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Tuesday, September 28, 2021

Punjab AG said govt suffered Rs 125 crore loss in deal Cancel land auction, JCT lease, finance writes to industry dept

Finance Department’s recommendation came after Punjab Advocate General Atul Nanda, in his legal opinion, stated that the government incurred a loss of nearly Rs 125 crore with the deal.

Written by Kanchan Vasdev | Chandigarh |
August 10, 2021 8:14:00 am
Captain Amarinder Singh, Tarun Chugh, India Army, Punjab CM Amarinder Singh, Amarinder Singh news, Congress Amarinder Singh, BJP, Indian army, farmers protest, tractor rally, delhi violence, india news, indian expressThe legal opinion was sought by the Chief Minister Amarinder Singh after Finance Department had objected to the deal. (File)

SIXTEEN months after the Punjab Small Industries and Export Corporation (PSIEC) auctioned a piece of 31 acres of prime land of liquidated JCT Electronics in Mohali, during the lockdown period last year to a private realtor, GRG Developers, Punjab Finance department has written to Department of Industries to cancel not only the auction but also the lease with JCT.

Finance Department’s recommendation came after Punjab Advocate General Atul Nanda, in his legal opinion, stated that the government incurred a loss of nearly Rs 125 crore with the deal.

Sources said that after the recommendation by the Finance Department, the Department of Industries is likely to cancel the auction.

“The department has no option. After legal opinion by the Advocate General, the FD has recommended cancellation. The department wants not only the auction cancelled but also the lease with JCT Electronics since the firm is liquidated. It has stated why the land should not be recovered back from the liquidated firm and why is it being allowed to auction land further. The file is now with the Minister of Industries Sunder Sham Arora,” a source said.

The legal opinion was sought by the Chief Minister Amarinder Singh after Finance Department had objected to the deal. The FD had sought the opinion asking if the deal was legally tenable and if PSIEC can take back the property by buying back the lease hold rights given to JCT Electronics.

Nanda had opined that “casual approach if not outright negligence” had resulted in a loss to the public exchequer and this had taken place at a multitude of stages.

With the deal, the opposition has countered the government on the issue. Former Deputy Speaker Vidhan Sabha Bir Devinder Singh was the whistleblower in the case. But the stamp on his allegations came when the government’s law officer opined that the deal had caused a loss of crores to state exchequer.

Bir Devinder, meanwhile, is planning to take the issue to Lokpal demanding action against the minister concerned. Singh said, “The Lokpal has been stating that he has not got any complaint. Hence, we have sought time from him. We will take the issue to him. It is a serious matter.”

In January 2020, the PSIEC not only agreed to sell the lease land proposed to agree to a reduced amount of Rs 90.56 crore from Rs 161 crore as unearned increase income of which PSIEC would get only 50 per cent (Rs 45 crore) and a reduced amount of Rs 8.54 crore from Rs 9.77 crore as enhanced compensation in the auction to be conducted by Asset Reconstruction Co. (ARCIL).

The PSIEC had only proceeded on a legal opinion by a private advocate, which did not examine the nature of charge over the lease rights held by Punjab Infotech as per the lease deed nor that it was the Managing Director of Punjab Infotech who was the competent authority to value the unearned increase.

Although there were financial and legal implications involved, the matter was never referred to the Finance Department nor to the AG office. The sale was advertised based on this reduced rate on January 4, 2020 and GRG Developers became the successful bidder on February 17, 2020.

The AG has, however, opined that even if the lease deeds were to be cancelled and resumption proceedings initiated, the tripartite agreement would be argued and treated as a novation of the lease deed to contend that the terms of the lease deed stand substituted with the terms of agreement.

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