Behind realty rush in Haryana, a gilt-edged licence raj

Land is first notified, then released, for public acquisition once ownership is transferred from farmer to builder

February 04, 2013 12:01 am | Updated November 17, 2021 05:12 am IST - NEW DELHI:

Haryana Chief Minister Bhupinder Hooda

Haryana Chief Minister Bhupinder Hooda

Haryana Chief Minister Bhupinder Hooda’s motivation in licensing a staggering 21,000 acres of land in just 8 years since he assumed office in May 2004 may not be entirely to drive planned development — as the State administration claims. Fresh evidence culled from over 200 land deals reveals that far from planned development, roughly 1,350 acres of land acquired from poor, unsuspecting farmers at a low rate in the name of ‘public interest’ were later licensed to builders after bestowing out-of-turn favours and concessions that helped the land value increase exponentially.

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Though the first scent of this ‘land dole for the rich’ emerged from Congress president Sonia Gandhi's son-in-law Robert Vadra’s irregular financial dealings with DLF and other realtors for the purchase of land in Haryana, the beneficiaries of Mr. Hooda’s largesse include scores of big builders.

The Hooda government, by its own admission in the Punjab and Haryana High Court, acquired and released roughly 1,350 acres of land from 2006 to 2008. The government stipulated compensation rate for acquisition was an average of Rs. 10 lakh/acre at that time and in over 90 per cent of the cases, builders obtained licences for projects in collaboration with landowners/farmers. A rough analysis reveals that the value of projects launched by 19 builders on 1,029 acres is valued in the region of a handsome Rs. 22,852 crore (see chart on Page 10) even when calculated using the lowest average market rates. This is a huge premium over Rs. 102 crore (Rs. 10 lakh/acre for 1,029 acres) — the government’s acquisition cost — had it completed the acquisition process for the same land.

Special favours

In the case of Vipul Infrastructure, the policy was relaxed to grant a licence for a township project even though the firm was falling short of the minimum 100-acre area required by 2.5 acres. Trehan Promoters & Builders was granted a licence solely upon submission of brochures of past projects instead of substantive evidence of financial capacity. This was despite the fact that the builder had not received a licence before. For Bestech, while granting a licence for 11.793 acres of land in Sector 3, the Chief Minister ordered that the “land in question be released in view of the fact that the application for licence for the same is under consideration.”

Land which is being acquired for public purpose cannot be released in this manner. However in all cases, licences have similar notings, showing that the government had no intent to acquire this land for public purpose. In Rohtak, the Chief Minister’s own political constituency, the process of acquisition, including award of payment by the government to farmers/landowners for 205 acres in Sectors, 4, 5 & 6 was completed on December 29, 2004. Under the Land Acquisition Act 1894, there is no provision for release of such land. Yet, despite a noting by the District Town Planner (DTP) pointing to this as well as the fact that it would compromise planned development, the State government used its special powers to release even this land. Curiously, the government is refusing to consider a similar move to benefit farmers who have been hit in the Reliance SEZ land acquisition matter in Gurgaon.

Modus operandi

After becoming Chief Minister, Mr. Hooda retained the portfolios of Town & Country Planning (TCP) — the real estate licensing arm, Haryana Urban Development Authority (HUDA) — the urban development department and Haryana State Industrial Development Corporation (HSIDC) — the industrial wing. This gave him complete control over all land deals in the State.

Under the Land Acquisition Act 1894, HUDA and HSIDC have powers to acquire land under Section 4 & 6 through the issuance of notifications, while the award of licence is announced under Section 9. Builders who are unable to coerce farmers to sell their land turn to the government for official assistance. On cue, using Section 4, the State intimates landowners that the government requires those specific parcels of land for ‘public purpose’. At this stage, builders enter into agreements to sell/collaborate with landowners/farmers, offering them a modest premium over the government’s prevailing compensation rate. If landowners/farmers offer resistance, Section 6 is imposed, declaring the State’s intention to acquire land. This forces even resistant landowners to enter into agreements. Between the imposition of Sections 4 & 6, builders apply for licences in collaboration with farmers/landowners to the TCP, Haryana. Once the land is released from acquisition, its value — to the lucky new owners — soars dramatically.

Data submitted by the State government in response to questions raised by the High Court shows that roughly 1,350 acres were acquired for public purpose and licensed by the State government in this manner. File notings available with The Hindu for over 200 associated land deals from 2006 to 2008 reveal that all these licences carry the direct approval of the Chief Minister himself. In many instances, valid objections of senior officials are overruled in order to benefit the builder.

For example, in MG Estate Pvt Ltd’s licence application for 84.674 acres of land at Dodwa village, Shamgarh, Sector 1, District Karnal, the District Town Planner (DTP) wrote: “The area for which licence has been applied stands notified under Section 6. The area is being acquired for HUDA. Considering the case for grant of license will certainly marginalise the capacity of HUDA to develop a sector. There is a tendency among the developers to apply for license for the land which stands notified for acquisition; otherwise large areas in residential zones of development plan are available, which are not notified for acquisition. The government has been considering such cases but in order to achieve public purpose and strengthen HUDA, there is a need for review of this policy.” This view was further endorsed by the Financial Commissioner, TCP but eventually overturned by Mr. Hooda himself.

This file noting is official acknowledgement of the established modus operandi designed to help builders at the cost of public interest to obtain land at throwaway prices, which appreciates manifold once the licence is obtained.

Violations overlooked

More evidence of the fact that builders’ reign in Haryana comes from the case of M/s Unitech Ltd. The realty firm, in collaboration with 5 other individuals who collectively own the well-known 32nd Milestone located on National Highway 8, Sector 15, part 2, continues to violate conditions imposed to protect the green belt during the grant of its commercial licence on March 20, 2008. This is despite the Haryana government stating in a reply to the court in July 28, 2010 that “the green belt abutting National Highway 8, as shown in the layout plan, has to be essentially acquired without exception.” However, ground evidence shows that far from providing for the green belt, Unitech continues to flout licence conditions by utilising the designated area for commercial purposes without any fear of licence cancellation. Mr Hooda’s office did not respond to The Hindu when asked why this violation was being overlooked.

Vadra favoured

In Mr. Vadra’s case too, his commercial licence application of March 10, 2008, for 2.701 acres in Shikohpur, Sector 83, Gurgaon, in favour of his firm Skylight Hospitality was awarded despite the fact that this violated the density provisions of that sector. According to the licence details, the total area of Sector 83 is 126.80 acres and the density for commercial purposes for private developers is 50 per cent, which works out to 63.40 acres. At the time Skylight applied for the licence, the density was already in excess of 8.712 acres, which meant that the licence could not be awarded. However, to accommodate Mr. Vadra, Mr. Hooda ensured that an area of 9.223 acres taken from road and green belt was added to 50 per cent of the commercial area, raising the density to 72.623 acres. This special dispensation was despite a TCP, Haryana Notification dated February 5, 2007 on the final development plan 2021, which states in Section VII (3) that “The area under green belt and sector roads shall not be included under ‘net planned area’ while approving layout plans for colonies to be developed by HUDA and private developers. The FAR and saleable area shall continue to be permitted only on the net planned area.” Skylight Hospitality’s licence document, further cautions that, “in case the present application is considered on account of explanation/grounds given above then the same shall be made applicable on all the cases in consideration for grant of licence.”

In addition, Skylight was given the licence despite not having received a licence before (a requisite criteria) for the setting up of a commercial colony and without submitting any documents proving financial capability, solely on the grounds that “Mr. Robert Vadra is one of the Directors of the company.” The financial capacity clause was overlooked in the case of Skylight Hospitality since its net worth at the time that it applied for the licence was just Rs. 1 lakh, which increased to Rs. 5 lakh at the time of grant of licence.

Finally, the policy mandates that a commercial site must be approachable from a 24-metre wide road. Since Mr. Vadra’s site did not have this road, Skylight said the approach would be provided “through the plotted colony of M/s Onkareshwar & Mark Buildtech in collaboration with M/s Vatika Land base for which LoI is already issued and licence is being issued.”

Skylight was given the licence on March 23, 2008, which was subsequently renewed on January 18, 2011. In March 2008 itself, the government asked Mr. Vadra to pay Rs. 2,22,16,494 towards Internal Development Works (IDW), Extra Development Charges (EDC) and conversion charges for a commercial licence. Since Skylight didn’t have any money on its balance sheets, DLF stepped in. DLF first entered into a sale agreement with Skylight on or before June 3, 2008, followed by a sale deed registered on September 18, 2012. As known, Rs. 50 crore was given by cheques to Skylight till October 7, 2009. The former DG, Consolidation of Land Holdings, Haryana, Ashok Khemka, while cancelling the mutation of the land, mentioned in his order that “The vendor (Skylight) had ex-facie entered into a sale agreement with the vendee (DLF)…. The Department ought to be taking action against the vendor for suppressing the material fact… It is unfathomable how the Department could renew the LOI/licence on 18.01.2011 in favour of the vendor who had ex-facie entered into an agreement to sell within 65 days of the issue of the first LOI/licence.”

Public interest sacrificed

All this is just the tip of the iceberg. The Haryana government has also gone out of its way to favour builders by first announcing its intent to acquire roughly 4,651 acres of land for ‘public purpose’ by imposing Sections 4 and 6 and then allowing the acquisition proceedings to lapse. Though the government clearly had no intent to acquire these lands, this enabled builders to enter into agreements to sell with these landowners/farmers at throwaway rates for their personal gain.

In its defence in court, the reasons given by the State government for this lapse were that TCP, Haryana received too many applications for grant of licence/CLU’s; certain land parcels had been decided to be released on the recommendations of the ministers committee; few landowners approached the High Court, which directed a committee of officers formed by the state government to look into their remedies.

The government has also said that for “Land measuring 151 acres 03 kanals 06 marlas in District Gurgaon was notified for development of water-works, CETP and STP (Sewage Treatment Plant) for the IMT Manesar expansion phase. It was found that the Committee headed by the Divisional Commissioner had recommended the compensation amount at an exorbitant rate, rendering the proposed project as economically unviable. As such, the government has decided to drop the acquisition proceedings in this case.” This demonstrates the government’s lack of seriousness in acquiring land for genuine public purpose. Over 50 per cent of this 4,651 acres of land is presently being developed by builders like Ramaprastha, DLF, ABW and others.

The State government further faces allegations of providing invaluable insider information — including its intent to increase the controlled area/net planned area — to select builders prior to the release of its Draft Master Plans for Gurgaon. Huge changes are further made between the Draft and final Master Plan, like changing public/semi-public sector to residential and commercial, and industrial to residential and commercial to the benefit of builders. Three Master Plans have been released within just 6 years in this manner. Gurgaon and Faridabad, in particular, have been developed entirely by private players, whose profit motives have seriously compromised public interest.

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