Prasad Reddy got them at an astonishing Rs. 225 per sq. ft
When G. Prasad Reddy made an unsuccessful bid for the 2008 Assembly elections on a BJP ticket from the BTM Layout constituency, he was by far the richest candidate in the first phase of the elections, with declared assets of Rs. 313 crore. Encumbrance certificates of the Vyalikaval House Building Cooperative Society with The Hindu show that on three days — April 5, 7 and 17 of 2004 — Mr. Reddy was allotted no less than 173 sites, measuring 2,400 sq. ft each, in Nagawara by the society for a throwaway price of Rs. 225 per sq. ft.
The land was acquired by the Government on February 2, 1986 and given to the society at subsidised rates on condition it be used for a “public purpose” and plots be allotted “only to members of the society”.
The society borrowed Rs. 14.80 crore from the Bangalore District Central Cooperative Bank to develop the layout. In violation of the Karnataka Cooperative Societies Act, it put up the land as security for the loan.
On February 2, 1996 the bank complained to the Joint Registrar of Cooperative Societies that the society had defaulted on the loan.
The Department of Cooperation brokered a settlement on July 21, 2000. But the society defaulted again and the bank moved to attach its properties.
The society then devised an ingenious but illegal way out. It entered into a joint development agreement with Shri Shakti Promoters and Developers. No tender was called as required by Section 54 of the bylaws and an agreement was signed on March 31, 2002. The developer would pay for the layout formation in exchange for ownership of 50 per cent of the property. The society would repay its loan to the bank by selling its share of the property.
The then Minister for Cooperation D.K. Shivakumar approved the agreement, which stated that the developer must sell the plots only to genuine members of the society and not in the open market. Overlooking the long list of genuine members, the order directed the society to enrol as nominal/associate members those who bought sites from the developers, in contravention of law.
When The Hindu contacted Mr. Reddy, he said, “How can I be allotted sites when I am not a member? I was sold the land by the developer.”
What Mr. Reddy did not mention is that the Act makes it imperative that only a member can be sold land by the developer. It is another matter that the encumbrance certificate shows that the sale was made to him by the society.