Shady business

Nothing wrong with Robert Vadra's land deal, says the government, which refuses to order a judicial inquiry. But the questions remain.

Ashok Kemka, Senior IAS officer, after a meeting with the Chief Secretary outside the Haryana Civil Secretariat in Chandigarh in October 2012.

A NEW storm seems to be brewing for the United Progressive Alliance government following allegations of favouritism shown by the Congress government in Haryana in the matter of certain land deals involving Robert Vadra, UPA chairperson Sonia Gandhi’s son-in-law. With the crucial Land Acquisition Rehabilitation and Resettlement Bill slated to be passed in the present session of Parliament, issues relating to land deals in a State with a high per capita income have thrown up questions of transparency.

The allegations have actually been in the public domain for almost one and a half years. The latest controversy was triggered by the leak of a report containing the comments of Ashok Khemka, Indian Administrative Service (IAS) officer and former Director General, Land Records and Consolidation of Land Holdings, and Inspector General of Registration, Haryana. Khemka had raised these issues in his official capacity. The comments contained in the leaked document were made in response to the report of an inquiry committee constituted by the State government on October 19, 2012, to inquire into the questions that Khemka had raised.

His comments ( Frontline has a copy), running into 108 pages, have put the UPA in a spot. The matter came up in Parliament and opposition members demanded a judicial inquiry into the matter. Some also asked for an inquiry by the Central Bureau of Investigation (CBI). The issues that Khemka had raised were inquired into, but he was not given a copy of the government order instituting the inquiry. It was made available on request after the three-member committee finalised its report and sent it to the Chief Secretary. Khemka, in his comments, complained that he had not been associated with the inquiry at any stage. A copy of the report was sent to him on March 1 for comments. After receiving it, Khemka sought some information from one committee member and two other officials, one associated with the Industries and Commerce Department and the other with the Town and Country Planning and Urban Estates Department.

Khemka also requested a copy each of all the documents registered in any office of sub-registrar or joint sub-registrar in the State by the companies of Vadra in the capacity of either vendor or vendee and information on any representation or appeal or complaint received from Vadra or DLF or Onkareshwar Properties against the orders signed by Khemka in his capacity as DG, Consolidation of Holdings, or as Inspector General of Registration. He sought details of land released from acquisition proceedings or not notified under Section 6 after the preliminary notification under Section 4 of the Land Acquisition Act, and on land licensed by the Department of Town and Country Planning (DTCP) in the last 10 years. He sought information of all relevant files relating to the grant, renewal and transfer of licences to the companies of Vadra, including Sky Light Hospitality, and also Onkareshwar Properties and all relevant files relating to the grant, renewal and transfer of licences to the firm, and all cases concerning transfer of licences in the past 10 years. Khemka believed the queries were relevant for him to offer comprehensive comments on the report, but his efforts were “stonewalled”.

Khemka says in his comments that the committee did not follow the frame of reference set by the government order of October 19 but constituted its own terms of reference, which were not only inadequate but biased and intended to give a clean chit to the land-licensing transactions of Sky Light Hospitality and to “hide from public glare other land-licensing transactions indulged by the companies owned by Mr Robert Vadra in collusion with the departments of the State government including T&C planning, Urban Estates, Revenue, Industries and Commerce”. It was further stated that to “ensure that the clean chit to Mr Robert Vadra looked credible, the indictment of the undersigned was imperative, carried out in the crassest manner possible”.

There were selective leaks to the media from the committee’s report in the Chandigarh editions of some newspapers and some national dailies between January and April. Khemka has said in his comments that the committee chairman and another member should have dissociated themselves from the inquiry because of conflicts of interest. One of them was the Financial Commissioner, Revenue, and the other was the Principal Secretary to the government in the departments of T&CP and Urban Estates when the licence of Sky Light Hospitality was wrongly renewed by the Department of T&CP on January 18, 2011. “These two officers could not be expected to be objective or fair and to ascertain the true facts and submit true and complete findings on the land scams,” Khemka said in his comments. The head of the Revenue Department, who was the chairperson of the committee, “failed to act on the various land scam exposures [made by Khemka] which were duly informed to him”.

Khemka had raised the issue of the transfer of large chunks of panchayat land, worth hundreds of crores, to newly created realtor companies under the garb of consolidating fragmented landholdings. He claims in his report that he was not allowed by the Revenue Department to apprise the Punjab and Haryana High Court of the proceedings in the matter of a civil writ petition (CWP) in 2010. After he succeeded in submitting a written statement, on September 6, 2012, the court undid the illegal transfer. Khemka gave several illustrations of undervaluation and illegal mutation of panchayat lands in favour of village proprietors and builders.

In one case in Ankhir village in Faridabad district, he points out how the then Deputy Commissioner supervised the partition proceedings by his junior revenue officer and cornered a prime plot after partitioning panchayat land in favour of his mother, who happened to be the Chief Minister’s aunt. The general modus operandi “was to purchase cheaply a share of jointly held land from a co-owner not in possession of the common land and after applying undue influence upon the subordinate revenue officers, take into possession prime Khasra numbers after partition proceedings, resulting in the appreciation of the initial investment several times”. Khemka wrote in his report that the chairman of the committee as head of the Revenue Department did not take any action despite a reference being sent to him on October 5, 2012. In fact, the Haryana Registration Rules, 2012, framed by Khemka under Section 69(1) of the Registration Act, 1908, to check unauthorised transfers of gram panchayat land and to prevent benami transactions, were not notified under Section 69(2) of the Act.

Khemka wrote to the Revenue Department on August 27, 2012, pointing out the abuse of the consolidation scheme observed in Gurgaon and Faridabad districts by vested business-politico-bureaucratic interests, as discovered in the villages of Rozka-Gujar, Baad-Gujar and Kot, and strongly recommended measures to be adopted in all the 51 villages under consolidation. He made specific recommendations about the kind of land to be included for consolidation and relative valuation of the land done after the approval of the departments concerned in order to prevent the rampant abuse of undervaluing land belonging to panchayat and/or government departments. He also recommended that the statutory authorities under the Consolidation Act should not have any interest, either direct or indirect, in the village under consolidation. He recommended that huge investments made in the purchase of land in Kot, Anangpur, Bandhwari and Rozka-Gujar villages through companies must be investigated to find out who actually owned them.

Curiously, the State government’s rebuttal of Khemka’s comments on the inquiry committee report only answers the references to the deals in which Vadra is involved.

Vadra’s deals Khemka has pointed out that the inquiry committee “gave a clean chit to the grant, renewal and subsequent permission to the transfer of commercial colony licence to M/s Sky Light Hospitality, a company owned by Robert Vadra”. As per public information available and collected from the portal of the Ministry of Corporate Affairs, this was incorporated into a company on November 1, 2007, with a total paid-up share capital of Rs.5 lakh. Onkareshwar Properties was another company incorporated on September 28, 2004, with a paid-up share capital, in September 2011, of Rs.25 lakh. As per deed No. 4928 dated February 12, 2008, registered in the office of the joint sub-registrar, Sohna, 3.531 acres (one acre is 0.4 hectare) of agricultural land in Shikohpur village, Gurgaon, was sold by Onkareshwar Properties to Sky Light Hospitality at Rs.7.5 crore before the date of registry through a cheque dated February 9, 2008. Other expenses, including stamp duty amounting to Rs.45 lakh, were borne by the vendee company, Sky Light Hospitality.

Khemka had pointed out that the deed itself was a false document, that the payment claim made was false, and that the cheque number of the said amount did not belong to the vendee company. It was a sham transaction. He also pointed out that as the paid-up share capital of the vendee company was Rs.1 lakh, it did not have the resources to pay Rs.7.5 crore to the vendor company or to meet the stamp duty costs of Rs.45 lakh. The stamp duty, Khemka, pointed out, had been paid by the vendor company.

The logical corollary, then, was that if there was no payment as alleged in the registered deed, how could it be said that the registered deed conferred ownership title upon the said land by virtue of the “sale”? The payment of Rs.7.95 crore was made after the money was received from DLF Universal Limited in the form of an advance or interest-free loan. Even DLF itself could not have paid the advance or interest-free loan without fulfilling certain legal formalities like legal title to the land or a letter of intent for grant of commercial colony licence from the DTCP for which the minimum requirement was a land title. The motive of the sham transaction was to corner the huge market premiums accruing on account of the commercial colony licence. According to the balance sheet of Sky Light Hospitality, as on March 31, 2009, it had received advances of Rs.25 crore from the DLF group towards the joint venture and land accounts during the year 2008-09. This funding, says Khemka, was used to clear the dues of Rs.7.95 crore, including the cost of land and stamp duties, to Onkareshwar Properties. This payment would have been made after August 5, 2008, the date the collaboration agreement was executed between Sky Light Hospitality and DLF Retail Developers.

The letter of intent was issued by the DTCP within a mere 18 days of the application by Sky Light Hospitality for a commercial colony licence. Undue haste was shown without verifying aspects like the title of the land and the capacity of the owner-applicant to develop a colony. The DTCP also failed to check the authenticity of the sale transaction.

“The capacity of the applicant company was nothing else other than Mr Robert Vadra. The man became the measure of everything and the entire statutory apparatus a castle of sand,” noted Khemka in his comments. The Income Tax clearance certificate was also done away with. In return for obliging Sky Light Hospitality, Onkareshwar Properties also gained as it was granted two group housing licences and a colony licence, following which its fortunes went up substantially.

Government rebuttal The government has rebutted the allegations. It says that a high-level committee comprising three financial commissioners “did not find anything wrong in grant of license or renewal thereof… that once the intkaal (mutation) in favour of an applicant is presented to the Department for a particular piece of land, the Department is bound to accept the ownership of land in favour of such applicant. This is the standard procedure followed for grant of licence, which has been followed in the licence case pertaining to Sky Light Hospitality Pvt Ltd also. The Sale Deed and Mutation by which Sky Light Hospitality Pvt Ltd became the owner of the land in question is valid even today and nobody has challenged the same till date. As far as the exchange of sale consideration is concerned, it is a matter between private parties which cannot be gone into by the Director. It is reiterated that no fake papers were submitted to the Department as alleged.”

The silence of many UPA constituents on the issue was an indicator of growing discomfiture within the coalition regarding the manner in which the matter had been dealt with. There were repercussions within the State Congress as well. The Member of Parliament from Gurgaon, Rao Inderjit Singh, who is also the chairman of the Parliamentary Standing Committee for Information and Technology, raised issues of transparency in general while his supporters declared their intent to form a new outfit called the Haryana Insaaf Congress. Dissensions within the State Congress have been an open secret for a while. Plagued with charges of corruption for quite some time now, the Congress-led UPA will have to answer questions on land deals as well.