DLF's controversial 350 acre deal with Haryana govt: All you need to know

The Punjab and Haryana High Court on Wednesday quashed the Haryana government’s decision to allot 350 acres of land in Gurgaon to DLF for development of a residential society, commercial facilities, sports activity and a golf course. The High Court has ordered that the land be returned to the Haryana government.

Haryana has been asked to allot the land through international bidding. DLF can also participate in the fresh bidding process.

The ruling comes a week after the Supreme Court had ordered DLF to pay Rs 630 crore penalty imposed by the competition watchdog CCI as a pre-condition for hearing the company’s appeal.

The allotment of 350 acres of prime property in Wazirabad had been challenged by villagers who claim they were told that the government was acquiring their land for a recreational park.

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Here is all you need to know about the case:

1. Land belonged to the panchayat and was later acquired by the state govt: As _Firstpost_ reported in the pas t, this 350 acres of land belonged to the panchayat (and not the farmers) of village Wazirabad in district Gurgaon. The state government acquired it through a notification in 2003.

After the acquisition, the land was initially meant for industrial infrastructure and residential purposes and was jointly owned by HSIIDC (Haryana State Industrial and Infrastructure Development Corporations Ltd) and HUDA (Haryana Urban Development Authority).

2. Later the Haryana government decided to set up a world-class recreation and leisure project on this 350-acre plot: The plot went to DLF through an international competitive bid for Rs 1,700 crore in 2009.

In 2009, DLF, Unitech and Rajarhat IT Park Ltd had participated in the auction but the bids of Unitech and Rajarhat IT Park were cancelled since they failed to meet the minimum technical requirements like having developed and managed golf course in the past, which left DLF as the sole bidder. And it was on this ground that the high court struck down the auction.

3. To see if it can get better bids, the state government again advertised on 20 July 2009 with the same rules. The only changes made in the second advertisement were that the government would obtain statutory clearances in respect of the project land and the successful bidder would be permitted to use 20 percent of the golf course area for residential purposes.

As Raman Kirpal wrote in _Firstbiz_ earlier , “Country Height Holdings Berhad, Malaysia, and a consortium led by Unitech also joined DLF in the race for this bid. Both - Country Height and Unitech - however, failed in their technical bids. The bid documents of both the companies failed to show a net worth of Rs 500 crore and their papers did not reflect experience in constructing an 18-hole golf course in the past.

Both the bidders, however, were re-consulted and asked if they could still fulfil the conditions of the technical bid. When they failed to do so, the state government rejected their bids and accepted DLF’s. The reserve price quoted was Rs 11,978 per square metre, while DLF had offered Rs 12,000 per square metre in its bid.

Thus the rules of the technical bid were mentioned in the very first advertisement published in January 2009 and they were never changed at any stage of bidding. Interestingly, the media had highlighted this deal as the most expensive one in 2009, since the developer (DLF) was allowed to construct on only 92 out of the 350 acres of land and it agreed to pay Rs 1,700 crore.”

4. Six petitions were filed in the High Court by land owners and panchayats challenging the acquisition and the government’s decision to transfer the land to DLF. They said that according to the Forest Conservation Act, the Ministry of Environment and Forest’s permission is required for using the land for commercial purposes.

In essence, these petitions filed by Wazirabad villagers challenged the government’s decision of acquiring forest land measuring around 278 acres in 2003 for “public purpose” and later in 2010 handing it over to DLF for construction and sale of Golf Villas which was a “private purpose”.

Also, around 76 acres earlier acquired for the Haryana Urban Development Authority (HUDA) were also transferred to DLF for the project.

The petitioners had sought quashing of the acquisition notification of August 2003 for a total of around 278 acres, which were purchased from the villagers for Rs 55.66 crore but handed over to DLF in 2009 for Rs. 1,703 crore along with the other piece of already-acquired land.

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The petitioners had alleged that the DLF in collusion with the authorities of the state had adopted an alternate method to get the land of the gram panchayat for the project.

5. The High Court, in 2012, had restrained DLF from constructing over the said land and creation of third party rights over the 300 acres of land in Gurgaon.

Sources told CNBC-TV18 that DLF is set to challenge yesterday’sHC order citing that the company got the land parcel in an international competitive bidding process. Though it has not got the land yet, DLF is learnt to have paid instalments for the Rs 1,750-crore bid.

A statement issued by the company said, “DLF won this land in an international competitive bid conducted twice by the government of Haryana in 2009-10. As a copy of the order is awaited, we wish to clarify that it will have no bearing on any of our completed or ongoing projects. This land was to be developed in the future. After reading the order and taking legal advice, we will take appropriate steps.”

According to a report in the Business Standard, DLF has even launched a project on the same parcel of land and even made many bookings as it is one of the premium projects of the company around the Golf Course Road.

6. The political angle: The verdict is another blow to the state’s Congress government, which has been accused of allowing sweetheart land deals between DLF and Robert Vadra, the son-in-law of Congress president Sonia Gandhi.Ashok Khemka, a senior bureaucrat in Haryana who handled land records in an earlier posting, has alleged that the Hooda administration allowed Vadra to strike illicit land deals in Gurgaon.The development is likely to help the BJP in the forthcoming stateelections as it would bring back real estate and corruptionas key issues.