Friday, June 29, 2007

How can anyone mortgage a lake?

How can anyone mortgage a lake?

Bangalore: Lake mortgage made news on Wednesday too when the joint legislature committee inquiring into land encroachments went on an inspection.
This case came to light when the Lok Ayukta launched a preliminary investigation this week.
A private developer had mortgaged Byrasandra Lake to a private bank as guarantee for a loan to build apartments. MLA A T Ramaswamy, who is heading the joint legislature committee, described the mortgage not merely an encroachment or grabbing, but as “dacoity.’’
“How is it possible to mortgage a lake? Isn’t it public property? What was the BBMP doing? It is obvious that different departments and officials are involved. How else could it have happened?’’ Ramaswamy asked.
The private developers — Siera Developers — had presented fake documents of the lake to Indian Overseas Bank, Jayanagar, as guarantee for a loan of about Rs 5 crore to build apartments. The bank duly extended the loan.
But when the developers did not return the loan, the bank got worried and went in for an auction before the Debt Recovery Tribunal.
Interestingly, the bank produced the same fake documents during the auction and sold off the lake for Rs 7.6 crore to a bidder whose identity is not known. “First, a private developer uses the documents to mortgage the lake and then a private bank uses the same to sell it off. Worse, a tribunal allows auction not knowing anything about the authenticity of the documents. How is all this possible? This is all very fishy,’’ Ramaswamy said.
The government is at fault on another count too. A 1986 Forest Department order slated the lake for development of a tree park — so there was no question of apartments coming up — which meant that the entire transaction involving the bank and the developer was illegal.
And a 1992 high court order had stayed all human habitation on the lake. “Of all the parties, why should the BBMP have been the first to violate this order? They have tried to close the lake by building a bund. How can a government agency itself do this, let alone private parties trading off the lake itself ?’’ Ramaswamy asked.
The BBMP spent Rs 1.2 crore to build a bund on the lake as it was not aware of the court order.
The lake area, spread over 15 acres and 11 guntas, is valued at Rs 200 crore, while it was bought and sold for less than Rs 8 crore by the private developer and bank!


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