Authority slams MIDC inaction

Mumbai: The Comptroller Auditor General has come down heavily on Maharashtra Industrial Development Corporation (MIDC) in its report. The CAG has found that plots were sublet by the allottees without permission from the corporation. The corporation violated the instructions given by itself and failed to take action, the CAG said.

Out of 452 cases of subletting by Regional offices, 312 cases in 34 industrial areas of eight regional offices were examined.

The auditor observed that there was a continuation of subletting without renewal after the expiry of the permission. 107 cases of subletting without permission were found by the CAG. The total amount of subletting charges and penalty recoverable in these 120 cases were up to Rs 24.03 crore till March 2016.

Of the 120 cases, 63 cases were found in which corporation initiated no action and in the remaining 57 cases, except for the issue of demand notice, the corporation did not pursue the matter for recovery of dues or termination of the lease agreement and resume possession of land. The CAG stated that “Thus the absence of a system of periodical survey and non-maintenance and monitoring of subletting cases resulted in unauthorised subletting, besides this failure to take penal action on allottees violating the terms and condition of allotment resulted in no recovery of charges.”

The regional office of Pune-II allowed subletting of 25 premises admeasuring 1,342 square meters built on the industrial plot for commercial purposes. This was in contraventions of a circular dated July 23, 2014, where it was reiterated that subletting of industrial plots for commercial activities was not to be allowed.

Case study 1

The MIDC had in August 2004 allotted a plot admeasuring 1,800 square meters in TTC Industrial Area to a lessee for residential purpose. Subsequently, it approved to transfer of the plot to another lessee by charging Rs 36.60L as transfer charges in November 2010. The lease agreement provided for completion of construction and obtaining building completion certificate within three years from the date of transfer. In January 2011, the lessee requested the corporation to grant permission for change of use of plot from residential to commercial, which was allowed in January 2012, by charging a differential premium of Rs 2.38 crore. Auditors observed the lessee did not complete the construction as provided in agreement within three years. The lessee asked the corporation to reconsider time limit of three years from January 2012, but this was not accepted. Instead, a demand of Rs 2.12cr as extension charges was made, but was not recovered.

Case study 2

M/s. EON Kharadi Infrastructure Private Limited (allottee) having built up area of 2.55 lakh square meters was given subletting permission up to May 31, 2014. The allottee approached regional office, Pune-II for renewal of subletting permission on May 17, 2014, for increased built-up area of 2.62 lakh square meters.
The corporation did not renew the subletting permission without any recorded reason till June 2016. Further, the plot holder approached the corporation in April 2016 for subletting an additional built-up area of 45,990 square meters, which was already sublet from August 2015 without permission.
Thus the indecision of the corporation on the request of the allottee resulted in unauthorised subletting and non-recovery of subletting charges of  Rs 26.78 lakh till April 2016.