The Halcyon Palace. A Telegraph picture

Thiruvananthapuram, June 20: A prized resort in Kovalam has run into a storm with the CPM demanding that its divestment be overturned.

V.S. Achuthanandan of the CPM, which supports the Congress-led coalition at the Centre but is the principal opposition to the alliance led by the party in Kerala, has demanded that the government reclaim the Halcyon Palace from the Gulfar Group.

“This is very much a part of Kerala’s heritage, which cannot be sold to private individuals. The government should immediately claim it back from the group that’s holding it illegally,” says Achuthanandan, who led a protest at the 75-year-old palace on Friday.

The palace is the only completely granite structure on the beachfront and a single-day occupancy of any of its four suites costs Rs 15,000 plus taxes.

The Gulfar Group had bought all the shares of the palace for Rs 44 crore and rechristened it Kovalam Hotels Pvt Ltd. The group says it has documents to prove its rights to the erstwhile Indian Tourism Development Corporation facility.

However, Achuthanandan has demanded that the group make public the documents and clear the air over its transaction with the Union government for the property.

Besides, the additional tehsildar at Neyyattinkara near here confirms that property is in “adverse possession”, which means that the possession rights of the property have not been settled.

The palace was built in 1930 by the regent of Travancore principality, Sethu Parvathi Lakshmi Bayi. Royals later quarrelled over its possession, resulting in the state taking it over. At present, there is no title deed to show who the palace’s previous owners were.

When Karan Singh was Union tourism minister, he developed the entire seafront into a resort. The ITDC took over the revenue land part of the Kovalam beachfront for development to enhance tourism and also set up Hotel Surya Samudra. The Halcyon Palace then came to be seen as part of the project and the ITDC as its custodians.

However, the controversy flared up when the ITDC facility changed hands. Tourism industry sources cite adverse possession status of the property as proof that the palace does not belong to Gulfar. When there is no title deed a property belongs to the state and, thus, only the state government could have transferred it, they say.

The Gulfar Group rejected the Marxist leader’s contention, and reiterate that the change of hands was legal and they possess the title deeds to the Kovalam property.

M.M. Abdul Basheer, director of the group, which has invested Rs 100 crore on renovating the palace, said in Kochi yesterday that Gulfar will sort out the issue in consultation with the tourism department.

There are fears that the group might dispose of the palace.

Gulfar chairman Mohammed Ali’s proximity to ministers in the A.K. Antony cabinet and the state government’s alleged indifference have added grist to the rumour mill.

Manmadhan Nair, the archaeology director in the state government’s department of culture, says any structure that is 75 years old is heritage property. However, neither the Union nor the state government sought his opinion on the late regent’s summer retreat at Kovalam.