MHA audit finds penalty clause missing from agreements,slams UT

The audit report mentions that the “penalty clause was not found anywhere in the Development Agreement,which implies that proper safeguards for protecting government interests were not kept in the agreement”.

In case of a dispute,as is the case with the projects,penalty clause becomes a vital tool for the parties signing an agreement.

Digging out the anomalies in the agreement signed between the Administration and Unitech,the report adds,“The agreement was signed on December 6,2006,whereas the possession of the land was given on March 3,2008. The firm represented that since the land was handed over to the firm on March 3,2008,the date of commencement (of the project) may be treated from March 3,2008 and not from December 6,2006. (But) as per the Tourism Department,the project was required to be completed within 42 months,starting from the signing of Development Agreement (December 6,2006). The dispute has not been sorted out till the date of audit.”

The report further says,“It is not understood,when no Land Allotment Letter has been issued in favour of the firm,then how the land was handed over to the firm on March 3,2008.”

“A Development Agreement was executed on December 6,2006 between the Administration and M/s Unitech Limited¿ As per Company Act,it is mandatory for both the Administration and Developer to comply with the provisions contained in the Development Agreement. If in any case,a Developer transfers/ would like to transfer his responsibilities,the entire process of calling of bids should be done again. However,it is seen from the records that M/s Unitech Limited,the Developer has sought permission for transferring the project in favour of independent company alleged to be 100 per cent subsidiary of M/s Unitech Limited,which is again in violation of the Development Agreement,” the report adds.

In case of Filmcity,the report says,“No land has been allotted to M/s Parsvnath so far and will not be allotted till further orders,as per instructions issued vide letter dated January 21,2009,by the Finance department. Only a sum of Rs 47.75 crore has been deposited and the balance money has not been deposited by M/s Parsvnath Developer. In response,the UT Estate Office has stated that due to non-issuance of allotment letter,no penalty regarding forfeiture of the deposited amount can be imposed.”

The CBI,meanwhile,will conduct a preliminary probe into the matter and if needed,register a criminal case against those found prima facie guilty.