Change of land use mystifies DLF SEZ case

While a 30-acre plot has changed hands over the years, much ambiguity on who allowed the use conversion at the relevant stage

Real estate developer DLF set up a Special Economic Zone (SEZ) on a 30-acre lot in Silokhera village, Gurgaon, in 2006, even as there is no evidence of any formal grant of ‘change of land use’ from the authorities for doing so. While in April 2006, the Haryana government gave permission to East India Hotels Ltd, promoter of the Oberoi group of hotels, to sell this land to DLF, there’s a question mark on how the site, formally converted from being agricultural land to one for a hospital, ended becoming an SEZ.

DLF did not respond to a query sent by Business Standard on this, saying the matter was in court. Officials in the Haryana government were also not available for comment. A statement last week by Randeep Singh Surjewala, minister for parliamentary affairs, argued it was a private deal between two parties, without touching on the issue of change of land use.

“This 30 acres was not owned by either the government of Haryana or gram panchayat or any other governmental authority. This was private land and the sale-purchase was between two business houses of India,” Surjewala had said.

An analyst who specialises on SEZ land told Business Standard the Board of Approval (BoA) for SEZs does its checks and balances on land ownership and documentation. “But the due diligence can only be up to a limit,” he said; the state government concerned needed to clear any SEZ before a BoA approval.

An official with the Haryana government, without wanting to be named, said the land use changes when the SEZ was cleared were according to the norms, with no favours given to any party. Another official said land use changes are required for shift from agriculture to non-agriculture land use and East India Hotels (EIH) was granted this ‘change of land use’ way back in 1984.

In 1984, when EIH purchased agricultural land in Silokhera from private land owners, it was granted ‘change of land use’ for 18 acres for constructing a hospital, nursing home, a hotel management institute and accommodation for executives. The project was not completed and, subsequently, in 1995, the government decided to release 30 acres in favour of EIH for construction of a hospital (15 acres), an Institute of Hotel Management (7.5 acres), executive apartments (5 acres) and a green belt (2.5 acres), a Haryana government statement said.

Later, EIH sold the land to DLF in 2006 at a market value of Rs 124.4 crore and DLF set up an SEZ there, according to the government. Congress president Sonia Gandhi’s son-in-law, Robert Vadra, had acquired a 50 per cent stake in this SEZ and after a year, sold it back to DLF.

The issue had come into focus recently when India Against Corruption’s Arvind Kejriwal had alleged violation of rules by the government in allowing DLF to set up an SEZ on land meant for a hospital. Kejriwal had said the Haryana government showered undue favours on DLF.

According to Surjewala, “This land was never reserved for setting up a hospital by the state government nor the state government ever sought to acquire the land for setting up of a hospital.” He argued it was during the HVP-BJP rule of the late 1990s that the compromise for release of the 30-acre land was entered into. Even at the time of agreement for sale of this land by EIH to DLF in February 2005, an INLD-BJP government was in power in Haryana, Surjewala had said. “As a consequence thereof and on an application made by DLF/East India Hotels, permission to purchase /sell was granted by the present Congress government on April 28, 2006,” he had said last week.