The CAG report on Adarsh Cooperative Housing Society scam, tabled in Lok Sabha on Tuesday, says welfare of servicemen, ex-servicemen used as ruse to grab public land.

The full report available on the CAG website: click here.

Here are the "conclusions and recommendations" excerpted from the report:

9. Conclusion and Recommendations

The entire episode of the Adarsh Co-operative Housing Society, Mumbai is a remarkable case study. It is a classic example of the fence eating the crops; of those holding fiduciary responsibility betraying the same for personal aggrandizement. It reflects a consistent failure across all departments, State and Central Governments and cross sections of officialdom. This case would perhaps have no parallel anywhere else in the country where all concerned agencies have pooled their strengths not for a common national cause but for personal benefit. It is an example of how a group of select and powerful elite could collude to subvert rules and regulations for personal benefit. In the process of seeking apartments in a prime location for themselves they have resorted to falsification of the records, suppression of facts and abundantly used the avowed noble cause of welfare of exservicemen and their widows.

The saga starts with an innocuous letter written in February 2000 (copy placed at Annexure I) by a serving Sub Divisional Officer in the Defence Estates Office in Mumbai to no less than the Chief Minister of Maharashtra, for allotment of certain extent of land in the Back Bay Reclamation Scheme, Colaba for construction of a residential building for the “welfare of serving and retired personnel of defence services”. He addressed this letter in his capacity as the Chief Promoter of Adarsh Co-operative Housing Society (proposed). It was processed speedily in Mantralaya and passed on to the Collector of Mumbai City. The letter got a surprisingly prompt response such that on 29 March 2000 the Collector, Mumbai City approached the Headquarters Maharashtra & Gujarat Area for issuance of an NOC for the plot as it was under the occupation of the Military. This request of the Collector got further prompt response from the Headquarters M&G Area such that, on 5 April 2000 itself- within 6 days of the earlier letter- the  Collector was informed that the land falls outside the defence boundary and “necessary action could be taken as deemed fit for the welfare of serving personnel and their widows”. This communication was construed by the Society as a NOC. Thereafter commenced a series of letters addressed to agencies within the State Government and the Central Government seeking concessions and liberally using phrases such as: “members who are from the Armed forces and serving the motherland”, “dedicated their lives to the safety of our motherland”, “reward for heroes of
Kargil operations who bravely fought at Kargil and protected our motherland”. Those in positions of responsibility should have sensed that ab initio the concept was flawed as very few war widows or ex-servicemen would have had the financial capacity to pay for an apartment in such a prime locality. It is also remarkable that a State Government Department approached the Central Government in the Ministry of Environment and Forests and “persuaded” them for a prompt response which was then construed by them to be an environmental clearance. The Ministry of Environment and Forests, Government of India certainly either failed, or consciously decided, not to apprise the State Government of the extant provisions of the CRZ notification of 1991 and subsequent modification of May 2002.

As per laid down procedures, the project promoter was required to submit the project proposal to the concerned Coastal Zone Management Authority for environmental clearance, which in this case was not done nor insisted upon. Apart from this, the correspondence also indicates a deliberate attempt on the part of both Ministry of Environment and Forests in the Government of India and the Urban Development Department of Government of Maharashtra to skirt the procedures to enable grant of “NOC” to the Society. It is not surprising that the Society used this to their advantage. In March 2003, the Chief Promoter, in another letter addressed to the Chief Minister directly and separately to Minister of State for Urban Development, Government of Maharashtra did not hesitate to write that “it is submitted that the Department of Environment and Forests, Government of India have considered our case on priority as a goodwill gesture to serving and ex-servicemen looking to their service towards the motherland and have accorded their NOC”. On 9 July 2004 Government of Maharashtra accorded sanction for transfer of land to the Society levying a charge of ' 10.19 crore. On 28 September 2004, the Society was formally registered and on 4 October 2004, the plot was handed over. The promoters were so confident of allotment of land that even before registration of the Society and before hand over of the site, on 12 July 2004 they wrote for additional FSI from the adjacent land in use by BEST. Within two days of the letter, the Minister of Urban Development also discussed the same. This issue was pursued till BEST finally acquiesced!

It is significant that the residential development on the land allotted to the Society in CRZ-II was carried out without the requisite environmental  clearance from the MoEF. Despite this, MMRDA granted “Occupancy Certificate” to the Society on 16 September 2010. This was cancelled on 30 October 2010 at the instance of MoEF. This was done by MOEF only after media and public attention was repeatedly drawn towards the grave irregularities and dereliction at all levels in the administration.

This report details how public servants, who have been entrusted by the Government to safeguard national interest, facilitated, in the belief that cronyism would be rewarded, a private housing Society to obtain “NOC” from the Army, modification to the MMRDA Development Plan, NOC for Residential Development in the CRZ area and transfer to the Society of Developmental rights of adjoining land in use by a public utility (BEST) with an additional FSI on account of Recreation Ground.

The entire episode reveals glaring examples of dereliction of duty and severe lack of probity and accountability which needs to be very seriously investigated. This case has engaged the attention of national headlines. Not taking exemplary remedial and punitive action which would serve as a deterrent, would seriously erode the credibility of Government. Laxity in follow-up would encourage similar attempts in future. Audit merely strives, as it is constitutionally mandated to do so, to place documentary evidence in this Report in a sequential form before the ultimate stakeholder. It is for the Parliament and the Government to ensure that public trust is not betrayed.

There have been various statements by high dignitaries and observations in the media of the irregularity of this construction. In many of these, there is an explicit suggestion that the building should be demolished. Such suggestion probably is hasty and inadequately considered. To raze it to the ground would compound the problem. Now that it has been constructed, though incorrectly so, indeed it should not be allotted to those who fraudulently tried to appropriate it. An option would be for the building to be acquired by the Government and used for Central Government Housing of which there is enormous shortage in Mumbai. Those of the Society members who have paid, may be compensated as per law. In case there are a few and they certainly are less than half a dozen, genuine war widows and deserving ex-servicemen, the Government could allot apartments to them as an independent and deserving gesture.