CAG report tabled in House, says ₹417 cr in ‘unearned revenue’ yet to be recovered

CHANDIGARH The Comptroller and Auditor General (CAG) has pointed out that leasing out land for an amusement park in Gurgaon by the Haryana Urban Development Authority (Huda), without assessing the unearned increase in value, had led to the non-recovery of Rs 417.15 crore.

The CAG, in its report tabled in the Haryana assembly on Monday, also pointed out that the ground rent of Rs 10.77 crore, including interest, has also remained unrecovered.

It said that the land acquisition officer (LAO), Gurgaon, had recommended a bid premium of Rs 106 crore for 58 acres (25 acres in Sector 29 and 33 acres in Sector 52 A) in July 2009 for leasing out the land for 33 years.

The letter of award was issued to a firm in July 2010 and the lease agreement was executed on June 14, 2011 though the fixed reserved price was enhanced in May 2010 to Rs 94.50 crore, after negotiations.

The report pointed out that the Huda did not apply a provision which stipulated deposit of 50% of unearned increase in value of the land with it. The market value of the land, on the basis of prevalent collector rates, worked out to Rs 928.8 crore and the 50% of the unearned increase was Rs 417.15 crore, which was neither demanded nor deposited by the firm.

The CAG report also said that, as per the agreement, the lessee was required to implement the project within 24 months of the date of lease agreement (June 14, 2011) and the annual ground rent was to be paid from June 14, 2013, at the rate of 2.5% per annum of the premium paid by the lessee.

In case there is a delay in payment of premium or ground rent, an interest of 15% per annum was to be paid by the lessee.

The government in its reply said the particular provision in Huda regulations was not applicable in this case as no transfer of the land or property disposed of on leasehold basis was involved.

The land would revert to the Huda upon completion of lease period. It also said that UDA had its own system of calculation and the bid price was decided by a committee formed for the purpose.

However, the CAG report held that government’s reply was not tenable as the land was transferred on a leasehold basis. Also, the lessee had the sole and exclusive right to levy appropriate revenue from the user.