Army hit by clubs

India Today report by Sandeep Unnithan
Two army commanders allegedly colluded with a private developer to hand him seven acres of prime defence land worth Rs 25.50 crore in Pune. A confidential Comptroller & Auditor General (CAG) report, a copy of which is with india today, notes that Lt General (retd) B.S. Thakker and Lt General Nobel Thamburaj regularised unauthorised constructions on military land.
The report also holds a director in the Directorate General of Defence Estates guilty of passing decisions that helped the developer continue commercial exploitation of defence land. Lt General Thamburaj succeeded Lt General Thakker as the General Officer Commanding-in-Chief (GOC-in-C), Southern Army Command, in 2006.
Residency Club, formerly a residential bungalow, built on defence land.
The Army recently court-martialled Lt General P.K. Rath for issuing a no-objection certificate to a private developer at the Sukna military station in West Bengal. There was, however, no transfer of defence land in Sukna. In the Pune cantonment, this alleged nexus between the Defence Estates department and the Army virtually gifted away prime defence land to Ramkumar Agarwal, a private developer and chairman of Citizen Sports and Recreation Club Pvt Ltd. Leased as a private residence, the plot has been turned into a commercial venture, the Residency Club, violating cantonment rules.
The CAG report suggests, the 'old grant bungalow', or a private residence built on defence land, was built in 1940. In 1986, Zarir Cooper, the Holder of Occupancy Rights (HOR), informed the army about a proposal to transfer the land to Agarwal. This was not granted. In August 1987, the HOR once again applied for permission to start a club in the premises, which was once again rejected by the DEO. Defence land rules expressly stipulate that the bungalow can be used only for residential purposes.
The Government can resume ownership of the land after paying the occupant the cost of the building. In 1999, however, the Director General, Defence Estates overruled the deo's objection and okayed the transfer of the property to the private party. The main condition for the transfer was that the Government would hold the title to the land and that the bungalow would be used for residential purposes only. The developer challenged the Government's title over the land in the civil court and began redeveloping the bungalow as a recreation club. The court confirmed the Ministry of Defence's (MOD) title on the land but restrained the Government from interfering with its use as a club. The case remained pending in court.
Armed with the court order, the developer converted the bungalow into the Residency Club and made extensive alterations on the land. As none of these constructions were approved by the Cantonment Board, Pune, notices were issued on Agarwal by the board between 1992 and 2006. The builder appealed against the notices.
In January 2005, he agreed to pay the MoD an annual lease rent. The Defence Estates Department assessed the rent at Rs 79 lakh per year. "Interestingly, no progress was made in this regard by the MoD," the report notes. This inaction cost the Government over Rs 10 crore-Rs 7.91 crore in a one-time premium and Rs 3.8 crore in annual rent since 2005.
The case then went to the appellate authority, Ved Prakash, then director of Defence Estates. Prakash set aside all the notices and stopped the removal of unauthorised constructions. In 2006, then goc-in-c Lt General Thakker regularised the unauthorised constructions on the deposit of a meagre Rs 8.33 lakh. He did this a few days before he retired. In 2006, the Pune Cantonment Board filed a suit in the Bombay High Court against Prakash's decision stopping unauthorised constructions.
In December the same year, a new Cantonment Act passed by Parliament came into force. The Act transferred appellate powers from the Defence Estates Officer to the goc-in-c. In 2007, a notice for unauthorised construction was served on the club. The developer filed an appeal before the goc-in-c Southern Command. This appeal was allowed by Lt General Thamburaj on December 30, 2008, a day prior to relinquishing charge. This decision taken despite the matter being subjudice, virtually regularised the club's illegal constructions.
The report severely indicts the army and Directorate General of Defence Estates (DGDE) for failing to protect Government property. Despite being aware of the builder's intent in utilising the bungalow as a club, the DGDE sanctioned the property transfer. Defence Estates authorities failed to pursue the court case: no hearing was held since 1997. This soft-pedalling only loosened the Government's hold on the land. Despite a decade, the local military authorities failed to finalise the board proceedings that were convened in 1999.
Defence ministry officials say the Pune case is symptomatic of the malaise afflicting cantonments in Lucknow, Delhi and Meerut. "Most of the corruption in these cantonment areas revolves around Old Grant Bungalows," says one official. "Even when leases expire, no effort is made to resume leases on these bungalows," he adds. In several cases, either the land is illegally sold or the usage is changed from residential to commercial with nobody to check.
A CAG report says that three crucial decisions that virtually legitimised the Residency Club's occupation of defence land were issued just a few days before the incumbents either retired or moved out of office.
Bungalow owners allege discrimination by the 'pick and choose' policy of lease renewal adopted by the local army commander, cantonment ceo and Defence Estate officer. "Frequent land scams take place because of the flawed land records kept by a single authority, the Defence Estates Department," says Raghavinder Dass, president of the All-India Cantonment Bungalow Owners' Association.
This new scam to tumble out of the ministry's closet once again highlights the dangers to prime defence land. Last year, the Defence Estates was severely criticised by a Controller of Defence Accounts (CDA) report. The report said that the DGDE, custodian of 17,000 acres of defence land worth Rs 20 lakh crore, had failed in all its primary tasks of audit, accounting, acquisition of land and financial management.
The department has been unable to punish its black sheep. One of its officers, A.S. Rajgopal, was promoted twice despite being chargesheeted a few years ago. He retired as principal director of Defence Estates last year. The cda recommended closing down the DGDE. The Government is yet to take any action.
Defence Minister A.K. Antony recently told Parliament that 11,000 acres of defence land were being illegally occupied all over the country. Antony said that he had asked for computerisation of the DGDE's records. "This is preposterous. Computerisation is being held out as a panacea for corruption," says a senior Ministry of Defence official.
Computerisation of the DGDE's land records has been on for the past five years but the organisation is nowhere near realising a central database. The DGDE has been unable to respond to even basic RTI queries on the size of defence land holdings. With no reform or accountability in sight, defence land scams will continue to stain officers of the armed forces.
Army hit by club scam: click here to read the full story
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Comment and Observations
These Club scams are perpetuated by Politicians, Bureaucrats in connivance with the MOD and AHQ. The Sukhna Scam fades into insignificance compared to revenue loss of over hundreds of Crores of Rupees to the exchequer for a period of over 2 decades as black money has been used by vested interests to evade legitimate revenue due to the Government! A closer look at the clubs under scrutiny reveals:
The clubs have lease agreements for a period of 30 to 60 years. Defence lands— often huge tracts given to run the clubs to ensure "betterment of Members including the Garrison Officers". One needs to zero in on the terms and conditions of the lease agreements, which are grossly violated. These are restricting public entry and use, discriminatory membership practices, non-payment of dues, non-submission of audited accounts and earning illegal revenue by letting out premises for weddings, parties, guest rooms and Guest fees. The Garrison Officers are relegated as second class members without voting rights. The managements and Governing body owes an explanation to the nation for violating the Rules of the land. Even capital gains taxes are cleverly evaded. Besides, the management and Governing Body are minting money by hiring out premises without paying a dime for tax. It's nothing but a robbery of citizens' resources, If these conserves of the privileged governing body can be brought to the negotiating table to renew their leases at reasonable rates and made to follow terms, the bigger battle of fighting corruption in high places can be won!