MIDC waives ₹5.3 crore unauthorised subletting charges of firm related to Ajit Pawar

Maharashtra Industrial Development Corporation (MIDC) waived over ₹5.3 crore in charges from Arpee Consultants Private Limited for unauthorized subletting of its property to SAP Holdings and Leasing Private Limited. The decision was deemed contrary to policy by the Comptroller and Auditor General of India (CAG).

MUMBAI: The Maharashtra Industrial Development Corporation (MIDC) has decided to waive over ₹5.3 crore from Arpee Consultants Private Limited (ACPL) as charges for unauthorisedly subletting its property for commercial use to SAP Holdings and Leasing Private Limited (Sharayu Motors) for over a decade without permission. The company is headed by Shrinivas Pawar, elder brother of deputy chief minister Ajit Pawar.

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MIDC also chose not to impose penalty charges when SAP Holdings claimed that SAP Holdings and Leasing Private Limited (Sharayu Motors) was its affiliate company and it was not getting any fees from the latter. This was revealed in the Comptroller and Auditor General of India (CAG) report on the performance audit of MIDC in the industrial development of Maharashtra. The report was tabled during the winter session of the state legislature last December. The CAG report also pointed out that the MIDC reply was not tenable, as the decision of the board was contrary to the laid-down policy.

In 2016, MIDC discovered that the ACPL was not carrying out any industrial activity on the allotted plot and had sublet it to SAP Holdings and Leasing Private Limited (Sharayu Motors) for commercial use as a showroom and repairing/servicing activities. As per the prevailing policy, it issued a notice, asking ACPL to pay ₹5.89 crore as unauthorised subletting charges for a period of ten years from January 2008 to September 2018.

In July 2019, ACPL requested a waiver on the grounds that SAP Holdings and Leasing Private Limited (Sharayu Motors) was an affiliated firm from which it did not get rent for utilising the plot. In October 2020, the MIDC management (administration) submitted a proposal before the board, recommending the same. It also proposed that the charges for unauthorised subletting for a further period from October 2018 could be recovered from ACPL.

“The MIDC board overruled the proposal and decided to grant a waiver of 50 percent,” states the CAG report. “It justified the decision, saying the occupant was a sister concern of the allottee and there was no rent receipt. Accordingly, ACPL was directed to pay an amount of ₹3.34 crore (for the period up to September 2018). It also included a demand for the period from October 2018 to December 2020, where sub-letting charges were calculated without considering the penalty charges.”

According to the CAG report, the sub-letting charges, along with the penalty, worked out to ₹8.65 crore from January 2008 to December 2020. “Hence, there was a short recovery of subletting charges to the extent of ₹5.31 crore,” says the report. It further observed that the allottee had neither paid the demanded amount nor taken any permission for further subletting from January 2021 onwards. MIDC, however, had not taken any action against ACPL.

In reply to the CAG, the MIDC board in August 2022 stated that it was empowered to overrule the management’s observations and take a decision based on the overall merit of the proposal. It added that the board had taken a conscious decision after due deliberation on merit, and there was no financial loss to MIDC. The CAG report emphasises that MIDC’s reply “is not tenable as the decision of the board was contrary to the laid-down policy”.

Sanjay Tatkare, spokesperson of the Ajit Pawar-led NCP faction, said there was nothing objectionable about the decision. “When MIDC itself says the board is competent enough to take a decision, it means the decision was taken as per rules and MIDC policy,” he said “There is nothing wrong in it and should not be seen through a political prism.”