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Allow resale of commercial land only in rare cases: Himachal panel

Himachal Pradesh,Business/Economy, Wed, 25 Apr 2012 IANS

Shimla, April 25 (IANS) Resale of commercial land in Himachal Pradesh, purchased after special permission, should be allowed in rarest of rare cases. And in case the land is not used for which it was meant, the property vests with the government, says a commission appointed by the state government.


"In the cases of resale of the company/factory, the government has been more liberal to the industrialists," said Justice D.P. Sood, a former judge of the Himachal Pradesh High Court, who headed the commission.


The state government had constituted the one-man commission to probe 'benami' (illegal) land transactions in the state from 2003 to 2011 and look into violations of statutory provisions and administrative procedures.


In his report submitted to the government this month, Justice Sood said that resale of land, including change of land use, purchased under Section 118 of the Himachal Pradesh Tenancy and Land Reforms Act of 1972, should not be allowed.


"The permission shall be given in genuine cases wherein it is established that the industrialist has put his all efforts to run the unit but due to facts beyond his control the unit couldn't be put to a profitable use."


In the report, Sood cites the alleged violations by Goodwill Industries in resale of property.


In 2007, the government allowed Pune-based Indian Card Clothing Private Ltd to purchase land and building from Goodwill Industries of Shimla.


In December 2004, Goodwill Industries had purchased 65.19 bighas (one bigha is 0.4 hectare) along with assets of Himalayan Fertilizers, a sick unit of the state-run General Industry Corp, for Rs.3.06 crore. But in December 2007 the government allowed Goodwill Industries to resell it to Indian Card Clothing for Rs.7.51 crore.


"Goodwill Industries has caused an undue loss of approximately Rs.4.45 crore to the state exchequer. The commission feels that the deal should be inquired into and the guilty should be punished," said Sood.


State industries department officials told IANS that the sanction for resale of the unit was given by then cabinet headed by Virbhadra Singh, now the union minister of micro, small and medium enterprises, despite objections raised by the department.


"Goodwill Industries had violated a clause that the unit which it was acquiring would be revived. Rather than going for its revival, it preferred to sell it out," an official said.


Likewise, the commission says, Cheminova Anti-Biotics Private Ltd was allowed to purchase 10.4 bighas in 2006.


After raising some structures on the land, the company was given permission to sell it to another company, Kamla Cleio Private Ltd.


"Permission should have been declined as the seller had not put its unit in production. There are strong possibilities of purchasing the land only for the purpose of speculation and not for industrial purposes," said Sood.


The commission also picks holes in the resale of 283.6 bighas worth Rs.21 crore in Nalagarh in Solan district by automobile component company DCM Ltd to Nicholas Piramal India Ltd in 2004.


The report asks the government that in case where industry has not been set up within the prescribed period of two years under the provisions of the land reforms act, the land should be sold again by the government.


"The industrialists may be paid the price of the land and the cost of the machinery and other investment in the property as incurred at the time of its establishment. Rest of the entire amount received from sale should go to the government exchequer."


Under Himachal Pradesh laws, only permanent residents can buy land in the state. Others who want to purchase the land for non-agricultural purposes have to seek permission from the government under provisions of the Himachal Pradesh Tenancy and Land Reforms Act.


(Vishal Gulati can be contacted at


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