Prime land sold at lower price, MC suffers Rs 20-cr loss: CAG

  • Vishal Rambani, Hindustan Times, Patiala
  • Updated: Apr 03, 2016 15:20 IST
Mayor Amarinder Bajaj (right) and Patiala (rural) MLA Brahm Mohindra (left) (HT Photo)

The cash-strapped Patiala municipal corporation (MC) sold its 7,800 square yard prime land near the old vegetable market at low rates, causing a loss of Rs 20 crore to the civic body, reveals the Comptroller and Auditor General (CAG) report which was placed in the Vidhan Sabha during the budget session.

The land was sold to the Patiala Improvement Trust at Rs 8,500 per square yard against the commercial collector rate of `64,000 per square yard. The report states that acting on a resolution passed by the MC, the local bodies department accorded an approval to transfer the land to the improvement trust at a much lower rate.

During scrutiny of 2014 records, CAG found that in March 2013, the deputy commissioner, who was also the chairman of the improvement trust said it was ready to take the possession of land at the residential collector rate of `8,500 per square yard since the land is meant for residential purposes. This was done despite a note from the town and country planning that the land falls in the mixed land use category and can be used for both commercial and residential purposes.

However, the MC did not explore the possibility of selling the land on commercial rates and decided to transfer half the land at commercial and the remaining at residential rates to the improvement trust in violation of the government rules.

The MC transferred 7,056 square yards (600 yards left for road widening) to the trust at Rs 25.58 crore instead of Rs 45.16 crore, resulting in a loss of around Rs 20 crore to the civic body, the CAG report stated.

In reply to the CAG report in January 2014, the MC commissioner tried to justify the move saying that the land was transferred following an approval from the of MC House and there was no loss of revenue.

However, CAG found that till September 2014, there was no such approval from the state government.

“The reply was not acceptable as half of the land was transferred to the improvement trust at residential rate, which was in contravention of the approval of the state government to transfer the entire land at commercial rate,” stated the CAG report.

Justifying the move, mayor Amarinder Bajaj said he had done what the general House has passed. “The land has been transferred from one government department to another, thus there is no actual loss to the government as the improvement trust and MC are both part of the local bodies department,” he said.

Targeting the MC, Patiala (rural) Congress MLA Brahm Mohindra said the civic body had become a den of corruption. “The MC should justify why it has not explored the option of selling the land on commercial rate. Action should be initiated against officials who had acted in violation of rules. The Congress will take up the issue in the public accounts committee of Vidhan Sabha,” he added.

Regarding Mayor’s justification that land was transferred from one government department to another and thus no loss, Mohindra said: “The MC has suffered a loss. In MC, every penny is spent as per wishes of the elected members, while in the improvement trust, only officials or nominated persons a take decision. The `20 crore could have been spent on development works in the city.” He said the MC needs money for repairing roads and providing basic amenities to city residents.

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