Huge Revenue
loss to State Exchequer due to illegalities, irregularities and undue
favour shown in respect of allotment of
land to KIIT ( Kalinga Institute of Industrial Technology ) by IDCO, Govt. of Odisha Bhubaneswar and through fraud and forgery of Sri Ahyut Samant
Dear friends
The Performance Audit of CAG
(Comptroller ad Auditor General of India ) has exposed the series of
illegalities and irregularities
committed by IDCO in respect of allotting land to KIIT in Bhubaneswar,
capital city of Odisha. As per section
34 of IDCO Act, 1980, in order to promote rapid growth and development of
industries, the Board could carry out a six-monthly review of the allotted plots
and resume unutilised portion of allotted land by giving a notice to the
allottee of the industrial estate. Further,
as per IDCO circular ( September 2004 ), no mutual transfer of
industrial property was permissible and in the event of any allotted property
mis-utilised, the allotment was required to be cancelled. But IDCO continues to violate the above laws
and regulations in terms of allotment of land to KIIT which resulted in loss of
huge revenue to state exchequer.
Case - 1
Kalinga Software Private
Limited, represented by its Director Mr. Achyut
Samata who was also Secretary, KIIT, was allotted ( October 2000) 2
acres of land in Chandaka Industrial area for manufacturing softwire goods. Sri
Samanta applied ( Feb 2004 )to IDCO for mutual transfer of land of Kalinga
Software Limited in favour of KIIT and then resigned ( September 2005 ) from the
post of Director, Kalinga Software Private Limited. The Managing Director of
Kalinga Software ( P) Ltd. wrote ( April
2008 ) IDCO regarding illegal use of its letter pad and withdrew the proposal
for transfer of its land to KIIT as suggested earlier. Subsequently, the Chief
Manager of Oriental Bank of Commerce requested IDCO to issue “ No Objection
Certificate” in their favour as they had
sanctioned a loan amounting to Rs. 51.90 crores in favour of KIIT on mortgage
of allotted land. Mr. Samanta, illegally posing as the Director of Kalinga
Software Private Ltd ( though he was no longer the Director at that time )
requested ( May 2006 ) IDCO to accord mortgage permission in favour of the
Bank. IDCO did not take any steps to get the matter investigated by the police
for possible fraud and forgery and instead accorded ( May 2006 ) mortgage
permission and finally transferred the
land ( December 2010) illegally to KIIT
at the cost of the company.
Case-2
Mangalchand Telecom Pvt.
Ltd. Was allotted 3.504 acres ( plot No.
51 ) of land for manufacturing of jelly flitted telecom cables. It was issued
show cause notice by IDCO for breach of terms of allotment and unauthorised
sale of land to KIIT. But, the Company reported ( January 2009 ) to IDCO for
mutual transfer of allotted land in favour of KIIT as it had received final
consideration value for the land and asset and the allotted land was located
just in front of KIIT. IDCO, without resuming asset and land, illegally
approved the transfer of land in February 2011.
Case-3
PGL Plastic Tubes Industries
was allotted (December 2003) land measuring 0.989 acres for manufacture of PVC
pipes. Since the plot allotted to it had been encroached upon by KIIT, another
plot was allotted (October 2004) in its favour. Subsequently, though, the
Company sold (July 2006 ) the same to KIIT and intimated IDCO accordingly. Show
cause notices were issued ( November 2007 and January 2009 ) to PGL Plastic
tubes Industries by IDCO after more than
one year for non-utilisation of land. Finally, without resuming the land,
transfer of ownership of land was illegally effected ( October 2010) in favour
of KIIT.
Case-4
Utkal Tubes, which was
allotted ( September 2002) 1.550 acres ( Plot No-31) of land in Chadaka
Industrial Estate for production of galvanised pipes lodged ( June 2004 )
an FIR with the Police station, Chadrasekhar Pur alleging that KIIT had
forcibly encroached land ( June 2004
) the allotted land by breaking the compound wall. Without
settling the issue, IDCO asked ( July
2006 ) to Utkal Tubes to show cause for non-utilisation of the land.
Ultimately, the land was cancelled ( January 2007 ). Subsequently, without
mentioning any date, it was reported by Utkal Tubes to IDCO that they had
handed over the land to KIIT after receipt of the total consideration value of the land. Finally, the plot was
illegally transferred in favour of KIIT
by IDCO.
Case-5
B. Engineers and Builders
Limited, which subsequently changed its name to Corrosion Protection ( P)
Limited , was allotted ( April 1999 ) 4.828 acres of land for manufacturing LPG
cylinders and valves. It was served ( January 2009 ) Show-cause notice for
breach of the conditions of allotment by
IDCO. Without mentioning any date, the company sold the plot to KIIT and
suggested for transfer of ownership of the land in favour of KIIT. Finally, the
land was illegally transferred ( December 2009 ) i favour of KIIT.
Case-6
New Life Health Care was
allotted ( May 2009 ) Ac. 0.987 of land ( plot No-A/8 & A/9 ) for assembly
of exercise bicycles. The unutilised land was sold ( March 2011 ) by the
Company on receipt of full consideration value from KIIT ad the land was illegally transferred ( December 2011) in favour of KIIT by IDCO.
In
the above cases, though show-cause notices were issued and allotments were cancelled due to
violation of the terms of allotment, the land in question was not resumed. In
most cases instead, mutual transfer of estate was effected in favour of
transferee, i.e., KIIT without releasing the prescribed cost.
Further, in Writ Petition No.
13101/2012, the Hoourable High Court of Odisha rejecting mutual transfer of
industrial estate opined that since IDCO was a lessee and sub-leased the land
to in favour of one allottee, there was no provision for second sub-lease to
any other party.
In view of the above, it was explicit that by wilfully not
resuming the land from original entrepreneurs and instead illegally
regularising mutual transfer of land in industrial estates, IDCO extended undue
benefits to KIIT and suffered a loss of Rs. 73.75 crores.
Case -7 Misutilisation of land by KIIT
purchased through BIFR( Board of Industrial and Financial Reconstruction)
resulting in a loss of Rs. 51 crores.
KIIT
purchased a piece of land of 16.200 acres from Magnrtix India Pvt. Limited (
6.00 acres) and Indo Maxwell Limited ( 10.200 acres) through the official
Liquidator, Odisha High Court. In case of Indo Maxwell Limited liquidation
case, the Honourable High Court specifically instructed ( July 2006) in Misc case No. 78/2005 that the transferred
land should be utilised as per the terms and conditions of the original lease
agreement, i.e., industrial purpose only.
But,
in blatant disregard to the orders of the honourable court, KIIT was found
utilising the land for running a school. No action was taken by IDCO for
cancellation / resumption of land resulting in loss of Rs. 51 crore (calculated
on the bench mark valuation of the cost of land).
Pradip Pradhan
M-9937843482
Date- 11.3.18
