M A I N   N E W S

HC stays Punjab move to mortgage MC assets
Saurabh Malik
Tribune News Service

Chandigarh, March 18
The Punjab and Haryana High Court today ordered a stay on the Punjab Government move to raise loans for municipal corporations across the state by mortgaging public land and properties with banks.

Acting on a PIL, the high court stayed the step whereby the government intended to take over public utility properties, including parks, waterworks, jails and mayor house, for raising funds by mortgaging them.

Issuing notice of motion to the State of Punjab and other respondents, the Bench of Chief Justice Ranjan Gogoi and Justice Augustine George Masih fixed May 24 as the next date of hearing for enabling the respondents to come up with their response to the contentions raised in the petition.

In their petition against the State of Punjab, the Finance and Revenue Secretary, Punjab Infrastructure and Development Board and Punjab Municipal Infrastructure Development Company, Sunita Rinku of Jalandhar and three others had contended that they were “aggrieved by the action of the State in squandering the property of the municipal corporations”. This, they contended, was "in complete violation of the various provisions of the Constitution of India”.

DS Patwalia, counsel for the petitioners, said it was “shocking to see that instead of utilising the enormous income generated through levy of fees and taxes, land and properties meant for public use and utility were being mortgaged to raise funds”. “The petitioners are disturbed by the proposed action of the respondent State to transfer public utility properties in favour of Punjab Municipal Infrastructure Development Company, which would subsequently mortgage them for raising about Rs 1,100 crore.”

Patwalia said the loan would then purportedly be distributed among municipal corporations for various developmental projects. “The State of Punjab had, in a similar manner, earlier incorporated and later transferred properties in favor of Punjab Infrastructure and Development Board. In fact, the respondent failed to utilise even one of the properties so transferred in its favor. Besides, the Board has raised Rs 1,500 crore through public bonds on which it is paying interest/dividend. Out of this amount, Rs 1,300 crore still lies deposited in bank.”

In an earlier round of litigation, contended Patwalia, “this Court had deprecated the stand of the respondent State wherein on account of non-payment of loan a property was sought to be sold by a bank. This is exactly what the petitioners apprehend is going to happen to these properties as well”.

The petitioners contended that “as the government was in election mode and wanted to disburse money to the corporations where their electoral holding was weak, hence the new Punjab Municipal Infrastructure Development Company is sought to be created” for mortgaging MC property and raising loans.