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KMF 'gifts' prime land in Koramangala to pvt builders

Leases plot to earn rent, instead loses right over property
Last Updated 23 May 2017, 20:00 IST

A prime property in the city allotted to Karnataka Co-operative Milk Federation (KMF) has fallen onto the laps of realtors.

Of the four acres and 14 guntas of land it was allotted in Koramangala to build its office complex, KMF leased two acres and 16.74 guntas to a real estate firm for construction of a commercial building. The realty firm, in turn, entered into a joint development agreement (JDA) with another well known realty firm and even claimed absolute rights over the property.

The land in question is on four survey numbers — 71, 2, 3, and 4 in Koramangala. Based on a request by KMF, the state government handed over the land through two orders — one in 1986 and the other in 1998. KMF did not construct any office on the land for 10 years. Instead, at its 189th board meeting in 2007, it resolved to commercially exploit two acres and 16.74 guntas of land and proposed to earn Rs 25 lakh as monthly rent. KMF handed over the lease hold rights to PVK Koramangala Development Pvt Ltd, which was the special purpose vehicle (SPV) for the project.

According to the deed, PVK Koramangala Development Pvt Ltd secured the lease hold rights for 30 years, which is extendable by 10 years from the date of commencement of the commercial complex and that KMF would get a quarterly rent of Rs 35 lakh after completion of the commercial complex. The construction is still going on.

Interestingly, PVK Koramangala Development Pvt Ltd entered into a JDA with a leading realty firm in March 2011 by receiving Rs 9 crore as deposit. According to the JDA, PVK Koramangala gets 44% of the super built-up area and the remaining 56% of the super built-up area is the share of the other realty firm. One of the clauses in the JDA states that both the parties enjoy absolute ownership over their share in the constructed area and that they can “hold, gift, sell, mortgage, lease or otherwise dispose of their respective shares or any part thereof in any manner they may deem fit”. KMF is not a party in the JDA and also has not taken any action on the clause about absolute ownership.

Despite repeated attempts to contact him, the KMF director redirected the call to the chairman's office and then to the additional director. However, no one was ready to comment on the developments.

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(Published 23 May 2017, 20:00 IST)

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