The Telegraph
Wednesday , February 19 , 2014
CIMA Gallary

Squatter slur on race turf

CAG says the Royal Calcutta Turf Club (RCTC) owes the army authorities Rs 814 crore as rent for the Maidan land
Non-payment of dues leads to non-renewal of lease for the property
The RCTC has requested lease renewal for 30 years from January 2007
The directorate general
of defence estates recommends 15-year lease because of RCTC’s commercial activities
CAG report says non-renewal of lease “has led to unauthorised occupation”

The Calcutta race course is on illegal turf as it owes Rs 814 crore to the defence authorities — the custodians of the Maidan — as rent.

The comptroller and auditor general (CAG) report tabled in Parliament on Tuesday says the Royal Calcutta Turf Club (RCTC) — that runs the race course — is illegally occupying defence land because of its dues and non-renewal of the lease.

The RCTC’s dues were the highest among six test-checks by the CAG during 2010-11 and 2011-12. Comptroller and auditor general Shashi Kant Sharma was defence secretary till May 2013.

The report, “(Defence Services) Army and Ordnance Factories, Report no.30 of the year 2013 (compliance audit)”, says RCTC was leased 153.416 acres on the Maidan under the administration of local military authorities. In this case, the authority is the army’s Eastern Command.

Sudhir Kumar Kothari, the RCTC CFO, was unaware of the report tabled in Parliament. “The figure quoted by them is astronomical, which has no relevance to our lease,” he said.

The original lease dates back to January 1932 and was renewed till 2006. It was fixed at the rate of 0.5 per cent of the gross revenue of RCTC for 53 acres plus Rs 1,000 an acre per year for 100.416 acres. The condition was that the defence authorities would have the right to use the land.

The course doubles up as a helipad for VIPs and, occasionally, as a training ground for the army.

About four months after the lease expired, the RCTC requested its renewal for 30 years from January 2007.

But the directorate general of defence estates (DGDE) recommended to the defence ministry that the lease be renewed for 15 years till December 2021.

The recommendation was made because “the RCTC was engaged in commercial activities as they were paying Rs 8 crore per annum to the state government by way of entertainment tax”.

The defence authorities had leased land on the Maidan to several clubs on the condition that they would not use it for any commercial activity. Over the years, the defence authorities have winked at the “businesses” carried out by the clubs because these institutions had also encouraged sports on their premises.

The RCTC has not been able to keep up the subterfuge.

Having concluded that the RCTC was an entertainment and business venture, the DGDE recommended commercial rates for the renewal of the lease. It said RCTC should pay a lease rent of Rs 31.80 crore per year for 53 acres plus Rs 636 crore as one-time premium calculated by the defence estates officer (DEO). For the remaining 100.416 acres, it recommended a lease rent of Rs 2,000 an acre per year.

“The case for sanction of lease was forwarded to the defence ministry. The renewal of lease was, however, pending (till July 2012),” the CAG report states. It is now 19 months since that recommendation was made.

“Thus the non-renewal of lease of defence land on the Maidan for five years and seven months has led to unauthorised occupation and non-realisation of revenue of Rs 814 crore from the RCTC,” the CAG report concludes.

Some club members said the RCTC could look for realtors to develop the premium property since the DGDE had dubbed it an entertainment and business venture and recommended commercial rates for renewal of the lease.