Punjab Finance Department finds procedural deficiencies in GMADA’s Rs 40 crore waiver to a private builder

Punjab: Raising serious procedural and legal concerns, the Punjab Finance Department has strongly objected to how GMADA processed and approved the waiver of approximately ₹40 crore (including penalty interest) in favor of a private real estate agent, despite failing to provide basic amenities and an unobstructed site. A prime 1.13-acre site in Sector 62, Mohali, was allotted to Remigate Builders in 2015 (through an auction at a reserve price of ₹32.50 crore) for the construction of a food court. The builder paid 20% of the amount and the first installment of ₹9.87 crore, but the project could not proceed as GMADA allegedly failed to provide clear possession despite repeated requests. Instead of resolving the long-pending matter, GMADA issued a show-cause notice to the allottee for non-payment of the pending dues. The matter was later raised at the 34th GMADA Authority meeting, chaired by Chief Secretary KAP Sinha. A decision was taken to waive the penalty and postpone the allotment date from 2016 to 2022. However, in its communication to the GMADA Chief Administrator, the Finance Department has now questioned how the agenda items were placed before it at the 37th and 40th GMADA Authority meetings. The letter states that the matter has been pending since 2016. It states, “The Estate Officer/Competent Authority should have taken appropriate action in accordance with the law, based on the merits, within the stipulated time. However, no decision has been taken for the last 10 years.” Citing Sections 44 and 45 of the Punjab Regional and Town Planning and Development Act, 1995, the Finance Department reminded that the Estate Officer has the authority to impose penalties and decide the case on the merits after providing a reasonable opportunity of being heard. Under Section 45(6), the Chief Administrator has the power to hear appeals and confirm, modify, or amend the order passed by the Estate Officer. The letter states, “Therefore, this matter is not eligible to be placed before the GMADA Authority as an agenda item in both the 37th and 40th meetings and should be finalized on its own merits in accordance with law. Therefore, the decisions taken on these agendas cannot be confirmed and approved by the GMADA Authority, and the minutes of the meetings cannot be agreed to in this regard.” It further states that the agendas for both meetings were received “at the very last moment,” leaving little time to examine complex matters with significant financial implications. The department reiterated its earlier demand that agendas be sent at least seven days in advance. In general terms, the Finance Department has directed that the objections or objections raised during the meeting should be properly recorded in the minutes in future, and matters in which the Estate Officer, Chief Administrator or Secretary have the power to take decisions should not be placed before the entire authority without clearly mentioning the legal jurisdiction.