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Kanjurmarg plot: Decisions taken by revenue officials suspect, says PAC report

Officials’ plans led to great loss of government revenue, says panel

mumbai Updated: Jan 16, 2018 00:39 IST
Ketaki Ghoge
Ketaki Ghoge
Hindustan Times
PAC report,Kanjurmarg plot,Comptroller and Auditor General of India
While the government earned a nominal annual rent of Rs33,590 on the plot, its lease owner and developer constructed a residential and commercial complex roughly valued at nearly Rs1,000 crore.(HT File)

The timeline of how a government-owned nine-acre industrial plot in Kanjurmarg got converted into a swanky residential and commercial complex shows a maze of contradictory government orders, which raises questions over the state’s intent to protect its biggest resource.

While the government earned a nominal annual rent of Rs33,590 on the plot, its lease owner and developer constructed a residential and commercial complex roughly valued at nearly Rs1,000 crore.

“There is suspicion that there has been great loss of government revenue, going by the history of this lease and the way decisions have been made by different levels of authority — from the district suburban collector to the revenue minister,” said the 26th public accounts committee in its report into the audit on this plot. The PAC, which comprises members of the state legislature, probed audit observations by the Comptroller and Auditor General of India in its 2013 report. Pointing to violations of this land allotment, the CAG had questioned why the government had not recovered the land.

The questions raised

“The government was either napping or in connivance [with the accused] when the plot meant for industrial use was being converted into commercial and residential complex. The revenue department only woke up after the CAG slammed it over misuse of the land and the construction of a IT park on it,” said a PAC member.

He said the committee’s main contention was over the amount of ‘unearned income’ earned for regularising this plot after the violation.

The unearned income on the land was brought down from Rs50 crore to Rs17.33 crore after the lease owner appealed against the collector’s order. The PAC report states there was no transparency or rationale in deciding this amount.

The committee also raised doubts over the quasi judicial decision-making powers of revenue officials. It questioned the then revenue minister’s decision to hold a suo motu hearing on a collector’s decision taken a year ago. After the revised hearing, the minister only confirmed the collector’s order to grant the no objection certificate to Lodha. “What was the need for the minister to hold a revised hearing suo motu ?” the report asked.

The report questioned the logic behind charging a nominal annual lease rent of Rs33,590 and not upgrading this even after allowing change of land use.

Reassessing lease rent arrears

After the report sought a reassessment of the lease rent and formula, the district collector calculated the lease rent arrears for the plot based on a 1992 order by the then revenue minister, who had said that whenever a new lease policy was formulated, the lease owner would have to pay a one-time amount according to it, but retroactively from August 1, 1989, with interest. The matter went to the minister after the lease owner opposed the decision of the collector and divisional commissioner to pay an annual lease rent of Rs31. 99 lakh for the plot.

The government has now asked the lease owner to pay the difference from 1989, the year the plot was allotted, according to 2012 new lease policy. Revenue officials said the lease holder had given a guarantee in 2006, saying it would pay up according to this order.

First Published: Jan 16, 2018 00:39 IST