UT Employees Housing Scheme: Providing flats at 2008 rates to cost Chandigarh ₹2,000 crore

Finding it impossible to construct the flats within a year, as directed by HC, apart from the mammoth financial loss, UT is planning to approach the top court

The Punjab and Haryana high court’s ruling that UT employees, who had applied for the 2008 Self-Financing Employee Housing Scheme, will get the flats at brochure rates of the same year, will translate into a financial loss of nearly ₹2,000 crore for the Chandigarh administration.

In its May 30 order, the court had also directed Chandigarh administration to construct the flats within one year. Finding itself in a tight spot, the administration is planning to approach the Supreme Court against the HC order. (HT File)

In its May 30 order, the court had also directed the UT administration to construct the flats within one year. Finding itself in a tight spot, the administration is planning to approach the Supreme Court against the HC order.

As per the HC judgment, the cost of construction is to be paid by the employees at current rates. However, cost of the entire land meant for implementation of the scheme will remain at the rate of ₹7,920 per square yard, as announced in 2008.

“Giving the land at the collector rate of 2008 is not financially feasible. It will result in a financial loss of nearly ₹2,000 crore. It is also not possible to construct the flats in one year, considering that the tender process itself will take around two to three months. Therefore, we are planning to move the top court,” said a senior officer of the UT administration, not wishing to be named.

The officer further said since the land belonged to the Union ministry of home affairs (MHA), they will approach the apex court only after receiving MHA’s recommendation.

Land cost has shot up from ₹237 crore to ₹2,200 crore since 2008

As per records, in 2019, the MHA had determined the cost of the 61.5 acres land for the scheme at around ₹2,200 crore, coming to ₹74,131 per square yard. However, according to the collector rate of 2008, the per square yard rate will be ₹7,920, equating to ₹237 crore for the 61.5 acres.

Thus, the revised cost of a three-bedroom flat will be around ₹50 lakh, a two-bedroom flat will cost around ₹40 lakh, a one-bedroom flat around ₹35 lakh and a single-room flat around ₹15 lakh.

Around 4,000 flats were to be built in Sectors 52, 53 and 56 by the Chandigarh Housing Board (CHB) for government employees as part of the scheme, launched in 2008.

The project comprised 252 3BHK flats with servant quarters, 168 2BHK flats with servant quarters, 3,066 1BHK flats and 444 single-room flats for Group D employees.

A draw of lots was held in 2010, in which 3,930 employees among 7,911 applicants were selected. They had then deposited around ₹57 crore with the CHB under the scheme.

However, the project ran into rough weather, as the administration could not make requisite land available for the purpose.

In October 2013, when employees realised that UT was dillydallying, they approached the high court, demanding that flats be allotted at the same rates asked for in 2008, within a time-bound manner.

In the past 16 years, as many as 100 employees, who had opted for the scheme, have died.

In high court, UT initially had argued that as per a 2012 letter of department of expenditure, Union government, no land belonging to government could be sold to a local authority, body or any person or institution without prior sanction and specific approval from the Centre. Also, it had to be given on commercial rates. The central government on January 2, 2019, cleared the scheme, although at prevailing collector rate.

This resulted in a major spike in the flats’ rates due to higher cost of land, prompting the employees to move the Punjab and Haryana high court.

While during the launch of the scheme in 2008, UT offered 3BHK flats for ₹34.70 lakh, 2BHK flats for ₹24.30 lakh and 1BHK flats for ₹13.53 lakh; their prices had jumped to ₹1.76 crore; ₹1.30 crore; and ₹75 lakh, respectively.

In February this year, UT had informed the court that it had decided not to go ahead with the scheme, as it was no longer viable. Following this, the court had heard the matter on merit.

In the May 30 order, the court said the 2012 circular was issued in “colourable exercise of power” by the executive and is having prospective operation, whereas the scheme was launched in 2008.

The court said the UT administrator had overall superintendence and control over the working of CHB and the scheme was launched with his nod. “However, it appears that as senior officers/officials of the Chandigarh administration were not successful in the draw of lots, they lost interest in the scheme and, thus, inaction on the part of the board to comply with terms and conditions of letter(s) of intent, dated 10.01.2008, coupled with lack of exercise of superintendence and control over the said board by the UT administrator, all these factors led to non-implementation of the scheme,” it recorded.

The court further held that the entire controversy arose on account of inaction on the part of the board due to non-deposit of 25% of cost of land with the UT administration within stipulated time, despite the fact that a sum of ₹57 crore was deposited by the successful employees and it had ₹300 crore in its account.

Consequently, the UT administration cancelled the land allotment in 2010 and no fault of employees can be found in this.

Dr Dharamender Shastri, general secretary of the UT Employees Housing Welfare Society, said, “If the UT decides to approach the top court, we will also fight until the end. We want to know, what was our fault? Already around 100 employees have died fighting the battle with the UT administration for their houses.”