LuLu group chairman M.A. Yusuff Ali told TV channels in Dubai that he would return 26 acres of land at Bolgatty Island, which he had taken on lease from the Cochin Port Trust, if the latter returned his money.
The LuLu Convention and Exhibition Centre of group had made an upfront payment of Rs.71.37 crore to the CPT in lieu of the leased land. The Hindu had in a series of articles brought out issues of undervaluation of land at Bolgatty by the CPT and the possible breach of contract in the proposal to build 572 apartments in the leased land.
The industrialist had stated in Dubai the other day that he was withdrawing from the Bolgatty project following the CPI(M)’s allegations of land grab for LuLu Mall at Edappally. The group had proposed to set up an international convention centre, a hotel and 572 “service” apartments at the reclaimed land in the island, which the group took on a renewable lease for 30 years.
But going strictly by the provisions of the lease deed signed between the CPT and the LuLu Convention and Exhibition Centre Private Limited on July 26, 2011, the CPT is not required to return the upfront payment. According to Clause 1 (a) of the lease deed, the upfront payment is non refundable under any circumstances: “the Lessee has paid to the lessor as one time upfront premium for the lease of the land an amount of Rs.71,37,66,000 (excluding service tax @ 10.3 per cent), the said premium being non-refundable under any circumstances.”
At the same time, CPT sources said they were yet to receive any communication from the group regarding its decision to walk out from the project. Cyril C. George, secretary of the CPT, said a decision on the demand of the entrepreneur for getting back his money could be taken only after obtaining a legal opinion. “As the demand was an unprecedented one, its legal implications will have to be examined before making a decision. The port can initiate the process only if the entrepreneur officially communicates his decision to walk out of the deal,” said Mr. George.
Trade union leader M.M. Lawrence said the CPT had no contractual obligations to pay Mr. Ali the money deposited as upfront payment back. The decision of Mr. Ali to walk out of the project should be welcomed. The port, on its part, should initiate steps for restoring its land, he said.
Responding to Mr. Ali’s statement, CPI(M) district secretary C.M. Dinesh Mani said the party demanded the cancellation of the lease deed as it resulted in huge revenue loss to the exchequer. The party was not against Mr. Ali. It had always adopted a pro-investment approach. However, it was opposed to the investments that would be detrimental to the interests of the State, he said in a statement issued here on Sunday.
The Central government and the CPT should be held responsible for the undervaluation of the port trust’s land which was leased out to the industrialist. The party demanded annulment of the lease agreement to protect public land, he said.