‘First City’ reaping benefit of crores on 10-acre free land in MIHAN-Nagpur-HITAVADA

‘First City’ reaping benefit of crores on 10-acre free land-HITAVADA

Staff Reporter

AFTER gobbling up an additional 10-acre land free from Maharashtra Airport Development Company (MADC) in lieu of curtailment of height of twelve towers as they interfered with the landing and take-off path of aircraft, M/s Reatox Builders and Developers is now aiming to make hundreds of crores of rupees through illegal construction of as many as 33 bungalows at a whopping price of Rs. 10 crore each as one more phase of its highly controversial First City project. When the firm is supposed to develop only residential flats on the additional land, it is proposing construction of posh bungalows, and that too with a permission (?) from the MADC.
Breaching its own affidavit before the High Court that the Reatox Developers will not indulge in sale of the First City flats to people who are not connected with the Special Economic Zone, the MADC has granted permission to the developer firm to build independent bungalows and indulge in brazen profiteering at the cost of farmers’ land acquired at throwaway price.
This mind-boggling gift worth hundreds of crores to promoters of First City project by the MADC has raised many eye-brows besides raising a serious question about the functioning of promoters of MIHAN-SEZ and M/s Reatox Builders - promoters of First City, who are reaping obnoxious benefit from a land received free of cost.
The promoters of First City are now planning to sell these 33 bungalows to city elites on the basis of a questionable letter from Maharashtra Airport Development Company (MADC) permitting them to sell it to anybody, against the letter and spirit of the law of the land. Ironically, the MADC had repeatedly informed the Board of Approvals and High Court (see box) that entire residential project of First City is meant for employees and persons directly connected with SEZ.
MADC officials confirmed this new venture of M/s Reatox to construct bungalows within SEZ area. The MADC is already under fire for allotment of 31-acre land to M/s Reatox Builders for a paltry sum of Rs 72 lakh per acre when a nearby land owned by the Patel family had fetched a whopping Rs 2.55 crore per acre in one of the most expensive land deals in the region. The entire land in question itself was forcibly acquired from protesting farmers at a throwaway price.
MADC had permitted M/s Reatox Developers to consume 2.5 FSI for ‘First City’ project within the SEZ to construct houses for “persons directly connected with SEZ.” M/s Reatox Builders had planned twelve 18-storied towers, but the Airports Authority of India (AAI) curtailed the height since it was in aircraft landing funnel area.
Ostensibly to compensate for this loss of five floors in each of the proposed twelve towers, the MADC showed utmost generosity towards First City and awarded an additional piece of 10 acres of land free of cost, to construct additional flats in lieu of loss of units due to curtailment of height. Going by the then prevailing market rate on Wardha Road, this land was worth Rs 25 crore.
Now, this land is sought to be used for reaping additional profits without paying a single paisa to public exchequer and without bothering about terms and conditions laid down by the Board of Approvals of Union Ministry of Commerce. This has raised a disturbing question about the conduct of the MADC and its nexus with builders about misusing subsidised land for profiteering. Vidarbha Jan Andolan Samiti convenor Kishor Tiwari, who has lodged complaints with Chief Minister and other authorities against alleged land scam by MADC, described it as brazen land grab and shocking abuse of public land.


MADC’s affidavit before HC

“OUT of the area that is being utilised for establishing Special Economic Zone, an area admeasuring 31 acres of land is being developed by M/s Reatox Builder and Developers, under power of attorney executed by the respondent no 1 (MADC) for construction of residential complex to accommodate employees/officers working in Special Economic Zone.” This is what the Maharashtra Airport Development Company (MADC) had told Nagpur bench of Bombay High Court on an affidavit, duly sworn by a senior officer of MADC in 2008, which is now being violated.
The affidavit was filed by MADC in response to a petition filed by M/s Suretech Hospital questioning the motive of MADC to acquire its land at Mouza Chinchbhuvan for rehabilitation of project-affected persons of MIHAN. Incidentally, the rehabilitation work over 58 hectare land, too, has been entrusted to M/s Reatox Builders- the firm which is coming up with ‘First City’ project in MIHAN-SEZ area.

Mihan faces new challenge-Time of India

Ramu Bhagwat, TNN, Aug 14, 2010, 05.45am IST

NAGPUR: The multi-modal international hub airport at Nagpur (Mihan) dragging its feet for the last couple years after being hit by economic slow-down now faces a new challenge.

DelhiMumbai Industrial Corridor (DMIC) being planned by the central government in consonance with the state government looks set to corner fresh investment coming to the state starving Mihan which is yet to see any big player coming in the manufacturing sector.

The DMIC project is being planned to come up parallel to the proposed Dedicated Freight Corridor being set up by the Indian Railways.

Accounting for the third largest share of DMIC project area-wise, Maharashtra has put in place an enabling policy framework with an aim to strategically capture the spillover growth from Mumbai into other areas that fall under this 1,500 km long, 300 km wide belt as part of DMIC.

Under the chairmanship of chief secretary, a highpower committee has been constituted by chief ministerAshok Chavan to facilitate inter-departmental coordination and fast-tracking of approvals. Maharashtra Industrial Development Corporation (MIDC) has been appointed as the nodal agency for DMIC-related development.

The DMIC project-districts in Maharashtra have been divided into two key Economic Influence Zone viz; Nashik-Sinnar-Igatpuri Investment Region (NSIIR) and the Dighi Port Industrial Area.

There are various industrial and mega industrial park projects being implemented under each of the two zones. Work on developing Dighi port in Raigad district as a new gateway connected by high-speed rail service, modern roads and highways has been going on for the last two years.

A multi-modal logistics park at Karla is proposed to accommodate increased traffic freight volumes, movement and connections and bring in a multiplier effect. MIDC is acquiring 70,000 hectares of land to accommodate these DMIC initiatives.

Steps are also being put in place to ensure water allocations and superior road and rail connections to and from every DMIC hub. "It sure will be a setback for Mihan and making it further difficult to attract investment from manufacturing sector. Till now only IT sector which does not have any cargo has shown interest in Mihan. With more competition within the state and from politically influential area, Mihan will no doubt suffer," said Confederation of Indian Industries (CII) Vidarbha zonal committee chairman Shivkumar Rao.

He said even the state will face a stiff completion in attracting investment as Gujarat will be the biggest beneficiary of the industrial corridor project as 38% area will be in that state.

City MPVilas Muttemwar agreed: "Mihan may find it hard to cope with fresh competition in attracting investment. More so if powers that be continue to ignore Vidarbha. The delay has already hit the project beyond repair."

However, RC Sinha, vice-chairman-cum-managing director of Maharashtra Airport Development Company (MADC) which is developing the project, is optimistic. He said both projects are different and Mihan will always have an edge due to the air-connectivity it provides.

"Moreover, it has an SEZ which invites investments from export oriented firms. So such firms will still be attracted towards the SEZ where they can get tax exemption too," said Sinha

Brazen abuse of SEZ land by ‘First City’-HITAVADA

Brazen abuse of SEZ land by ‘First City’-HITAVADA

Staff Reporter-5^th August 2010

1) Why was the 31-acre land given at a subsidised rate to M/s Reatox and who is responsible for the huge loss to the state exchequer ?

2) Why were another 10 acres given free of cost to M/s Reatox?

3) Why is the MADC turning a Nelson’s eye towards open sale of flats to  general public by M/s Reatox in violation of BoA approvals and its own affidavit ?

The land allotment to M/s Reatox Builders (promoters of ‘First City’ project) at a highly subsidised rate by Maharashtra Airport Development Company (MADC) within MIHAN-Special Economic Zone (SEZ) and brazen act of the builder to sell flats to general public, has raised a serious question mark over legal permissibility of the entire act. The very action of MADC to allot to a builder the agricultural land acquired from farmers for peanuts, and subsequently to allow the builder to sell the same to general public at market rate and earn mind-boggling profit, is nothing but a massive abuse of public property for the benefit of private few, apparently with the blessings of MADC top bosses, who are now maintaining a conspicuous silence.

M/s Reatox Builders bagged 31 acres of land for Rs 72 lakh per acre when a nearby land owned by the Patel family fetched a whopping Rs 2.55 crore per acre in one of the most expensive land deals in the region. If that is a market bench-mark, then the MADC could have earned close to Rs 75 crore from promoters of ‘First City’ project. Instead, the Government company received only Rs 22 crore. Who is responsible for this loss of Rs 53 crore? Several social workers of repute have alleged that MADC Vice-Chairman and Managing Director R C Sinha needs to come clean on this issue, since he has been the virtual face of MADC and MIHAN-SEZ all along.

The land was acquired from protesting farmers who were offered a pittance for Meghdoot project of CIDCO and later handed over to MADC with an intention to create integrated MIHAN-SEZ. However, to the shock of everybody, the land was offered to realty majors who, in turn, are allowed to encash the current realty boom on land offered to them at a highly subsidised price and in many cases without inviting tenders. Several organisations fighting against such acquisitions have charged MADC with arbitrariness and lack of transparency and undue favours to a select few with the blessings of MADC top brass and their powerful mentors.

MADC had permitted M/s Reatox to consume 2.5 FSI for ‘First City’ project within the SEZ to construct houses for “persons directly connected with SEZ.” M/s Reatox Builders had planned 18-storeyed towers, but the Airports Authority of India (AAI) curtailed the height since it was in aircraft landing funnel area.

Ostensibly to compensate for this loss of five floors in each of the proposed twelve towers, the MADC then showed utmost generosity towards M/s Reatox and awarded an additional tract of 10 acres of land free of cost. Going by the then prevailing market rate on Wardha Road, this land was worth Rs 25 crore. This land was given to the builder (co-developer) in lieu of the AAI curtailment of the tower-height.

Was there any clause to such effect in the MADC-Reatox agreement, and what is legal sanction to such an agreement? -- is the main question.

Sources claim that the MADC Board of Directors had permitted 2.5 FSI to the developers and it was the responsibility of the builder to construct its building within permissible parameters. If the AAI directive has forced an alteration in the original building plans, it was obvious that the builders had not adhered to the parameters. In such a case, how does the MADC find itself responsible for that lapse, so much so as to offer the builder an additional tract of land free of cost? Was this done for reasons of someone’s hidden agenda?

Apparently, the collusion between MADC and promoters of ‘First City’ is crystal clear as the Special Purpose Vehicle appeared to have bent the rules and looked elsewhere to allow illegal action of builder in selling flats to general public. What is legal sanction behind this bail-out of ‘First City’ when the BoA clearly states that the approval to the project is absolutely restricted to selling the property only to people employed in various units that would be coming in SEZ?

If the land was to be used to house workers/officers and others working in SEZ units, the subsidised land rate could have been justified. But violating the original permission granted by Board of Approvals (BoA) and MADC’s own affidavit before the High Court, the builder is openly selling these flats to general public as per prevailing market rate and in the process earning huge profit at public cost-since MADC had spend huge public money to create basic infrastructure within SEZ and the builder is not required to spend a single penny from his pocket on this count.

Interestingly, ‘First City’ promoters always maintained that flats are meant for general public, clearly suppressing that they had a mandate to construct housing facilities for employees working within SEZ. This wilful breach of condition and regulatory permissions naturally has civil and criminal consequences and the MADC and M/s Reatox Builder may have to face the music.

The expose by ‘The Hitavada’ has put the developer - MADC - and co-developer - M/s Reatox Builders - in a tight spot. Unable to justify the brazen violation of SEZ Act/rules and open sale to general public, the builder issued misleading statements explaining nothing. However, the non-denial seems aimed at skirting the main issue as to how subsidised land offered for housing projects exclusively for SEZ employees can be sold to outside public ignoring BoA directive. Incidentally the MADC, too, has adopted a very ambigious stance claiming that project was approved by BoA - a fact nobody has questioned.

But this has raised a disturbing question about conduct of the MADC and its nexus with builders about misusing subsidised land for profiteering.

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CM orders probe in violations by ‘First City’ of Mihan Nagpur-Hitavada

CM orders probe in violations by ‘First City’ of Mihan Nagpur-Hitavada

Staff Reporter

Maharashtra Chief Minister Ashok Chavan has taken a serious cognisance of the irregularities and brazen violation of norms and sanctions by the First City project of M/s Reatox Builders and Developers and has asked the Principal Secretary (GAD) to undertake necessary probe.

Acting promptly on the complaint filed by Vidarbha Janandolan Samiti(VJAS) regarding ‘multi crore land scam in Nagpur MIHAN project by Mumbai based builder- M/s Reatox Builder and Developers,’ exposed by The Hitavada, Chief Minister has asked the top officials to probe all irregularities and violations in the matter related to illegal ‘sale of flats to the general public, totally reserved for the employees working in MIHAN-SEZ area as per existing Union Government law of SEZ, informed Kishor Tiwari of VJAS.

As per a communiqué received by VJAS, Principal Secretary (Industries) A.A.Khan was initially asked to probe the matter by the Chief Minister. But as issue is related to General Administration, he has forwarded the original complaint to Principal Secretary (GAD) for necessary probe. Incidentally, Chief Minister is ex-officio Chairman of Maharashtra Airport Development Company (MADC) and hence his office took a serious cognisance of entire issue. Extensively quoting from The Hitavada reports, VJAS asked Chief Minister to decisively intervene in the matter and stop illegalities.

Quoting MADC’s affidavit before Nagpur bench of Bombay High Court which insisted that 31 acre land being developed by M/s Reatox Builder and Developers, is for construction of residential complex to accommodate employees/officers working in Special Economic Zone, the VJAS questioned legality of offer extended to general public to purchase these residential dwellings. VJAS has alleged massive malpractice’s in this land deal and has submitted detailed complaint alleging unholy nexus between developer of MIHAN-SEZ and co-developer M/s Reatox Builders.

The complaint also pointed out that Board of Approvals (BoA) in its recent meeting held on July 13 had raised objection over "agreement of MADC with all its co-developers which contained 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 BoA had directed the MADC to remove condition of sale from its agreement with co-developers (in the instant case M/s Reatox Builders)

VJAS has also sought urgent intervention of President of India and Prime Minister to expedite the action of cancellation of land allotment and subsequent flats allotment to legitimate claimants of MIHAN-SEZ promoted by MADC as per SEZ laws and rules framed thereunder, Tiwari added.

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MADCL granted undue favours to Satyam: CAG-Economic Times

MADCL granted undue favours to Satyam: CAG

MUMBAI: The Satyam scandal is back to haunt the Maharashtra government with the Comptroller and Auditor General of India (CAG) reporting ‘undue’ favours granted to the company that cost the state at least Rs 20 crore. The state-run agency Maharashtra Airport Development Company Limited (MADCL) allegedly sold huge tracts of land to Satyam in Multimodal International Hub Airport (MIHAN) project at Nagpur at much lower rates, the CAG has pointed out. It, however, is no coincidence that RC Sinha, MD, MADCL—the nodal agency for the project—was also the chairman of the tainted Satyam subsidiary, Maytas Infrastructure. “MADCL allotted 100 acre to Satyam at Rs 18 lakh per acre against applicable rate of Rs 24.28 lakh,” the report said. The land was given to Satyam to set up an IT company at MIHAN on December 5, 2005. MADCL defended the decision by describing it as an “early bird” offer. But the CAG report, released recently, has exposed how hollow MADC’s claim was. On the same day, another deal was signed for 100-acre of land at MIHAN to Shapoorji Pallonji and Company Limited. However, the latter was charged Rs 26.30 lakh per acre. “The sale of land to Satyam at lower rate was not justifiable and it resulted in a loss of revenue of Rs 6.28 crore to MADCL owing to undue benefit offered to Satyam,” the CAG report said. Satyam was also given over 28 acres of additional land on March 3, 2007 without the approval of the competent authority at Rs 22.35 lakh per acre while the market price during 2005-06 was Rs 72 lakh per acre, the report highlights. “The allotment of additional land without the approval of competent authority at less than the prevailing market price of land was irregular and resulted in loss of revenue of Rs 13.93 crore,” it said. Meanwhile, Vidarbha Janandolan Samiti (VJAS) has dashed off a letter to Prime Minister Manmohan Singh demanding a CBI probe into the whole issue. It was the VJAS that had first questioned RC Sinha’s dual role on January 10, 2009.

MADC under fire over land allotment-TIMES OF INDIA

MIHAN CRISIS-MADC under fire over land allotment-TOI Reports

Printed from

MADC under fire over land allotment NAGPUR: The Union ministry of corporate affairs has sought an explanation from Maharashtra Airport Development Company (MADC) regarding a complaint lodged by the Vidarbha Janandolan Samiti (VJAS). The samiti has alleged that there was favouritism by MADC in allotment of land to big companies, including allotment of land before it was acquired by MADC and causing loss to the exchequer by giving land at discounted prices. MADC is developing Mihan and a SEZ near the city. The assistant registrar of companies, Mumbai, has said in a notice sent to MADC that the complaint lodged by VJAS prima facie shows that “there is material indicative of violation of Companies Act, 1956.” The ministry has warned that if it does not receive a reply or if the reply was not relevant to the points raised by the complainant, or was haphazard or evasive, then it would take legal action against the company. VJAS president Kishor Tiwari has alleged that MADC exhibited favouritism in allotment of land to big companies. Many companies were given land at throwaway prices, thus causing huge loss to the public exchequer, Tiwari alleged. He also claimed that allotment of land was started before completion of the acquisition process, and land was ‘reserved’ for certain companies without following due process of law. Tiwari has said that many of these companies also raised bank loans amounting to crores of rupees by showing ownership of land allotted by MADC, even though at that time MADC itself had not become the lawful owner of the land.

‘First City’ violates BoA directive about purchasers-VJAS seeks PM’s intervention -Hitavada Reports

First City’ violates BoA directive about purchasers-VJAS seeks PM’s intervention -Hitavada Reports

“It is surprising to note that how the land which is meant for residential accommodation of working professional at SEZ has been given to Reatox Company for sale/lease in open market to investors and capitalists who all have invested crores of rupees in the said township? This all needs to be probed by CBI and all culprits need to be booked under relevant provisions of law for cheating the public at large, especially the Project Affected People - Farmers of the regions

‘First City’ violates BoA directive about purchasers

Staff Reporter
Nagpur-30th July 2010

“The representative of Maharashtra Airport Development Company (MADC) made a brief presentation on the requests of the authorized operations in the SEZ, indicating the quantum and justifications of these activities. He also informed that about approximately 1,20,000 employees will be serving in this SEZ when fully developed. After deliberations, the Board approved following activities/operations in the SEZ for 100% consumption of the SEZ users: Housing Phase I as per the plan provided by the developer with total number of 2082 flats with a built up area of 2,75,000 square meters.” (Page 4- Minutes of the 16th meeting of the SEZ BoA held on August 8, 2007)
This revelation comes in the minutes of 16th meeting of the Board of Approvals (BoA) held on August 8, 2007. It clearly reveals that First City project of M/s Reatox Builders routed through MADC was approved by BoA with a clear understanding that all the residential dwellings so constructed would be sold to employees working in SEZ.
The BoA had also approved construction of 10,000 houses in Phase-II total built up area not exceeding 17,00,000 sq mt, again with crystal clear direction that same would be available for persons directly connected with SEZ.
Thus, there was no ambiguity about end-users of housing projects coming up within non-processing zone of the notified SEZ area. Ignoring this fact, the developer (MADC) permitted all co-developers including M/s Reatox Builders to sale flats built by such co-developers to public and MADC had issued power of Attorney to such co-developers for such sale, the BoA recorded in its minutes with a stern directive to remove such “condition of sale from agreement” while granting co-developer status to M/s Reatox Builders.
It may be recalled that MADC, Developer of the MIHAN SEZ in Nagpur, had requested for transfer of approval in respect of authorised operations in favour of M/s Reatox Builders and Developers Private Limited. The matter came up before BoA during its meeting held on July 13. 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.
The authorised operations include housing phase-I as per the plan provided by the Developer with total number of 2082 flats with a built up area of 2,75,000 square metres, low income houses, convenient shopping units, 180 houses with a total area of 11,312 square metres, and Club House in the housing phase-I with an area of 2,035 square metres. M/s Reatox Builders and Developers Private Limited was approved as a co-developer vide LoA dated January 5, 2009.
The ‘First City’ project was launched with much fan-fare on November 4, 2007 and was expected to be completed within 27 months as per the term of lease. Initially, ‘First City’ was to have 12 building of 18 floors each. However, the Airports Authority of India raised strong objection to such a height stating that project was situated in funnel area of airport and would pose danger to aircraft’s landing at Nagpur airport. This forced M/s Reatox to lower the height by five floors and redesign the project.
Interestingly, M/s Reatox Builders and their marketing company Disha Direct had claimed that flats are available for Nagpurians and have undertaken a special drive to sell these flats to general public ignoring the clear and consistent directives of BoA.

VJAS seeks PM’s intervention

Vidarbha Jan Andolan Samiti has sought immediate intervention of Prime Minister Dr. Manmohan Singh in the matter of allotting land inside the SEZ to real estate companies like M/s Reatox Builders and Developers Private Limited at a throwaway price. In a letter addressed to the Prime Minister, VJAS Chief Kishor Tiwari has levelled serious charges against promoters of MIHAN-SEZ for favouring M/s Reatox Builders and for turning nelson’s eye towards brazen violation of SEZ Act and rules by promoters of First City project by utilising land acquired from farmers for peanuts to earn huge profits.
VJAS has also demanded a CBI probe and alleged that land given to M/s Reatox Builders, promoter of First City was a “glaring example of gross misconduct in granting lease of land meant for the residential accommodation of employees of the companies - organizations in the SEZ and their families houses, at a throwaway price to M/s Reatox due to closed link with politicians.”
“It is surprising to note that how the land which is meant for residential accommodation of working professional at SEZ has been given to Reatox Company for sale/lease in open market to investors and capitalists who all have invested crores of rupees in the said township? This all needs to be probed by CBI and all culprits need to be booked under relevant provisions of law for cheating the public at large, especially the Project Affected People - Farmers of the regions,” VJAS demanded.

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