RIL pays additional premium of INR 642 crore to MMRDA

The Reliance Industries Ltd (RIL) has accepted the claim of Mumbai Metropolitan Region Development Authority (MMRDA), and paid the additional premium of Rs 642 crore and furnished bank guarantee for premium of INR 885 crore.

The authority had sought the payment for not completing construction work on the two plots allotted to the company. The Mukesh Ambani controlled RIL had earlier contested MMRDA’s claims of additional premium.

A senior MMRDA official, who did not want to be named, said, “It is a major victory for MMRDA as Reliance, which was not accepting the fact that it has to pay an additional premium to us, has at least partially paid its dues. The rest of the dues have also been paid by the company in the form of bank guarantee, which is subject to realisation depending upon the ongoing case in the Bombay High Court.”

When contacted, RA Rajeev, Metropolitan Commissioner, MMRDA, confirmed that the dues had been paid by Reliance but directed this correspondent to his junior officials for details. However, phone calls and text message sent to RIL spokesperson remained unanswered at the time of going to press.

The Public Accounts Committee (PAC) of the state legislature in its report tabled in the monsoon session in 2017 had rapped MMRDA for inordinate delays in recovering additional premium from RIL and also showing ‘undue favouritism’ to RIL.

The MMRDA had asked the RIL to pay the ‘additional premium’ for not completing construction work on the two plots allotted to it at the Bandra Kurla Complex (BKC) in 2007. The PAC had directed the MMRDA to immediately initiate the process of recovering its dues and inform it within two months what action it has taken on the matter.

It also questioned the rationale behind handing over the matter to a judicial committee. “There was no need to form a committee under a retired judge of the Supreme Court to decide upon the issue of additional premium, which was to be recovered from Reliance Industries. After a decision to appoint such a committee was taken, there was an inordinate delay in constituting the committee,” the PAC report observed. The PAC also pointed out that the law, rules and policies in this regard are self-explanatory.

When the MMRDA has recovered additional premium from other companies in similar cases, why it decided to form a committee in the case of Reliance, the committee asked. The committee also wanted to know what were the factors that “arose suddenly” only in Reliance’s case for which a decision could not be made at the MMRDA, state government or advocate general’s level. “This seems to be a clear case of favouritism,” it said, adding that the MMRDA has applied different yardsticks when it comes to Reliance vis-a-vis other companies. “It clearly shows their intention of dilly-dallying on the issue,” the PAC alleged.

The MMRDA allotted Reliance Industries two plots in G block of the Bandra Kurla Complex in 2007 – one for a convention centre and another for corporate office. However, due to a court stay order, the RIL could not start any developmental activities till 2012. After the court stay was lifted, the RIL was expected to complete its work within four years but it failed to do so.

The PAC observed that in similar cases, the MMRDA has recovered the additional premium to the tune of INR 1,200 crore from other allotees which include government entities such as CBI, Income Tax, Maritime Board, government-owned companies such as Bank of India, Canara Bank, IDBI Bank and private companies like Sterlite Systems, Jet Airways and Tata Communications Ltd.

Source: Mumbai Mirror

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