Case of fence eating crops: CAG on Adarsh Housing Scam

Holding that Adarsh Housing scam was a classic case of fence eating the crops and "consistent failure" of Centre and Maharashtra government, the CAG today said rules were bent to benefit relatives of politicians, public servants and senior service officers including former army chiefs Gen Deepak Kapoor and NC Vij.

In a report tabled in Lok Sabha today, the government auditor named two former chief ministers of Maharashtra Ashok Chavan and Sushil Kumar Shinde as part of the process of giving clearances to the Society's project and came down heavily on concessions granted by the Maharashtra government.

Recommending punitive action against those responsible, the CAG disagreed with suggestions for razing the 31-storeyed building but favouring central government acquiring it for housing purpose.

"The entire episode of the Adarsh Cooperative Housing Society, Mumbai, is a remarkable case study. It is a classic example of fence eating the crops; of those holding fiduciary responsibility betraying the same for personal aggrandisement," the comptroller and auditor general said on the controversial project that cost Chavan his job as chief minister after his relatives were found to be beneficiaries.

The CAG said, "It reflects a consistent failure across departments, state and central governments and all officialdom. The case would perhaps have no parallel in the country where all agencies have pooled their strengths not for a common national cause but for personal benefit."

The auditor said, "It is an example of how a group of select and powerful elite could collude to subvert rules and regulations for personal benefit."

The report said in the process of seeking apartments in a prime location for themselves, "they have resorted to falsification of records, suppression of facts and abundantly used the noble cause of welfare of servicemen and their widows."

The CAG also targeted the Union Environment Ministry and the Maharashtra Urban Development Ministry saying indications were there that procedures were skirted to enable grant of No-Objection Certificate (NOC) to the Society.

The CAG said welfare of servicemen and ex-servicemen was used as a ruse to grab the piece of public land for the Society.

It said the entire episode reveals "glaring examples of dereliction of duty and severe lack of probity and accountability which needs to be seriously investigated.

"Action of the Local Military Authorities acting in collusion with Defence Estates Organisation (DEO) enabled misappropriation of prime government land in Mumbai for the benefit of a select few," it said.

The report said these officials were "responsible for protection of defence land and they betrayed the trust reposed in them for the personal benefit of a number of favoured individuals- all of whom are highly placed."

The auditor pointed out that the membership of the society kept expanding where "junior service and civilian officers went out of the society and many senior service officers and public servants became members."

"Notable among Service officers who became members of the society at a later date were two former army chiefs General NC Vij and Deepak Kapoor," it said.

The CAG said the two generals were allowed to be members of the Society as "one time special case" in view of their service to the army and special status in the society.

Other significant members who benefited include former Navy chief Admiral Madhavendra Singh, Lt Gen GS Sihota, Rear Admiral RP Suthan.

Highlighting the role of commanders of Mumbai-based Maharashtra, Goa and Gujarat Army Area, the report said all service officers except one who were in-charge there between February 1998 to July 2010, became beneficiaries as per the list of the members of the society.

The report said that on July 20, 2009, the then Chief Minister Ashok Chavan approved a proposal from the Society.

It said that, "at every stage, significant concessions were extended by the Maharashtra government in favour of the Society."

To highlight the importance given to the Adarsh Society proposals, the report said that letters written by a Joint Director of Government of India were being seen by the state chief minister in 2002.

The CAG said the land was in possession of the army but its title was never transferred to Defence Ministry.

The CAG said the Environment Ministry certainly "either failed or consciously decided" not to apprise the state government of the extant provisions of the Coastal Regulation Zone (CRZ) notifications.

The auditor noted that "not taking exemplary remedial and punitive action which would serve as a deterrent, would seriously corrode the credibility of the government and laxity in follow-up would encourage similar attempts in future.

"It is for Parliament and the government to ensure that public trust is not betrayed," it said.