M A I N   N E W S

Norms flouted in allotting prime land in Noida
Prabhjot Singh
Tribune News Service

New Delhi, June 17
A scam involving allotment of 232 acres from the green sector of Greater Noida for setting up of a leisure and amusement park with permission to sell 5 per cent of the total land for commercial use has shaken the Uttar Pradesh Government.

The scam came to light after a Chief Executive Officer of Greater Noida, Mr Dinesh Singh, noticed various irregularities, both in fixation of land price and subsequent allotment to the beneficiary company, which was considered as a “single case on file”.

He felt that “there has been gross violation of rules and administrative and financial principles and it cannot be said the principles of justice, equity and good conscience have been satisfied.” He had sent a copy of his report to the government, mentioning the facts of the case, indicating the irregularities, besides informing the higher authorities of steps being taken to cancel the allotment.

The allotted land is adjoining the golf course and on the 105-m main artery.

It seems that the rights granted by the authorities to the beneficiary company was not the objective of the allotment of institutional land at fixed price under the open-ended scheme.

The Tribune has access to the entire case file, including the notings made by Mr Dinesh Singh, who has been now replaced by Mr Rakesh Bahadur as Chief Executive Officer. Mr Dinesh Singh could not be contacted.

Though a similar entertainment-cum-amusement park adjoining Noida was auctioned, no advertisement was given in newspapers or other media channels in this regard.

The beneficiary, a private limited company, after defaulting twice on demand-cum-acceptance offers made to it in May 2000 and again in September 2000 was in the process of cobbling together a consortium whose formal equity closure was still to be communicated to the Greater Noida authorities.

The third and final demand-cum-acceptance letter was issued to the beneficiary company on March 27, 2002, just four days before the rate of allotment under institutional head was to be revised from Rs 411 per sq m to Rs 490. The entire piece of land on the main arterial road was offered for Rs 38.59 crore. The beneficiary company was also given permission to sell or transfer 5 per cent of the allotted land as build-up-cum-commercial space at the prevalent market rate.

According to real estate experts, the current asking rate in Greater Noida for commercial land was anything between Rs 35,000 and Rs 54,000 per sq m. Even if the rate was taken to be Rs 50,000 per sq m, 5 per cent of the 232 acres, 11.6 acres, will fetch approximately Rs 2,402 crore. This means that the beneficiary company gets a subsidy of a little more than Rs 1 crore per acre.

But before the lease deed could be signed, Mr Dinesh Singh, an IAS officer of the 1982 batch, after perusing the file not only recommended the cancellation of the allotment but also suggested seeking legal opinion on the irregularities committed. He reportedly recorded his observations on the file, holding that the reserve price was fixed only for tendering purposes and for allotment at fixed price under the open-ended scheme.The method used for allotment was erroneously adopted as at no stage advertisements seeking interest of companies engaged in entertainment and amusement business was sought.

The entire process of allotment started in 1999 when Mr Brijesh Kumar, a senior IAS officer of the Uttar Pradesh cadre, was Chairman-cum-CEO of Greater Noida.

Despite best efforts, he could not be reached on phone for his comments.

Fairwood Consultants had mooted a proposal for setting up a leisure-cum-amusement park in Greater Noida in March 1999 and followed it up with a request for allotment of land. Entertainment-cum-amusement parks normally do not come under “institutional head" for allotment of land at reserve price.

After request for the allotment of land had been received, Feedback Infrastructure, which was Greater Noida’s project development consultant, gave a feasible report on the qualifications, criteria and price of land for such a venture.

The board at its meeting on September 27,1999, fixed a price of Rs 409 per sq m for projects up to 20 acres and Rs 350 per sq m for projects exceeding 20 acres. Interestingly, there was no explanation as to how the size of the disputed leisure and amusement park came to be fixed at 232 acres. It suggests that those in authority at that time had in mind a particular chunk of prime land for the project.

Moreover, the proposed park site was fenced and even overhead road signages were put up with an intend to help the beneficiary in soliciting clients for the commercial land.

When the first demand-cum-acceptance letter was issued, the beneficiary company was asked to pay Rs 3.28 cr, 10 per cent of the total price of the land offered, within 30 days. The allottee defaulted as it had the net current assets of Rs 2.77 crore and paid up capital of Rs 9.70 lakh as per its balance sheet on March 31, 1999. A revised demand-cum-acceptance letter was issued on September 13, 2000, again at the same rate of Rs 350 per sq m but the company, which was given 15 days to pay the 10 per cent, defaulted again.

Interestingly, though two demand-cum-acceptance letters had been issued, the company had not applied on the prescribed application under the institutional category in the open-ended scheme till November 30, 2000. The third revised demand-cum-acceptance letter was issued on March 27, 2002, at the revised rate of Rs 411 per sq m. At no stage any penal interest was charged from the beneficiary company for defaulting twice. To facilitate him, he was given the permission to sell 5 per cent of the land as build-up commercial sites. The caveat suggested by the project.