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Cancel land leases to industries which mortgaged it for loans, demand activists

So far Rs 8,625.89 crore has been released by banks and the rest is about to be released.

Written by Debabrata Mohanty | Bhubaneshwar |
July 2, 2014 8:02:00 pm

A week after Comptroller and Auditor General (CAG) slammed the state-owned Odisha Industrial Infrastructure Development Corporation for allowing the private companies to mortgage leased land for raising loans from banks in violation of several rules in the Land Acquisition Act, leading activists on Wednesday demanded that all such leases should be cancelled and money be recovered from them.

Last week, the CAG for the year ending March 2012, had said IDCO irregularly conferred mortgage rights in the lease deeds executed with 52 MoU (memorandum of understanding) based and 54 non-MoU based industries while handing over possession of 46,732.894 acres land even though it did not have such powers under LA Act.

Slamming the IDCO’s move, leading activist Prafulla Samantara and Biswajit Mohanty said: “The report exposed the Naveen Pattnaik government’s crime against the innocent and helpless farmers of the state. Even if you don’t have a single rupee in hand after you pay whatever you have to pay for bribing politicians and bureaucrats you can still run a profit making industry if you get land. The same land will get you money from the bank and the Naveen Pattnaik government is fully behind you,” both Samantra and Mohanty alleged.

The CAG report tabled in Odisha Assembly said IDCO issued No-Objection Certificate to 26 MoU based industries for mortgaging 13,846.23 acre land in order to raise loans from financial institutions. Based on the NOCs issued by IDCO, 12 companies got loans worth Rs 52,423.50 crore by mortgaging 8,489.89 acre land allotted to them. So far Rs 8,625.89 crore has been released by banks and the rest is about to be released.

“IDCO unauthorisedly issued such NOCs, thereby enabling industries to raise loans on the basis of land allotted for industrial purpose, without adequate safeguards to ensure that such capital would actually be used in the industrial projects concerned,” the report said. Incidentally, in January this year the revenue & disaster management department came out with a notification which laid down the conditions for grant of NOC for mortgage of the allotted land. The notification said while granting permission for mortgage, the same has to be examined and approved by the board of directors, Idco on case-to-case basis.

The activists said while 70 criminal cases have been pending against Bhusan it was been allowed a loan of Rs 10000 crores whereas no farmer in distress is able to get a thousand of rupees as loan to get out of distress. “As per CAG both Posco and Vedanta have been allotted land at nominal cost and 6 other companies have got land at the cost of Rs 165 crore whereas the value of the land should have been Rs 901 crores and forest land have been illegally transferred. The State should take money and land back from thse companies while initiating criminal action against them as well as the erring officials,” they demanded.

“Evoking public purpose clause for private companies and use of emergency clause has been falsely invoked though it is not applicable and hence farmers could not file objections. Therefore adequate compensation must be paid to all land losers apart from restoring the land back to them,” said Samantra.

Last week, the North Orissa Chamber of Commerce and Industry and All Industry Associations of Orissa had joined the issue over mortgage rights alleging that CAG had sensationalised the issue. “The CAG report has sensationalized the matter and created unnecessary doubts in the mind of the public for no genuine reasons. The report of CAG is not a financial audit report but only a performance audit report. The thought that something illegal is being perpetrated destroys the already poor industrial climate in Orissa,” said RN Sarkar, president of Odisha Young Entrepreneurs Association.

The industry bodies said once the IDCO was vested with power after a notification by revenue and dissaster management department and a subsequent cabinet approval in January this year, the matter should have been put to rest. “Making the mortgage issue more controversial would serve no purpose except creating loss to the industrial development in the state. It would also affect job opportunities and compound the unemployment problem, ” said Sarkar.

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