Mega fraud in Faisalabad Development Authority (FDA)

[LahoreEstate]

Tuesday, March 03, 2009
By Tariq Butt

ISLAMABAD: The Anti-Corruption Establishment (ACE) Punjab has unearthed an alleged mega fraud, running into hundreds of millions of rupees, in the FDA city of Faisalabad Development Authority (FDA), and over a dozen FDA officials may shortly be in the clutches of the law.

“The final report into the whopping scam would be submitted within a week to the ACE director-general for further action,” ACE Faisalabad Director Nawazish Ali told The News last week before the dismissal of the Shahbaz Sharif government.

It is not yet known what will be the response of the new Punjab administration to the ACE report on the alleged scandal. Nawazish Ali said the conclusive findings were delayed a bit because two members of his team were away for an official course.

However, FDA Director-General Raja Safdar Hassan told this correspondent that no fraud was committed in the purchase of land for the FDA city as alleged by the ACE. The rates of payment to the landowners were approved by the (former) chief minister and crossed cheques were issued to them to be deposited in their accounts, he said.

In its present report, a copy of which is available with The News, the ACE Faisalabad charged that the total payment made as per the revenue record was Rs160,659,277 while the same as per the FDA record was Rs479,657,698. This marks a difference of Rs318,998,421.

The report said huge loss caused to the public exchequer was clear from this discrepancy. At the same time, it is also not understandable that Rs2,352,000 per acre were paid to each seller of the land and for every marla of land uniformly and without distinction.

Nawazish Ali said the final report would not be different from his present findings in any way. However, he talked about tremendous pressure from different quarters that was being managed by the top FDA bosses, their political backers, land mafia and middlemen involved in the scandal. The purpose, he said, is to derail the investigation, which would not be allowed to be achieved.

Notwithstanding the grounds assumed by the FDA during the investigation, it is a case of criminal liability and further probe on the grounds of deliberate concealment, loss to the government and undue benefit to the landowners, the ACE director wrote.

The report noted that the FDA chief had stated in a letter to the ACE that the FDA is ready to pay the difference on the mutation fee and it is a case of civil liability between two government departments, whose correction is a routine matter. It said the transactions through imprest account and those under the head of contingency clearly suffered from want of transparency.

The ACE Faisalabad had launched the inquiry on the orders of its superiors. The FDA launched the FDA City scheme on 1,218 acres situated in Chak No.5/JB, 119/JB and 118/JB vide gazette notification of 2005. The land was procured on the principle of land for land.

The report said the area of the scheme was further extended to another 2,400 acres situated in Chak No.115/JB, 117/JB, 118/JB and 119/JB vide another gazette notification of 2006. In the extended area, the FDA purchased 1,204 kanal in Chak No.118/JB at the rate of Rs800,000 per acre. Accordingly Rs117,208,177 were paid vide 26 mutations. Similarly, in Chak No.119/JB, 509 kanals 13 marlas were purchased at the rate of Rs635,200 through 34 mutations against the total payment of Rs43,451,100.

According to the report, this purchase of land was violative of the relevant rules and policy, which said the cash payment was against the cherished and advertised participle of land for land. The deviation was in no way justified. The price of land has been paid from out of the funds, deposited by plot holders of first phase for the purpose of development. The FDA has not been fair to spend the same on the purchase of land without having first completed the development, it said.

The report said as per mutations the land was purchased on the basis of average price in Chak No.118/JB @ Rs800,000 per acre and Rs635,000 per acre in Chak No.119/JB but payment to the vendors was made in both the Chaks @ Rs2,352,000.

But the FDA chief said the ACE headquarters had not accepted the ACE Faisalabad findings and formed another team to carry out the investigation. Offhand, he did not remember the names of the members of this team.

Raja Safdar Hassan, who retires during the current month after attaining the age of superannuation, said the FDA had purchased 900 acres of land for the new city on the basis of land for land while cash payment was made just for 100 or 125 acres of land. He said the difference in the rate of mutation, pinpointed by the ACE, was an academic issue, and the FDA would pay the balance as decided by the board of revenue (BoR), where the case was pending.

He said every now and then complaints were filed with the ACE against the FDA city. However, the two similar lengthy complaints, which triggered investigation by the ACE Faisalabad, were filed by PML-N MNA Abid Sher Ali and one Tahir Pervez.

In a letter to the ACE, Raja Safdar Hassan said there appears to be some misunderstanding with the ACE Faisalabad regarding the rate of mutation fee of transactions relating to the purchase of 139.626 acres of private land in Chak No 118/JB Tehsil Sadar through 24 mutations and 64.3 acres of private land in Chak No 119/JB Tehsil City District Faisalabad through 28 mutations during 2006-08 at the approved rate of Rs2,52,000 per acre.

Elaborating, the FDA chief said section 46 of the Land Revenue Act 1967 reads that the BoR may fix a scale of fee for all or any classes of entries in any record or register or for copies of any such entries; and a fee in respect of any entry shall be payable by the person in whose favour the entry is made.

He wrote as per Sr No 9 of the Commentary to Section 46 of the Land Revenue Act 1967 by Sardar Muhammad Iqbal Khan Moakkil, “when a mutation fee is to be levied in respect of a holding whose revenue is fluctuating the fee has to be calculated on the total of the Kharif and Rabi assessments of the agricultural year during which the transfer took place”.

The FDA chief said the mutation fee levied/recovered in these cases was on the basis of “average sale price of the preceding year” strictly according to the instructions of the BoR Punjab. If still there is anything contrary to these instructions, the revenue authorities may recalculate the mutation fee on the basis of revised instructions of the BoR, if any, and intimate the same to his office for payment of the balance amount.

Raja Safdar Hassan also referred to Para 7.33(2) of the Land Record Manual, which said the mutation fee levied on any mutation if subsequently found to be incorrect can be corrected at any time by the revenue officer, who attested mutation by his successor, or by a superior officer. Therefore, he said, what the ACE has pointed out was a civil liability between the two government departments correction of which is a routine matter. He said his office accepts payment of arrears if any covered under the rules after reconciliation and there is no dispute about it.

http://www.thenews.com.pk/daily_detail.asp?id=165322