This could well sum up a CAG report on Robert Vadra’s land deals in Haryana. The state government is seen as flouting all norms to accommodate Sonia Gandhi’s son-in-law
By Vishwas Kumar
THE Congress party could face a major embarrassment in opposing the Modi government’s attempt to dilute land acquisition laws. A recent Comptroller and Auditor Ge-neral of India’s (CAG) report on the earlier Congress government of Bhupinder Singh Hooda in Haryana has alleged that several private companies, including that of Robert Vadra, Sonia Gandhi’s son-in-law, had earned a windfall on lands purchased from farmers at throwaway prices.
According to the CAG report, Vadra’s company, M/s Skylight Hospitality, sold the lands purchased from farmers between 2007 and 2008 in the Gurgaon-Manesar area to DLF Universal Limited at 7.73 times the original cost. In addition, two other companies, M/s Sun Star Builders Pvt Ltd and M/s Witness Construction Private Limited (single developer with two companies), and M/s Botil Oil Tools I India Pvt Ltd, formerly known as M/s Baker Oil Tools (Bharat) Pvt Ltd, earned 303 and 880 times the original cost of land respectively after they sold it off to their collaborators and developers. This was within a few months of them being gra-nted the license to develop colonies by the Hooda government.
In order to avoid haphazard development around cities, the state government under Section 4 of the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Development Act, 1963 (applicable to Haryana), declares any area outside the limits of the municipal town or any other area deemed fit for residential, industrial, commercial, institutional or recreational activities to be controlled area. Development plans for these areas are prepared under Rule 8 of the Punjab Scheduled Roads and Controlled Areas Restriction of Unregulated Develop-ment Rules, 1965.
This is how it works. Private developers purchase land from landowners and then, D-G, Town and Country Planning Depart-ment (TCPD), grants licenses to them according to Section 3 of the Haryana Development and Regulation of Urban Areas Act (HDRUAR), 1975. From 2006-14, TCPD issued 1,003 licenses to colonizers in Haryana, out of which, 225 license files were scrutinized by CAG. The development plan of controlled areas in Gurgaon-Manesar was notified in February 2007.
As CM, Hooda allowed and even helped private companies bypass rules with impunity
Expectedly, after the grant of license for setting up of commercial colonies, the value of land multiplied several times. However, as per Rule 17 of HDRUAR, the colonizers cannot transfer their licenses to any other person without the approval of TCPD director.
Moreover, as per the bilateral agreement between developers and the Haryana government, firms were required to set up commercial colonies on the land and derive a maximum net profit of 15 percent of the total project cost after making provisions for statutory taxes and net profit. And if the net profit goes beyond 15 percent of the total cost, it has to be deposited with the government in completed projects.
To maintain consistency, this should have also applied to projects which haven’t been completed, says the audit report.
However, it found that the government did not bother to collect money from private firms, allowing them undue profits. Among the companies benefited was Skylight. The report noted: “Thus the department (TCPD) neither at the time of granting-in-principle approval nor at the time of formal approval for transfer of licenses (to collaborators) ensured that net profit beyond 15 percent of the total cost accrues to the public exchequer. This enabled the developers to earn huge profits merely by selling the land, while the government had to forgo a sizeable amount.”
There were also irregularities, connivance and flouting of rules in allotment of land to private firms by the Haryana government, including Skylight. Some of the key findings are: According to the HDRUAR Rule 5 and Rule 11, the government is responsible for metalling of roads, footpaths and street lightning in colonies but the upkeep is in the hands of the private builder for five years from the date of issue of completion certificate. It was observed that while granting licenses to developers in Sector 83, Gurgaon, the area owned by the developer but falling under the 24-meter circulating road (standard stipulation) was also covered on the condition that the applicant would construct the circulating road passing through their site at their own cost, and road area shall be transferred free of cost to the government. The manner in which the alignment and continuity of such roads would be done has not been envisaged.
Further, as per the existing practice, the commercial area sites should be approachable through internal roads. “In case of M/s Skylight Hospitality Pvt Ltd, the site was not approachable. The Department (TCPD), however, decided (on March 2008) to waive off this condition on the ground that approach would be taken by licensee through the plotted colony of Onkareshwar Prop-erties Pvt Ltd and Mark Builtech Pvt Ltd in collaboration with Vatika Landbase Pvt Ltd,” said the audit report.
Another violation in lands allotted to Skylight pertains to the area for setting up of commercial colonies. The policy in this regard, framed in December 2006, says that in Hyper Potential Zone (HPZ) under which Gurgaon falls, the minimum area for setting up a commercial colony is two acres. The audit observed that commercial projects were sanctioned in Sector 86, Gurgaon, in less than two acres on the rationale that if applied land was contiguous with already licensed area (i.e. another plot of land), then the area of both plots is to be taken into account.
Moreover, there were no clearly laid down norms regarding assessment of two acres and whether this was inclusive of roads and green belts. “Thus, while appraising the license of M/s Skylight Hospitality Pvt Ltd, it was observed that out of the 3.531-acre applied area, 0.83 acres fell in residential zone and 1.35 acres in the 24-meter internal circulation plan road. After excluding these areas, net area for commercial license remained 1.351 acres. The colonizer was assessed to have fulfilled the minimum area requirement of 2 acres,” said the audit, clearly hinting at a nexus between Skylight and the then Haryana government.
The Gandhi family will have to answer many questions on Vadra’s company, raised by the CAG report
The audit found further evidence of collusion. As per the final development plan of Gurgaon-Manesar 2021 (name of report), the area falling under roads was not to be calculated in net planned area. Only Floor Area Ratio (FAR) was to be given for transferring the land falling under roads. (This means that areas earmarked for roads had to be left as such and one can only benefit in FAR, which is the number of floors permitted in ratio of the net area). “While this principle was applied in 12 cases, the net area indicated against each of these applications was after deducting area under sector roads, etc. But in respect of M/s Skylight Hospitality Pvt Ltd, the whole area, including the area falling under roads, has been indicated. It was not clear as to why such a distinction has been made in respect of M/s Skylight Hospitality,” the report says.
GREEN BELT ENCROACHED
Yet another violation was in the interpretation of the development plan. The total commercial area of Sector 83, Gurgaon, was 126.80 acres, out of which 63.40 acres was to be given to private developers. By the time the green belt, roads, streetlights, etc, are considered, the area came up to 71.202 acres. As of March 31, 2008, there were 14 applications, of which M/s Skylight Hospitality Pvt Ltd was at Serial No 14. Scrutiny of records by CAG shows that if the application of Skylight was to be considered, Vadra’s 2.701 acres plot land would have been allocated by encroaching on the green belt of 7.802 acres land (71.202-63.40 = 7.802).
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Thus in violation of existing rules, the TCPD allowed Vadra’s allocation of lands. Later, similar benefits were extended to other developers. Nailing the Haryana government for distorting the rule, the audit report says: “As per Para 4 of the Development Plan, the area under green belt and sector road shall not be included under the net planned area. Area under commercial belt and residential areas were, as such, inclusive of area under internal circulating roads and service roads. However, TCPD has again added back area under 24 meter circulating road and service roads while computing net area falling under commercial belt. The decision to add back area falling under internal circulating roads and green belt while considering the case of Skylight…was not as per existing practice.
“Thus, in the absence of clearly spelt out procedures for computing area availability, lack of clarity and consistency, the possibility of extending undue benefits to particular applicants cannot be ruled out,” it added.
It will be interesting to see how this salvo by CAG is tackled by the Congress.