CAG questions KU’s land purchase deal with J&K Bank

SRINAGAR: The Comptroller and Auditor General (CAG) of India has raised questions over a land deal between University of Kashmir and J&K Bank Limited, which has caused an ‘unnecessary’ financial burden of Rs 71.73 crore to the varsity.
The CAG in its annual report says that as per records available in the Revenue Department, the highest sale deed registered with the Revenue authorities in June 2008 for adjacent plot of land in the outskirts of Srinagar at Zakura was “Rs two- four lakh per kanal.”
“However, the university had purchased the land (around 300 kanals) through J&K Bank Ltd at exorbitant rates at Rs 20 lakh per kanal,” the CAG says in its annual audit findings released for the year 2014.
The report says the land was taken over by the university in two installments in March 2009 and March 2010, “but the title of the land was not transferred in its favour till July 2013.”
“The injudicious decision relating to acquisition of 299 kanals and 6 ½ marlas of land had caused financial burden of Rs 71.73 crore with further liability of interest on unpaid amount,” the report says.
The CAG has come down heavily over the land deal for not involving Revenue Department into it. It says the rates of the land had been determined through an MoU without involving the Revenue Department for acquisition of land under the Land Acquisition Act.
According to the CAG report, the decision to go in for negotiated purchase of encumbered property without proper assessment of immediate and long term requirements was injudicious.
“The lapse was compounded by accepting a negotiated price without ascertaining the circle rate or market rate and further compounded by taking recourse to a costly loan from the seller or attorney holder,” the CAG says.
The university had identified the land measuring 300 kanals at Zakura in close vicinity of the main university campus for developing it for future expansion and growth of the varsity.
Later, the university executed a MoU with the J&K Bank Ltd, as the bank was the attorney holder of 10 residents of Khanyar Srinagar (owners of land measuring 259 kanals) and of three residents (owners of 39 kanals and 17 marlas of land).
“These owners of the land have authorized the bank to sell their land to the university to adjust their loan accounts,” the CAG says, adding that the university agreed to buy these lands at the rate of Rs 20 lakh per kanal involving cost of Rs 59.86 crore.
“The university raised loan of Rs 52.97 crore (March 2009: Rs 45 crore; March 2010: Rs 7.97 crore) from J&K Bank Ltd, which was repayable within one year or on the date of release of grant by the state government, whichever was earlier. The government had released Rs 60 crore for this purpose during 2008-12,” the report says.
“The two chunks of lands are not geographically contiguous and require additional acquisition for a compact campus,” it added.