E-Paper
CAG findings: HSIIDC fails to provide encumbrance-free site to allottee in Gurugram
The HSIIDC failed to provide encumbrance-free site to an allottee in Gurugram within the prescribed time frame, resulting in deferment of payment schedule leading to loss of interest of ₹45.96 crore
The Haryana State Industrial and Infrastructure Development Corporation (HSIIDC) failed to provide encumbrance-free site to an allottee in Gurugram within the prescribed time frame, resulting in deferment of payment schedule leading to loss of interest of ₹45.96 crore.
The observations were made by the Comptroller and Auditor General (CAG) in its report on public sector undertakings (social, general and economic sectors) ending March 2019.
The CAG observed that revision of the schedule of regular letter of allotment (RLA) resulted in deferment of payment schedule of allottee by 113 to 354 days.
“Had the company received payments as per original RLA, it could have saved interest of ₹45.96 crore paid on its borrowings as HSIIDC has obtained various loans for its operations,” the audit said.
The audit said that the corporation should have initiated the process for vacation of land well in advance so that clear and encumbrance-free site could have been provided to the allottee as per bid document to avoid any losses.
The cash-strapped corporation had in February 2018 auctioned a 11.76-acre commercial site in phase 5 of Gurugram’s Udyog Vihar for ₹1,496 crore. The reserve price of the site was fixed at ₹686 crore.
“Four parties participated in bidding for the site - Beech Projects Limited, Experion Developers, Parmida Constructions Ltd, and Aadarshini Real Estate Developers. All four were found technically qualified. Aadarshini Developers emerged as the highest bidder with a quote of ₹1,496 crore as compared to the bid of ₹1,446 crore made by Beech Projects,” a HSIIDC spokesperson had said.
The CAG in its audit pointed out that as per clause 2.3 of bid documents, the site was clear and free from all encumbrances.
“The HSIIDC offered the site as free from all encumbrances, but the building having two tenants and mobile tower on the land, were not vacant. Notices to vacate the premises were issued to the tenants in September 2017, though the corporation had decided to sell this land in November 2016 itself. Since the building on the land was not vacant, HSIIDC initially extended the due date for deposit of first instalment from April 8, 2018 to April 30, 2018.
The allottee apprehending non-removal of encumbrances moved high court for extension in payment time and deposited ₹224.40 crore with the HC.
The court, in May 2018, ordered the corporation to remove all encumbrances and issue the revised RLA. Accordingly, the corporation issued revised RLA on July 3, 2018 with revised payment schedule.
The allottee again requested the corporation to provide encumbrance-free site as it was still not clear and there were still some issues relating to allotting of parking slot, underground water tank, sewerage lines, demarcation points which were not as per zoning plan.
HSIIDC, however, in March 2019 served a notice to the allottee for balance payment upon which the allottee again moved the HC.
The state government, in its reply, stated that the allottee had been raising different issues at different times and did not approach the corporation for taking possession of the land pre-supposing that the land was not free from encumbrances.
The reply was not acceptable as the corporation could not provide the encumbrance-free land to the allottee till March 2019 upon which the HC directed it for revision of schedule of the RLA commencing from March 26, 2019.
