Hry govt mulls exemptions for Reliance
Under attack from India Against Corruption (IAC) activist Arvind Kejriwal for favouring colonisers, the Haryana government is considering to exempt Mukesh Ambani’s Reliance Venture Ltd (RVL) from provisions, including the penal clause of the joint venture (JV) agreement, while working out modalities for the return of 1,383 acres of government land in Gurgaon.chandigarh Updated: Oct 13, 2012 14:43 IST
Under attack from India Against Corruption (IAC) activist Arvind Kejriwal for favouring colonisers, the Haryana government is considering to exempt Mukesh Ambani’s Reliance Venture Ltd (RVL) from provisions, including the penal clause of the joint venture (JV) agreement, while working out modalities for the return of 1,383 acres of government land in Gurgaon.
The 1,383 acres were transferred by the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) to Reliance Haryana SEZ Ltd (RHSL) for setting up a special economic zone (SEZ) in Gurgaon. The JV agreement was executed between the HSIIDC and RVL for the SEZ.
In January 2012, Haryana had asked RVL to return 1,383 acres after the project could not fructify even after six years.
The matter pertaining to proposed exemptions and modalities for return of land will come up for a decision on Saturday at a meeting of the Haryana Investment Promotion Board (HIPB), headed by CM Bhupinder Singh Hooda. If ratified, it will be put up before the council of ministers.
Reliance has sought a reimbursement of Rs 1,172 crore from the state government for the return of the 1,383 acres of Garhi Harsaru land in Gurgaon.
This included the refund of the entire land cost it paid to HSIIDC, development cost, stamp duty refund, annuity it paid to the farmers along with 18% annual interest (about Rs 670 crore).
A committee of the state government, while examining the matter, had come up with two options -– either to abide by provisions of the JV agreement or amicably resolve the matter by taking a rational view and settling the issue outside the scope of the agreement.
Surprisingly, the committee has recommended to the HIPB that the government should step outside the scope of the JV agreement while finalising modalities for handover of the 1,383 acres. The committee has argued this approach will facilitate the smooth transfer of land back to the government and also thwart litigation.
On the other hand, the committee has said that the RHSL is likely not to abide with the stipulations of the JV agreement and may take legal recourse leading to a long drawn out battle that would delay the handing back of land and consequently harm the state’s interest in terms of fresh plans for utilisation 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 4,100 acres) equivalent to 1,383 given to RHSL by HSIIDC, which was mandatory in terms of the 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 reverting the government land to HSIIDC. Another JV agreement clause stipulated forfeiture of interest and administrative charges in case the project failed.
However, the committee has recommended to the HIPB that the entire land cost paid by Reliance, including the interest and administrative charges, be reimbursed to the company. Also, it has recommended the reimbursement of stamp duty of Rs 22 crore paid by RHSL on the registration of conveyance deed, annuity paid to farmers and cost of development of works executed by the SPV.
First Published: Oct 13, 2012 11:27 IST