P R I M E  C O N C E R N

HARYANA CLUs
Land use and abuse
Change of land use licence is nothing new. What is new is the indiscriminate pace at which the permits are being issued through questionable procedures in Haryana, escalating land prices manifold. The ruling Congress calls it a barometer of development, but the Opposition sees a multi-crore scam. 
By Naveen S. Garewal and Pradeep Sharma

A colony being developed without change of land use licence in Karnal. Tribune photo: Ravi Kumar

THE term ‘change of land use’ (CLU) has rocked Haryana with the opposition, the Indian National Lok Dal (INLD), levelling allegations against the government, accusing it of issuing licences for a consideration, bypassing all norms of uniform and regulated development. The controversy started with IAS officer Ashok Khemka cancelling the mutation of land sold by Robert Vadra, son-in-law of Congress president Sonia Gandhi, to DLF, has assumed a new proportion with the INLD releasing CDs showing eight Congressmen, including five sitting legislators, demanding money for facilitating CLU.

The Congress has on the other hand shot back, saying that the large number of CLUs across the state is a barometer of development. Chief Minister Bhupinder Singh Hooda says the government has fixed certain norms and criteria for CLU. Anyone fulfilling these can attain a CLU for any land without illegal ‘gratification’. In the monsoon session of the Vidhan Sabha, the Congress also coined a new phrase for CLU, calling it ‘Chautala land use’ for the alleged misuse of land allotted to societies and trusts during his regime. These are reportedly being run by the Chautala family. Allegations and counter allegations have necessitated the understanding of CLU and how it is attained.

What CLU means

INLD legislators protest their suspension from the Haryana Assembly after they brought out CDs with alleged recording of Congress MLAs demanding money to arrange CLUs. Tribune photo: Manoj Mahajan

The Department of Town and Country Planning, Haryana, is responsible for regulating development and checking haphazard development in and around towns in accordance with the provisions of three statutes—the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963, the Haryana Development and Regulation of Urban Areas Act, 1975, and the Punjab New (Capital) Periphery Control Act, 1952.

In order to involve the private sector in the process of urban development, the department grants CLU, popularly called licences, to private developers of residential, commercial, industrial and IT or cyber park colonies in accordance with the provisions of the Haryana Development and Regulation of Urban Areas Act, 1975.

The proposed developmental activity should be a part of the long-term developmental plan of the city or the town where the proposed CLU is sought. The clearance entails ensuring that provisions of sewer, roads and other civic amenities are provided for. Environment and pollution board clearances are required, besides ensuring that green and red zones are not breached.

According to some people who have got CLUs in the past, there are 401 points through which the file moves before a CLU is granted. After an application to the District Town Planner in the area where the CLU is sought, till the time the Director Town and Country Planning, finally issues a licence, ‘ordinary’ people drop out of the game.

Ashok Bansal, a Chandigargh-based builder with huge experience in the field, says the latest trend is that once a project is submitted for grant of CLU, the big fish in the market purchase the entire project with the objective of getting a CLU with the help of their own people that facilitate the moving of the file at every point. Once a CLU is granted, the value of the cleared project goes up three times, and the project is then sold to another party.

This is what is alleged to have happened in the case of Sky Light Hospitality owned by Robert Vadra, where the land bought by Vadra escalated manifold after the CLU was obtained. This was one of the grounds on which Khemka cancelled the mutation of the land sold by Vadra to DLF.

Between 2005 and 2012, the tenure of the ‘builder-friendly’ Chief Minister Bhupinder Singh Hooda, the town and planning department has issued various colony licences to the tune of about 21,366 acres. While during 1981 to 2004, successive Chief Ministers reportedly granted licences for a total of about 8,550 acres only. Millennium city Gurgaon accounted for the lion’s share with over 7,700 acres, followed by Faridabad which accounted for over 2,300 acres of CLUs while the rest of the licences were granted in the other parts of the state.

In all, over 350 developers, including a large number of minor players with hardly any experience in the real estate sector, are reported to have benefited from the CLU-granting spree of the Hooda government.

The trend of making a file pass through different steps was started during the Chautala regime and the trend continues. Every time the file moves from one table to another, there is a presumption that some illegal ‘gratification’ takes place. The process is repeated 401 times. Bansal alleges that players in the CLU facilitating business have their men on every table to ensure “greater collection”. This is despite the fact that the legislation empowers the Director to issue the CLU on his own. In Punjab, the Senior Town Planner (STP) is empowered to grant CLU, bypassing the red tape and the accompanying “expenses”.

How it is issued

Anyone seeking the change of use of his land has to apply to the office of the District Town Planner (DTP) with requisite documents, including survey plan, sale deed, copy of ‘jamabandi’ and ‘intkal’, land utilisation plan and project report justifying the requirement of land for the project and no-objection certificate from the Haryana State Pollution Control Board. The application is ‘theoretically’ then considered if it is in conformity with the land-use proposals of the development plans and in accordance with the zoning regulations.

The licence is either granted or refused by the department with prior internal concurrence of the state government at the minister level (Chief Minister in case of Haryana as he holds the portfolio of the Minister of Town and Country Planning. The state government, however, exercises appellate powers under the Act). But a majority of the cases initiated by individuals never see the light of the day as ‘red tape’ starting from the DTP to officials of the revenue department, including patwaris and tehsildars, make it impossible to have any estimate of how long it would take to get a CLU.

Land sharks are always on the prowl for people wanting to get a CLU. They then buy out the individuals to get projects cleared, which they later sell as CLU-cleared projects at huge profits.

The loopholes

Pointing out the lacunae in the CLU and highlighting the modus operandi in CLU scams, Khemka told the Tribune in an interview last month that “the value of land sold by M/s Onkareshwar Properties Private Limited to M/s Sky Light Hospitality in February 2008 for Rs 7.5 crore (sale deed of February 12, 2008) escalated to Rs 58 crore within four months. Part payment of Rs 5 crore towards the total sales consideration of Rs 58 crore was received on June 3, 2008, and the possession of land was also transferred to M/s DLF around this time. Even though part sales consideration was received and possession of land transferred to a third party, M/s Sky Light Hospitality was given commercial colony license after six months on December 15, 2008.

“The sale deed was registered after four years and three months on September 18, 2012, when Sky Light Hospitality sold the land with the commercial colony license to M/s DLF Universal. After going through the details of the case, I discovered that M/s Sky Light Hospitality had as its assets only a paid-up capital of Rs 1 lakh, so it was reasonably inferred that the cheque no. 607251 for Rs 7.5 crore shown in the sale deed dated February 12, 2008, as payment from M/s Sky Light Hospitality to M/s Onkareshwar Properties was a bogus instrument”.

On the face of it, it is said that an application for licence will not be considered to be valid until a plan and copy of deed has been furnished to the satisfaction of the department. In case of failure of such compliance, the application shall be returned to the applicant for resubmission in accordance with rules. After the scrutiny of the plan and other necessary enquiry, the Director-General of the department, before granting permission, will call upon the applicant to fulfil the conditions within a specified time frame. But in reality, it is stated that once the person seeking the CLU has done his or her homework, a majority of the requirements are fulfilled only on paper. Requirements like inspection of site are bypassed, but the file bears the signatures of all officials certifying the clearance of every step.

As per rules, if the applicant fails to fulfil the prescribed conditions within the stipulated period, permission would be refused. But rules are rarely followed and are often bypassed when files “develop wheels”, says Abhey Chautala, senior INLD leader.

…and the excuses

The Chief Minister, however, refutes allegations of any “wrong doing” in the department headed by him. He recently told the Haryana Vidhan Sabha: “Chautala’s own kin (nephew) Jagdish has obtained a CLU for a housing project. Ask him if he had to bypass any rules or bribe anyone. The husband of BJP MLA Kavita Jain is member of a trust that has obtained a CLU recently. Ask him if the trust had to pay money to obtain the CLU. It is fashionable to make allegations and caste aspersion. The opposition has no agenda and is trying to hit at us. Everyone in Haryana knows who made how much money and how. All deeds of the Chautalas are being exposed in courts.”

In a pre-poll year, the issue has gained momentum and is likely to generate more heat in the coming days with the opposition threatening to release more CDs that show ruling party legislators demanding huge sums of money for CLUs. The CLU business is not new, but as land is becoming scarce, agriculture non-viable and regulations tighter, people are thinking of ways to add value to agriculture farms with a view to cashing in on the growing pressure of population and need for housing and other social and economic necessities.

How crores are made

After Hooda took over the reins of the state in March 2005, the grant of CLUs picked up momentum. The rate of grant of CLUs during 2005-2012 was seven-and-a-half times the corresponding rate during the period from 1981 to 2004. “Even if the market premium for the colony licence is assumed to be as low as Rs 1 crore per acre, the land-licensing scam in the last eight years is worth at least Rs 20,000 crore. The scam in the past eight years could be between Rs 20,000 to Rs 3.5 lakh crore,” Khemka has alleged in a report to the state government.

The CLU goes a long way in value addition to the land. Since trading in licences allegedly by builders and close kin of politicians is a routine affair, getting a CLU for even barren land multiplies its value by several times.

“Trading in licences is a deliberate ploy to allow crony capitalists operating as middlemen to flourish and appropriate the market premium of the licence,” alleges whistleblower Khemka, who cancelled the land mutation deal between DLF and Robert Vadra in Manesar, in his report.

Vadra made a profit of nearly Rs 42.62 crore by selling a commercial property to DLF for Rs 58 crore after getting a CLU.