Govt’s war with WTC escalates: Maharashtra to move tribunal for probe into ‘irregularities’

Sources say MVIRDC is planning to file a writ petition in the High Court, challenging the takeover order.

By: Express News Service | Mumbai | Published:November 26, 2016 1:00 am

A day after ordering the takeover of the plot on which the World Trade Centre (WTC), or the M Visvesaraya Industrial Research and Development Centre (MVIRDC), is located in Cuffe Parade, the state decided to approach the National Company Law Tribunal (NCLT) seeking a probe into ‘irregularities’, and demanding an administrator be appointed on the company.

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The government contends that the MVIRDC has allegedly been involved in rampant financial irregularities.

Mumbai Collector (city) Ashwini Joshi confirmed that the government had permitted her office to approach the tribunal.

The MVIRDC, headed by former Union minister Kamal Morarka and having noted industrialist Vijay Kalantri as vice-president, is registered under the Companies Act, 1956.

On Thursday, Joshi’s office, which functions under the revenue department, had issued orders taking over the possession of the plot on which the landmark property stands.

In the order, the government accused the MVIRDC of large-scale violations including alleged unauthorised construction, letting out of open space for restaurant and other commercial purposes, non-payment of the state’s share of income, and opening up of subsidiaries in other parts of the country without the government’s mandatory permission.

The WTC has been built on a 5.17 lakh sqft government land, leased to it on October 16, 1970, on a concessional rent for promotion of trade and commerce.

The state’s decision to approach the NCLT comes in the backdrop of a complaint from the MVIRDC Lessees’ Association, which had approached Chief Minister Devendra Fadnavis alleging that the management had flouted norms stipulated under the Companies Act.

Following the complaint, state’s Principal Secretary (Revenue) Manukumar Srivastava on July 19, 2016, instructed Joshi to conduct an inquiry in the matter.

Besides giving the complainant and the management a hearing, the Collector’s office also conducted an inspection of the site and its records.

A report submitted by Joshi to the government on September 3 had found merit in the Association’s complaint that the MVIRDC had opened up subsidiaries in Bhubaneswar, Jaipur, and Goa without the state’s permission.

While accusing the management of defaulting on the norm that 50 per cent of its income, after deduction of expenses, was to be shared with the government, the state has claimed that the lease conditions demanded a prior approval from the government for all capital investments.

Accusations of other financial irregularities including diversion of funds have also been levelled by the Association, which the MVIRDC has been refuting. Incidentally, four government secretaries exist as ex-officio members of MVIRDC.

The state has permitted the Collector’s office to appoint a senior legal expert for pleading the government’s side before the NCLT.

The Indian Express made attempts to contact the office bearers of the MVIRDC, including Kalantri and the centre’s director Roopa Naik, but phone calls and text messages went unanswered.

Sources, however, said the MVIRDC is planning to file a writ petition in the Bombay High Court, challenging the government’s order. But anticipating this, Joshi’s office has already filed a caveat in court seeking to be heard before any order is passed.

Following Thursday’s orders, Joshi visited the Cuffe Parade site on Friday, along with her staff, to formerly take over possession of the plot.

Officials from the Maharashtra Industrial Development Corporation (MIDC) were also present. “The office bearers offices and the record rooms were sealed,” said an official. Joshi also addressed the 170-odd lessees at the WTC, who were anxious to know how the day-to-day functioning of the centre would continue under the new arrangement.

For now, the government has ruled that a Deputy Collector-rank official with the City Collectorate and designated MIDC officials would oversee the day-to-day matters. The lessees have been asked to pay the maintenance fee and other service charges with the Collector’s office for the time being.

Meanwhile, there is intense debate in the state’s political and bureaucratic circles that the centre had first come on the government’s radar after the June 2012 Mantralaya fire.

While the government was looking to shift some departments, including the home and revenue departments, out of Mantralaya and had approached the WTC office-bearers, some senior bureaucrats had complained that the latter were not very accomodating.

A couple of senior IAS officers weren’t even allowed inside the building for hours when they had first reached the site for the relocation. Incidentally, then additional chief secretary (Revenue) Swadheen Kshatriya is now the state’s chief secretary.