Fix responsibility of officials who did not revalidate bank guarantees of realtors: Haryana assembly committee

As per the CAG report, failure to revalidate bank guarantees not only caused a loss of ₹9.84 crore to the state exchequer but it also extended favour to licencees

Haryana assembly’s committee on public accounts has sought to fix the responsibility of erring officers of the town and country planning department for failing to get revalidation of bank guarantees submitted by developers for getting real estate development licenses.

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In a report tabled during the monsoon session of the state legislature, the committee while examining the Comptroller and Auditor General (CAG) audit report said the bank guarantees being neither encashed nor re-validated was viewed seriously by the committee. As per the CAG report, non-revalidation of bank guarantees not only caused a loss of ₹9.84 crore to the state exchequer, but it also amounted to extending undue favour to the licensees.

The audit said during a test check of town and country planning department records, it was seen that the department was not enforcing the rules and regulations to protect the interests of the state exchequer and was extending undue favour to the licensees. During the exit conference in April 2022, the town and country planning department director stated that in all three cases licenses were cancelled by the department and the process of encashment of bank guarantee was initiated before the expiry of the validation period. However, the department could not produce the documents in support of the reply except in the case of license no. 42 of 2008 wherein the department had instructed the bank in July 2012 to encash the bank guarantee but the bank conveyed its inability due to expiry of validation period of the bank guarantee.

“Thus, due to the lackadaisical approach of the town and country planning department to enforce the provisions of the Haryana Development and Regulation of Urban Areas Act, the state exchequer has suffered a loss of ₹9.84 crore,” the audit said.

The audit said the department cancelled the license of a developer in October 2012. The department had the bank guarantees on account of external development charges (EDC) and internal development charges (IDC) of ₹4.162 crore which were valid till October 2009. However, the department did not revalidate the bank guarantees which resulted in the loss of ₹4.16 crore to the exchequer. The department did not initiate any action to recover the pending dues except making a request in November 2020 to the Sonepat deputy commissioner for handing over of land of the license to the senior town planner, Rohtak. In another case, the department cancelled a license in August 2018 but did not revalidate the bank guarantees.