NIT’s Rs 163 crore order against Rashtrabhasha Sabha quashed

Source: The Hitavada      Date: 04 Nov 2017 11:53:59

Staff Reporter,

In a major respite to Maharashtra Rashtrabhasha Sabha, State Government has quashed the order of Nagpur Improvement Trust demanding Rs 163.75 crore from them as “revised premium” and “ground rent” for the prime 1.01 acre land situated on North Ambazari road along with interest. Instead the Government has directed the NIT to re-assess the ground rent and revised premium as per ready reckoner of 1991 and actual market transactions of NIT’s plot with permissible commercial use to finalise the amount.

Allowing the appeal filed by Sabha, the Minister of State for Urban Development Department Dr Ranjit Patil set aside the order passed by NIT on February 4, 2017 holding it as highly inflated, improper and without considering prevailing market rate of similar plots. The Government has directed the NIT to recalculate ground rent from April 1, 1991 to February 20, 2004 as per 1991 ready reckoner rates in which Rs 2500 per sq mt rate was prescribed. Similarly, for calculating revised premium, NIT must take into account property transactions in West Nagpur in which maximum Rs 15,450 per sq mt rate was fetched for NIT’s own plot in which commercial use was permissible, to finalise the sum as per section 7(3) of NIT’s Land Disposal Rules, 1983. 

The UDD has further directed NIT to recover the entire sum from Sabha within one year by allowing it to pay the ground rent and revised premium in six installments. In case Sabha failed to pay the sum, the entire amount should be recovered from its tenants M/s SMG Hospitals and their tenant Wockhardt Hospitals Ltd.  This Rs 163 cr premises was finalised by a committee consisting of Joint Director of Town Planning, District Collector and NIT Chairman pursuant to orders passed by Nagpur bench of Bombay High Court directing the NIT to calculate and recover the revised premium from the original allottee and subsequent tenants who used the land for commercial purpose.

It may be recalled that the High Court while allowing PIL filed by Citizens Forum for Equality through its president Madhukar Kukde had quashed the NIT resolution dated August 11, 2005 by which premium of mere Rs.30 lakhs was fixed for allotment of land to the Rashtrabhasha Sabha and had directed NIT to make fresh calculations as per rule 8 (2) of Land Disposal Rules 1983 as per prevalent rate. The HC had also directed the Sabha and others to pay the new lease premium within next two months of the calculation of premium. High Court had also directed the enquiry in to the entire episode and had also directed that the persons found guilty be prosecuted in criminal proceedings. However, about the partial commercial use of plot, the High Court had upheld the right to allow 15 per cent commercial use and held that construction of Wockhardt hospital was in public and patients interest and it was not open for petitioner to question its construction now when the hospital became functional in 2007.

The committee of three senior officers after considering all the submissions and arguments of the parties calculated the revised premium of value of the land on 2005 as Rs 31.53 crore and had calculated interest of Rs 106.03 crore. Thus the total amount of revised premium and interest upto 2017 was Rs 137.57 crore. Revised Ground Rent for period 1991-2004 along with 12% interest was Rs 6.29 crore while revised ground rent for 2005-2017 along with 12% interest was pegged at Rs 19.88 crore. Thus the committee had directed Sabha and its tenants to pay Rs 163.75 crore.

The allottee was also required to pay the amount of Rs.31,53,12,225/ as current premium and Rs.63,66,346/ as current lease rent within two months of this order and rest of the amount was required to be paid in 12 months in equal installments as directed by the High Court. The committee while approving the revised premium and ground rent described it as “fair and reasonable.”

The PIL was filed by Forum against the illegal constructions made by the allottees, illegal change of user, illegal allotment of land, illegal calculation of premium by NIT against the allotment of one acre prime land situated at Shankar Nagar. It was argued that the land in question changed hands and land having market cost of Rs.100 crores was allotted by NIT only at Rs.30 lakhs. The PIL had alleged that the land given for Hindi promotion was illegally sold out to SMG Hospitals Pvt. Ltd for a sum of Rs.6.5 crores. Then the SMG Hospitals Pvt Ltd signed Management Agreement with M/s Wockhardt Hospitals Pvt. Ltd on 33% revenue sharing basis so as to make huge financial gains, the PIL had stated while claiming that land was misused for commercial purpose and caused a loss of Rs 100 crore to state exchequer.

The Maharashtra Rashtrabhasha Sabha had challenged the High Court ruling by way of special leave petition before the Supreme Court but could not get any interim relief. The Supreme Court had also directed the authorities to continue with the process of determination of fresh premium as directed by High Court in its judgment dated January 3, 2017. Adv Shantanu Khedkar appeared for M/s Rashtrabhasha Sabha. Adv Deven Chauhan argued for M/s Wockhardt Hospitals Pvt. Ltd, Adv Prakash Meghe represented SMG Hospitals while Adv Tushar Mandlekar appeared on behalf of Citizens Forum.

What Govt order states

High Court had rejected objection raised by Citizens Forum about commercial use

NIT should have granted opportunity to allottee before finalising order n NIT should have considered prevailing rate for finalising ground rent

WHC road land’s commercial rate was considered for entire land 

Only one example cited to determine premium, ignoring NIT’s own properties

Only 15% land commercially used while 85% land given back to Sabha for cultural and literary activities

NIT relied on chart furnished by Citizens’ Forum overlooking its own agreement with three more institutes in which much less rate was charged

Rejected Forum’s argument justifying huge rate since 10,268.25 sq mt FSI was commercially used

NIT not justified in charging penal interest with retrospective effect, since revised premium itself was finalised on February 4, 2017 and there was no evasion or delay