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8 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch of it; that Managing Director is nominated by the Government from the IAS officers from the rank of Principal Secretary level officers and the other directors of APIIC Limited are Principal Secretary (Finance), Principal Secretary (Industries), Principal Secretary (Roads & Buildings), Member Secretary (Pollution Control Board) apart from other non-official members; that as many as 105 proposals of SEZ were sent for approval of Government of India of which 74 were notified; that in the SEZ M/s. Aurobindo Pharma Limited and M/s. Hetero Drugs Limited applied for allotment as anchor clients; that other Pharma companies applied for lease too; that in Jadcherla about 950 acres was for SEZ; that the application for allotment of land was received on 17.11.2006 from M/s Hetero Drugs Limited and M/s. Aurobindo Pharma Limited and on the same day 'In Principle' offer letter was issued to them as the 10% of EMD was also paid by them. When enquired about development of Green Industrial Park / SEZ at Jadcherla, he stated that in Jadcherla is a backward area in Mahaboob Nagar District; that APIIC acquired 955 acre of land in 2004-05 under the Industrial Growth Centre Scheme of Government of India; that in collaboration with the Green Business Centre of Confederation of Indian Industries (CII), there was a proposal to locate eco-friendly non-polluting green industry in Jadcherla Area and it was called Green Industrial Park by APIIC; that, as the land was lying unutilized for a long time, a proposal was mooted by the Bulk 9 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch Drugs Manufacturers Association (BDMA) to APIIC to create an Industrial cluster for promoting export oriented non- polluting pharmaceutical formulation industry by developing a formulation SEZ at Jadcherla; that, accordingly, the proposal was sent by APPIC with the approval of the state Government for notification of SEZ by the Ministry of Commerce, Government of India; that Hyderabad, being the Bulk Drugs Manufacturing Hub of the country, there was a possibility of attracting large scale investments in this sector, thereby generating employment in this backward district of Mahaboob Nagar known for migration of labour and hence, such a proposal was considered appropriate and accordingly action was taken by APIIC to initiate the formalities for SEZ notification; that 954 acre land was earmarked from Green Industrial Park and out of which 250 acre of land for the SEZ in Jadcherla was acquired under the Land Acquisition Act at a rate of Rs.50,000/- per acre in 2004-05 by APIIC and the development of Infrastructure was yet to be started for SEZ when land was allotted to the first allottees. When enquired about procedure to be followed for allotment of lands by APIIC Limited to entrepreneurs either on outright sale basis or on lease basis along with relevant guidelines issued by Government of AP / APLLIC Limited, Shri Acharya stated that, normally, the allotments made by APIIC in Industrial Parks are on freehold basis wherein the land cost is collected upfront and after implementation of the project, Sale Deed is 10 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch registered in the name of the allottee; that, in case of SEZs, this was not applicable; that as per Section 51(1) of SEZ Act, 2005, the provisions of the SEZ Act supersede all other acts and rules as the SEZ land cannot be allotted on freehold basis and it should be with the Developer; that in the present case, APIIC is the Developer and hence APIIC allotment regulations had to be modified accordingly; that for SEZs, it was decided to adopt the practice of collecting a lease premium initially to be paid Upfront by the Lessee and Annual Lease Rental thereon for a period of 33 years and this procedure was unanimously decided by the Board of APIIC Limited. when enquired about the procedure of fixation of price for allotment of lands in various industrial areas developed by APIIC Limited, Shri Acharya stated that the price fixation committee comprising senior officers of APIIC Limited headed by the Executive Director, is an internal committee appointed by the Managing Director of APIIC, to recommend benchmarks for price fixation, duly considering land cost, development cost of external & internal Infrastructure such as approach road, internal roads, water & power supply, effluent disposal, compound wall, etc.; that Price Fixation Committee is only a recommending body, the Board of APIIC has delegated full powers to the Managing Director regarding fixation of price for sale of land in the very first resolution passed in January, 1974; that more often than not, the Managing Director uses the price recommended 11 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch by price fixation committee as an indicative price and takes a decision about the price keeping in view several factors such as current state of development of internal/external infrastructure, importance of investment and the possibility of attracting further investments to the cluster; that as per the normal practice, in the rate recommended by price fixation committee, the land cost accounts for 30% and development cost of infrastructure contributes to 70% of the price fixed; that the price fixation committee recommended the rate of Rs.15 Lakh Per Acre in August 2006 in respect of Green Industrial Park where land can be allotted on Out-right sale or freehold basis and not for the formulation SEZ in which land can be allotted only on lease basis as per the SEZ Act, 2005; that for SEZs, it was decided to adopt the practice of collecting a lease premium initially to be paid upfront by the lessee and annual lease rental thereon for a period of 33 years and that this system was applicable to the allotments made to M/s Hetero Drugs Limited and M/s Aurubindo Pharma Limited at Jadcherla and the price recommended by the price fixation committee for the Green Industrial Park was not at all relevant or applicable; that the Plot Allotment Committee headed by the Managing Director takes a decision regarding allotment of Plots for Industrial Parks located in and around Hyderabad; that normally the allotment committee takes a decision considering the importance of the project, etc., but, this was not applicable to SEZs. When 12 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch enquired about as to whether any notification/ advertisement was published in newspapers regarding allotment of lands in Jadcherla, Shri Acharya stated that the development of SEZ was highlighted by APIIC in the advertisements issued on the occasion of the foundation day and other promotional programmes on SEZs and sufficient awareness was created all over the country about the new SEZ on formulation, first of its kind in India ; that BDMA also publicized it among its members asking them to seek allotment in this SEZ; that the applications of M/s Hetero Drugs Limited, M/s Aurobindo Pharma Limited were the first applications received for allotment of land by APIIC Limited duly fulfilling all the requisite conditions and hence they were treated as anchor investors; that the application of M/s Lee Pharma which was received afterwards was not accompanied by the mandatory Earnst Money Deposit (EMD) and even then, a decision was taken to offer the land at a lease premium of Rs.10 Lakh per Acre duly treating as early bird incentive; that the required payment was not made by M/s Lee Pharma and thus allotment was not finalised for the said company and other Pharma companies such as M/s Glochem applied for allotment apart from other companies; that the Plot Allotment Committee did not look into allotments in SEZs and thus there was no need to place the allotments to plot allotment Committee for the allotment of lands to M/s Hetero Drugs Limited and M/s Aurobindo Pharma Limited. When enquired 13 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch about basis for allotment of land of 75 Acre each to M/s Hetero Drugs Limited and M/s Aurobindo Pharma Limited without any justification for such huge lands, Shri Acharya stated that based on the investment plans presented by M/s Hetero Drugs Limited and M/s Aurobindo Pharma Limited, wherein they planned to invest around Rs.500 Crore each with global tie up, they had requested to allot 125 acre of land each in the 250 acre SEZ at Jadcherla; that, in order to maximize returns to APIIC by allotting to other investors in future at higher rate, a decision was taken to restrict the allotment to 75 acre of land to each which was quite justified in view of the environmental requirements of retaining open area, etc. When enquired about various steps taken in safeguarding the interest of M/s APIIC Limited as VC & MD of M/s APIIC Limited in allotment of land to M/s Hetero Drugs Limited and M/s Aurobindo Pharma Limited and transfer of lands to M/s Trident Life Sciences in SEZ, Jadcherla, Shri Acharya stated that all steps were taken to protect the interest of APIIC Limited and land leased could be resumed as per lease conditions if the lessee failed to implement the project. When enquired the persons who gave directions/suggestions for fixing the land cost @ Rs. 7 lakh per acre for allotment to M/s Hetero Drugs Limited and M/s Aurobindo Pharma Limited, Shri Acharya stated that based on the prevailing status of the development of infrastructure and the price of land available in the surrounding areas, the 14 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch development wing of the office arrived at a reasonable lease the promoter of the original company, he marked their application to process accordingly; that, subsequently, when the proposal was put up after due scrutiny by the development wing, he cited the recent precedent M/s Zenotech in Bio Tech Park and asked to collect nominal processing fee, as per the practice followed by APIIC Limited, as per Circular No.347/DW/206 dated 29.06.2006 issued by APIIC wherein it was prescribed that land can be transferred within the family members or to subsidiaries by colleting nominal process fee; that, however, if the applicant had suppressed any facts or failed to submit any documents to the Zonal Manager who was asked by the Head Office to scrutinize the request before transfer of land, it is the responsibility of the Zonal Manager concerned (Shri YVL Prasad) to verify the same and in no way the Head Office or Managing Director is responsible for any lapse in this regard and that M/s Trident Life Sciences Limited was subsequently merged in M/s Aurobindo Pharma Limited. When enquired specifically about the remarks viz. 'Pl. process for change' on representation dated 02.11.2006 of Shri K Nityananda Reddy without obtaining any proof whether the proposed company M/s Trident Life Sciences Limited is a wholly owned subsidiary of M/s Aurobindo Pharma Limited or not", Shri Acharya stated that the role of the Head Office is to take a in- principle decision based on the application and the Zonal 15 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch manager is asked to scrutinize the documents before transfer of land. Shri Acharya finally stated that he does not have any idea about the investments made by M/s Hetero Drugs Limited/M/s Hetero Labs Limited in the group companies of Shri Y.S Jagan Mohan Reddy viz., M/s Janani Infrastrcture Private Limited in November, 2006 and December, 2006 till CBI registered the case."

"33. Shri B.P. Acharya, IAS, in his statement dated 03.08.2015 given under Section 50 (2) & (3) of PMLA, 2002, inter-alia stated that a decision was taken by the Government to develop IT SEZs near the new International Airport at Shamshabad and accordingly a proposal was sent by the APIIC to Government of India for in-principle approval to develop IT SEZ on 1582.28 acres available in Mamidipally and Raviryala Villages, Saroor Nagar Mandal, Ranga Reddy District; that in the 34th meeting of Consultative Committee on IT Industry (CCITI) held on 21.12.2005, under the Chairman ship of Principal Secretary, IT&C Department, which was not attended by him, a decision was taken to identify M/s Indu Projects and 3 other developers to develop IT SEZ in that area; that CCITI is a high level coordination committee constituted since 1999 onwards, that is headed by Principal Secretary, IT&C Department, to decide different issues relating to IT Industry, including coordination with

24 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch various departments to ensure rapid growth of IT Industry in the state; that normally, APIIC is represented in the meeting by the Chief Engineer and Project Manager, Infocity Project unit, in APIIC; that allotments to IT developers were decided by CCITI; that the members of CCITI include the Principal Secretary (IT&C), Secretaries of other Government departments like Finance, Revenue, etc., including representative from APIIC; that based on the decision taken by CCITI on 21.12.2005 and the application forwarded by the Government to APIIC, the request for allotment for 250 acres was processed; that the developer and the extent of land to be allotted were decided by the Government and APIIC had no direct role in the matter; that in a meeting conducted by the then Late Dr. Y.S. Raja Sekhar Reddy, Chief Minister of Andhra Pradesh, the decision was taken that, "as regards the cost of land for allotment In Hardware park area, VC & MD or APIIC seated that the present rate being charged by APIIC is RS.26 lakh Per acre (for developed plots). Considering the fact that Internal infrastructure need not be developed by APIIC for allotment to be made to developers and major companies where more than 100 acres of land allotted, it was decided to charge a rate of Rs.20 Lakh per acre for the present"; that, as per Clause 1.3 of the MOU entered into between M/S Indu Tech Zone private Limited and APIIC, as approved by the Council of Ministers, it was stipulated that the Government of Andhra Pradesh and APIIC agreed to transfer, vest and 25 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch convey the project land to the company as per provisions, terms and conditions and rules & regulations of Government of India, SEZ Act, 2005, as applicable; that as per Clause 2 of the MoU, the terms for transfer of land shall be subject to the provisions of SEZ Act, 2005 and rules thereon; that Clause 2.14 Of the MoU that the developer shall obtain all clearances under SEZ rules, which would be facilitated by the Government; that the very purpose of taking of the project was to facilitate notifications of IT SEZs near the new International Airport so as to attract investments and the Government as well as its nodal agency (APIIC) were expected to achieve SEZ status for this area as early as possible; that Rule 7 (1) of the Government of India, SEZ rules, stipulates that the developer shall furnish a certificate to Government of India from the state government or its authorised agency stating that the developers have legal possession and irrevocable rights to develop the said area; that the project could have been a non starter and the very purpose of MoU would have been defeated without transferring the land to developer; that Clause 5(3) of the MoU regarding Sale Deed for the project land has to be interpreted with reference to Clauses 1.3 and 2.14 of the MoU that make the terms of transfer of land subject to SEZ Rules and also the overriding effect of the SEZ Act, 2005 under Section 51; the proposal of M/s Indu Tech Zone Private Limited for permission for investment in the project was scrutinised by the technical 26 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch staff of APIIC under the guidance of Shri D. Pardhasaradhi Rao, Project Manager, IPU, APIIC and it was certified that it would not amount to any change in the associates of the company as per the MoU with the Government; that based on the above, the Executive Director and Project Manager, IPU categorically clarified that the agreement did not violate any terms of the MoU; that based on the information furnished to him, he did not see any valid ground to disagree with the proposal; that as an abundant precaution, he specifically asked to the staff concerned to mark a copy of the NOC to be given by APIIC to the Government, so as to keep IT&C Department informed about the decision taken; that a letter was issued by the Project Manager, IPU on 17.01.2008 duly endorsing a copy to Secretary, IT&C department; that based on the proposal received from M/S Indu Tech Zone Private Limited, to assign developing rights of 100 acres to M/S SPR Properties Private Limited, an associate company of M/S Indu Tech Zone Private Limited and with common management control, the connected file was scrutinised by the technical staff of IPU, APIIC and its head the Project Manager, scrutinised the proposal and certified that the above proposal was in conformity with Clause 12 of the sale agreement executed, which was as per the Clause 2.7 of the MoU with the Government; that he did not find any valid ground to reject the proposal; that the request only to accord permission to assign development rights of a part of the project land to 27 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch an associate company, while the entire land continued to be allotted/hold by the developer as per the terms of the MoU with Government and that the obligations of the developer as per the MoU were not compromised in any manner."

28 Dr.SSRB,J Crl.P.No.3988 of 2016 & batch Cabinet Decision and the conditions of the MOU approved by the Cabinet.

Shri B.P Acharya also permitted to register land of 250 Acres in the name of M/s Indu Tech Zone L.imited before the implementation of the Project against the norms of APIIC Limited and also permitted to transfer of 100 acres of land from M/s Indu Techzone Private Limited to M/s SPR Properties Private Limited by violating the conditions of MOU. Shri B.P Acharya also willfully ignored the facts such as M/s Indu Projects Limited did not meet eligibility criteria for allotment of lands, SEZ status, etc., on its own and without any representation from other consortium members forwarded the application of M/s Indu Tech Zone Limited for granting SEZ status notification to the Secretary, IT&C department for onward submission to the Board of Approvals. He also permitted to enter into Sale Agreement cum GPA without obtaining agreement by consortium members of M/s Indu Projects Limited with M/s Indu Tech Zone Limited by APIIC Limited.