Sl.

4 (R ) to 6(R)

A representation has been received from Executive Director

(Works & Disposal) HUDCO, regarding the implementation of
Andrewsganj Project, New Delhi. Detailed contents of
representation may please be seen at page 90/c onwards. He
has raised the following issues

a) He has stated that allotment letters for 42.6 acres

land (residential pocket and community centre pocket)
were issued on 1/11/1990 and 19/3/1996 & Perpetual
Lease Deed between the President of India through
MoUAE (Lessor) and HUDCO(Lessee) for 17.6 acres of
land on 4/7/1997. During execution of the project
various issues were referred to MoUD by HUDCO for its
decisions (including grant of mortgage permission to M/s
Leela hotels & approval on sublease terms of sub-leases)
in line with Perpetual Lease Deed conditions by the
decisions were either delayed or still awaited. This has
resulted in various disputes with the allottees for which
expenses are to be incurred on defending is also being
incurred on maintaining the properties at 17.6 acres
community centre pocked and 18 acres zonal green.

b) He has also referred the opinion of Ld. A. G. Shri G.E.

Vahanvati’s opinion dated 19/8/2009 which is read
as under:-

“it is not open top the Ministry of Urban

Development to contend that they had nothing to do
with the development of Hotel site or that HUDCO was
not its agent. The protracted dispute between the two
ministries is leading to mounting interest which is being
added to the amount of the decree. This is a matter
which therefore, has to be resolved on a mutually
acceptable basis and the MoUD should accepts its
liabilities as the land owner”

c) HUDCO is implementing Andrewsganj project as an

agent of MoUD and all the expenses incurred on the
project are to be borne out of the “ No lien
Andrewsganj Project Account” of Government, which
is maintained by the HUDCO and funds in this
account are not available. HUDCO has been
requesting M/o UD for making available the funds so
as to meet the liabilities arising out of Andrewsganj
Project. MoUD is requesting to reimburse the
amount of Rs.41.20 crores spent by HUDCO on
Andrewsganj Project from HUDCO’s account
alongwith the interest 10.75% from the date of
incurring the expenditure by HUDCO besides 1.5%
administrative charges, as decided by the Board of
Directors of HUDCO.
d) He has also referred the letter dated 18/8/2010 of
CPWD in connection with arbitrator for construction
works carried out by CPWD for 319 transit flats at
Andrewsganj, New Delhi. In its letter CPWD has
demanded Rs.3,29,59,917/-. HUDCO is requested to
pay the above mentioned award by MoUD because
 this works has been done by HUDCO on behalf of
MOUD.
e) Vide letter dated 18/11/2010 Dy. Chief(Projects),
HUDCO has forwarded the latest statement of
Accounts as on 15/11/2010 regarding the
expenditure incurred out of

J-13011/3/91-LD

HUDCO’s Account on Andrewsganj Project, as there are no

funds in the “No lien AGP Account” of Government. In the
above mentioned letter, she has requested to reimburse
the amount of Rs. 42.35 crores spent by HUDCO on
Andrewsganj Project alongwith the interest @ 10.75% from
the date of incurring the expenditure by HUDCO BESIDES
1.5% administrative charges, as decided by the board of
Directors of HUDCO.

In this connection it is stated that HUDCO is lessee by

virtue of the Perpetual Lease deed executed on 4/7/97 for 99
years. The relationship of M/o UD and HUDCO are governed by
the lease terms and conditions and not any agent ship terms
and conditions. HUDCO has all the rights as lessee and not as
an agent. This has already been clarified to HUDCO. Further it
is mentioned that HUDCO falls within the administrative
control of Ministry of HUPA. As per presidential notification no.
CD-160/2004 dated 27/5/2004 entry no. 6 at page 17, M/o
HUPA has been allocated all matters pertaining to HUDCO
other than those relating to Urban infrastructure. Even though
urban infrastructure operations of HUDCO fall in the domain
of MoUD as contended in the letter, the subject matter at hand
pertains to entrustment of a specific project,(and not of urban
infrastructure in general) allotment of land to HUDCO,
execution of perpetual lease deed and thereby creating
relationship of Lessor and Lessee. The Lessee in this case is
HUDCO which is under the administrative control of Ministry of
HUPA and this has also been stated in the letter dated
20/2/2009 of Hon’ble UDM.

In this context opinion of S.G. of India may be perused; he

has opined on August 9, 2002:-

“In any view of the matter, I do not see how the Government
could be made liable at all for any of sums awarded by the
Arbitrator. HUDCO was undoubtedly entrusted with the
responsibility of developing the property in Andrews Ganj on
behalf of the Government of India. However, what has been
awarded is damages for breach of contract. HUDCO cannot
seek to burden the Government of India with damages caused
by its wrongful acts. It has to be borne in mind that the award
is on the basis of that HUDCO has been guilty of committing
gross breach of contract and invited this liability on to itself.
That being so, the Government of India cannot be burdened
with a liability arising out of the lapses of HUDCO”

In view of the position explained above, HUDCO as lessee by

virtue execution of lease deed on 4/7/1997 so that all
expenses/financial implication incurred by HUDCO; so that
HUDCO is liable to bear the financial burden. It is also
mentioned so that there is no question arise to pay Rs. 42.35
crores spent by HUDCO and interest thereon.

Submitted for orders please.

 Sl.no.26( R) at page99/c

Communication has been received from Executive Director

(Projects) regarding utilization of 9 nos vacant guest houses
blocks at HUDCO Place, Andrewsganj, New Delhi. Detailed of
the representation has been seen at page 99/c onwards. He
has requested to consider the proposal of licensing/ leasing
the 9 guest houses blocks.

In support to the proposal he has referred the Court orders

passed in Nov/Dec 2003 granting permission to utilize the 9
nos tendering or re-allotting it either by/for itself or on short
terms license to other government bodies or institutions or
third party with clear stipulations that the same is terminable
on a short notice and shall subject to the orders of Hon’ble
Court or the trial court as the case may be, till disposal of the
appeal or the final disposal of the pending suits being heard in
the courts.

Further he has forwarded the copy of minutes of Board of

Directors dated 28/9/2010, wherein Board has resolved to
forward the proposal as contained in the agenda note to MOUD
for its approval and for finalizing the terms and conditions and
licensing fees, since HUDCO is acting as agent of MoUD for this
project, in line with the existing lease deed dated 4/7/1997
executed between HUDCO & MoUD. A condition of maximum
11 months leasing/licensing period to be renewed upto 5
years, extendable to 10 years, subject to decision of court on
the pending suits is to be recommended in the proposal.

In this connection it is mentioned that the issues

explained above has already examined earlier in the Ministry
and it has been decided that these guest house blocks could
be utilized by the Directorate of Estates for use as government
office as there is a huge unsatisfied demand such
accommodation, but HUDCO board decided that any action for
handing over the 9 guest houses blocks could be taken only
after the recommendations of the Review Committee are
considered by the Government and decision taken by it for the
entire Andrewsganj project as a whole. Further it is also
mentioned that HUDCO is a lessee and Perpetual
Lease/Supplemental Lease Deeds have been executed
between HUDCO and Union of India. All actions of HUDCO
were to be governed by the terms and conditions of the
Lease Deed/Supplementary lease deed and it is not correct to
state that HUDCO is an agent of the Ministry.

In view of the facts mentioned above, draft letter is placed

below for approval/signature.
 Sl.1(R)

A representation has been received from Shri Ramesh

Kumar Safaya, Executive Director (Works & Disposal) HUDCO,
regarding the implementation of Andrewsganj Project, New
Delhi. He has raised the following issues

(a) That HUDCO is implementing Andrewsganj project as

an agent of MoUD and all the expenses incurred on
the project are to be borne out of the “ No lien
Andrewsganj Project Account” of Government, which
is maintained by the HUDCO and funds in this
account are not available. HUDCO has been
requesting M/o UD for making available the funds so
as to meet the liabilities arising out of Andrewsganj
 Project. In its. 459th meeting the HUDCO Board which
was held on 24th August 2009 vide item no. 459.4,
Board has decided to recover the amount from MoUD
alongwith interest @ 10.75% in addition to
administrative charges @ 1.5% being charged on
expenditure incurred on Andrewsganj Project. He has
enclosed the statement of expenditure incurred on
Andrews Ganj Project as on 8/9/09 and as per this
statement Rs.40.04 Cr which is required to be
reimbursed to HUDCO by MoUD alongwith interest.
(b) He has requested to hand over the 18 Acres land
allotted for maintaining Zonal Green Pocket to MoUD.
Since it is not possible for HUDCO to maintain the 18
acres as ‘green’ because of paucity of funds due to
the fact that the present annual expenditure
including security is around Rs. 35 lakhs. Therefore
HUDCO is not in a position to continue maintenance
of 18 acres Zonal Green. He has further mentioned
that Vivekananda Park, in close vicinity of HUDCO
Place was also developed through the surplus
generated from the Andrewsganj project which is
being presently maintained by CPWD. In view of
nature and use of 18 acres zonal green, it has been
decided by the Board of Directors of HUDCO that
MoUD may be requested to take over the said area
from HUDCO and hand it over to any other agency for
maintenance within one month time period from
issue of this letter as HUDCO would not be in a
position to maintain it due to non availability of
funds.

In this connection it is stated that HUDCO is lessee by

virtue of the Perpetual Lease deed executed on 4/7/97 for 99
years. The relationship of M/o UD and HUDCO are governed by
the lease terms and conditions and not any agent ship terms
and conditions. HUDCO has all the rights as lessee and not as
an agent. This has already been clarified to HUDCO. Further it
is mentioned that HUDCO falls within the administrative
control of Ministry of HUPA. As per presidential notification no.
CD-160/2004 dated 27/5/2004 entry no. 6 at page 17, M/o
HUPA has been allocated all matters pertaining to HUDCO
other than those relating to Urban infrastructure. Even though
urban infrastructure operations of HUDCO fall in the domain
of MoUD as contended in the letter, the subject matter at hand
pertains to entrustment of a specific project,(and not of urban
infrastructure in general) allotment of land to HUDCO,
execution of perpetual lease deed and thereby creating
relationship of Lessor and Lessee. The Lessee in this case is
HUDCO which is under the

L-II/1(974)/09
Andrewsganj Project, HUDCO
-2-

administrative control of Ministry of HUPA and this has also

been stated in the letter dated 20/2/2009 of Hon’ble UDM.
 As per clause of allotment letter dated 19/3/96, 18 acres of
land is entrusted to HUDCO without payment of any fee for
care and maintenance as Zonal Green. HUDCO will develop
this area and maintain it till further directions from the Govt.
The cost of development and maintenance of the Zonal Green
may be charged by HUDCO to the accounts of the community
centre project. According to meeting held under the
chairmanship of Cabinet Secretary, the matter was referred to
the Ministry of Law regarding issue of whether HUDCO is agent
of MoUD or not which is still pending with them.

In view of the facts explained above it is for order we may

process the case for handing/taking over of 18 acres of land.

L-II 8(3)/08
Plot-25 August Karanti Bhawan
Bhikaji Cama Place

Dy. No. 118/R.P.Cell dated 11/3/2010

F.R is a letter from Shri N. K. Negi Chief Project Housing

and Urban Development Corporation Ltd. HUDCO Bhawan Lodhi
Road and requested to approved the Draft Sub Lease Deed Plot No-
25 August Karanti Bhawan as submitted by HUDCO in 2004.
 2. The issue a Supplemental Lease Deed to the Lease Deed
between L&DO and HUDCO of Plot No-25 August Karanti
Bhawan and
3. To consider application submitted by HUDCO on 12.8.2005
or conversion or plot no-25 august Kranti Bhawan from Lease Hold
to Free Hold. In this connection it is submitted that the matter
regarding approval a draft Sub Lease has already been discussed
and it was decided that since the Govt. of India is not a party nor a
signatory and as such Sub Lease Deed/Agreement should wetted by
its legal Department

4. Regarding 2nd issue execution of supplemental Lease Deed the

matter is still under consideration M/Law & Justice.

5. Regarding 3rd issue Conversion of Leasehold rights, it is

submitted that the matter require the approval of Cabinet. The
action in this regard is to be taken by M/HUPA.

If approved draft is placed below for approval/signature.

Dy.No.422/R.P.Cell dt.26/8/09

Asstt. Legal Adviser has returned our letter dated 10/8/09

It has been ascertained for the office of Ld. AG that matter is

still pending with Ld. AG and it has been informed
that same will be cleared very soon.
May Kindly see for information please.
 It has been found from records that HUDCO is lessee by virtue
of the Perpetual Lease deed for 99 years
 A representation received from Shri T. Prabakaran, Director
(Finance), HUDCO requesting fort meeting to resolve the disputes
relating implementation of Andrewsganj Project at New Delhi.
Detailed contents of letter may please be seen at page /c onwards.

He has further informed that HUDCO has constructed 1176

number of flats/transit flats at 25 acres land at HUDCO place, one
underpass on Khel Gaon Road & other Govt. directed works and
given free of cost to Ministry. HUDCO has also developed 17.6
acres community centre pocket comprising of shopping arcade, two
levels of car parking in basement, 12 blocks of guest houses,
cultural centre site and hotel site to generate resources for
construction of houses and also developed 18 acres land as zonal
green and is still maintaining as per allotment terms.

He has request to finalization of recommendations of the

committee for transferring freehold right of 17.6 acres of
community centre is still awaited. In this connection it is
mentioned that HUPA is administrative Ministry in charge of
HUDCO and the further action is to be taken by HUPA separately.

He has also referred the recent development in the case of M/s

Leela Hotels Ltd. and in order to contain the rising interest liability
on account of the same, an amount of Rs. 50.54 crores is being
deposited in the court without prejudice to its rights and contention
in the appeal already filed. HUDCO’s Board has also resolved the
amount deposited in the Court shall be claimed from Ministry with
interest. He has requested to make available the funds in “No Lien
AGP Account” as fund in the same are not available and HUDCO
has not earned out of this project.

In this connection it is stated that The case of M/s Leela

Hotels Ltd., relating to Arbitration has arisen out of the agreement
to sub-lease entered into by HUDCO with M/s Leela Hotels Ltd. It
has been found from records that HUDCO is lessee by virtue of the
Perpetual Lease deed for 99 years executed on 4/7/1997 regarding
17.6 acres of land for community centre. The ground rent payable
in advance @ Rs.1/- per acres. The Perpetual Lease Deed does not
have any clause for agreement to sub-lease. The clause III(2)
states about sub-lease of built-up space after allotment. In the
instant case an agreement to sub-lease has been executed by
HUDCO with Leela Hotels, though it did not have approval of
MOUD/L&DO.
 Regarding the issue of mortgage permission, the opinion of
Ld. ASC was obtained and forwarded to HUDCO. It includes

“Legally, the allotment and consequently the agreement to

sub-lease or the sub-lease itself, if entered, would be invalid. Since
the bank or the financial institution which will advance the money
to M/s Leela Hotels Limited would look to the hotel site for
recovering its advance, they may initiate litigation which could put
HUDCO into difficulty in complying with the decree obtained by
M.S. Shoes limited. It is essential, therefore, that the bank or
financial institution which is agreeable to advance moneys to M/s
Leela Hotels Limited is apprised of the litigation should be required
to give an undertaking that in the event of M/s M.S Shoes Ltd.
succeeding in the suit, the mortgage would cease to be valid and
they would have to claim, change or lien in respect of the hotel site.
It is only in the event that M/s Leela Hotel Ltd. and their intending
creditors/mortgagees are willing for such a condition that the
government/HAUDCO could permit the mortgage of the site”.

In this regard the stand of MOUD is crystally clear that MOUD

is not responsible to pay Rs. 50.54 crorres because sub-lease
agreement in between HUDCO and M/s Leela Hotels Ltd.
and
He has enclosed the agenda for meeting and requested to
indicate the convenient date and time.

Submitted please.
 -77-

Sl.no 31 (R) to 39(R)

This is regarding meeting to be held by Cabinet

Secretary on 25/6/2009 at 5 P.M. in the committee room of
Cabinet Secretariat, Rashtrapati Bhavan, regarding resolution
of disputes related to Andrewsganj Project between L&ADO
and HUDCO- award decided by Hon’ble Supreme Court and
Hon‘ble Execution Court( High Court of Delhi in favour M/s
Leela Hotels Ltd.). As per notice dated 17/6/2009 received
from Cabinet Secretariat, a background note is to be circulated
by M/o HUPA separately. The background note is awaited by
the time this note is prepared.

2. In this regard the letter from Kumari Shelja the then

Hon’ble MOS HUPA addressed to Hon’ble UDM dated 24.3.09
was received in L&DO on 30.3.09. Subsequently another letter
was received from Dr. P.K. Mohanty J.S, NURM (HUPA) on
2.4.09. After that a letter from Director, Finance HUDCO dated
17.4.09 addressed to Secretary (UD) was received on 22.4.09.
All these communications pertain to the issues involved in
HUDCO project Andrews Ganj relating to financial implications
of arbitration award and Court Orders against HUDCO in the
case of M/s Leela Hotels Ltd. The issues raised in these
communications have already been raised by HUDCO/HUPA
and their reply has been sent by Secretary (UD) to Secretary
(HUPA) through a D.O. letter no.J-13026/10/99-LD dated
18/5/09. The stand of M/o UD has also been conveyed by
Hon’ble UDM to MOS, HUPA vide d.o. letter no. J-13026/10/99-
LLD/523 dated 20/2/2009.

3. Now a fresh communication has been received from

Secretary HUPA [ S.No. 38(R)] addressed to Cabinet Secretary
requesting to his intervention to find a meeting ground
between two Ministries. Before a copy of this letter was
received, his letter dated 5.6.09 addressed to Secretary (UD)
is also received. On the said letter Secretary’s remarks are as
under;

”we may convene a meeting now, early as this goes on”.

4. In the letter addressed to Cabinet Secretary, Secretary

(HUPA )has raised the following two points:-

A. HUDCO in the Andrews Ganj project was agent of the

M/o UD(L&DO) which was the Principal and Lessee
of the site. HUDCO as agent has asked M/o UD to
make payment for the amount in dispute or freehold
assignment of the site to them to develop to recoup
the outgo.

Stand of UD: On this issue the stand of M/o UD, as already

conveyed to M/o HUPA is that HUDCO is a lessee and
Perpetual Lease/Supplemental Lease Deeds have
been executed between HUDCO and Union of
India. All actions of HUDCO were to be governed by
the terms and conditions of the Lease
Deed/Supplementary lease deed and it is not correct
to state that HUDCO is an agent of the Ministry.

B. Second issue is that the M/o HUPA feels that as the

land in question belongs to M/o UD and Urban infrastructure
 operation of HUDCO stands assigned to the M/o UD, it is
for the Ministry of Urban Development to indicate the
possible solution. That M/HUPA cannot approach on an
issue outside its business allocation. If HUDCO loses the
last appeal (as is likely to be the case), with the matter
ticking away Rs.4.9 lakhs per day, a resolution becomes
urgent.

Stand of UD: The stand of M/oUD on this issue was

conveyed vide D.O. letter of Hon’ble UDM dated
20/2/2009 to MOS, HUPA as under:-

“The request for transfer of freehold rights for 17.6

acres of commercial land to HUDCO is a substantial
deviation from the earlier allotment/lease conditions.
Normally, when commercial exploitation of Govt. land is to
be done on a freehold basis, it is advisable and desirable
that specific approval to that effect is obtained
from the Union Cabinet. Since the problem essentially
pertains to HUDCO and there are compelling circumstances
necessitating an early resolution of the issue, the Ministry
of HUPA, the administrative Ministry in charge of HUDCO,
may take further action”.

Further regarding moving of cabinet note it may be

stated here that HUDCO falls within the administrative control
of Ministry of HUPA. As per presidential notification no. CD-
160/2004 dated 27/5/2004 entry no. 6 at page 17, M/o HUPA
has been allocated all matters pertaining to HUDCO other than
those relating to Urban infrastructure. Even though urban
infrastructure operations of HUDCO fall in the domain of
MoUD as contended in the letter, the subject matter at hand
pertains to entrustment of a specific project,(and not of urban
infrastructure in general) allotment of land to HUDCO,
execution of perpetual lease deed and thereby creating
relationship of Lessor and Lessee. The Lessee in this case is
HUDCO which is under the administrative control of Ministry of
HUPA and this has also been stated in the letter dated
20/2/2009 of Hon’ble UDM. Therefore, the difficulties being
faced by HUDCO on account of Arbitration Award arising out of
certain contractual obligations between HUDCO and some
other parties created by decisions of actions of HUDCO should
be taken up by the Ministry of HUPA.

5. It has been found that the letter addressed to Cabinet

Secretary by Secretary (HUPA) does not incorporate the basic
issues leading to financial burden on HUDCO and its failure in
complying with the terms and conditions of Agreement to Sub-
lease between HUDCO& M/s Leela Hotels Ltd on 4/7/1997.

6. It is also not a correct statement that HUDCO in the

Andrews Ganj Project was the agent of M/o UD. While it has
already been clarified to the M/O HUPA that HUDCO is a lessee
as per the perpetual Lease Deed executed on 4/7/1997
between HUDCO and L&DO. Thus the relationship of M/o UD
and HUDCO are governed by the lease terms and conditions
and not any agent ship terms and conditions. HUDCO has all
the rights as lessee and not as an agent. This has already
been clarified to HUDCO.
7. In the letter dt. 24.3.09 from Hon’ble MOS HUPA to Hon’ble
UDM, it has been contended that it is due to denial of
Mortgage Permission by M/o UD and there by default by M/S
Leela Hotels Ltd. in paying the 3rd installment that HUDCO
had to ultimately cancel the allotment of land to M/s Leela
Hotel Ltd forfeiting 50% of the paid amount i. e Rs.76 crores.
The point has already been examined and incorporated in
letter dated 20/3/2009 of Hon’ble UDM to MOS(HUPA )and DO
Letter dated 18/5/2009 Secretary (UD) to Secretary HUPA
wherein it has been stated that on 24/6/1999, the then
Secretary(UD) wrote to
ensure that all action taken by HUDCO in this regard must fully
protect the interest of Government and they must be in strict
compliance with relevant clauses in the agreement of sub-
lease entered between HUDCO and M/s Leela Hotels Ltd., in
particular to the clause relating to Arbitration etc.

contd../-

-79-

FPP:

8. The file is submitted in view of the meeting to be held by

Cabinet Secretary on 25.06.2009 at 5.00 p.m.

(Surendra Singh)
Dy.L&DO(III)/23/06.2009

L&DO
 Reference from pre-page:-

Summon has been received from the Court of

Shri Ajay Goel, Senior Civil Judge tot appear on
11/5/2009 to prove the documents as listed duly
attested by Shri Surinder Singh, CPIO & Dy. Land &
Development Officer. The undersigned alongwith the
Dy. Land & Development Officer and Govt. Counsel
attended the Court on 11/5/09. The statement of
Dy.L&DO has also been recorded. The next date of
hearing is fixed for 23/5/09 for admission and denial.
Submitted for information please.
Sl.no.34(R) page 481/c
 Reference JS (DL)’s comments at p 68/n. We have
received a copy of D.O no.I-14012/1/2009-H dated April2,
2009 written by Dr. P.K. Mohanty, JS(NURM) to
Director(Finance) officiating CMD, HUDCO regarding
preparing agenda for proposed meeting between two
Ministries on the following issues:-

i) The extent of liability on account of M/s Leela

Venture.
ii) The repercussion on other cases viz. M.S Shoes
and others and the extent of likely liability out of
them; and
iii) If the solution is the transfer of lessor’s rights on the
land in question to the lessee (HUDCO) alongwith
the liabilities, but only of lease hold and not freehold
rights, would HUDCO be able to use the land
sufficiently to discharge the liabilities arising out of
this contract with Ministry of Urban Development?

2. The clarification regarding issues mentioned in JS (DL)

notes and D.O. of JS (NURM) are as under:-

(i) HUDCO had strictly compiled with the mandate as spelt

out by MOUD in the Lease deed.

The case of M/s Leela Hotels Ltd., relating to

Arbitration has arisen out of the agreement to sub-lease
entered into by HUDCO with M/s Leela Hotels Ltd. It has
been found from records that HUDCO is lessee by virtue
of the Perpetual Lease deed for 99 years executed on
4/7/1997 regarding 17.6 acres of land for community
centre. The ground rent payable in advance @ Rs.1/- per
acres. The Perpetual Lease Deed does not have any
clause for agreement to sub-lease. The clause III(2)
states about sub-lease of built-up space after allotment. In
the instant case an agreement to sub-lease has been
executed by HUDCO with Leela Hotels, though it did not
have approval of MOUD/L&DO. Regarding mortgaging
the Hotel site by M/s Leela Hotels, the opinion of Ltd. ASG
Shri C.S. Vaidyanathan was communicated to HUDCO. It
includes, “Legally, the allotment and consequently the
agreement to sub-lease or the sub-lease itself, if entered,
would be invalid, “M/s M.S. Shoes Ltd. succeeds in the
suit and in the interregnum, HUDCO permits M/s Leela
Hotels Ltd., to mortgage the Hotel site.” Para 6 at page
66/n may be perused. It also suggests that bank or
financial institution agreeable to advance money to M/s
Leela Hotel Ltd. be apprised of litigation, should be
required to give an undertaking that in the event of M/s
M.S. Shoes Ltd succeeding in the suit, the mortgage
would cease to be valid and they would have no claim,
change or lien in respect of Hotel site. It is only in the
event that M/s Leela Hotel Ltd. and their entire
creditors/mortgagee are willing for such conditions that
Govt/HUDCO could permit to mortgage the site.
 The opinion was forwarded to CMD, HUDCO under
signature of the then Secretary (UD) on 20/5/1999. But
Board of HUDCO decided not to grant permission for
mortgage of hotel site as the matter was under llitigation
with M/s M.S. Shoes Ltd. Thus the issues with M/s Leela
Hotels Ltd. and HUDCO leading to arbitration/Apex Court
have arisen due to the decision of HUDCO at its own not
to grant permission for mortgage. It is also worth
mentioning that Secretary(UD) on 24/6/1999 cautioned the
HUDCO to ensure that all actions taken by the HUDCO in
this regard must fully protect the interest of Government
and they must be in strict compliance with relevant
clauses in the agreement to sub-lease entered with
HUDCO and Leela Hotels Ltd. Thus it is evident that
HUDCO has defied the instructions of Secretary (UD) in
this case.

(ii) It is due to denial of mortgage permission by MOUD that

HUDCO cancelled the allotment of land to M/s Leela
Hotels Ltd.

It is wrong to say that MoUD denied permission of

mortgage to M/s Leela Hotels Ltd. The stand of MOUD
is crystally clear from the above referred letter of
Secretary (UD) to HUDUCO. HUDCO was cautioned
by MOUD though the MOUD was not a party to the
agreement to sub-lease.

(iii). The arbitration award against HUDCO was also

primarily due to denial of mortgage permission.

As per Ld. SG’s opinion, the conclusions of Ld.

Arbitrator are inter-alia as under:-

a) The refusal by HUDCO to permit Leela Hotels to

mortgage or charge the hotel site is a contractual
breach, a breach of a fundamental term of the
agreement of the sub-lease.
b) HUDCO is guilty of misrepresentation in relation to the
submission of the revised outlay plan, although this
conclusion, as per this award, is inconsequential.
c) Leela Hotels was justified in treating HUDCO’s
breaches as constituting a repudiation of the contract
and, therefore, it stood relieved of the obligation of
paying further installments.

From the above it may be noticed that it is not only

denial of permission to mortgage the hotel site but also
misrepresentation by HUDCO in relation to the submission
of revised outlay plan and treating Leela Hotels stand as
justified for treating HUDCO’s breaches as a repudiation
of the contract and therefore it stand relieved of the
obligation of paying further installment.
 It is also noticed that though allotment to Leela Hotels
was cancelled on 30/6/1999, the amount deposited by M/s
Leela Hotels as Ist installment and IInd installment and
ground rent was not refunded to them alongwith
cancellation of allotment. The Arbitrator has awarded
damages with reference to amount paid as Ist and IInd
installment, property tax for the period of amount payment
with HUDCO until payment to MCD, an interest for period
amount remaining with HUDCO.

(iv) The denial of permission by MoUD cannot be construed

as HUDCO’s fault.

It is wrong on part of HUDCO and misleading to state

that MOUD has denied permission to mortgage.
HUDCO did not act as per advice of Ld. ASG and
Secretary (UD).

(v). Powers to take decisions in the matter was with

MoUD and not with HUDCO as per the lease
conditions.

It is wrong to say that the decision making authority

was with MoUD as agreement to sub-lease was between
HUDCO and Leela Hotel Ltd. Also that Secretary (UD) has
conveyed clearance to HUDCO in this matter, by way of
forwarding opinion of Ld. ASG.

3. From the facts of the case there is no ambiguity on

the liability of HUDCO on account of Arbitration Award in
favour of M/s Leela Hotels. Accordingly, a draft D.O. letter
reply is placed below for approval/signature of Hon’ble UDM.

Submitted please.
Sl.no.23(R) at page 72/c

A representation received from Shri T. Prabakaran,

Director (Finance), HUDCO regarding allotment of space for
office requirement of the newly set up National Investigation
Agency(NIA) in guest house blocks constructed by HUDCO
in Andrews Ganj. Detailed contents of the letter may please
be seen at page 72/c onwards.

He has further informed that recently the request made

by MOHA for allotment of space for office requirement to
National Investigation Agency, the matter was placed before
the 452nd meeting of Board of Directors vide item no. 452.23
held on 16/3/2009 wherein
“it has been decided that in view of the pending
decision of Government on conversion of freehold rights of
17.6 acres of community centre pocket, the said guest
houses cannot be handed over to MOUD for allotting the
same by them to the Government bodies. However, in case
MOUD communicates the licensing terms and licensing fees
to be charges by licensing the vacant guest houses blocks,
HUDCO can allot these guest houses to prospective
licensees (PSU/government bodies etc.) on the licensing
terms and fees approved by MoUD. And the revenue thus
received could be deposited in “No lien Andrewsganj Project
Accounts”.

He has requested to expeditiously convey the approved

licensing fees & licensing terms for licensing the vacant guest
houses blocks. And also finalization of recommendations of
the committee for transferring freehold rights of 17.6 acres of
community centre is still awaited.

In this connection it is mentioned that the issue

regarding finalizing of licensing terms and licensing fees has
examined earlier in the Ministry and it has been decided that
these guest houses blocks could be utilized by the
Directorate of Estates for use as Government office as there
is a huge unsatisfied demand such accommodation. This
decision was communicated to the HUDCO on
6/12/2005(copy placed at page 51/c).

Issue with regard to the transfer of freehold rights of

17.6 acres is concerned. In this regard it is mentioned that a
D.O. letter dated 20/2/2009 has already been issued in which
it is mentioned that HUPA is administrative Ministry in charge
of HUDCO, the further action is to be taken by HUPA
separately.

Submitted for further orders please.

 65/n

Ref. on pre-page

1. Dy. No. R.P.Cell/192 dated 27/3/09

2. Dy. No.R.P.Cell/4/VIP dated30/3/09
3. Dy. noR.P.Cell/5/VIP dated 30/3/09

Advance copies of D.O. letter has been received from

Minister of state for HUPA addressed to UDM regarding
prompt consideration of the issues regarding the recent
Supreme Court judgment in case of allotment of hotel site to
M/s Leela Hotels Ltd. at Andrewsganj Project by HUDCO.
She has mentioned that it is due to denial of mortgage
permission from MOUD and thereby default by ultimately
cancel the allotment of land to M/s Leela Hotels Ltd. forfeiting
50% of the paid amount i.e. Rs. 76 crore. This money was
utilized by HUDCO for the construction of houses and other
works of MOUD. 1176 houses have been given to MOUD
free of cost since then. The cost of these 161 crores.
HUDCO has not earned or kept any money whatsoever from
this development and as such cannot be burdened to bear
the current liability of Rs. 119 crores as claimed by M/s Leela
Hotels Ltd. on account of recent Supreme Court decision in
the case filed by M/s Leela Hotels ltd. The arbitration award
against HUDCO was also primarily due to denial of mortgage
permission by MOUD which cannot be construed as
HUDCO’s fault as powers to take decisions in the matter was
with MoUD and not with HUDCO as per lease conditions.

2. She has further stated to please reconsider the stand

of MoUD as HUDCO is not liable to pay this amount as it
neither owns the land nor has earned any money out of this
project. It is suggested that the available land may be utilized
in a manner in which funds could be generated for MoUD in
the Project Account and current as well as future liabilities
are taken care of.

3. In this connection it is stated that HUDCO is functioned

as lessee as per the perpetual lease/Supplemental Lease
deed executed between HUDCO and Union of India. All the
actions of HUDCO are governed the terms and conditions of
the lease deed/Supplementary lease deed.

4. Briefly stated that the Government allotted an area of

42.6 acres at Andrewsganj to HUDCO on 19/3/1996 with the
stipulation that 17.6 acres of land will b e developed as a
Community centre and HUDCO will build general pool
houses in the remaining 25 acres. Government was to use
land as a resources and build general pool residential houses
out of the surplus earned from the development of 17.6 acres
land as a community centre. The lease deed was also
executed with the
HUDCO on 4/7/1997 whereby 17.6 acres of land was leased
to HUDCO for 99 years. The lease contemplated that the
lessee would be required to sub-lease the land and space
created to others and laid down a number of conditions for
sub-lessees. One of the conditions III(6) was that the sub-
lessee may with the previous consent in writing of the lessor,
sell, transfer, mortgage or charge their respective interest in
sites/built-up spaces as may be approved by the lessor in his
absolute discretion.

5. As part of its development of the Community Centre,

HUDCO has originally allotted a part of land for hotel to M/s
M.S. Shoes which went into litigation. After getting the
injunctions, HUDCO was in a position to reallot the land and
after inviting tenders allotted it to M/s Leela Hotels Ltd.,
HUDCO also entered into an agreement to sub-lease.

6. Regarding permission of Ministry of Urban

Development for mortgaging the hotel site by M/s Leela
Hotels Ltd., and as requested by HUDCO, the delay in
forwarding the decision was due to the delay in furnishing the
requisite information to the Ministry by HUDCO. The matter
was referred to Additional Solicitor General of India, Shri C.S.
Vaidyanathan. As per his opinion dated 4/11/1998:-

“The question is if M/s M.S. Shoes Limited were to

succeed in the suit and if in the interregnum, HUDCO permits
M/s Leela Hotels Ltd. to mortgage the Hotel site, What would
be the consequences? Legally, the allotment and
consequently the agreement to sub-lease or the sub-lease
itself, if entered, would be invalid. Since the bank or the
financial institution which will advance the money to M/s
Leela Hotels Limited would look to the hotel site for
recovering its advance, they may initiate litigation which could
put HUDCO into difficulty in complying with the decree
obtained by M.S. Shoes limited. It is essential, therefore, that
the bank or financial institution which is agreeable to advance
moneys to M/s Leela Hotels Limited is apprised of the
litigation should be required to give an undertaking that in the
event of M/s M.S Shoes Ltd. succeeding in the suit, the
mortgage would cease to be valid and they would have to
claim, change or lien in respect of the hotel site. It is only in
the event that M/s Leela Hotel Ltd. and their intending
creditors/mortgagees are willing for such a condition that the
government/HAUDCO could permit the mortgage of the site”.

7. This opinion was forwarded to the Chief Managing

Director, HUDCO under signature of the then Secretary (UD)
on

J-13026/10/99-LD
linked file no.J-13026/8/97-LD
 67/n

contd. From pre-page:-

20/5/1999 vide D.O. letter no. J-13026/8/97-LD thus which is

clear that HUDCO could take action as per opinion of Ld.
Additional Solicitor General dated 4/11/1998 by incorporating
the conditions mention therein. The D.O. was received by
the PS to CMD on 21/5/1999. But the board of HUDCO
decided not to grant permission for mortgage of hotel site as
the matter was under litigation with M/s MSSEL and pending
in the Court of Law.

8. Further on 24th June, 1999, the then Secretary (UD) vide

D.O. no. J-13026/8/97-LD quotient the HUDCO to ensure
that all actions taken by HUDCO in this regard must fully
protect the interest of Government and they must be in
stricted compliance with relevant clauses in the agreement of
sub-lease entered between HUDCO and M/s Leela Hotels
Ltd. in particular to the clause relating to Arbitration etc. This
DO was also received by PA, CMD, HUDCO.

9. The position explained above, it is evident that it was

not Ministry of Urban Development/Government of India that
refused to grant permission to mortgage but only HAUDCO
that took the decision not to grant permission for mortgage at
its own. If approved, we may convey the same to Hon’ble
Minister of State, HUPA as per draft d.o. placed below for
approval/signature please of Hon’ble UDM.
 AS per clause 18(a) and (b) the intended sub-lessee shall not
have the right to sell, transfer, assign or otherwise part with the
possession of the whole or any part of the said demised premises
without the written prior approval of the lessor/corporation except
the license to use and occupy the demised premises solely for the
purposes of constructing and executing a hotel building.
Notwithstanding anything contained in sub-clauses referred above,
the intended sub-lease may to enable him to raise funds for
construction of the hotel building and the required equipment and
machinery with the previous consent in writing of the
lessor/corporation and subject to first charge of the
lessor/corporation to the extent of its outstanding dues payable
hereunder mortgage or charge the said premises to such person and
on such terms and conditions as the lessor/corporation may specify
in its absolute discretion.

M/s Leela Hotels applied for permission for mortgage to

HUDCO and to Government. HUDCO refused permission to
mortgager and Leela hotel thereafter went for arbitration.

The Arbitrator has held that either HUDCO or the

Government could give the permission to mortgage and since
HUDCO refused to give permission. So that HUDCO entitled to
pay damages to leela Hotels. The arbitrator has awarded damages
to the extent of the amount paid by Leela Hotels with interest @
20%. The Court has also awarded 15% interest on the payable
amount of the award from the date of the award.

The arbitration was between M/s Leela Hotels and HUDCO.

Govt. as a lessor was not made a party. Nor does it seem that
Government’s approval was taken to appoint the arbitrator
In this regard it is stated that we had taken the opinion of the
Ld. Solicitor General and on the basis of that we have
communicated to HUDCO vide out letter dated 11/9/2002(F/C) and
again on 1/10/2002 that in so far as the award itself is concerned
HUDCO may take a decision on it after considering the legal
advices to it.

It is stated that on these issues SG of India has opined as

under:-

“In any view of the matter, I do not see how the Government
could be made liable at all for any of the sums awarded by the
Arbitror. HUDCO was undoubtedly entrusted with the
responsibility of developing the property in Andrews Ganj on
behalf of the Government of India. However, what have been
awarded are damages for breach of a contract. HUDCO can not
seek to burden the

J-13026/10/99-LD
67/n

Government of India with damages caused by its wrongful

acts. It has to be borne in mind that the award is on the basis of that
HUDCO has been guilty of committing gross breach of contract
and invited this liability on to itself. That being so, the Government
of India cannot be burdened with a liability arising out of the lapses
of HUDCO.”

In view of the facts above, we may the same to the Ministry

of HUPA as per draft DO is placed below for approval please.
 J-13014/1/2009-R.P.Cell
Ansal API

Dy. No. 3/VIP/R.P.Cell dated 24/3/2009

Dy. MD & CEO has represented himself through his letter

dated 24/3/2009. He has stated that in terms of allotment letter,
draft sub-lease deed, duly approved by the Govt. Of India was to be
sent to us for our perusal and execution in our favuor. He has
further stated that the several representations have been made to
HUDCO pointing out that the variations/departures between the
Agreement to Sub-lease and draft sub-lease and requested to delete
the clause of variance with the agreement to sub-lease. Detailed
contents of the letter may be seen at page 1/c onwards.

Briefly stated that as per notes of the then Dy.L&DO on

31/7/95,
“HUDCO propose to execute an agreement to Sub-lease .and
request that a nominee of the lessor to join on behalf the President
of India for execution of Sub-Lease deed. …….he has written that
agreement for lease appears to be in order. Since this is a legal
document and the legal officer is required to vet the same. The then
VLO in his notes dated 1/8/95 stated that the Agreement to sub-
lease legally vetted. The copy of the sub-lease deed executed by
the then VLO on behalf of President of India with HUDCO &
APIL at page 114-131may kindly be seen

On going through the file, it is understood that file was

neither referred to Law Ministry Internal Finance Division (IFD)
of Ministry for vetting of draft sub-lease deed. This was done at
the level of Legal Officer of this office.

Submitted for information please.

 Pt file J-13026/01/99-LD
M/s Leela Hotel Pvt. Ltd.

DY. NO. R.P.Cell/66 dated 30/01/2009

In response to this office letter dated 13/1/09, Executive

Director (Law), HUDCO has requested to provide the noting of the
Ministry and/or the brief which the Ministry might have sent in/or
about July-August, 02 to the then SGI for seeking his opinion dated
9/8/2002. Further he has stated that the said notings/brief would
held facilitate us to appreciate and understand in right prospective
the issue/s involved and/or the stand of MOUD in the matter of
litigation with M/s Leela Hotels Ltd., relating to Hotel site at
HUDCO Place for taking further action so as to protect the interest
of HUDCO.

In this connection, it is mentioned that the main file has

already submitted on 21/1/09 on issue of reimbursing ground rent,
to examine the matter with in the provisions of lease deed/allotment
letter etc.
 Submitted for information please.

As per the notes of JS(DL) regarding issue of reimbursing

ground rent, to examine the matter with in the provisions of lease
deed/allotment letter etc.

As per clause (xi) of allotment letter dated 19/3/1996, the

ground rent will be payable from the date of the possession of the
site was handed over.

Clause III(2) tells that the lessee shall pay unto the lessor the yearly
rent thereby reserved on the day and in the manner hereinbefore
appointed without any deductions until any portion of built spaces
are allotted. Thereafter the sub-lessees/space buyers shall pay to
the lessee the yearly rent of two and half per cent of the premium
paid towards the proportionate share of the land as per the
provisions of the sub-lease without any deductions, who in turn
shall pay the yearly rent collected to the lessor in two equal
installments payable on 15th January and 15th July every year.

Clause III(4) tells that the space buyers shall from time to
time and at all times pay and discharge all rates, taxes, charges and
assessments of every description which are now or may at any time
hereafter during the continuation of the sub-lease be assessed,
charged or imposed upon the premises hereby demised or any party
thereof or on any building to erected thereupon or on the sub-lease
in respect thereof.
 Dy. No.2466/DYIII dated 4/12/2008

The Assistant Chief (W&D), HUDCO has forwarded the

request of M/s Focus Energy Ltd., for permission of the creation of
charge in favour of Oriental Bank of Commer5ce and also for grant
of time extension, for the purpose of construction of Cultural
Centre at the site allotted to them at HUDCO Place, Andrews Ganj.

She has further stated that M/s Focus Energy vide its letter
dated 23/9/08 and 14/11/2008 regarding to grant permission for
creation of mortgage as well as extension of time for construction
of Cultural Centre as the construction alleged to be delayed on
account of permission for mortgage. As on date, HUDCO is acting
as an agent of Govt. for Andrewsganj Project as per the Perpetual
Lease Deed dated 4/7/1997, which is still in operation and Govt.
has yet to take a decision on review of leasing arrangement of
Andrewsganj Project for transferring freehold rights in favour
HUDCO as recommended by Committee.

In this connection it is submitted that no objection for grant

of extension of time to M/s Focus Energy Ltd. For carrying out
construction at Cultural Centre site has already been issued on
16/6/08.

Further it is mentioned that the issue regarding creation of

mortgage is concerned, as per the Allotment letter dated
31/10/1994, Clause (iv) & (v), it tells that date of handing over
possession of the site on license bases for construction of the
Cultural Centre building and Licensee have not any right to sell,
transfer, assign or otherwise parting with the possession without the
prior permission of lessor/HUDCO. In this connection Ministry of
Law has also opined in their note dated 9/9/03 (p-29/30/N) that a
licensee does not any interest in the licensed property. It has right
to use and enjoyment and occupy for particular permitted purposes.
 The brief facts of the matter are that HUDCO (Lessee) was
allotted 42.6 acres of land at Andrews Ganj on 1.11.90 by the Govt.
(Lessor). The letter dt. 1.11.90 was modified and in suppression of
this letter, allotment letter dt.15.6.93 was issued conveying the
allotment of 42.6 acres of land to HUDCO at Andrews Ganj (Flag
'B'). 17.6 acres of land, out of the 42.6 acres, was for construction
of Community Centre (CC) and the remaining 25 acres of land was
for residential purposes. The lease deed was also executed between
the Government of India and HUDCO in respect of this land on
4.7.97 (Flag 'C'). The HUDCO had allotted land measuring about
1500 sq. mtrs. to M/s. FEL on dt.31.10.94 for construction of
Cultural Centre at Andrews Ganj (P.91-95/C).

There are following issues are involved for consideration:-

A. Approval of draft Agreement to Sub-lease by this
Ministry/Office already entered into between M/s. Focus Energy
Ltd. (earlier known as M/s. Phoenix Overseas Ltd. (Sub-lessee)
and HUDCO (Lessee). In this matter, the Ministry of Law
 Opined that sub-lease deed between two companies that are
independent of Government of India and as should have their
own legal advice. It may be conveyed to HUDCO.

B. Grant of NOC to HUDCO to enable them to grant permission

for creating charge to M/s. FEL in respect of land allotted to
them for construction of Cultural Centre at Andrews Ganj, New
Delhi. In this regard, Ministry of Law has opined in their note
dated 9/9/03 (29-30/N) that a licensee does not acquire any
interest in the licensed property. It has mere right to use and
enjoyment and occupy for particular permitted purpose. It may
also be conveyed to HUDCO.

C. The third issue is regarding permission for execution of time for

carrying out construction of Cultural Centre at cultural site at
Andrews Ganj. In this connection, it is stated that the plot of
land measuring 1500 sq. mts in Andrews Ganj Project was
allotted based on auction by HUDCO to M/S Focus Energy
Overseas Ltd. for a cultural center on 31/10/94. M/S Focus
Energy Overseas Ltd. for has made payment for the land as well
as the interest thereon to HUDCO.
The Perpetual lease Deed executed on 4/7/1997 between
President of India and HUDCO, possession was handed over on
3/10/2006. It may be considered that as per policy of L&DO,
issued vide office order No. 7/98(f/a) dated 15/7/98 file No.

J-13026/2002/03

60/N

24(10)-CDN regarding delays in construction on plots allotted

by L&DO reads as under:

"….in respect of institutional plots, the Land & Development

Officer shall grant extension for construction on case-to-case
basis upto 5 years and thereafter the extension shall be
granted only with the approval of the Ministry. However, the
maximum period for which such extension shall be allowed
is 10 years in all, and in case no construction takes place
within this period, the allotment shall be cancelled and plot
would be put to alternative use."

Though the issue is to be finally decided by the HUDCO

being Lessee, we may convey no objection to the request of M/S
Focus Energy or that it is f or HUDCO to decide.

Proposal as per paras A, B & C are submitted for seeking

approval of L&DO and draft is also put up for approval.
In referred file, the following issues involved for consideration:-

1. Approval of draft Agreement to Sub -lease by this Ministry

already enter5ed into between M/s Focus Energy Ltd. in this regard,
Ministry of Law has opined in their note dated 9/9/03(29-30/N) that a
licensee does not acquire any interest in the licensed property. It has
mere right to use and enjoyment and occupy for particular permitted
purpose.

2. The second issue is regarding to grant of NOC to HUDCO to enable

them to grant permission for creating charge to M/s FEL in respect of
construction of Cultural Centre at Andrews Ganj, New Delhi. In this
matter, the Ministry of Law had opined that sub-lease deed between
two companies which are independent of Government of India and as
should have their own legal advice.

3. The third issue is regarding for giving extension of time for carrying
out construction of Cultural Centre at Andrews Ganj. The plot of
land measuring 1500 sq. mts in Andrews Ganj Project was c allotted
by HUDCO to M/s Focus Energy Overseas Ltd. for a cultural center
on 31/10/94. M/s Focus Energy Overseas Ltd has made full payment
for the land as well as the interest thereon to HUDCO. Moreover, the
Perpetual lease Deed was executed on 4/7/1997 between President of
India and HUDCO. Possession was handed over on 3/10/2006. The
office order 7/98 dated 15/7/98 regarding delay in construction on
plots allotted by the Land & Development Office referred as under :-
 "…. in respect of institutional plots, the Land & Development Officer
shall grant extension for construction on case-to-case basis up to 5 years
and thereafter the extension shall be granted only with the approval of the
Ministry. However, the maximum period for which such extension shall
be allowed is 10 years in all, and in case no construction takes place
within this period, the allotment shall be cancelled and plot would be put
to alternative use."

The present case is fit under the above-mentioned office order. If

approve we may send the file to L&DO for approval.
Reference from pre-page:-

This is regarding proposal for approval of draft Sub-lease

Deed and signing of Supplemental Lease deed in respect of plot
no. 25 Bhikaji Cama Place known as August Kranti Bhawan.

Briefly stated land comprising of Block no. 14, 25 & 26 at

Bhikaji Cama Place was allotted to HUDCO with effect from
8/11/1990 vide allotment letter dated 16/4/1992(page 22/c).
HUDCO paid cost of land plus development charges to DDA.
Ground rent at the nominal rate of Rs.1/- per month was payable for
initial period of 5 years. Thereafter, ground rent @ 2.5% of the
then prevailing market value in respect of block no. 14 & 25 was
payable by HUDCO. A Perpetual lease deed in respect of block no.
25 has been entered into by L&DO with HUDCO on 22/7/2004
(page 8/c vol-5).

The present case relates to execution of sub-lease deed

between HUDCO and CIC at block no. 25. With respect to sub-
lease deed in the bipartite format, it is stated the lease of plot no. 25
has been executed on the lines of lease deed which provide for that
the lessee shall get tripartite agreement executed in the prescribed
format but of late in many cases the department of legal affairs has
been taking a view that the lease deed should be bipartite only.
HUDCO was submitted the copies of the draft of sub-lease deed
and Supplemental Lease Deed. HUDCO had also pointed out in
their letter dated 8/5/07 that draft Sub-lease in respect of plot no.25,
August Kranti BHawan is on the same format as approved by this
office in respect of plot no. 14. The extracts where the draft sub-
lease deed was approved by the Ministry of Law in respect of plot
no. 14 may kindly be seen at flag 'D'.

File may please be sent to Ministry of Law for their approval.

Dy.No. R.P. Cell/173 dated 20/3/08

The above said FR is a representation received from Office of the

Resident Commissioner of Karnataka. He has requested for registration of
sub-lease agreement in respect of A-5 Guest House Block, (Karnataka Bhavan)
HUDCO Place, and Andrews Ganj. Detailed contents of the letter may please
be seen at page 49/c onwards.

Resident Commissioner on behalf of the Karnataka Govt. requested to

settle the issue of date of liability of ground rent and finalization of the Sub-
Lease Agreement. He has annexed number of documents to support to his
claim. In this connection, it is stated that we have already submitted the draft
Cabinet note for approval regarding conversion from leasehold to freehold of
17.6 acres of area of Community Centre.
Submitted please.
 Allotment of guest houses to NTRO by HUDCO

DY No. R.P. Cell/86 dated 7/2/2008

The above said FR is a DO letter written by Shri S. Prabhu,

I.A.A.S, Controller of Administration, Office of National Security
Advisor (Prime Minister's office) addressed to Shri S.K.
Choudhary, Ex. Director (W&C), HUDCO and copy forwarded to
the Land & Development Officer, Ministry of Urban Development.
In his letter he has referred to his earlier D.O. letter dated 2/11/2007
and 6-7/12/2007 regarding allotment of 9 blocks of hostel cum
Office accommodation in HUDCO place to NTRO. He has further
stated that NTRO is in urgent need of office accommodation.

Notes from page 1/ante onwards may be perused. HUDCO

has constructed 12 blocks of Guest Houses at the Community
Centre. Out of these 12 blocks, HUDCO had allotted three blocks
to CPSUs/States Government Institutions. The remaining nine
blocks are vacant as the allotment of these blocks to M/s M.S.
Shoes Ltd., had to be cancelled for non-payment of requisite
amount by the firm and subsequently the matter in sub-judice in the
Delhi High Court, the next date of hearing is 20/2/2008.

In this connection, it is stated that it was decided with the

approval of Secretary (UD) that instead of renting out these guest
house block to individual organizations, these blocks would be
utilized by the Directorate of Estates for use by various
commissions/offices keeping in view the great paucity of space for
General Pool Office Accommodation (GPOA). It was also decided
that HUDCO should be asked to hand over possession of the vacant
guesthouses to the CPWD for maintenance while the Directorate of
Estates would utilize them for the purpose of Office
accommodation. However, until date HUDCO has not hand over
the possession of the vacant guest houses to CPWD for
maintenance stating that their Board has decided the matter of
handing over possession of the nine vacant Guest Houses Blocks
can be decided only after the recommendations are finalized by the
Committee (as constituted by MOUD to examine the various issued
related to Andrewsganj project terms and conditions of allotment
and decision taken by the Govt. for the project as a whole.)
 In view of the position explained above it is for order
whether we may reject the allotment application of NTRO, or keep
pending till final outcome of the Court case or transfer of
possession from HUDCO to CPWD/Directorate of Estates.
 Allotment to NTRO

Reference note on pre-page:-

The recommendation of Review Committee has been

examined in the linked filed from page35/ante (F/A) onwards. The
Review Committee has suggested the following three options:-

OPTION I Payment of value of land and conversion

charges in respect of Community Centre by HUDCO to
L&DO at the rate of notified land rates of 1998 + 100%
thereof. Under this option, the amount payable by HUDCO
to L&DO comes to Rs.180.39 crores after adjusting the cost
incurred by HUDCO in respect of construction of GPRA and
other Government directed work, (Cost land per sq. meter =
RS. 53.36/-, area of community centre in sq. meter = 71224.74
Expenditure on GPRA = Rs. 168.99crores)

Option-II Payment of value of land in respect of hotel site

and 9 Guest House Blocks at the rate of notified land rates of
1998 + 100% thereof while rest of the land in Community
Centre valued at notified land rates of 1990( 23rd July, 1990).
Under this option the amount payable by HUDCO to L&DO
come to Rs. 82.61 crores after adjusting the cost incurred by
HUDCO in respect of construction of GPRA and other
Government directed works, (cost per sq. meter @ 1990
rates= Rs.19260/-, area of hotel site + 9 guest house block =
42550 sq. meter, rest of the community centre = 28674.74 sq.
meter)

Option -III Payment of value of land in respect of hotel

site at the rate of notified land rates of 1998 + 100% thereof while
rest of the land in Community Centre valued at notified land
rates of 1990. Under this option the amount payable by HUDCO
to L&DO comes to Rs. 22.76 crores after adjusting the cost
incurred by HUDCO in respect of construction of GPRA and
other Government directed works( area of hotel site = 25000 sq.
meter, cost of hotel site area = 133.40 crores; area of rest of
community centre = 46224.74 sq. meter, cost of rest of
community centre = Rs. 89.03 crores, total cost of community
centre land = Rs. 222.43 crores. Expenditure on GPRA = 211.07,
freehold conversion charges @ 6% of the land cost =Rs.11.40
crores. Balance const Rs. 11.36 crores

2. A meeting was held under Chairmanship of Secretary (UD)

on 13/7/2006 to discuss the report of Review Committee and
it had been decided that option III along with concomittent
conditions (enumerated in pare 7 of the report) may be
adopted as it was acceptable to all concerned inducing
HUDCO. Option III provides for land value calculated at
L&DO's notified rates i.e. Rs. 22.76 crores. The details of
calculations may be seen at table at p 104/c of linked file
(F/B). The decision therefore is for transfer of land to the
 HUDCO on freehold basis subject to the conditions
enumerated in para 7 of the report.
3. The file was then sent to Internal Finance Division. On
their advice the file was sent to Ministry of Finance,
Department of Expenditure. The comments of Department
of Expenditure may be seen at page 40-41/ante (F/C) of the
linked filed. They have opined that appropriate view on the
issue may be taken by Ministry of Urban Development on
the merit of the case, after seeking legal opinion, looking
into the fact that there are several legal/arbitration
proceedings pending in the matter. JS (DL) asked to
examine whether we, in the ministry, will be able to settle
the matter now. This matter has been discussed with officer
of HUDCO on 13/9/07 (page 45/ante of linked file) in the
chamber of L&DO. The officers of HUDCO were of the
view that various problem of sub-letting etc being faced by
them in respect of properties of Andrews Ganj project, may
be easily resolved if the proposal for conversion of 17.6
acres of land of community centre at Andrews Ganj were to
be approved by the Ministry.
4. `The observations of Review Committee 8regarding General
Pool Residential Accommodation are reproduced as under:-

"The Committee also notes of the fact that the primary

objective of the project was to construct General Pool
Residential Accommodation (GPRA) by using "land as
resource" and without drawing funds from the
Government exchequer namely, the Consolidated Fund
of India. To this end, HUDCO has informed that the
following GPRA units have been constructed and
handed over to Directorate of Estates:-

Type - VI 60 Units
Type- V 200 Units
Type -IV (Special) 314 units
Type -IV 24 Units
_________ _____
Total __598_Units

In addition, 319 units of transit accommodation

are under construction and are likely to be handed over
by June 2006 to the Directorate of Estates. The
construction is being done by CPWD with the funds
being released by HUDCO for this purpose. Further,
259 servant quarters were also constructed and handed
over to Directorate o f Estates along with Type VI and
Type V units. In all 1176 units of accommodation
including the servant quarters, have been considered
by virtue of this project."

GNERAL POOL OFFICE ACCOMMODATION

5. So far as the issue regarding General Pool Office
Accommodation is concerned there is no
observation/recommendations given by the Review Committee. The
issue of General Pool Office Accommodation has been considered on
separate file as linked below. HUDCO informed that 9 guest house
blocks (A1, A3, A4, B1 TO B6) were constructed by them as a part
of Andrews Ganj Project and were lying vacant unutilized informed
in 2005. HUDCO indicated therein that Government had permitted
licensing of the same to Government institution/PSUs or for the use
of HUDCO on temporary basis and that, the license should be
terminated on a notice of 3 months. It was examined in Ministry of
Urban Development and was decided that Directorate of Estates
could utilize these guest houses for use as Government Office
(G.P.O.A) as there is huge unsatisfied demand for such
accommodation. Accordingly, on 6/1/2/2005 the HUDCO was
requested to handover the possession of these guesthouses to CPWD
for their maintenance and that Dte. of Estates shall allot the same
for their use as office accommodation to various Government
department/offices (F/C). In response to these directions HUDCO
informed on 24/1/2006 that the matter was placed before the Board
of Directors of HUDCO on 21/12/2005 wherein the Board had
resolved that the matter of handing over of possession of 9 vacant
guest house blocks can be decided only after the recommdations are
finalized by Review Committee and decision taken by Government
for the project as whole (F/D). Again on 20/1/2006 (F/E) the HUDCO
was requested to handover the possession of the guest houses to Ex.
Engineer, CPWD immediately on the Committee of Ministry of
Urban Development had decided that the guest houses blocks be
taken from the HUDCO and further allotment may be made. Also
that the issues relating to Andrews Ganj Project including terms and
conditions of allotment may be implemented later as per decision of
the Committee. On 22/3/2006 the HUDCO re-iterated their earlier
stand stating that the project needs to be seen in its entirety and an
exclusive decisions on the guest houses alone may not be prudent at
that stage.

6.. The recommendations of the Review Committee have been

examined as explained herein before and Secretary (UD) has
decided to accept option No.3, the allotment of guest houses at
present may be done by HUDCO or HUDCO may be directed to
wait till final decision is taken by this Ministry after decision on
Cabinet note. A draft Cabinet note is already under preparation
and will be submitted next week. The recommendations of Review
Committee have been processed on the relevant file. Submitted for
orders regarding request of the N.TR.O.
 ALLOTMENT TO CIC

The request has been received from Shri V. Roy, Chief

(Works & Disposal) on 26/3/2007 regarding g allotment of space to
M/s Central Information Commission in August Kranti Bhavan,
Plot No.25, Bhikaji Cama Place, New Delhi- approval of Rent
Agreement format.

The recommendation of Review Committee has been

examined (F/A) onwards. The Review Committee has suggested the
following three options:-

1. OPTION 1 Payment of value of land and conversion

charges in respect of Community Centre by HUDCO to
L&DO at the rate of notified land rates of 1998 + 100%
thereof. Under this option, the amount payable by HUDCO
to L&DO comes to Rs.180.39 crores after adjusting the cost
incurred by HUDCO in respect of construction of GPRA and
other Government directed work.

2. Option-II Payment of value of land in respect of hotel site

and 9 Guest House Blocks at the rate of notified land rates of
1998 + 100% thereof while rest of the land in Community
Centre valued at notified land rates of 1990. Under this
option the amount payable by HUDCO to L&DO come to Rs.
82.61 crores after adjusting the cost incurred by DUCO in
respect of construction of GPRA and other Government
directed works.

3. Option -III Payment of value of land in respect of hotel

site at the rate of notified land rates of 1998 + 100% thereof
while rest of the land in Community Centre valued at notified
land rates of 1990. Under this option the amount payable by
HUDCO to L&DO comes to Rs. 22.76 crores after adjusting
the cost incurred by HUDCO in respect of construction of
GPRA and other Government directed works

A meeting was held under Chairmanship of Secretary (UD) on

13/7/2006 to discuss the report of Review Committee and it had been
decided that option III along with concomitment conditions
(enumerated in pare 7 of the report) may be adopted as it was
acceptable to all concerned inducing HUDCO. Option III provides
for land value calculated at L&DO's notified rates i.e. Rs. 22.76
crores. The details of calculations may be seen at table (F/B). The
decision therefore is for transfer of land to the HUDCO on freehold
basis subject to the conditions enumerated in para 7 of the report.
The file was then sent to Internal Finance Division. On their
advised, the file was sent to Ministry of Finance, Department of
Expenditure. The comments of Department of Expenditure may be
seen at page 40-41/ante (F/C) of the linked filed. They have opined
that appropriate view on the issue may be taken by Ministry of
Urban Development on the merit of the case, after seeking legal
opinion, looking into fact that there are several legal/arbitration
proceedings pending in the matter. JS(DL) asked to examine
whether we, in the ministry, will be able to settle the matter now.
This matter has been discussed with officer of HUDCO on 13/9/07
(page 45/ante of linked file) in the chamber of L&DO. The meeting
officer of HUDCO were of view that various problem of sub-letting
etc being faced by them in respect of properties of Andrews Ganj
project and be easily resolved if the proposal for conversion of 17.6
acres of land at Andrews Ganj were to be approved by the Ministry.
The observations of Review Committee regarding General Pool
Residential Accommodation are reproduced as under:-

"The Committee also notes of the fact that the primary objective
of the project was to construct General Pool Residential
Accommodation (GPRA) NY USISNG "la d as resource" and
without drawing funds from the Government exchequer namely, the
Consolidated Fund of India. To this end, HUDCO has informed
that the following GPRA units have been constructed and handed
over to Directorate of Estates:-

Type - VI 60 Units
Type- V 200 Units
Type -IV (Special) 314 units
Type -IV 24 Units
_________
Total __598_Units

In addition, 319 units of transit accommodation are under

construction and are likely to be handed over by June 2006 to the
Directorate of Estates. The construction is being done by CPWD
with the funds being released by HUDCO for this purpose. Further,
259 servant quarters were also constructed and handed over to
Directorate o f Estates along with Type VI and Type V units. In all
1176 units of accommodation including the servant quarters, have
been considered by virtue of this project."

2. The issue regarding General Pool Office Accommodation is

concerned there is no observation/recommendations given by the
Review Committee. The issue of General Pool Office
Accommodation has been considered on separate file as linked
below. HUDCO informed that 9 guest house blocks (A1, A3, A4, B1
TO B6) were constructed by them as a part of Andrews Ganj
Project and were lying vacant unutilized informed in 2005. HUDCO
indicated therein that Government had permitted licensing of the
same to Government institution/PSUs or for the use of HUDCO on
temporary basis and that, the license should be terminated on a
notice of 3 months. It was examined in Ministry of Urban
Development and was decided that Directorate of Estates could
utilize these guest houses for use as Government Office (G.P.O.A) as
there is a use of unsatisfied demand for such accommodation.
Accordingly, on 6/1/2/2005 the HUDCO was requested to handover
the possession of these guesthouses to CPWD for their maintance
and that Dte. of Estates shall allot the same for their use as office
accommodation to various Government department/offices (F/D).
In response to these directions HUDCO informed on 24/1/2006 that
the matter was placed before the Board of Directors of HUDCO on
21/12/2005 wherein the Board had resolved that the matter of
handing over of possession of 9 vacant guest house blocks can be
decided only after the recommdations are finalized by Review
Committee and decision taken by Government for the project as
whole (F/E). On 20/1/2006 (F/F) the HUDCO was requested to
handover the possession of the guest houses to Ex. Engineer, CPWD
immediately on the Committee of Ministry of Urban Development
had decided that the guest houses blocks taken from the HUDCO
and further allotment may be made. Also that the issues relating to
Andrews Ganj Project including terms and conditions of allotment
may be implemented later as per decision of the Committee. On
22/3/2006 the HUDCO re-iterated their earlier stand stating that the
project needs to be seen in its anterity and
an exclusive decisions on the guest houses alone may not be prudent
at that stage.

3. The recommendations of Review Committee have been

examined as explained herein before and Secretary (UD) has
decided to accept option No.3, the allotment of guest houses at
present may done by HUDCO or HUDCO may be directed to wait
till final decision is taken by this Ministry after decision on Cabinet
note. A draft Cabinet note is already under preparation and will be
submitted next week.

Allotment of guest houses to NTRO by HUDCO

DY No. R.P. Cell/86 dated 7/2/2008

The above said FR is a DO letter written by Shri S. Prabhu,

I.A.A.S, Controller of Administration, Office of National Security
Advisor (Prime Minister's office) addressed to Shri S.K.
Choudhary, Ex. Director (W&C), HUDCO and copy forwarded to
the Land & Development Officer, Ministry of Urban Development.
In his letter he has referred to his earlier D.O. letter dated 2/11/2007
and 6-7/12/2007 regarding allotment of 9 blocks of hostel cum
Office accommodation in HUDCO place to NTRO. He has further
stated that NTRO is in urgent need of office accommodation.
 Notes from page 1/ante onwards may be perused. HUDCO
has constructed 12 blocks of Guest Houses at the Community
Centre. Out of these 12 blocks, HUDCO had allotted three blocks
to CPSUs/States Government Institutions. The remaining nine
blocks are vacant as the allotment of these blocks to M/s M.S.
Shoes Ltd., had to be cancelled for non-payment of requisite
amount by the firm and subsequently the matter in sub-judice in the
Delhi High Court, the next date of hearing is 20/2/2008.

In this connection, it is stated that it was decided with the

approval of Secretary (UD) that instead of renting out these guest
house block to individual organizations, these blocks would be
utilized by the Directorate of Estates for use by various
commissions/offices keeping in view the great paucity of space for
General Pool Office Accommodation (GPOA). It was also decided
that HUDCO should be asked to hand over possession of the vacant
guesthouses to the CPWD for maintenance while the Directorate of
Estates would utilize them for the purpose of Office
accommodation. However, until date HUDCO has not hand over
the possession of the vacant guest houses to CPWD for
maintenance stating that their Board has decided the matter of
handing over possession of the nine vacant Guest Houses Blocks
can be decided only after the recommendations are finalized by the
Committee (as constituted by MOUD to examine the various issued
related to Andrewsganj project terms and conditions of allotment
and decision taken by the Govt. for the project as a whole.)

In view of the position explained above it is for order

whether we may reject the allotment application of NTRO, or keep
pending till final outcome of the Court case or transfer of
possession from HUDCO to CPWD/Directorate of Estates.

J-13026/04/08-L&DO
-16-

Dy.No.R.P.Cell/165 dated 17/3/08 - FR

e said FR is a letter received from Shri K.L. Dhingra, CMO,
HUDCO regarding the review of HUDCO Project at Andrews
Ganj, New Delhi. He informed that the Secretary had been
attended the meeting at Chandigarh on 14/3/2008, which he had
also been directed to attend.

Further he has stated that issues involved having financial

implications for HUDCO project at Andrews Ganj and he has also
interested to attend the same. He has requested to postpone the
meeting.

Keeping in view, file is re-submitted for fixing of date and time for
meeting to review the HUDCO project at Andrrews GAnj, New
Delhi.