The Bangalore Metro Reporter
THE UGLY FACE OF NICE!
NICE MORTGAGED BMIC TO ICICI FOR 150 CRORES
CHEATED REVENUE DEPT NICELY FOR OVER 20 CRORES
Please refer to our TBMR 01st June, 2011 issue “NICE-LY PLAYED”. We had clearly exposed on how Mr. Ashok Kheny, the MD of Nandi Infrastructure Corridor Enterprises (NICE) Company had cheated in the much hyped BMIC project.
Of course, Kheny had no money at his disposal even to pay 0.001 percent of the project cost, yet managed to bag the project and raised a Bank loan of Rs. 150 crores. Not only that, but, he shockingly cheated the State Government in paying the Stamp duty to the tune of Rs. 20 crores.
Ashok Kheni, when bagged the prestigious BMIC project, propagated himself as a billionaire to be capable of completing the BMIC project by spending hundreds of crores from his own pocket. But the hard reality is quite contrary to this image.
Ashok Kheni, actually, did not have money even to deposit the acquisition cost to the KIADB. In fact when the MoU for the BMIC project was signed when HD Deve Gowda was the Chief Minister; the KIADB was made the nodal authority to initiate acquisition process, take the possession of the lands after paying compensation and hand over the same to NICE Company for laying the roads.
NICE on its part had to bear the cost of acquisition process, the cost of the lands acquired and pay an initial amount of Rs. 5 crores to the KIADB towards notification of lands. NICE was duty bound to pay the land costs to the KIADB demands and get the possession of the acquired lands.
But, after the MoU was signed, NICE had no money to pay KIADB, even the cost of notification. Shockingly, KIADB itself spent money from its pockets and issued Notifications in stages. For almost two years, the NICE Company did not pay the cost of the acquisition and when the KIADB threatened to stop the notification process, the NICE paid just a crore!
By 2002 October, the KIADB had acquired about 2000 acres of land in Bangalore North, South and Ramanagaram Taluks. But the company did not have a single penny to pay for the compensation, let alone the cost of acquisition. As the lands were acquired at the rate of Rs 6 lakhs per acre, the company had to pay Rs 120 crores towards compensation and Rs 10 crores as acquisition cost.
With no money at the disposal, the NICE Company began scouting for huge loan to meet the immediate requirement of the compensation to the land owners. The KIADB also had no money to bear the compensation amount to land owners and it had already incurred huge expenditure towards notification etc. Finally, the ICICI Bank agreed to provide a loan of Rs. 150 Crores to NICE towards BMIC project, but, the Bank put severe conditions to NICE to avail the loan. As per the humiliating conditions laid down by the ICICI Bank, the company had to mortgage the entire lands acquired so far, also the project and also demanded power of attorney on the lands from the company. Thus, the terms and covenant of the Mortgage Deed bearing No: 11113/2002-03 convey absolute rights over the lands mortgaged to the ICICI Bank as per the rules pertaining to transfer of titles under sec 46 (A) of the Karnataka Stamp Act and empowers the Lender to take full control of the lands and to have and hold possession of the same effective from the day of execution of the Deed.
Besides, a Sale Deed camouflaged as a mortgage deed was registered on 27.11.2002 bearing no.11113/2002-03. As per the rules, the company had to pay the stamp duty on the deed as per conveyance at 13.5%. The deed registered was an out and out sale deed camouflaged as a mortgage deed and the Sub Registrar was pressurized into registering the deed. It had no option but to register the mortgage deed and it did so.
Further, Ashok Kheni who registered the mortgage deed paid only Rs. 6 lakhs as Stamp Duty. The deed gives complete right and power over the company and the project including power of attorney and right to step in and take over the lands and the projects of NICE to the ICICI Bank. Most shockingly, though the KIADB had not yet handed over the possession of 1931 acres of land it had acquired in North, South and Ramanagaram Taluks to the NICE Company, Ashok Kheni already mortgaged these lands for raising the loan of Rs 150 Crores and paid a part of it to the KIADB. The lands were actually acquired from across different taluks and handed over to NICE only during the period from the last quarter of 2005 until the first quarter of 2008. But, NICE had executed a Mortgage Deed in favour of the ICICI Bank for Rs. 150 Cr (Rupees One Hundred and fifty crores) on 27.11.2002, much prior to receiving physical delivery of the lands by the company.
Furthermore, Ashok Kheni paid only Rs 6.10 lakhs towards Stamp Duty and another Rs 2.10 lakhs as Registration fee. The Stamp Duty applicable for such a transaction as per the Article 34(a) of the Karnataka Stamp Duty Act of 1957, shall be on par with the Article 20 (1) of the Act, which was at 10 per cent of the consideration amount mentioned in the transaction plus other applicable fees. Apparently, the Stamp duty payable would come to more than Rs. 20 crores including the registration fees. Thus, NICE has NICELY cheated the Government a sum exceeding Rs.20 Crs!
The Government is duty bound to collect the stamp duty and registration fee of Rs. 23 Crores from the NICE company under sec 46 (A) of the stamp Act. It is time that the Government takes stern action against the company for recovery of the deficit stamp duty and registration fee of more than Rs. 20 crores!
This incidence clearly explains that if Ashok Kheni was a billionaire and had billions at his disposal, then, why did he not deposit the acquisition cost and compensation amount to KIADB? Why did he raise a loan of Rs. 150 crores from ICICI with humiliating terms and that too against mortgaging the yet to be delivered 1931 acres of land to the ICICI Bank?
One can imagine the financial position of Kheny by the fact that he had no money to pay Rs.10 crores to the KIADB to take up land acquisition works. How one can imagine a person who had no money to pay even the cost of land acquisition which is only 0.001 percent of the project cost, to execute the project?
That is all!
LANDS MORTGAGED TO ICICI FOR 150 CRORES
Bangalore North Taluk ------205 Acres 25Guntas
Bangalore South Taluk-------1152 Acres 3Guntas
Ramangaram Taluk ----------573 Acres 12Guntas
Total---------------1931 Acres
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