HYDERABAD: The Telangana government informed the High Court on Wednesday that the erstwhile Congress-led N Kiran Kumar Reddy government of undivided Andhra Pradesh state, particularly its tourism minister Vatti Vasanth Kumar along with his officials, had caused a loss of Rs 135 crore to the state exchequer by restoring a cancelled lease over an extent of 5.60 acre of prime land situated within the premises of old Gandhi Medical College at Basheerbagh in the city which was handed over to a private company that failed to develop the promised project: Urban Entertainment Centre.
B Venkatesham, secretary in the Telangana state’s youth advancement, tourism and culture department, filed an affidavit in the court following a direction given by a division bench comprising Acting Chief Justice Dilip B Bhosale and Justice S V Bhatt which was dealing with a PIL filed by Chandra Kishore Jaiswal seeking a CBI probe into the deal.
In 2006, the then AP state, through a tender process, selected the companies of GS Gupta, a business man, with 73 pc stake in the project, and Pantaloon Retail India Ltd with 27 pc stake, for developing Urban Entertainment Centre at Basheerbagh. However, it was cancelled in March 2012 when they failed to develop the public-private partnership project. At this stage, another company, DLF Universal Ltd of Gurgoan, emerged on the scene stating that the developers had roped it in as a partner and that it invested more than Rs 100 crore in the project.
Following a petition by the developer in the High Court challenging the termination of the contract, the court asked the developer to pay at least Rs 10 crore towards lease rentals though the total outstanding amount at that time was more than Rs 25 crore. The court, however, made it clear that the state should not redeliver the possession of the land to the developer and that it should not restore the cancelled contract.
Contrary to this court’s order, the then Kiran Kumar Reddy government referred the matter to a high-power committee comprising ministers and also referred the matter to the advocate-general and the state’s law department for legal advice. While the AG did not give any opinion at all, the law department sent the file back to the committee asking it sternly not to seek legal opinions on a pending case that too before the High Court. The empowered ministerial committee then left the matter to the then tourism minister Vatti Vasanth Kumar.
When the composite Andhra Pradesh state was going to be divided into AP and Telangana states and even the AP Reorganization Act was enacted by Parliament in February 2014, the file on Urban Entertainment Centre started moving at jet speed.
On February 19, 2014, Kiran Kumar Reddy resigned as chief minister and on February 20 President’s rule was imposed on the state. Just five days before the CM’s resignation, Vasanth Kumar wrote on the file that the developer of the project met him and agreed to withdraw the writ petition and directed the authorities to restore the contract and redeliver the possession of the land to the developer.
The department’s special chief secretary called the developer for sorting out the issues on February 19, the day the CM resigned. The department later took three decisions that are contrary to the decisions of the empowered committee of ministers, Venkatesham said in his affidavit.
The three decisions included entering into a fresh lease agreement with the same defaulter developer for a period of 33 years, that too at the old rates fixed in 2006. The lease was to commence in 2014 afresh. It also waived all the old dues of the developer calling the developments that took place between 2006 and 2014 as unforeseen circumstances.
Venkatesham stated that the fresh lease agreement was entered into by the state with the developer on March 24, 2014 even when the High Court order was very much in force. The land was reconveyed to the said developer on March 25, 2014 during the President’s rule, he added.
