed to procure 1,105 acre, it has complied with the second sub-clause because they have acquired more than 4,100 acre in Jhajjar district. The compliance of second sub-clause was accepted by the Haryana Investment Promotion Board (HIPB) in its meeting on July 14, 2010."
"Since Reliance has complied with this clause of the JV agreement, the HSIIDC cannot impose penalty on it. The stand taken by Reliance that no penalty can be levied appears to be justified…,'' the AG said in his advice.
For taking back the government land, the HSIIDC on the basis of AG's opinion has decided to pay back to Reliance Rs 343. 51 crore. This includes the Rs 299 crore as acquisition cost of 1,383 acre, Rs 14 crore annuity paid to farmers among others. Reliance had sought a reimbursement of Rs 1,172 crore from the state government for the return of the 1,383 acre of Garhi-Harsaru land in Gurgaon. It has also been suggested to the Cabinet that corporation be exempted from payment of stamp duty on transfer/re-conveyance of 1,383 acre by Reliance to HSIIDC.
October 2006: Joint venture agreement executed between HSIIDC and RVL for implementing SEZ.
April 2007: 1,383 acre transferred by HSIIDC to Reliance Haryana SEZ Ltd (RHSL), a special purpose vehicle, for setting up SEZ in Gurgaon.
January 2012: Haryana asked RVL to return 1,383 acre after Gurgaon SEZ project failed to take off.
October 2012: A government committee explores options for return of land, mulls exemptions for Reliance.
June 2013: Advocate general says no penalty can be levied on Reliance.