More than seven years after the Kalyani Group acquired around 1720 hectares of land near Pune to develop Khed City, originally planned as an SEZ, Chairman Baba Kalyani finds something sweet as well as something bitter on his plate.

On the one hand Mars International the world’s largest chocolate maker has announced it is investing Rs 1005 crore to set up its plant here. Several other companies too have signed up.

On the other, 240 farmers who sold 1250 hectares for the project have filed a petition in the Mumbai High Court asking for their land back on the plea that they haven’t got their promised dues. And now MP Raju Shetti-led Swabhimani Shetkari Sanghatana (SSS) is lending support to the farmers.

“Honestly, it did not do as well as I thought it would,” Baba Kalyani admitted in a recent interaction withBusiness Line. “I had hoped to attract auto exporters and suppliers of OEMs based in the neighbouring auto hub of the Chakan-Talegaon belt to the SEZ,” he explains, adding that the idea was to create a higher industrial base for exports.

Since SEZs lost their lustre, and the subsequent economic downturn caused mayhem, the developers changed course and have now created a 100-acre operating SEZ and a larger domestic manufacturing area. “Khed City is finally beginning to move, and a lot of customers are waiting to set-up factories there,” says Kalyani.

Prominent amongst the 35-odd such companies are JSW Steel, asphalt mixing machinery maker Linhoff (setting up its second plant here), Alco Steels and footwear-maker Kas.

Being implemented by Khed Economic Infrastructure Pvt Ltd (KEIPL), the Kalyani Group owns 74% stake in the JV company while the Maharashtra Industrial Development Corporation (MIDC) owns 26% in the form of “sweat equity”. The land, Kalyani explains, has been acquired on a 99-year lease, and till date around Rs 1000 crore has been invested in the project.

It could have been a case of seeing the light at the end of the tunnel for Khed except that farmers who sold them land have gone to Court. The main grievance is that they have not got 15% of the land that was to have been returned to them as per the original agreement.

“The agreed price was Rs 25.5 lakh per hectare, but farmers got only Rs 17 lakh per ht. In lieu of the remaining consideration, 15% of the land was to have been returned as developed land,” explains Yogesh Pande, spokesman for SSS.

Kalyani says that 15% of the land has actually been allotted in Khed Developers Ltd (KDL) an SPV. “Farmers own the majority equity in KDL. It is therefore for them to decide on how they would like to develop and use the land for their benefit. We as minority shareholders in the company will support their decision,” Kalyani said on the issue.

Incidentally, KEIPL originally held 25% in KDL while the farmers owned the rest. This was subsequently revised to 35% and 65% respectively and has also become a contentious issue.

“There is no specific land for KDL even after seven years of acquisition. Further, the majority shareholder is represented by three people and the minority by five. So who controls KDL?” counters Pande.

The next hearing in petition against KDL is scheduled for April 16, while on March 23, the SSS is leading farmers in a march into Pune.

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