August 6: The City and Industrial Development Corporation (CIDCO) has filed a First Information Report (FIR) at Turbhe police station in Navi Mumbai, requesting the police to initiate criminal proceedings against a former marketing manager on charges of corruption.

CIDCO has been allotting plots of land for lease to private entrepreneurs and builders for development since 1980. In a sales promotion bid, a resolution was passed in 1980 by the corporation's board of directors, giving the leasee the benefit of surrendering the property at any time and seeking refund of premium with interest.

With sales showing an upward trend, CIDCO tightened its rules with a resolution in 1985 saying the liberty to surrender continued on the condition that the leasee would surrender his earnest money (EMD), a deposit made by the leasee to the corporation. In 1990, another board resolution said the surrender of the property would be subject to the leasee forfeiting his EMD as well as 25 per cent of the lease premium. This was done to discourage surrender of property if and when real estate prices dropped due to recession.

The FIR states that between September and October 1994, the then marketing manager R V Mendki modified the conditions by diluting conditions of surrender. He issued letters to 103 leasees, saying they would forfeit only EMD at the time of surrender of property. According to CIDCO, Mendki was aware of the rules and regulations which called for forfeiture of 25 per cent of lease premium. Between 1994-95, as a result of recession, 41 leasees applied for surrender of their properties and sought refund of their respective premiums, forfeiting their EMD only. CIDCO contested this in the Bombay High Court, winning an interim ruling whereby they paid leasees after deducting EMDs and 25% of lease premium.

In its complaint, CIDCO claimed it had paid 16 of the 41 leasees on the basis of the interim ruling and repaid 17 other leasees, who had applied earlier, the full premium. ``CIDCO has decided to file a police complaint because in case we lose the case, we will have to pay all those leasees who surrender full premium,'' said CIDCO PRO B Gaikwad. He refused to disclose the amount of money the corporation stands to lose if it loses the case. However, Gaikwad admitted the corporation usually leased out its plots for amounts running into crores.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.