How a private entity seeks to take up most of Nagaland House, meant for Nagas in Mumbai, for commercial profit; legal loopholes persist
Morung Express News
Kohima | October 2
The Zacharia Industries Pvt. Ltd. (ZIPL) made a proposition to the Chief Minister of Nagaland on August 18 this year to take up the Nagaland House in Navi Mumbai for ‘management, maintenance & development.’ In Part II of a four-part series, The Morung Express explores how the company proposes to do this by floating a joint venture company that makes the Government of Nagaland (GoN) a meager 20% equity holder.
The proposal
Made available to The Morung Express, the proposal letter states that “Zacharia Industries (ZI) and Department of Housing, Government of Nagaland, through Secretary of Housing Department, float a Joint Venture Company, in the name and style of M/s Nagaland Residency LLC (NRL), wherein the equity stake of the Nagaland Government will be 20% and that of ZI will be 80%.”
It proposes the management, maintenance and development of Nagaland House and plot to be entrusted to NRL on “an exclusive and irrevocable basis for the residual period of lease enjoyed by the Government of Nagaland.”
The government, it is proposed, will further authorize NRL by way of a Power of Attorney to facilitate interaction with departments concerned to apply and acquire the necessary permits or clearances and to appoint external agencies and consultants as the need may be for managing/maintaining and developing various facilities of the house and the plot.
It also proposes that NRL, on behalf of the GoN, will get the Coastal Regulation Zone (CRZ) clearance, Occupation Certificate and then facilitate the signing of a Lease Deed between City Industrial and Development Corporation of Maharashtra (CIDCO) and GoN. “Demolition of the staff quarters and relocation of utility structure, presently at the plot is a must and will be carried out in due course, by NRL at its own cost,” states the proposal.
It further states, “There will be share holders agreement stating that, the share of profit for the GoN for ever will be 20% whatever the investment that will be required presently and in future for further development of the plot that will be made by NRL and at all times without any investment by the GoN, its profit sharing ratio will remain unchanged at 20%.”
The GoN has already invested over Rs. 26 crore on the property.
Besides the meager 20% share, the company also states the terms and conditions where it will only allot 10 rooms out of the 26 rooms available for the use of persons recommended by the GoN at concessional rate.
The rest, it is presumed, will be used for commercial purposes by the company. It may be noted that local realtors estimate the current market rate for commercial property in the area to be up to Rs 1,50,000 per sq ft.
In the section termed as ‘Agreement for maintenance and development to be executed between the Department and Zacharia Industries Pvt. Ltd. (ZIPL),’ the terms and conditions point out that the period of Lease will be 60 years where the ZIPL will take over the operations of the House and pay a sum of Rs. 10 Lakh per year to the GoN.
Mysteriously, the proposal states that ZIPL will “pay a sum of 20 Lakh per year if any new construction is done at the site in addition to the existing structure, or everything new all together.” Also, ZIPL will take over responsibility for the entire monetary outgoing of the house.
Legal Loopholes
The GoN has already signed a Lease Deed with CIDCO that allows the use of the said land only for purposes of setting up a State guest house.
“The land was given at a concession for the purpose of a Nagaland state guest house and emporium only,” reiterated an official of the CIDCO in Navi Mumbai while speaking to The Morung Express.
Further, the official maintained that it is “meant for the natives of Nagaland to have a place to stay when they are in Maharashtra and for the State to hold exhibitions. The change of user, sub-lease or commercial use of the property is not permissible under our current rules.”
Besides, the original Lease Deed clearly states that the Licensee (GoN) “shall not appoint any person as his/their/its agent, by a power of attorney or otherwise, for the purposes of this Agreement except its Officer or Servant.” This may explain why ZIPL has suggested that the Secretary of Housing Dept. Nagaland “may be inducted on the board of directors” of M/s Nagaland Residency LLC (NRL), the joint venture it proposes to float to take over the property.
The issue of the CRZ clearance, however, is a “separate issue,” the CIDCO official said. “That is a new rule given by the central government’s environment department.”
When asked about the conundrum this creates for GoN, he assured that “the CIDCO and Navi Mumbai Municipal Council will extend all help possible to the GoN to get the required clearance. There is no need for middle persons here.”
When asked about the proposal by the private entity, Nagaland State Home Commisioner, Abhishek Singh, said, “I am not aware as I have recently joined.”
However, Singh acknowledged that the application for an Occupation Certificate of Nagaland House in Navi Mumbai has been submitted to the Union Environment Ministry and the clearance will be done this month.
A GoN official meanwhile noted that “No one is allowed to run the place commercially. This should be run by the government for the benefit of the people and not for profit making. The House is meant for Nagas. And our officers are competent enough to run the house.”
According to the official, the Nagaland House will greatly benefit the students and patients going to Mumbai from Nagaland who run short of affordable places to live in. To be continued…
.JPG)
