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Controversial deal to redevelop Jaipur lake before apex court

The dispute over the way in which the Rajasthan government is seeking to re-develop Jaipur's historic Mansagar lake and its environs, may come up before the Supreme Court today, report Paranjoy Guha Thakurta and Patrick S L Ghose. 

Read Part I here: Jousting over Jaipur's jewel

The Story so far

The Mansagar lake, one of the largest manmade water bodies in India with a palace called Jal Mahal at the centre of it, a popular tourism and heritage spot in Jaipur, the capital of Rajasthan, was handed over for redevelopment to a private real estate firm as part of what was allegedly a "sweetheart deal". The area was given on a long lease of 99 years at what was considered to be very low lease rentals.

After various public interest litigations were filed against different agencies of the state government and the private developer, Jal Mahal Resorts Pvt Ltd, in May 2012, the Rajasthan high court ruled in favour of the petitioners that included Professor K P Sharma, a botanist, and two civil society groups. The high court's decision has been challenged in the Supreme Court of India which is expected to hear this case from October 30 onwards.

The court decides

The Jaipur bench of the high court of Rajasthan, comprising Chief Justice Arun Mishra and Justice Mahesh Bhagwati, examined and considered previous cases relating to the use of natural resources, especially those decided by the Supreme Court, while arriving at its judgment.

The bench acknowledged that an attempt had been made to mislead the court on the supposed clearance sanctioned by the Union ministry of environment and forests. The judges said the state had no right to include the 14.15 acres in the lease agreement since it fell within the lake, nor did it have the right to allow the lessee to reclaim that land, even if at their own expense.

In fact, the court went further and stated that ‘the entire 100 acres handed over to [JMR] was submerged in water…which was filled and compacted to raise its level from soil of lake itself for carving out this area of land in the lake basin to be used for tourism activities…No transfer of any part of the lake bed was permissible, much less construction on it…Thus, lease deed is illegal, void and in violation’ of earlier orders by the division bench of the court and the ‘principles enunciated by the apex court in various decisions’.

The court noted that there was not just a misrepresentation of facts but a distortion of these as well. Environmental clearance was not obtained from the MoEF before entering the lease agreement, nor was any approval or sanction obtained for a public-private partnership project as conceived, and that such a venture which included the lake bed itself violated the rights of ‘unalienable public property’.

The judges also found that the cost of the land was not determined at any point in time by the state government's department of tourism or the Rajasthan Tourism Development Corporation. ‘Thus, the action of virtually selling away property by way of lease for 99 years is in contravention’ of the Rajasthan Tourism, Disposal of Lands and Properties by DOT/RTDC Rules, 1997. ‘Flagrant violation of the rules cannot be permitted…and the [lease deed] is liable to be cancelled,’ the bench averred.

The court also ruled that since the Jaipur municipal corporation owned 52 per cent of the land being leased, ‘the property being held by the municipal corporation in public trust, it was not open to it to hand over to RTDC or Jal Mahal Resorts Pvt Ltd as that is also in contravention of the provisions of the Municipalities Act and the Rajasthan Municipalities (Disposal of Urban Land) Rules, 1974.’

Even if the state government authorities had to hand over the land to RTDC upon fulfilling written conditions, they should have realised a commercial reserve price by public auction. ‘The municipal corporation has failed to act in objective manner. Being custodian of the property, it was not open to the municipal corporation to transfer the land in any manner and the method which has been done to Department of Tourism or RTDC,’ the court stated.

A consequent ruling was that because of the JDA Act under which the JDA was co-owner of the land, ‘it was not open to (the) JDA to fritter away the valuable land without imposing proper terms and conditions’. The bench of Justices Mishra and Bhagwati went further to state that because of the conditions laid down in the Jaipur Master Plan 2011 and other associated factors, the contract ‘cannot be said to be sustainable’.

An adverse effect on the ecology was foreseen when the court decided that flagrant violation of rules under the Environment Protection Act, 1986, and the Wetlands (Conservation and Management) Rules, 2010, of the central government had also taken place. The judges were especially concerned since India is a signatory to the Ramsar Convention, an international agreement to identify and protect wetlands in every country.

(Tthe Ramsar Convention, formally called the Convention on Wetlands of International Importance, especially as Waterfowl Habitat, is an international treaty for the conservation and sustainable utilisation of wetlands, to prevent encroachment on such wetlands and to recognize the fundamental ecological, economic, cultural, scientific, and recreational value of such areas. The convention is named after the city of Ramsar, Iran, where it was signed in 1971.)

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Controversial deal to redevelop Jaipur lake before apex court

The Rajasthan high court was categorical in its ruling that all construction and commercial activities conceived for the project to re-develop the lake and its surrounding environs ‘are wholly illegal and unauthorised’.

It then stated that although the JMC and the JDA were the owners of the land held in public trust, they had not received any money from the private developer, JMR, which had paid money to a different state government body, that is, the RTDC, which was not the owner of the land. Thus, the court stated that the ‘execution of (the) lease and leave license agreement by RTDC in favour of [JMR] is without jurisdiction, illegal and void’.

The high court commented sharply: ‘It is shocking the conscience of the court how such a project could have been conceived at a throwaway price, particularly when there is a sale of leasehold rights for 99 years… It is not understandable that even (the proposed) seven-star hotel is to be constructed including other commercial venture(s) on (an) annual rental of Rs 2.52 crore, (the) amount is shocking and paltry…Virtually, land has been gifted free of cost and (the state government) authorities have bound themselves for maintaining (the) water lake, (and the) water resources for the benefit of the private sector developer’.

‘There was no rhyme or reason to even exempt payment of stamp duty’, the bench rued.

Moreover, the court pointed out that the winning bidder for the Jal Mahal Tourism Project, KGK Enterprises, was not eligible to bid in the first place since it was neither a private limited company or a public limited company. Nor did the firm have the ‘necessary and relevant experience in tourism projects’. The court said the bid should have been rejected and the firm should not have been allowed to participate in the bidding process at subsequent stages.

Here are more excerpts from the judgment:

‘This shows that the authorities were bent upon to totally ignore the interest of the public and they have grossly violated the public trust doctrine and failed to act in is mandate’.

‘…Action relating to tourism project appears to be on extraneous consideration, favouritism and against the public trust doctrine and violative of Articles 14, 21, 48A, 49 and 51A(g) of the Constitution of India’.

‘…The action of the state and its authorities suffers from the vice of arbitrariness and they have acted in breach of public trust doctrine and in flagrant violation of the provisions of.., various acts and rules…’

‘…We find the action of the respondents-authorities is not fair and free from the taint of unreasonableness’.

The court orders

The Rajasthan high court ‘reluctantly’ passed orders on May 17, 2012 declaring  ‘illegal and void’ the Mansagar Lake Precinct Lease Agreement dated November 22, 2005, giving 100 acres of land for 99 years to JMR and the Jal Mahal leave and licence agreement of November 22, 2012.

The court ordered that JMR, at its own cost, would have to restore the 100 acres to their original position and return it to the RTDC who in turn would give it back to the JDA, the JMC and the state government. The government authorities were ordered to remove the sedimentation and settling tanks built in the lake and realise these costs from JMR. The court called for an examination to restore the original position of the Nagtalai and the Brahampuri nallahs ‘in consultation’ with the MoEF.

The authorities were further directed to ‘monitor, maintain and re-fix boundaries of the Mansagar lake in its full original length, breadth and depth in consultation with MoEF and not to reduce the normal water level’.

The judges directed that all encroachments in the catchment area of the lake be removed immediately and the wall erected by JMR in the lake be dismantled with costs realised from the private firm.

As already mentioned, later in the same month (May 2012), the Rajasthan high court's judgment was stayed by the Supreme Court with the proviso that JMR not start any new construction but confine its work to ‘renovation and restoration’.

A bench of the apex court of the country comprising Justices Gyan Sudha Mishra and Pinaki Chandra Ghosh is likely to hear this case from Wednesday (October 30) onwards.

Concluded