Palike, the pauper who turns others into princes

More than 200 government-owned properties in prime locations have been magnanimously given out on long lease by the BBMP for a pittance, even as some private parties are making a killing by sub-letting them.  In a city where obtaining a house or a room for rent is a costly affair, the Palike has given 3,000 sq mt of land in a prime location on Cavalry Road adjoining Queens Road for a meagre Rs 100 for a period of 99 years.

Interestingly, the lessee, Continental Exporters (CE), is said to have rented it to another company, Lotus Labs Private limited (LLPL), for a sum of Rs 28 lakh per month.

Information obtained under the Right to Information Act by S Umesh, president of the “Five Years Law Course Advocates Association” (FYLCAA), which is available with Deccan Herald, shows that the corporation, way back on January 8, 1976, had leased out 3,000 sq mt of land on Millers’ Tank Bund Road for 99 years, for an annual rent of Rs 100 to K Sampathraj, partner in CE to carry out business on several conditions.

But the company has been laughing all the way to the bank by subletting it to LLPL.

Lease terms violated

As per the terms and conditions of the lease, as the lessee (CE) violated the lease terms by sub-letting it, the lessor (BBMP) was liable to initiate action by taking it back after issuing notice even when the lease period is still on. Though the information obtained through RTI reveals that the CE has been served with notice on August 18, 2010, under Section 4(1) of Karnataka Public Property Act, 1974, it does not suggest that any further action has been initiated against the violators.

Inquiries by Deccan Herald revealed that on Cavalry Road, land rate and the rent of the properties differ from one building to another.

A three-storey  building on land measuring 1,200 sq ft in the area has different slabs of rent.

The basement, which is about 900 sq ft gets about Rs 12,000 as rent ( Rs 13 per sq ft), while the ground floor with a dimension of 1,100 sq ft area gets Rs 30,000 as rent (Rs 26.60 per sq ft).

“If the Palike had rented out this property, then it would have earned at least Rs 8 lakh a month as rent going by government rates or Rs 30 lakh per month as per the market rate,” said Umesh.

Sources in the BBMP said it was not an isolated case. There are at least 15 such long term leases, but the Palike was keeping mum about it.

It is said that while 208 such properties have been leased out in the 1970s, the Palike has managed to reclaim about 100 of them so far.

When asked about the anomaly, the Deputy Commissioner, Estate, admitted to long-term lease, but said that nothing can be done until the lease period was over.

“These things have happened in the late seventies or eighties. We sought legal opinion about it and learnt that we cannot do anything until the lease period is over. But we are reclaiming those properties,” he said. Questioned about the violation of lease deal by CE, he said he would visit the place on Wednesday. The FYLCAA also sought details regarding such properties and says that at least 50 such case are there. Some of these