Bhubaneswar, Dec. 8: The Comptroller and Auditor General (CAG) report has indicated gross irregularities in the allotment of space by the state government to various traders in Unit-II market, popularly known as Market Building here.

The CAG report on the general and social sector ending March 2015, states that the general administration department leased as many as 15 shops and residences with 66,610.709sqft area in Bhubaneswar as of March 2015.

Survey of sample shopping halls with total area of 42,030sqft located in the Market Building area revealed cases of subletting, unauthorised alteration, addition to leased premises and occupation beyond the lease period.

According to rules laid out by the general administration department, an allottee cannot sublet a shop or a part of it without the written consent of the director of estates of the department. The report states that although four of the 15 surveyed shops violated norms, the officials failed to report it.

The rule states that if an allottee sublets a shop, its allotment must be cancelled from the date of detection. Failure to do so would result in a penalty 10 times the daily rent for each day of continuance beyond the date of cancellation of allotment. Measurement of floor area of the 15 shops by the department during an audit conducted in October 2015 revealed that traders have occupied 1,13,356.73sqft. This exceeds the allotted space by 71,326.73sqft. One of the traders whose shop has been mentioned in the report stated that he was not aware of the rules.

The shops mentioned in the report include a major jewellery shop, a public sector bank, three clothing stores and others. The rules further state that allotment of shops in the state capital can be done either through auction or through selection from applications received. It states that the agreement can be renewed for a maximum period of three years (at a time) after the expiry of first term.

But, the report states that the norms were violated in the 15 surveyed shops in the Market Building area. It states that instead of verifying the eligibility of allottees at the time of renewal, the lease period were repeatedly renewed three to 11 times in the favour of the proprietors or of their legal heirs and partners.

The allottees of these 15 shops were not eligible for renewal of lease period as all of them had either sublet their establishments or done unauthorised constructions in violation of the rules.

A senior general administration department official said action would be initiated against the defaulters and penalty imposed on them according to the rules.

"We will conduct another measurement exercise to ascertain the degree of violation and take action accordingly," he said.