Haryana’s move to exempt Reliance put on hold for technical reasons
Haryana’s proposed move to exempt Mukesh Ambani’s Reliance Venture Ltd (RVL) from the provisions including the penal clause of the joint venture (JV) agreement, for return of 1,383 acres of government land in Gurgaon was put on hold on Saturday for “technical reasons.”chandigarh Updated: Oct 13, 2012 21:56 IST
Haryana’s proposed move to exempt Mukesh Ambani’s Reliance Venture Ltd (RVL) from the provisions including the penal clause of the joint venture (JV) agreement, for return of 1,383 acres of government land in Gurgaon was put on hold on Saturday for “technical reasons.” The matter came put on before Haryana Investment Promotion Board (HIPB) headed by chief minister, Bhupinder Singh Hooda.
The 1383 acre was transferred by Haryana State Industrial and Infrastucture Development Corporation (HSIIDC) to Reliance Haryana SEZ Ltd (RHSL) for setting up the SEZ. Haryana however in January 2012 had asked RVL to return 1383 acres after the Gurgaon SEZ project could not fructify even after six years.
Hindustan Times had exclusively highlighted on Saturday the government’s proposed move to settle the issue of handing back of Gurgaon land to HSIIDC by stepping outside the scope of joint venture agreement executed between Reliance and HSIIDC for setting up a SEZ in Gurgaon. The move had the potential to create a fresh controversy for the state government since it entailed relaxations for Reliance from the provisions of the JV agreement.
Reliance has sought a reimbursement of Rs 1172 crores from the state government for the return of 1383 acres of Garhi Harsaru land in Gurgaon. This included refund of entire land cost it paid to HSIIDC, development cost, stamp duty refund, annuity it paid to the farmers along with 18% annual interest.
Haryana officials however maintained that the government committee constituted to examine the matter had rejected Reliance’s demand for payment of 18% annual interest - about Rs 670 crores. “ A final decision, of course in this regard will be taken by HIPB,’’ they said.
Since the request for reimbursement of cost of land, stamp duty refund, annuity paid to farmers and payment of 18% per annum interest was made by Reliance Ventures Ltd (RVL), it was decided that the request should instead be routed through the special purpose vehicle – Reliance Haryana SEZ Ltd (RHSL) set up to implement the Special Economic Zone (SEZ) project, top officials said while explaining the technical reasons for deferment of decision on Saturday.
The government committee while examining the matter had come up with two options– either to abide with the provisions of the JV agreement or amicably resolve the matter by taking a rational view and settle the issue by stepping outside the scope of JV agreement.
It though recommended to the HIPB that the government should step outside the scope of the JV agreement while finalizing the modalities for handover of 1383 acres. The committee has argued that this approach will facilitate transfer smooth and amicable transfer of land back to government and thwart litigation.
On the other hand, the committee has said, that RHSL would not abide with the stipulations of JV agreement and may take legal recourse leading to a long-drawn-out legal battle which would delay the handing back of land and consequently harm state’s interest in terms of fresh plans for utilization of high value land.
One of the provisions of JV agreement stipulated that in case the Reliance led special purpose vehicle- RHSL failed to procure about 75 % of the land (about 4100 acres) equivalent to 1383 given to RHSL by HSIIDC which was mandatory in terms of Haryana government’s land acquisition policy for SEZs, Reliance Ventures Ltd will be under obligation to pay 15 % of the value of land as penalty damages besides the reverting the government land to HSIIDC. Another JV agreement clause stipulated forfeiture of interest and administrative charges in case the project failed.
First Published: Oct 13, 2012 21:55 IST