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THE NATION:
GOVERNMENT RENTAL DUES
Grim
Storeys
The
NDMC decides to get tough with ministries and Central government organisations
that owe the civic body over Rs 160 crore in rent and interest
By
Sayantan Chakravarty
It
is common in Delhi to find landlords and tenants bickering over unpaid
rents. The city's courts are clogged with thousands of cases where the
landlord is seeking to evict his tenant for non-payment or because the
rent, which was fixed decades ago, is a fraction of the present market
value. The New Delhi Municipal Council (NDMC), the civic body that manages
the 43 sq km vip island that is the heart of the national capital, is
also locked in a similar dispute. Only the defaulting tenants are Central
government bodies and Union ministries that have together piled up over
Rs 160 crore in rental arrears to the NDMC.
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"Ministries
say the issue will be sorted out but nothing is done."
B.P. Mishra
Chairman, NDMC |
The biggest
defaulter is the Union Urban Development Ministry, which owes the NDMC
a mammoth Rs 76.32 crore as rent for the Directorate of Estates office
in Lok Nayak Bhavan. The NDMC says that the rent for the six floors occupied
by the directorate (which is in charge of allotting official bungalows
and flats to ministers and MPs) was revised nearly two decades ago. But
the tenant did not acknowledge the revision and continued to pay rent
according to the old rate of Rs 6.75 per sq ft per month. NDMC claims
that the ministry owes Rs 37 crore in rental arrears of the past 20-odd
years and Rs 39.32 crore as interest on the outstanding amount.
On their
part, senior officials of the Urban Development Ministry charge that the
NDMC owes the Land and Development Office of the ministry more than Rs
100 crore in penal damages for certain "breaches of contract".
Says Director of Estates Sarvesh Saini: "What we owe the NDMC is
far less than what it owes the Land and Development Office in our ministry."
The message is clear: the NDMC must shell out its dues before it gets
the rental arrears. Saini also disputes the NDMC's figures, claiming that
the ministry owes only Rs 29 crore in rent to the civic body.
The External
Affairs Ministry is next in the list of defaulters, owing the NDMC over
Rs 50 crore, including an interest component of Rs 34.30 crore, for the
property it occupies in Akbar Bhavan in Chanakyapuri, the plush diplomatic
area in the capital. Here too the dispute centres on the rates. While
the ministry insists on paying according to the rate that was fixed by
the cpwd in the early 1980s, the NDMC wants to charge a rent that is more
in line with the present market value. Interestingly, there is a provision
in the NDMC Act to charge the market rent. There is a clause that allows
an annual 10 per cent escalation in rent.
When the
NDMC sent out notices for the recovery of the outstanding rent to the
defaulters in September this year, there was a major hue and cry. It raised
the hackles of Ircon International Ltd, the public-sector undertaking
that makes runways, roads, bridges and signalling equipment for airports,
railways and overseas clients. It challenged in the Delhi High Court the
NDMC's contention that it owed the civic body Rs 1.59 crore as rent for
its office in the Palika Bhavan at Netaji Nagar. Says K.S. Sethi, Ircon's
general manager (administration): "The NDMC suddenly asked for a
66 per cent hike in rent. It was unreasonable and exploitative."
The court has now directed a panel of senior bureaucrats to look into
the matter.
The Union
Home Ministry, which was asked to cough up Rs 3.89 crore as rent for the
office of its Department of Official Languages in the Lok Nayak Bhavan,
has a different reason for not paying up. It questions the very idea of
one government organisation charging rent from another. It also expresses
its reservations against the NDMC's claims for an enhanced rent. "The
so-called dues are merely a claim made by the NDMC. The directorate is
yet to decide on NDMC's proposal for enhancing the rent," says P.V.
Sivaraman, under secretary in the ministry.
Getting the
high and mighty to pay up their dues has never been easy. Two years ago
a public-interest litigation forced MPs and politicians living in Lutyens'
Delhi to pay their pending electricity and water bills. Late last year,
power supply to the houses of 185 MPs was cut off after arrears of Rs
3 crore piled up.
NDMC's no-nonsense
Chairman B.P. Mishra is determined to recover the dues, come hell or high
water. Last month, NDMC cancelled the licence of Super Bazar, the government-run
cooperative, after it failed to pay Rs 25 lakh in rent for the multi-storeyed
shopping complex in the busy Connaught Place area. Though the Super Bazar
claims that it has already paid the Rs 25 lakh it owes the civic body,
the NDMC has initiated proceedings against it under the Public Premises
(Eviction) Act and even asked the Government to find an alternative accommodation
for the cooperative.
"We
have paid the NDMC the entire Rs 25 lakh that was due. But it has not
acknowledged the payment," claims Super Bazar Law Officer Ashok Pandita.
On the other hand, the cooperative's Managing Director P. Mitra is not
so combative. "All I can say is that we are trying to sort out the
matter with the NDMC," he says, while refusing to comment on the
eviction issue.
For the NDMC,
a continuous flow of cash into its coffers is crucial. If it has to provide
high-quality civic amenities in the area under its charge, it must have
very deep pockets. The rent from the buildings it owns is an important
source of revenue for the civic body. The rate of Rs 6.75 a sq ft was
fixed more than 20 years ago and calls for a revision. By not paying the
rent arrears to the NDMC, one arm of the government is preventing the
other from doing its job.
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CII’s
conference on Friday on corporate governance is called Independent Directors:
Why, How and Who. Why Not, How Not and Who Not, would have been better,
says INDIA TODAY Associate Editor, V Shankar Aiyar