BULK LAND AUCTIONS – THEIR VALIDITY? THE AP HOUSING

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BULK LAND AUCTIONS – THEIR VALIDITY? THE AP HOUSING

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BULK LAND AUCTIONS – THEIR VALIDITY

BULK LAND AUCTIONS – THEIR VALIDITY?


The AP Housing Board as well as the Visakhapatnam Urban Development Authority have auctioned seaside government land in bulk on the 21st of January, 2008. The upset price fixed per acre was Rupees Six Crores. On the 6th of January 2008, a public auction was conducted for the second time by VUDA in respect of a total of 11 plots in the prime Madhurawada and Paradesipalem areas. The size of bulk plots auctioned comprise several acres. Several big players in real estate have descended in Visakhapatnam to participate in the auctions. For instance, Devona Infrastructure Limited, a subsidiary of India Bulls, Mumbai was in the lime-light with the highest bid price of Rs.7.06 crores an acre for a 13.9 acre plot against an upset price of Rs.4 crores. Another company, Maytas Properties Limited quoted Rs.1.53 crores an acre as against the upset price of Rs.1.5 crores in respect of a 25.6 acres plot.

In the auction which took place in the month of August 07, Aditya Housing and Infrastructure Limited and Aditya Construction Company was the highest bidder for a 17.3 acres plot @ Rs.5.78 crores per acre. The other successful bidders were Bharat Infrastructure Projects Limited, Airmid Real Estates Limited, Sandhya Hotels Limited, Visakha Realty Limited, an NRI – Praveen Thota and Deccan Infrastructure Limited.

Prima facie, at first blush, the sale of bulk plots appears to be lawful, legitimate and innocuous. However, upon a threadbare analysis of the issue, it will be clear that the entire exercise is dubious.

1) The A.P.Urban Areas (Development) Act is the enactment which governs the constitution, rights and powers of the Urban Development Authority. The Urban Development Authority is constituted for the purpose of making organized development to ensure that sites are given to the poor and weaker sections at a low cost so that each and every family can have a roof over their head. Sale of bulk plots by VUDA is not contemplated either under the provisions of the A.P.Urban Areas (Development) Act or the rules there under. Besides such a sale is against the very spirit, object and avowed purpose for which the aforesaid enactment is passed. A bulk plot costing several crores of rupees per acre will only be in the reach and affordable range of the affluent class or the big real estate players. The recent auction attests to this fact. Therefore, VUDA is consciously serving the elite classes. VUDA, by advertising these bulk plots for sale, is creating a distinct class of buyers who only can afford to purchase the said plots. VUDA has turned out to be a commercial realtor!

2) The next question that would naturally come to anybody’s mind is whether Government land can be indiscriminately alienated without making any assessment of the future needs? What would be the situation in future when the Government is genuinely in need of land for promoting projects actuated by public interest?

With the help of an illustration, I think I can catch your imagination: Let’s assume that Telangana is declared as a separate state tomorrow. Let’s also assume that Visakhapatnam becomes a capital or even in the absence of these assumptions, in the near future, Vizag is selected as a place for setting up a premier institute like an IIT or IIM or a grand referral hospital and the Government is genuinely in need of a thousand acres of land. When such a need arises will Vizag have such a land bank to meet a future contingency like setting up of a premier institution?


If this indiscriminate and high-handed sale of land continues unabated, surely and certainly the land bank reserve would be exhausted by the time the Government would genuinely be in need of bulk land. Just because the Government possesses land does not mean that it is at liberty to sell the land to whomsoever it likes. This being a democratic country where the constitution drifts towards a socialistic pattern, prudence and reasonableness suggests that Government can never be the sole authority to arrive at a decision that it can sell its land to whomsoever it likes.

Moreover, trading is not the policy of government or VUDA. This point addresses a larger issue; the situation calls for the constitution of an authority with statutory powers. The present context calls for a credible institutional mechanism to regulate the sale of Government lands. The writer is of the opinion that there should be a statutory authority, say, something like a Land Bank Authority (LBA for short) to monitor and regulate alienation of Government land. The land bank authority should comprise persons with wisdom, maturity, integrity and understanding in the field of arts, law, sociology, economics or Human relations. It should be headed preferably by a retired Chief Justice of the High Court. It should be made mandatory before the Government sells land to obtain permission and sanction from the LBA. Whenever permission for alienation is to be granted, the following aspects should be considered:

  1. What is the available land reserve with the government?

  2. What is the likely expansion or growth in various fields like education and industry in that particular town/city?

  3. Whether there would be enough land reserve in the land bank to meet a future contingency actuated by public interest like setting up a multi specialty hospital, an industry or a premier institution?

TVSK KANAKA RAJU

The writer is a Senior Advocate

Practicing in Visakhapatnam

He can be contacted at

[email protected]







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