CAG report slams MTDC for favouring sports firm

The latest audit report prepared by the Accountant General (AG) has come down heavily on state tourism corporation for extending undue benefits to a well-known adventure sports company despite its unauthorised activities, encroachment of land and repeated dishonouring of cheques, which resulted in a loss of over Rs88 lakh to the state exchequer. AG reports to the Comptroller and Auditor General (CAG) of India.
The report claims that Maharashtra Tourism Development Corporation (MTDC) should have terminated its agreement with Drishti Adventure Sports Pvt Ltd and taken possession of the land, as directed by small cause court. The company is partly owned by actor Sunil Shetty.
However, company director Manoj Agiwal said his firm did everything as per the law and no discrepancies were made whatsoever with regards to the agreement. "All licence fees and delayed interests have been paid by us," Agiwal said.
As per the facts of the case, noted in the AG report, MTDC had, in 2001, handed over 500 sqm of land to the company to operate water sports and promote tourism for a period of 10 years. However, the lessee instead allegedly used the property for running a restaurant, renting it out for private celebrations, etc. Further, the lessee is also said to have encroached on adjacent 800 sqm, contrary to CRZ regulations, and was, therefore, liable to pay over Rs3.72 crore for its unauthorised use and as penalty. After the matter was brought to light by the city collector, the lease agreement was cancelled in 2008.
"There has been no encroachment; otherwise, action would have been taken by the collector and also by the HC, where the allegation of encroachment was made in a PIL," added Agiwal.
The agreement's termination was revoked in February 2012 and it was extended till October 2017. Also, the interest payable in event of delay/default was reduced from 21% to a mere 1% above the prime lending rate of RBI. The total outstanding dues of lessee (up to December 2013) stand at over Rs88 lakh.
Agiwal, however, said the licence fees were paid in advance and whenever the payment was delayed, it was because of valid reasons. For example, fees due on September 5 got delayed till October as the water sport activities themselves commenced then due to heavy rains in September, he added.

CAG observations regarding unauthorised activity and encroachment of land in view of scrutiny by the HC are based on lack of understanding of ground realities and a review of information, which is incomplete and piecemeal
—Manoj Agiwal, director, Drishti Adventure Sports Pvt Ltd