The Hindu Business Line : HTL land sale plan hits hurdles

Chennai/Delhi, April 15 HTL’s plan to sell a portion of its land to the Bangalore-based developer RMZ has hit a stumbling block following reports of the Tamil Nadu Government’s decision to buy back the land. According to a press release from HTL Ltd, the sale was effected over a year ago based on clear title deeds, consultations with the Centre and legal experts, and cannot simply be set aside.

In 2001, 74 per cent of HTL, formerly Hindustan Teleprinters Ltd, a Central Government undertaking, was sold off to HFCL (Himachal Futuristic Communications Ltd) for Rs 55 crore. The Centre continues to hold the other 26 per cent stake.

In March 2007, HTL sold 11 acres of the prime land at Guindy, on the southern outskirts of Chennai to RMZ for Rs 328 crore through an e-auction. This was then a record deal at Rs 6,178 a sq ft. However, the deal could not be finalised, pending the State Government’s approval.

Mr M. Nahata, Chairman and Managing Director, HFCL, said, “The land deal was done after getting all approvals from the Government and, therefore, it is incorrect now that the Government wants to buy the land. The Government as such has the right to acquire any land in the country for any public purpose. Such an acquisition process has to be supported by a planning document, urgency and need of public interest. To the best of our knowledge, no such circumstances exist in this case.”

On reporting the deal to stock exchanges and showing the revenues from the sale on HFCL’s books, he said the land belonged to HTL, an unlisted company, and there was no such requirement.

On the State Government’s move, the release from HTL said that “some of the important legal facts have got ignored while processing our representation.”

According to HTL, the State Government’s decision to buy the land appears to be based on an assignment deed executed in 1973. But this has been superseded by the registered title deed executed by Sidco in 1993.

Government officials said that the decision by the Government was taken at the Cabinet level after considering all the legal aspects.

The land is part of a Government-promoted industrial estate and Sidco only operates and maintains the land as an agent for the Government.

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