Staff Reporter
“The Developer shall not sell the land in a Special Economic Zone..” This is the mandatory provision of Special Economic Zone (SEZ) Act and rules framed thereunder which also stipulate that residential units should be primarily sold to persons connected with SEZ activities. Therefore, the Board of Approvals (BoA), the apex decision making body for SEZ has consistently maintained that no developer or co-developer can sell the land or residential dwelling to general public and extended this principle to ‘First City’ coming up at multi product MIHAN-SEZ promoted by Maharashtra Airports Development Company (MADC).
In fact keeping with statutory enactment, the Board of Approvals in its recent meeting held on July 13 has directed the MADC to remove the “condition of sale” from the agreement between developer and co-developer as well as from the Power of Attorney granted by MADC to the co-developer-M/s Reatox Builders which is coming up with ‘First City’ in MIHAN-SEZ.
Entire proceedings of BoA are available in the public domain and clearly mentions that Department of Revenue (DoR) pointed out “agreement of MADC with all its co-developers have been found to contain the condition that the flats built by such co-developers would be sold by them to public and MADC has issued Power of Attorney to such co-developers for such sale.”
The DoR representatives also pointed out, in the present case, the developer has come to transfer its authorised operations to co-developer without modification in the condition of sale of property. “The DoR does not agree to the proposal unless the condition of sale is removed from agreement between developer and co-developer, as well as from power of attorney granted by MADC,” the minutes mentioned.
The BoA after deliberations, decided to grant approval for transfer of the authorised operations, earlier granted to the developer, in favour of the co-developer, subject to the condition that the ‘Condition of Sale’ is removed from agreement between developer and co-developer, as well as from power of attorney granted by MADC. This leaves no scope of any ambiguity about fate of any residential project coming up within SEZ as the Department of Revenue had raised a similar objection about every housing project.
Interestingly, the First City project promoters are now claiming that the dispute is about word ‘sale’ and they will replace it with lease for 99 years which is as good as sale. However, instead of addressing the main issue about serious legal objection raised by the DoR representative, the MADC and M/s Reatox Builders have tried to claim that their project has valid approval from BoA- a fact nobody has disputed. In their effort to skip the main contentious issue of bar on selling the residential units to general public, they have tried to side-track the debate to confuse the gullible purchasers who are apparently not aware about this vital aspect.
Notably in case of another housing scheme of M/s Mahindra Bebanco Developers Limited coming up in MIHAN-SEZ, the BoA in its meeting held on August 11, 2009 refused to accord co-developer status. The minutes read as follows: “The Representative of the Department of Revenue pointed out that the residential building units proposed are for open sale which is against the letter and spirit of the SEZ Act and Rules. After deliberations, the Board directed the Development Commissioner, SEEPZ, to go into the issue and submit a report based on which BoA can take a decision. Accordingly, the Board decided to defer the proposal.”
In subsequent meeting of BoA held on December 15, 2009 the minutes stated “ DC, SEEPZ indicated that after perusing the agreement, it was noted that there are clauses in the agreement which denote sale envisaging transfer of ownership and not lease. Accordingly, BoA decided to defer the proposal with the direction that the developer must redraw the co-developer agreement in line with the SEZ Act/Rules.”
Interestingly, the SEZ Act/Rules clearly stipulates that the Developer or Co-Developer shall strive to provide adequate housing facilities not only for the management and office staff but also for the workers of the Special Economic Zones Units. This has put a big question-mark over open invitation to general public to purchase residential units within SEZ as the Act or rules clearly mention that in the non-processing area, the residential facility will be created for persons directly connected with SEZ activities.
Editor’s Note
Dear Readers,
It is painful to realise how vested commercial interests mislead the public. We found this out when a quarter-page advertisement on the front page of The Hitavada CityLine on July 27, 2010, in the name of Maharashtra Airport Development Company Ltd. called The Hitavada reporting on July 23, 2010, on a builder’s improper activities “malicious and false”. Though we were shocked to read the contents of the advertisement, we chose to publish it because that offered us an opportunity to bring before our esteemed readers more painful facts about what kind of wrongdoings are going on in the MIHAN Special Economic Zone in the name of development. We are releasing those details, available on the official website of the Board of Approvals of Union Ministry of Commerce, for the benefit of the public, as part of our bounden duty to do so in larger public interest. These details will bring to people’s notice how rules are ignored or manipulated or twisted or interpreted maliciously by vested interests to mislead the uninformed public.
MADC’s denial
We must add value to public information by stating here that local officials of the MADC have denied flatly that they have issued the said advertisement.
Following our report on July 23, the MADC issued its clarification as regards some details. We published this clarification, after suitable alterations by MADC itself, in our issue of July 25, 2010. The MADC officials informed their head office about our cooperation and closed the issue.
Factually, the said advertisement was issued to us by an agency for its client ‘Disha Direct’ for ‘Product - First City’. Disha Direct is the marketing company for ‘First City’. We insist that our July 23 report was based entirely on the proceedings of the BoA meetings, available on its official website www.sezindia.nic.in.
The accompanying report, too, derives the details from the same source.
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