Corporate Governance - The Adarsh Housing Society Scam

TABLE OF CONTENTS

Chapterization Chapterization

Page

No.

Disclaimer………………................... Disclaimer……………… ......................................... ............................................ ............................................. ...............................3 ........3 Acknowledgement………………….…………………………...................................4 Acknowledgement………………….………………………… ...................................4 Table of Abbreviation ............................................... ..................................................................... ............................................ .............................5 .......5

Chapters

I.

Chapter 1 –  1 – Introduction............... Introduction..................................... ............................................ ............................................ .....................................5 ...............5 Brief introduction of the research project Research Methodology Objects of research Scheme of Chapterization

II.

Chapter 2 –  2 –  International  International Legal Regime for PVPs: An Overview................................8

III.

Chapter 3 –  3 – Sui Sui Generis System........................................... System.................................................................... ........................................13 ...............13

IV.

Chapter 4 –  4 –  Protection  Protection Of New Plant Varieties In India.............................................18 India.............................................18

V.

Chapter 5 –  5 – Conclusion............... Conclusion..................................... ............................................ ............................................... .....................................22 ............22

VI.

Reference............................................. Reference................................................................... ............................................ ............................................... ............................24 ...24

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Disclaimer This project report has been prepared by the author as a student of 3rd year under the five year BBA.LL.B (H) Program in the MATS Law School for academic purposes only. The views expressed in this report are personal to the student and do not reflect the view of commission or any another person, law school or any of its staff or personnel. Any for academically publishing of this article then it must be authority from the respective law school in any manner. This report is the

“

Adarsh Housing Society Scam. Maharashtra

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and the same or any part thereof may not be used in any manner whatsoever, without express  permission of the MATS Law School in writing.

Divyansh Sharma MU13BBALLB09

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ACKNOWLEDGEMENT

I feel highly elated to work on this dynamic and highly important topic that is “

Adarsh Housing Society Scam. Maharashtra

”

This topic instantly drew my attention and

attracted me to research on it. I am fortunate to be provided with an opportunity to write my paper under the kind supervision of Miss Ruqiayyah Naaz (Asst. Prof., MATS Law School) and I am thankful to her for providing me with the appropriate guidance while writing the paper. This paper would not have been possible without her valuable inputs, honest remarks and earnest effort to guide me throughout the drafting of the paper. I would like to extend my sincere thank to her for giving me her valuable time to view my research from her busy schedule. I am highly indebted to the library staff to help me find the relevant books and  journals, and other officials and office staffs, who have also extended their help whenever needed. I would like to extend my sincere thanks to my friends and for their review and honest remarks. So, I hope I have tried my level best to bring in new ideas and thoughts regarding the  basics of this topic. Not to forget my deep sense of regard and gratitude to my faculty adviser, Miss. Ruqaiyyah Naaz who played the role of a protagonist. Last but not the least; I thank all the members of the MATS Law School and all others who have helped me in making this  project a success.

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Chapter 1Introduction

Adarsh Housing Society, a 31-storey upscale residential complex in Colaba, Mumbai, should have originally housed war heroes and war widows who lost their spouses during the 1999 Kargil War. But the occupants of the apartment complex built on defence land ended up  being bureaucrats and relatives of politicians who were in no way connected with the Kargil war. The purpose of this report is to highlight unethical practices involved in one of the wellknown scams in India - The Adarsh Housing Society Scam . This society is a cooperative society in Mumbai and the scam dates back to February 2002. At that time, a request was made to the then Chief Minister of Maharashtra for allotment of land in Colaba area of Mumbai for the construction of this housing society. Colaba is one of the most posh areas in Mumbai having Nariman Point in its vicinity. The welfare of serving and retired personnel of the Defence Services was the main motive behind the allotment. But over a period of 10 years, some bureaucrats, military officers and politicians went ahead to mould the rules in their favour, so as to get the flats allotted to them at much lowered prices. The Comptroller and Auditor General of India 2011 report to the President pointed out ‘The episode of Adarsh Co-operative Housing Society reveals how a group of select officials, placed in key posts, could subvert rules and regulations in order to grab prime government land- a public  property- for personal benefit.’ The allegations against the three former Chief Ministers of Maharashtra, Sushil Kumar Shinde, the late Vilasrao Deshmukh and Ashok Chavan are still in process by the Central Bureau of Investigation (CBI), Income tax (IT) department and Enforcement Directorate (ED).

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Objectives of paper:-

The paper has been designed to fulfil following objectives, which could contribute and facilitate to enhance the understanding following:1. What is Adarsh Scam? 2. Who was its Creator? 3. What black mark it create on Mumbai Review of literature: All the data sources are secondary, which is taken from library, book

 journals and internet. Research Methodology:-

The doctrinal method of research has been used, which involve collection of data from both primary and secondary sources. The researcher has relied on primary sources like International Charters, resolutions of the international bodies and committees related thereto and Secondary sources like books written by various eminent authors and articles found in the journals and websites, e-journals. Use of internet also became very relevant to find out the most updated, relevant and apt information which helped me in exploring the subject from various dimensions.

Scheme of Chapterization

The complete project is divided into Five chapters. The first chapter is an introduction to the research project. The second focuses on Legal Frame Work. The third one is the study on role of Sui generis plant variety protection system and its importance. The fourth chapter deals with the protection of new plant varieties and legal regime in India . And in last chapter the  project is been concluded on the basis of study, research and information. NATURE AND KIND OF RESEARCH

The doctrinal research methodology would be used in analysing the Natural resource accounting and to see its international prospective. Limitation of the study: The research has been complete d in approx. 1 week

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Chapter 2 The Adarsh Housing Society is a posh, 31-storey building constructed on prime real estate in Colaba, Mumbai, for the welfare of war widows and personnel of India’s Ministry of Defence. Over a period of several years, politicians, bureaucrats and military officers allegedly conspired to bend several rules concerning land ownership, zoning, floor space index and membership get themselves flats allotted in this cooperative society at belowmarket rates. The scam was unearthed in November 2010 which forced the then Chief Minister of Maharashtra, Ashok Chavan, to resign. In 2011, a report of the Comptroller and Auditor General of India (CAG) said, “The episode of Adarsh Cooperative Housing Society reveals how a group of select officials, placed in key posts, could subvert rules and regulations in order to grab prime government land - a public  property - for personal benefit.” In January 2011, the Maharashtra government set up a two-member judicial commission to inquire into the matter. The commission was headed by retired High Court judge Justice J A Patil, with N  N Kumbhar acting as member secretary. After deposing 182 witnesses over 2 years, the commission submitted its final report in April 2013 to the Maharashtra government. The report highlighted 25 illegal allotments, including 22 purchases made by  proxy. The report also indicted four  former chief ministers of Maharashtra: Ashok Chavan, Vilasrao Deshmukh, Sushilkumar Shinde and Shivajirao  Nilangekar Patil, 2 former urban development ministers: Rajesh Tope and Sunil Tatkare and 12 top bureaucrats for various illegal acts. The allottees included Devyani Khobragade. The Central Bureau of Investigation (CBI), the Income Tax Department and the Enforcement Directorate (ED) are currently investigating allegations that three former   chief ministers of Maharashtra - Sushilkumar Shinde, Vilasrao Deshmukh and Ashok Chavan - were involved in the scam.

BACKGROUND OF THE ADARSH CO OPERATIVE HOUSING SOCIETY A serving Sub-divisional Officer in the Defence Estates Office (DEO) Mumbai, Shri Ramchandra Sonelal Thakur, addressed a letter to the Chief Minister of Maharashtra in 2002 as Chief Promoter of the Adarsh Co-operative Housing Society. This letter was regarding the allotment of 38542 sq. metres of land in Block No VI of the Back Bay Reclamation Scheme 6

(BBR), Colaba, Mumbai. The major reason for this allotment was quoted as the welfare of serving and retired personnel of the Defence Services in numerous communications among the Society, Defence authorities and the Government of Maharashtra from time to time. Relaxations were sought in favour of the society from time to time on the grounds of Girls’ hostel for wards of Army officers posted in far-flung areas, welfare of Kargil War heroes, welfare of War-widows and of soldiers who have served their motherland. But gradually it  became clear that there was no place for any girls’ hostel or any other facility for welfare of servicemen. It is quite obvious that though references to ‘widows’ and ‘Kargil Heroes’ were repeatedly made, they didn’t have the financial capability to meet the cost of the flats in this society.

VIOLATIONS The Adarsh Housing Cooperative Society was constructed in the Colaba area of Mumbai. The Indian Defence forces consider this area to be a sensitive coastal area and there are many Indian Defence establishments here. Vice Admiral Sanjeev Bhasin, Commander, Western Naval Command, pointed that the  building posed a major security concern as it overlooked many military installations in that area. He wrote a letter in July, 2010 to Defence Ministry seeking action against the promoters and the officers involved in overlooking the construction itself since 2003. In the aftermath of  November, 2008 terror attack on Mumbai via sea route, the again highlighted the security concerns posed by this 100-metre tall building. This building has also violated the Coastal Regulatory Zone (CRZ) II limit of a height of 30 metres because it is next to a planned helipad and military installations. In a letter to the Defence Ministry and the Army, Vice Admiral Bhasin mentioned that despite repeated intimations to various concerned departments of Maharashtra Government to 7

not issue a 'No Objection Certificate(NOC)' or an 'Occupation Certificate (OC)', it came to notice that the Mumbai Metropolitan Region Development Authority (MMRDA) had issued an OC to Adarsh Society building. The inquiry ordered by Defence Minister A K Antony also didn’t rule out the involvement of some officers with building promoters at ground level, though it appeared to be a criminal conspiracy. It is not surprising as the scam took place over a period of 10 years and had to require the active involvement of many high ranked officials. Many rules were bent or flouted to allow the construction. Some of the examples are obtaining NOC from Army for construction of building in such a sensitive zone, modifying the MMRDA development plan and obtaining another for residential development in Coastal Regulation Zone. Some of the  big names who were allotted flats were the former Army chiefs Generals N C Vij and Deepak Kapoor, ex-Navy chief Admiral Madhavendra Singh, former Army Vice Chief Lt Gen Shantanu Chowdhary, former Union Minister and Shiv Sena MP Suresh. All efforts made by some honest officers were ignored by the senior officials. As stated by former defence estate officer and original whistleblower in Adarsh Housing Scam, Saurav Ray, “The principal director, defence estates southern command was the advisor of GOC in C Southern Command Lt General Sihota, who was a member of Adarsh. Many senior defence estate officers in southern command and DGDE were also m embers and had vested interest in diluting my objections and observations”. He had also indicated to his seniors that the society was dubious and had also objected the initial NOC by Army, terming it as a security threat. The construction of this society also violated some of the rules laid down by Ministry of Environment. The state environment department had informed the CBI that it never gave clearance to the society. The department stated that some environment related clearances had  been given directly by the state Urban Development Department (UDD) on its own and it

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was only after a Non-Governmental Organisation (NGO) wrote to it in 2008, that the department got to know about this. After repeated reminders by CBI to UDD seeking clarifications, UDD replied saying that it was not aware of anything.

Stages in Adarsh Scam 

First proposal of the came up before the Shiv Sena- BJP government with Narayan Rane as the Chief Minister.

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Second application came up the following year,when was Vilasrao Deshmukh as Chief Minister.

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At this time, the allotment application was sought in the name of providing homes for war widows and veterans

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On the list of beneficiaries who got flats were Ashok Chavans relatives, including his mother-in-law.

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In September that year, the MMRDA had given the occupation certificate to Adarsh Housing Society.

What was found?? 

Adarsh was granted additional floor space index of an adjacent plot that had been reserved for a bus depot.

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The Adarsh building flouted environmental laws. It was found that both the Union Ministry of Environment and Forests and the Maharashtra Coastal Zone Management Authority were in the dark about who exactly gave clearance to the 31- storeyed  building

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Flat of cost between Rs 6 Crore to 8.5 Crore , however members of Society paid Rs 60-85 Lakh for each flat.

Alleged violations

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The Adarsh Society high-rise was constructed in the Colaba locality of Mumbai. This is considered a sensitive coastal area by the Indian Defense forces and is the location of various Indian defense establishments. The society is also alleged to have violated Indian environment ministry rules. The scam is notable for the fact that it was enacted over a period of ten years and required the active involvement of successive officials in many crucial posts. Rules and regulations across many departments and ministries, both at the Centre and the state of Maharashtra, were flouted or bent to allow for the construction of the building. Some of the more blatant transgressions included: obtaining a No Objection Certificate (NOC) from the Army towards construction of the building in a sensitive zone, getting the Mumbai Metropolitan Region Development Authority  (MMRDA) development plan modified, and obtaining another NOC for residential development in a Coastal Regulation Zone, often through manipulation of records and misrepresentation of facts. Efforts by honest officers to  bring this to the notice of top officials were ignored. The issue was firs t raised in a newspaper report in 2003 but did not evoke any official reaction. In 2010, it was again raised by various newspapers and TV channels. Questions were raised about the manner in which apartments in the building were allocated to bureaucrats, politicians and army personnel who had nothing to do with the Kargil War and the way in which clearances were obtained for the construction of the building of the Adarsh Society. It had led to the resignation of the then Chief Minister, Ashok Chavan. Some of the current allottees of the flats in the Adarsh co-operative society  building have offered to return their flats, denying allegations that they were allotted flats  because they influenced or helped, in some manner, the construction of the society by violating the rules. In an interview to The Hindu  published on 26 March 2012, General VK Singh, the Chief of Army Staff ascribed many of the attempts to malign him during his tenure to, amongst others, those he described as “the Adarsh lobby”, those directly connected to the scam, as well as those who were affected by his efforts to rid the army of corruption.

Issues Adarsh Housing Society has defended its actions as similar to other housing societies such as Samata, “Nyay Sagar” & likes in which “serving and retired judges already owned homes in Mumbai but transferred these in names of their children to become eligible for apartments in Samata & Nyay Sagar.”. Also, Nyay Sagar Society is constructed upon a plot of land reserved for Housing the War Disabled.

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Arrests Following the Court’s criticism, the CBI carried out eight arrests including two retired Major Generals TK Kaul and AR Kumar, retired brigadier MM Wanchoo, former General Officer Commanding(GOC) of Maharashtra, Gujarat and Goa, Adarsh promoter Kanhaiyalal Gidwani and Pradeep Vyas, the then city collector and currently, finance secretary (expenditure) in the Govt. of Maharashtra. Accordingly, on 22 March 2012, the Chief Minister of Maharashtra, Prithviraj Chavan announced in the legislative assembly that the two IAS officers whose names have figured in the scam, Pradeep Vyas and Jairaj Phatak have  been suspended from government service. According to newspaper reports, many of the arrested hold more than one flat in the society in fictitious names. Former Congress MLC Kanhaiyalal Gidwani was reported to have as many as ten flats, which he had bought on behalf of top politicians. Gidwani and his son had  been earlier arrested on 6 March 2012, by the CBI for trying to influence CBI officials investigating their alleged involvement in the Adarsh scam. In a further twist to the case, the CBI officers arrested their own lawyers, J K Jagiasi and Mandar Goswami. Jagiasi allegedly asked an Air India (AI) official, one of the accused in the case, to pay a bribe of Rs 5 million in exchange for diluting charges levelled against him. The petty cash books maintained by Jagiasi helped unearth the conspiracy. In addition, Rs 2.5 million was allegedly paid to Goswami. He was the Special Counsel in the Ministry of Law and Justice and at present is working as Retainer Counsel for CBI. According to CBI sources, the tainted AI official approached the CBI for dilution of the case filed against him. Jairaj Phatak and Ramanand Tiwari were arrested by the CBI on 3 April 2012, for their alleged involvement in receiving illegal gratification in the Adarsh Housing Society Scam.

Bail

On 29 May 2012, a special CBI court granted bail to seven of the nine arrested accused in the Adarsh scam since the CBI failed to file a charge sheet within the stipulated 60 days from the time it took them in custody.

CBI special court rejects CBI plea

Governor of Maharashtra K. Sankaranarayan; in a latest development rejected the  proposal of Central Bureau of Investigations to grant sanction to prosecute former Chief

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Minister Ashok Chavan for having favoured Adarsh Society by way of allotment of additional Floor Space Index [F.S.I.] illegally. It is sta ted in the C.B.I.

Inquiry by a Judicial Commission

On 9 January 2011, Government of Maharashtra appointed a two-member judicial commission, under the Commissions of Inquiry Act, 1952, to investigate alleged irregularities and corruption. It was decided that the commission would be led by a retired Bombay High Court  judge JA Patil while former State Chief Secretary P Subramanian would be the member. The Commission’s terms of reference were to investigate all aspects, including land ownership and allotment, permissions given to Adarsh. The Commission was given three months’ time to complete the investigation. On 27 June 2012, while deposing before the two member panel probing the scam, Vilasrao Deshmukh, Union Minister and former Chief Minister of Maharashtra contended that land was allotted to the housing society after getting clearance from the Revenue Department, passing the buck to his successor, Ashok Chavan who headed the department then.

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