Thursday, April 7, 2011

MIHAN Nagpur LANDSCAM -BoA directs stern action against ‘First City’

BoA directs stern action against ‘First City’-HITAVADA

Staff Reporter

TAKING "a serious view on the sale of flats proposed by M/s Reatox Builders and Developers Pvt Limited to general public which is not permitted under the SEZ Scheme," the Board of Approval — highest decision making body for Special Economic Zones — has directed the Development Commissioner (MIHAN) to take stern action against First City project developer. The BoA decision is a tight slap on the face of those who violated the SEZ Act brazenly and misled the High Court, authorities and people at large by selling flats openly to general public.

The land allotted to M/s Reatox Builders (promoters of First City project) at a highly subsidised rate by Maharashtra Airport Development Company (MADC) within MIHAN-SEZ and brazen act of the builder to sell flats to general public - apparently without any permission from BoA - has raised serious questions over its legality. The very action of MADC to allot agricultural land acquired for peanuts to a builder, to be sold to general public at market rates and earn mind-boggling profit, is nothing but massive loot of public property for the benefit of private few and apparently with the blessings of MADC top bosses, who now need to come clean on entire issue and punish the erring officials and private parties. Chief Minister of Maharashtra is ex-officio Chairman of MADC. After taking over as Chief Minister, Prithviraj Chavan had taken a serious cognisance of the irregularities highlighted by ‘The Hitavada’ and had removed R C Sinha, the high-profile big boss of MADC from his position.

The BoA took this decision during its 45th meeting held on March 25 at Udyog Bhavan, New Delhi. The meeting was chaired by Dr Rahul Khullar, Secretary, Department of Commerce, Government of India, and was attended by 38 top ranking officials of Finance, Commerce, Revenue, Industries and other connected departments. The final minutes of the meetings were uploaded on the website (www.sezindia, on Monday revealing clearly that BoA had disapproved the action of MADC permitting sale of ‘First City’ flats to general public. Interestingly, ‘First City’ promoters always maintained that flats were meant for general public, clearly suppressing the fact they had a mandate to construct housing facilities only for employees working within SEZ.

According to the minutes, the Development Commissioner (MIHAN) Ved Prakash informed the Board "the developer of MIHAN SEZ (Maharashtra Airport Development Company) has permitted the co-developer (M/s Reatox builders) to construct and sell residential flats in the non-processing area of the SEZ to persons not connected with the SEZs."

"The Board took a serious view on the sale of flats proposed by M/s Reatox Builders and Developers Pvt. Limited to general public which is not permitted under the SEZ Scheme. Accordingly, the Board directed DC MIHAN to take strict action directly and through the agencies concerned in the matter and submit a report."

The BoA directive to Development Commissioner (MIHAN)- a senior officer of the Central Government, has also exposed the tall claims of MADC bosses, notably R C Sinha, then Vice-Chairman and Managing Director who had authorised ‘First City’ developer to "lease the flats in "First City’ (An Integrated Modern Township in MIHAN Nagpur) to General Public/persons outside SEZ area/anywhere around the world i.e. for leasing the flat, area/state/country is not restricted."

Apparently, this letter giving blanket permission was issued without consulting BoA and according to record, the MADC issued this letter contradicting its own stance stated on affidavit and application made to BoA about ‘First City’ project.

This communication issued by R C Sinha, Vice-Chairman and Managing Director of Maharashtra Airports Development Company (MADC) on August 23, 2010 was widely used by the promoters of ‘First City’ project to sell their flats to general public, cleverly suppressing the policy decision taken by Board of Approvals and Housing guidelines issued by Ministry of Commerce. The letter itself was issued by Sinha following a request made by Atul Shirodkar, Chairman and Managing Director of M/s Reatox Builders and Developers Private Limited on July 31, 2010 and August 23, 2010.

Going a step further, Sinha had informed Reatox Builders, "The flats are freely transferable by existing parties to third parties and likewise without any fees from Reatox Builder&Developers Pvt. Ltd (RBDPL) and/or MADC and NOC is not required from Reatox Builders& Developers Pvt Ltd (RBDPL) and/or MADC."

The latest missive from BoA has established clearly that the MADC overlooked the mandate of the Ministry of Commerce, SEZ Act, and rules framed thereunder putting severe restrictions on free transfer of residential units to outsiders.

Apparently, the collusion between MADC and promoters of ‘First City’ is crystal clear as top bosses of the Special Purpose Vehicle appeared to bend rules and looked elsewhere while relaxing norms and for allowing illegal action of builder in selling flats to general public and walking extra mile whenever the ‘First City’ project faced any crisis.

In fact, the Board of Approvals (BoA), the apex decision-making body for SEZ, had maintained consistently that no developer or co-developer can sell the land or residential dwelling and extended this principle to ‘First City’ coming up at MIHAN-SEZ promoted by MADC। Therefore, the BoA in its meeting held on July 13, 2010 had directed the MADC to remove the "condition of sale" from the agreement between developer (MADC) and co-developer (M/s Reatox Builders) as well as from the Power of Attorney granted by MADC to M/s Reatox Builders.