PUBLIC INTEREST LITIGATION WATCH GROUP: JNNURM, Rent Control Law Reform and Lies

This report prepared by Shobha Aggarwal and Dr. Paramjit Singh was first published by PIL Watch Group in December, 2011. It is reproduced here minus the annexures.

JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION,

RENT CONTROL LAW REFORM

& LIES

WHERE IS THE PM?

A Citizens' Report Documenting Fraud on the Exchequer under JNNURM

PIL WATCH GROUP, New Delhi, India

December, 2011

CONTENTS
1.	About this Report
2.	The Sarkari Version…..
3.	…And the Naked Truth
4.	Case of U.P., Gujarat, M.P., Chhattisgarh, Delhi
5.	Goebbelian Tactics at Work
6.	Response of the PMO – Stonewalling our RTI
7.	Response from the present Minister for Urban Development and Senior Bureaucrats
8.	We Demand
Annexures
Annexure ‘A’	Petition to CAG and its reply
Annexure ‘B’	Petition to CVC and its reply
Annexure ‘C’	Official notings by MoUD on our legal notice
Annexure ‘D’	Legal notice to the Secretary, PMO
Annexure ‘E’	Official communications between PMO and MoUD on our legal notice
Annexure ‘F’	Petition to Chairman, CCEA
Annexure ‘G’	Official communications between CCEA and MoUD
Annexure ‘H’	Petition to the President of India
Annexure ‘I’	Letter from Additional Comptroller, President’s Secretariat to MoUD
Annexure ‘J’	Petition to Secretary General, Rajya Sabha
Annexure ‘K’	Reply from Rajya Sabha Secretariat
Annexure ‘L’	Petition to Shri Saugata Roy, Minister of State for Urban Development
Annexure ‘M’	Reply from Shri Saugata Roy
Annexure ‘N’	Petition to the President, the World Bank
Annexure ‘O’	Reply from the World Bank
Annexure ‘P’	Letter from MoUD Re: Status of RCL reform in Gujarat
Annexure ‘Q’	Letter from MoUD Re: Status of Cabinet Note on RCL reform in Delhi
Annexure ‘R’	Letter from PMO Re: Transferring our RTI application on enquiry into JNNURM to MoUD
	About Ourselves

ABOUT THIS REPORT

This report by Public Interest Litigation Watch Group (PILWG) is based upon the experiences gained in the last four years while campaigning against and researching into the release of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) funds – Rs. 60,000 crores spread over a seven year period with effect from December 2005 to December 2012 – to 31 States/ Union Territories (UTs) who had not even undertaken the mandatory Rent Control Law (RCL) reform as committed under their respective Memorandum of Agreement (MoA). Throughout the period we had been petitioning the concerned authorities; filing Right to Information (RTI) applications; meeting senior bureaucrats and ministers in the Union Ministry of Urban Development (MoUD); examining official files procured under RTI running into hundred of pages; cross-checking information available on MoUD website regarding Central Sanctioning and Monitoring Committee (CSMC) meetings; quarterly reports filed with the Delivery Monitoring Unit (DMU) set up at the Prime Minister’s Office (PMO) to review a select number of flagship programmes/initiatives/iconic projects pursuant to the announcement made in the President's address to both Houses of Parliament on 4 June, 2009; examining information available on Ministry of Home Affairs website regarding Bills passed by State Assemblies and awaiting President’s assent; networking with social activists/organizations working outside Delhi to know the status of RCL reform in their respective States. Our findings are eye-opening.

In December, 2005 the Prime Minister had launched the flagship scheme JNNURM with the stated objective of urban development. It is the biggest funded urban renewal mission ever undertaken in any country so far. The policy document clearly enunciates the mandatory reforms to be implemented by the states and civic agencies during 2005-12. To receive funds under JNNURM the states and civic agencies have to sign a MoA clearly enunciating the time frame within which the mandatory reforms would be achieved. One of the mandatory reforms under JNNURM is of rental laws. The contribution from Central Government constitutes 35 to 90% of the total project cost while the remaining amount is to be borne by the State Governments/ para-statal bodies.

JNNURM requires certain reforms to be undertaken by States/cities in area of rent control legislation, with the objective of having a system that balances the rights and obligations of landlords and tenants to encourage construction and development of more housing stock, as well as promoting an efficient and robust rental/ tenancy market, so as to improve the availability of housing across all income categories. Details have been provided in the Model Rent Control Legislation, 1992 circulated by Government of India (GoI) to all States/Union Territories. In the MoA a time-line for reforms was to be committed indicating by which year the final enactment of the legislation by the legislature was to be undertaken as also the year of Notification; preparation and Notification of appropriate subordinate legislation; and implementation by municipalities.

How Rent Control Laws Ruin Cities

The archaic RCLs in India in existence for about 50 to 70 years have effectively brought ruination of the cities. Owners getting a pittance as rent – sometime as low as Rs. 10/- per month – are unable to maintain the property; long drawn court battles – extending up to few generations – between owners and tenants too, take their toll on all concerned. Owners suffer from physical, mental, emotional and psychological trauma for being unable to evict tenants; heated arguments and physical assaults are all too common. The political class buckles under pressure of the lobbies which wish to perpetrate status quo. Badly maintained buildings become dangerous for inhabitation; frequent collapse of such buildings all over the country results in thousands of people literally getting buried alive or injured. Under JNNURM an attempt was made to address these crucial issues by providing incentive to the States to undertake RCL reform.

THE SARKARI VERSION …..

Six years have elapsed since JNNURM was launched. The MoUD claim on the number of states that have undertaken the mandatory RCL reform is reproduced below from the latest information available on the Ministry's web site.

Table 1 shows the status of RCL reform as shown on the JNNURM website:

	State	Reform in Rent Control
	Total Achieved	12
Note: Number in box below indicates the year of commitment to accomplish the said reform. “ / Achieved” indicates that the reform has been accomplished
1	Andhra Pradesh	3
2	Arunachal Pradesh
3	Assam	4
4	Bihar	3
5	Chandigarh
6	Chhattisgarh	3/Achieved
7	Delhi
8	Goa	5
9	Gujarat	5/Achieved
10	Haryana	5
11	Himachal Pradesh	6
12	Jammu and Kashmir	4
13	Jharkhand	4
14	Kerala	7
15	Karnataka	Achieved
16	Madhya Pradesh	3/Achieved
17	Maharashtra
18	Manipur	Achieved
19	Meghalaya	5
20	Mizoram	Achieved
21	Nagaland	Achieved
22	Puducherry	4
23	Punjab	3
24	Orissa	Achieved
25	Rajasthan	Achieved
26	Sikkim	6/Achieved
27	Tamil Nadu	4
28	Tripura	3
29	Uttarakhand	4
30	Uttar Pradesh	4/Achieved
31	West Bengal	2/Achieved

Source: http://jnnurm.nic.in/wp-content/uploads/2011/11/Reforms-as-on-21.10.2011.pdf

Table 2 shows the status of the RCL reform as extracted from the DMU quarterly report “July 2011 to September 2011” submitted by the MoUD:

Key Indicators for JNNURM reform as per MoA Commitments	Progress on reforms committed upto Year 6: Quarter April-June 2011	Position on reforms committed upto Year 6 as on 30^th September, 2011
Amendment to Rent Control Acts.
States that have not amended the Rent Control Act	15 States Andhra Pradesh, Assam, Bihar, Chhattisgarh, Goa, Haryana, Jharkhand, Meghalaya, Punjab, Jammu & Kashmir, Puducherry, Tamil Nadu , Tripura, Uttarakhand, Himachal Pradesh	14 States Andhra Pradesh, Assam, Bihar, Goa, Haryana, Jharkhand, Meghalaya, Punjab, Jammu & Kashmir, Puducherry, Tamil Nadu , Tripura, Uttarakhand, Himachal Pradesh

Note : States/Cities marked with an asterisk(*) have sought extension to complete their commitments and has been agreed to

[Source: http://www.urbanindia.nic.in/DMU/JNNURM/DMU-JNNURM.pdf]

As per the Government's version 12 States viz. Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Manipur, Mizoram, Nagaland, Orissa, Rajasthan, Sikkim, Uttar Pradesh and West Bengal have undertaken mandatory RCL reform under JNNURM and by inference the other 19 have not.

Establishment View in Parliament, Court and Media

In reply to an Unstarred Question No. 2902 in Lok Sabha answered on 24 July, 2009 by Shri Saugata Roy, the Minister of State in the Ministry of Urban Development submitted in writing:

“So far 7 States have implemented the reforms on Rent Control. 24 States, including Uttar Pradesh are to implement this reform as per their commitments. Uttar Pradesh has committed to implement the Rent Control reforms by 2009-10.”

Interestingly in a writ petition challenging the Constitutional validity of Delhi Rent Control Act, 1958 (DRCA, 1958) titled ‘Shobha Aggarwal vs. Union of India’ [WP(C) 516/2010] which is pending in the Delhi High Court this is what the Union Government has confessed in its counter-affidavit filed in July 2010:

“State of Karnataka has amended the Karnataka Rent Control Act in 1999. State of West Bengal has amended the West Bengal Premises Tenancy Act, 1997 in 2005. Rajasthan has enacted a new Rent Control Act in 2001. State of Manipur, Mizoram, Nagaland and Orissa do not have rent control legislation.”

In an article titled 'JNNURM: A balance sheet’ (Economic Times, 15 January, 2011) Dr. M. Ramachandran, Former Secretary, MoUD, has opined that:

“Among reforms, community participation legislation, rent control amendment and transfer of city planning function appear as the most 'complicated' ones for implementation to the states as 18, 15 and 14 states respectively have not been able to meet this reform milestone.”

…..AND THE NAKED TRUTH

We have been campaigning over the last four years for the implementation of the mandatory RCL reform balancing the interests of landlords and tenants. Our findings are, to say the least, eye opening and shocking; intellectual sophistry and obfuscation have been indulged in by the bureaucracy to paint a rosy picture about the RCL reform at a pan India level in 31 States and UTs covered under JNNURM. The fact is that not a single State or UT has undertaken mandatory RCL reform since JNNURM was launched in December, 2005!

We researched into the latest legislative changes, administrative orders, State Law Commission report (in the case of U.P.) pertaining to the RCL reform in each of the 31 States and UTs; examined the orders of the various courts to see if any RCL reform has been effected in the last six years and networked with activists involved in court cases. Additionally media reports have been our other source of information. On the basis of our research 31 States and UTs can be divided into three categories viz. A, B and C.

Category A includes Arunachal Pradesh, Manipur, Mizoram, Nagaland and Orissa where no RCL existed even prior to launch of JNNURM. According to the MoAs signed under JNNURM, RCL has never been enacted in Arunachal Pradesh; same goes for Manipur (market mechanism takes care of the system); no RCL exists in Mizoram and Nagaland. Orissa had a House Rent Control Act, 1967 but as per section 1(4) it ceased to have effect from 4 May, 1981.

Category B includes West Bengal, Rajasthan and Karnataka where RCL reform has taken place before JNNURM came into existence. However reform even in these three States falls short of the Model Rent Control Legislation, 1992 prepared and forwarded by the Union Government to the State Governments the same year.

Category C includes rest of the 23 States and UTs. Of these, 20 have given a commitment under MoA to undertake RCL reform but have failed to adhere to the timeline given. The rest of the 3 namely Delhi, Chandigarh and Maharashtra have not even given such a commitment. It is noteworthy that the Union Government – which has the legislative competence to undertake RCL reform in Delhi and Chandigarh – has shown no inclination to undertake the same till date. Political expediency overrides legitimate policy!

Outlined below are five case histories to bring to light the forces at work both at the Centre as well as the States to perpetuate lies. The case of Delhi has been highlighted in greater detail.

CASE OF U.P., GUJARAT, M.P., CHHATTISGARH, DELHI

Curious Case of Uttar Pradesh

The State of Uttar Pradesh (U.P.) had given a commitment in the MoA to reform its RCL in the fourth year of JNNURM i.e. 2009-10. As late as 18 November, 2009 the U.P. Govt. had informed MoUD in a meeting that RCL reform would be under-taken by December, 2009. However, in the 85^th meeting of the CSMC under Sub-Mission Urban Infrastructure & Governance (SMUIG), JNNURM held on 29 March, 2010 the Secretary (Urban Development), U.P., stated that the “prevailing Regulation of Letting, Rent and Eviction Act, 1972 has provisions required under JNNURM and thus the reforms required to be achieved in the Rent Control Laws have been implemented prior to the launch of Mission. However, due to urgency, this matter was not properly looked into during signing of MoA. Since the provisions required in the Rent Control are completed, no further progress is required.”

Who's who at CSMC:

1. Secretary (Urban Development) Chairman

2. Secretary (Housing and Urban Poverty Alleviation) Member

3. Secretary, Ministry of Finance (Deptt. Of Expenditure) Member

4. Principal Adviser (Housing and Urban Development Division),

Planning Commission Member

5. Secretary, Ministry of Environment & Forests Member

6. Secretary, Ministry of Social Justice and Empowerment Member

7. Joint Secretary & Financial Adviser, Ministry of Urban Development Member

8. Chief Planner, Town and Country Planning Organisation Member

9. Adviser, Central Public Health & Environmental

Engineering Organisation Member

10. Chairman-cum-Managing Director,

Housing and Urban Development Corporation Member

11. Joint Secretary (Urban Development) Member-Secretary

Till date not one among the CSMC members has shown the courage of conviction to speak the truth about the RCL reform in U.P. One has to have an I.Q. well below that of a congenital idiot to suggest that the 1972 rental law in U.P. has provisions required under JNNURM launched in 2005!!!

Quid Pro Quo

Ironically the above-mentioned crucial meeting was held under the Chairmanship of the then Secretary (MoUD), GoI Dr. M. Ramachandran, who accepted the volte-face of the U.P. Government on the issue without batting an eyelid. It was expected of the Secretary, MoUD to crosscheck the alleged reforms undertaken by U.P. Government by comparison with the Model Rent Control Act, 1992 circulated by the Central Government. Apparently Dr. M. Ramachandran was in a hurry as he had just 3 months left for his retirement and wanted to ensure that JNNURM funding to U.P. could be released so that the obstacle of the mandatory RCL reform not having been implemented would be removed.

Subsequently, the JNNURM web-site started showing that RCL reform has been achieved in U.P. (See Table 1). It is no coincidence that Dr. M. Ramachandran after his retirement from service on 30 June, 2010 was appointed in December, 2010 by the Mayawati government as its new adviser with the rank of a cabinet minister for expediting mega projects currently under consideration for the development of the state. On 18 June, 2010 Justice V.C. Misra, Chairman, U.P. State Law Commission submitted the Sixth-Report, 2010 proposing a fresh legislation by the legislature of State on “The Uttar Pradesh Regulation of Rent and Eviction Act, 2010” to the Chief Minster/Law Minister of U.P. A model draft bill on proposed legislation formed part of this report.

Interestingly on 4 March, 2011 the High Level Committee (HLC) headed by Shri V.K. Shunglu constituted by the Government of India to look into issues relating to the organizing and conduct of Commonwealth Games indicted Dr. M. Ramachandran, the then Secretary, MoUD for playing a key role in determining the contours of the bailout package including high valuation etc which brought undue gains to Emaar MGF. ‘In May 2011 Dr. M. Ramachandran resigned as Infrastructure Adviser to U.P. Government.'

Questions arise:

l Why did Dr. M. Ramachandran, the then Secretary, MoUD, GoI not cross check the alleged RCL reforms undertaken by U.P. Government; and as a consequence of which U.P. stands beneficiary to thousands of crores of rupees through JNNURM funds?

and

l Did Dr. M. Ramachandran indulge in quid pro quo with the U.P. Government since soon after his retirement he was appointed as an adviser with the rank of a cabinet minister with the U.P. Government for expediting mega projects under consideration for the development of the state?

The Case of Gujarat

The JNNURM website shows that Gujarat has already undertaken the reform of its rent control law. Extensive research done on the internet showed no such reform has been undertaken by the Government of Gujarat. In fact what happened was just the opposite. In March 2011 the Gujarat State Assembly passed the Bombay Rents, Hotel and Lodging, House Rates Control (Gujarat Amendment) Bill, 2011 which immediately received assent of the President of India. This Bill extends the date of the existing archaic RCL in Gujarat viz the Bombay Rents, Hotel and Lodging, House Rates Control Act, 1947 for another ten years i.e. till 2021. A classic case of outright deception!

The Case of Madhya Pradesh and Chhattisgarh

Madhya Pradesh Legislative Assembly passed the Madhya Pradesh Parisar Kirayedari Vidheyak, 2010 in March 2010 and Chhattisgarh Legislative Assembly passed the Chhattisgarh Rent Control Bill, 2011 in March 2011. Both these Bills as per available information are still in the waiting list to receive the assent of the President of India. The JNNURM Directorate is trying to fool the people by claiming that the RCL reform is complete in these two States. The law has to be implemented before making such a claim. In any case passing a law means nothing as the Delhi Rent Act, 1995 has not been enforced even sixteen years after receiving the assent of the President of India. In true Orwellian double-speak, the Government’s implementation means non-implementation.

The Case of Delhi

The Delhi Rent Bill, 1994 was passed in the Rajya Sabha on 29 May, 1995 and the Lok Sabha on 3 June, 1995. It received assent of the President of India on 23 August, 1995 and was enacted as the Delhi Rent Act, 1995 (DRA, 1995). Section I(3) of the said Act provided that the Act shall come into force on such date as the Central Government may, by notification in the official Gazette, appoint. But the Act has not been enforced through a Notification till date because of vested interests. So the only step the MoUD had to take was to issue a notification enforcing DRA, 1995. But instead when on 11 September, 2007 a MoA was signed between the MoUD etc and the Govt. of NCT of Delhi (GNCTD) & others - four pages pertaining to the mandatory reform of RCL were kept unfilled. The MoA being incomplete, is neither legal nor final; hence it is not binding.

CAG's Indictment

In March, 2008 and again in September, 2008 we at PILWG brought the matter to the notice of the Comptroller and Auditor General of India (CAG). On 2 February, 2009 the CAG in response to our RTI application opined after its audit:

“With reference to the above mentioned letters, the matter was examined in audit. Audit scrutiny of the records revealed that MoA between Ministry of Urban Development (MoUD/ Ministry of Urban Employment and Poverty Alleviation (MUPA) and the Government of NCT of Delhi, Municipal Corporation of Delhi, Delhi Jal Board (DJB) and New Delhi Municipal Council (NDMC) was executed on 11 September 2007 subject to further negotiation of reduction of stamp duty. Even though the Delhi Rent Control Act, 1958 had remained in force in Delhi and the proposal to amend the Delhi Rent Act 1995 was not formally notified by the Ministry, details in regard, to Rent Control Reforms was left blank in the MoA and it was mentioned that the matter was within the purview of MoUD. MoUD, in turn had informed NCT of Delhi in March 2007 that the information required was not with them. In response to an appeal made under the Right to Information in April 2008, Ministry stated that MoA had captured some elements and it was under further negotiation/finalization of some elements including Rent Control. Despite this fact, Central share of Rs. 630.90 crore and State share of Rs. 875.99 crore and additional Central Assistance of Rs. 157.72 crore was released to Government of NCT of Delhi (GNCTD) under JNNURM during 2007-08.

Audit has concluded that as the MoA executed by the MoUD was conditional and deficient, the release of Central Assistance to GNCTD was irregular. A factual statement in this regard had been issued to the Ministry of Housing and Urban Poverty Alleviation, the reply for which is awaited. Further action rests with the Ministry.”

The reply was signed by Director (Legal), CAG.

On 15 September, 2008 the PIL Watch Group had petitioned the Central Vigilance Commission (CVC) demanding an enquiry into the Fraud on the Exchequer committed by Director, JNNURM, MoUD. The persistent misuse of authority of power during the years 2007 and 2008, the omissions and commissions of authority in MoUD and JNNURM were detailed in the petition. Through a letter dated 17/24 November, 2008 the CVC informed us that it is enquiring into the complaint. For over 15 months the MoUD chose to ignore the queries raised by CVC through OFFICE MEMORANDUM (O.M.) dated 2 December, 2008 and 3 March, 2009 and 26 April, 2010; and later granted exemption to GNCTD from rental law reform. This pretext was then used to scuttle the enquiry. Just a few days before the then Secretary, MoUD was due to retire the MoUD through O.M. dated 8 June, 2010 submitted a factual report to CVC with approval of Secretary, MoUD using the bogey of rental law exemption to escape form the clutches of CVC! Dr. Ramachandran was eager to get vigilance clearance days before his retirement so as to be considered for a lucrative post after retirement – speculated in the media to be that of the Cabinet Secretary.

On 14 October, 2008 a legal notice under Section 80(1) of the Code of Civil Procedure, 1908 was served on the Secretary, PMO. A similar notice dated 17 September, 2008 was earlier served on the Secretary (Urban Development), MoUD; Secretary (Expenditure), Ministry of Finance and Joint Secretary and Mission Director (NURM), MoUD. It was insisted in the notice that a legally binding MoA under JNNURM in the context of GNCTD should clearly state the time line by which the mandatory reform of DRCA, 1958 would be undertaken. Through a communication dated 17 October, 2008 Shri L.K. Atheeq, Director, PMO asked for comments and the action proposed to be taken in the matter mentioned in the notice from the Secretary, MoUD. Shri Rajesh Jaiswal, Under Secretary, MoUD, GoI wrote to the PMO on 30 October, 2008 stating that it has been decided at the level of Urban Development Minister to process the exemption of GNCTD from the commitment in respect of Rent Control Act for the projects proposed to be funded under JNNURM. Even as late as 14 November, 2008 Shri Atheeq wrote to the Secretary, MoUD enquiring as to why MoUD is seeking to exempt GNCTD from the commitment in respect of Rent Control Act when all other cities have this mandatory reform conditionality in the MoA. The MoUD in its communication dated 9 January, 2009 issued with the approval of Secretary, (MoUD) wrote to the PMO stating that the matter has been considered and hon’ble UDM observed that:

“As the proposal of the Amendment falls with in the purview of Central Government and it bristles with huge difficulties which cannot be tackled on the eve of Lok Sabha polls, necessary to exempt from the pre-condition.”

The Central Govt. continues to provide funds to the GNCTD under JNNURM in complete violation of the terms and conditions of JNNURM and even granting one time exemption to various ongoing projects. The GNCTD has received several thousand crores of rupees from JNNURM funds – primarily to spruce up the city of Delhi for the Commonwealth Games 2010.

Et tu, Pranab

During the years 2007, 2008 and 2009 while we were campaigning against release of JNNURM funds to GNCTD till the rental law reform was carried out, the MoUD kept insisting that MoA with GNCTD is under further negotiation/finalization of some element including rent control. As the mandatory reform agenda had been approved by the Cabinet Committee on Economic Affairs (CCEA) as such a proposal to place before the CCEA for exempting the GNCTD from the purview of rent control obligation was strategised by MoUD. On 25 January, 2009 PIL Watch Group had petitioned to the then External Affairs Minister, Shri Pranab Mukherjee (who happened to be the Chair Person of CCEA) regarding fraud on the exchequer being committed under JNNURM. On 2 February, 2009 the Officer on Special Duty to Shri Pranab Mukherjee wrote to MoUD asking for their version. Later on 3 June, 2009 the Ministry of Finance, Department of Expenditure conveyed to MoUD that “Department of Expenditure does not support the proposal of funding the ongoing projects of Delhi under JNNURM in relaxation of the guidelines as approved by the Cabinet.” There was total anarchy within the governmental set-up. Both the Chief Minister of Delhi as well as the Deputy Chairman of Planning Commission had been aggressively lobbying for exemption to mandatory reform. Consequently through an O.M. dated 1 October, 2009 the Ministry of Finance, Department of Expenditure intimated to the MoUD the concurrence for one time relaxation. This had the approval of Shri Pranab Mukherjee. Later, the Cabinet Committee on Infrastructure (CCI) in its meeting held on 10 December, 2009 granted exemption to GNCTD from implementation of rental law reform! In fact all JNNURM funding to GNCTD during the years 2007, 2008 and 2009 prior to this CCI decision got legitimised!! And another quite burial for rental law reform!!! The fact is that if the mandatory reforms are to be buried six fathoms deep – as in the case of Delhi – then the entire JNNURM flagship scheme falls flat on its face. The Govt. of India might as well dole out funds through the regular budget rather than create an illusion of funds being given in lieu of the stated mandatory reforms all in the name of urban renewal. And why should the holding of Commonwealth Games in Delhi be touted as a good enough excuse to release JNNURM funds for projects unrelated to urban renewal like renovation of Connaught Place?

Another question arises. Why should there be an attempt to exempt Delhi Government from the commitment in respect of Rent Control Act? This attempt kills the very basis of JNNURM. If the MoUD itself violates JNNURM policy and guidelines, how can it expect State Governments to abide by them? After all MoUD is the creator of JNNURM – which is named after the first Prime Minister of India. If MoUD kills the very spirit of JNNURM by giving exemptions to Delhi Government, will the soul of Pandit Jawaharlal Nehru ever rest in peace?

The CSMC, MoUD approved the re-development of Connaught Place, New Delhi on 29 August, 2008 and the funds for the project were released. How could the CSMC do this as even the processing of the exemption of Delhi from the commitment to reform Rent Control Act was itself decided upon 31 December, 2008 – and even here the final decision was taken in December, 2009? All this makes a mockery of JNNURM. How could the MoUD be sure in August, 2008 that the CCI would approve exemption of Delhi in December, 2009? What, if the CCI has disagreed?

A Maze of Enquiries

*A petition was submitted to the President of India on 14 February, 2009 demanding a CBI enquiry into the loot of the exchequer’s money under cover of allotment of JNNURM funds in relation to Delhi. The President’s Secretariat referred the petition to the Secretary, Govt. of India (GoI), Ministry of Home Affairs (MHA) vide serial no. P1-A/4402 dated 2 March, 2009.

*Shri S.K. Bhatnagar, Deputy Secretary, MHA, GoI, sent the petition on 4 June, 2009 vide no. A-43020/01/2009-RTI to Shri Neeraj Kansal, Director, MHA and Shri P.K. Misra, Under Secretary, Department of Personnel & Training (DoPT).

*The DoPT referred the matter to Director, CBI, CGO Complex, New Delhi for appropriate action through its communication no. 258/38/2009-AVD-II dated 17 February, 2009. Thereafter Shri S.K. Palsania, Assistant Inspector General of Police (P), CBI, Policy Division, North Block forwarded the petition to the Head of Zone, CBI, Anti Corruption Branch, Delhi vide his letter dated 1 July, 2009 bearing CBI ID No. 0992009/1455/21/1(190)/2009-PD for necessary action.

*Even as late as 18 September, 2009 Shri Neeraj Kansal, Director, MHA wrote to us that a factual report on our petition dated 14 February, 2009 has been sought from the administrative Ministry i.e. MoUD and the same is still awaited; and that further action could be taken only on receipt of the factual report from the MoUD.

We are unable to get any further information from the CBI, as lately it has been exempted from the RTI Act, 2005! Anyway, the MoUD scuttled the CBI enquiry by retrospectively granting exemption to GNCTD from rental law reform. Similarly the ongoing CAG and CVC enquiries were scuttled! The situation is akin to a rape (of the exchequer) being committed and when caught in the act the government changes the law of rape retrospectively after two years even as it grants one time exemption of rape!

An Act of Commission

In February, 2009 the Planning Commission decided to grant a one time exemption so that GNCTD would be able to access JNNURM funds even for projects which have already started. Pertinently the JNNURM guidelines stipulate that the projects have to be approved by the MoUD before they are initiated. Therefore release of funds to GNCTD under the circumstances violated the JNNURM policy and guidelines; and is a fraud on the exchequer.

Further, a sister organization named ‘Committee for the Repeal of Delhi Rent Control Act’ had made a representation dated 15 June, 2009 to The President, The World Bank, Washington DC, USA (just as reports were emanating about the World Bank's loan agreement) informing him about the state of affairs and requesting him not to sign any agreement with the Government of India for providing loans for JNNURM till the lacuna in the MoA between MoUD etc and GNCTD is removed and a time frame is indicated for reform of RCL in Delhi. The World Bank in its reply to us dated 7 July, 2009 has stated:

“The fulfillment of the timetable embodied in the MOAs is being monitored closely by the Ministry of Urban Development (MOUD), and is in some cases withholding release of funds until greater progress on reforms has been demonstrated.” [emphasis provided]

Any agreement signed by The World Bank and Government of India in relation to JNNURM funds without the rental law reform being undertaken in Delhi would be against the very spirit of JNNURM policy document. Besides the Rs. twenty five thousand crore loan from The World Bank would have to be paid back – probably with interest – and the citizens of India will eventually have to bear the cost. Without undertaking reforms – including rental law reform – the entire JNNURM would be a self-defeating exercise.

Ironically removing land market barriers can contribute an additional one percent to India's GDP growth rate according to the Tenth Five Year Plan 2002-07, Government of India. However, the biggest land market barrier today is archaic rent control laws existing in most parts of the country.

Stop JNNURM Funding to GNCTD

A petition dated 15 June, 2009 was submitted to the Council of States (Rajya Sabha) praying that release of JNNURM funds to GNCTD and its para-statal bodies be stopped till a clear commitment about rental law reform in Delhi is specified in the MoA signed between the MoUD and the GNCTD & others along with giving a time-frame by which this would be undertaken as required by the JNNURM policy document placed in Parliament. On 11 September, 2009 the Rajya Sabha Secretariat wrote to us that our petition dated 15 June, 2009 had been sent to the MoUD on 9 July, 2009 and again on 1 September, 2009 but no comments have been received from the Ministry till date! Such is the utter contempt the Secretary, MoUD has for the Parliament.

On 7 July, 2009 we met the Minister of State for Urban Development, Shri Saugata Roy asking him to stop JNNURM funds to Delhi till a commitment is made on mandatory RCL reform. He has merely indulged in masterly inactivity.

In October, 2009 we had petitioned the PM to order a high level enquiry into the misuse of JNNURM funds and ensure that rental law reform in Delhi is undertaken immediately and that till this is achieved all funding to GNCTD should be withheld; the PMO merely dispatched our petition to the MoUD. No further enquiry was instituted.

A petition along similar lines was earlier sent on 3 August, 2009 to the Principal Secretary to PM (marked for kind attention of Delivery Monitoring Unit for Flagship Programmes). Shri Sanjukta Ray, Deputy Secretary at the Prime Minister’s Office wrote on 1 October, 2009 that no action needs to be taken by the Delivery Monitoring Unit (DMU) on the petition!!! As a concerned citizens’ group we felt that we would act as eyes and ears to the wrongdoings of MoUD as the latter would never report such things directly to the DMU. As the adage goes that a regime in power which turns a blind eye to truth is actually digging its own graveyard. So be it.

Whither DMU?

Pursuant to the announcement made in the President’s Address to both Houses of Parliament on 4 June, 2009, it has been decided to set up a Delivery Monitoring Unit in the Prime Minister’s Office.
The Delivery Monitoring Unit would review a select number of flagship programmes/initiatives/iconic projects including JNNURM.
The tasks of the DMU will be interalia informing the Prime Minister on a quarterly basis on performance of the selected programmes/ initiatives/ projects,
The DMU will be an oversight mechanism with a view to improving monitoring arrangements, delivery of output and transparency.

(Adapted from the notification dated 7 July, 2009 issued by Shri T.K.A. Nair, Principal Secretary to PM)

Loot of the Exchequer and the Cabinet Secretariat's Deathly Silence

Outraged at the loot of the exchequer under JNNURM the PILWG filed a series of RTI applications. On 21 May, 2010 a RTI application was filed with the Cabinet Secretariat asking the following questions:

Reference the CCI meeting held on 10 December, 2009 granting exemption from implementation of inter-alia rental law reforms to GNCTD under JNNURM.

A. Please let us know:

1. Name and designation of all those who attended this CCI meeting?

2. Did the Union Minister of Urban Development/Secretary, MoUD apprise all those present in the meeting of the mandatory condition of rental law reform under JNNURM policy – announced by the Prime Minister in December, 2005 – before sanctioning of JNNURM funds to GNCTD?

3. Was the PM present in this meeting?

4. Can CCI overrule JNNURM policy decided upon by the Union Cabinet and announced by the PM in December, 2005?

5. Even if GNCTD had to be exempted from inter-alia rental law reform what steps has the Union Govt. taken from 16 September, 2005 till date to get the Delhi Rent (Amendment) Bill, 1997 passed in Parliament?

6. Has Parliament been informed of this shift in JNNURM policy vis-à-vis GNCTD? If so, when and the details thereof?

7. Was the public informed through any Press Information Bureau release about rental law reform exemption to GNCTD? If so, kindly provide us with copy of the press release and press clipping if any.

B. Kindly provide us with photocopies of full files both correspondence and noting; as also the full deliberations and decisions taken by the CCI in its meeting on 10 December, 2009 on the aforementioned issues.

The Cabinet Secretariat (CS) in its reply dated 14 July, 2010 through the Central Public Information Officer (CPIO) answered none of the eight questions; and transferred the application to MoUD. The First Appellate Authority (FAA), CS vide decision dated 7 September, 2010 upheld the order of the CPIO, CS. Thus no reply was forthcoming from the CS to any of our queries. Amazing!

The MoUD in its reply dated 10 September, 2010 through the CPIO refused to divulge the name and designation of all those ministers who attended this CCI meeting and whether – hold your breath – the PM was present in this meeting! It also denied photocopies of full files both correspondence and noting; as also the full deliberations and decisions taken by the CCI in its meeting on 10 December, 2009. The FAA, MoUD in its order dated 16 November, 2010 upheld the decision of CPIO to stonewall our queries. So much for transparency and accountability of public servants of the ‘Yes Minister’ variety!

Crucial decision of Central Information Commission thrown to the winds by the powers that be

The Central Information Commission (CIC) in its decision announced on 30.08.2010 as adjunct to Complaint no. CIC/WB/C/2010/000120 dated 14 May, 2010 in the case of Shri Venkatesh Nayak and Shri Shekhar Singh v. DOPT had held:

“This would imply that exemption u/s 8 (1) (i) will not apply to deliberations leading to formulation of a policy framework till such time as the draft is submitted to the Cabinet Secretariat, with all its necessary attachments for submission to the Cabinet, which would then be a final form given to the draft. Thereafter, this draft would remain exempt from disclosure till such time as the decision has been taken and action to be taken thereon is “complete and over”.

On the basis of the aforementioned CIC decision a fresh RTI application was filed on 7 February, 2011 asking for files pertaining to the CCI decision. It was explained in the application that as the matter (exemption of Delhi from rental law reform) of CCI decision on 10 December, 2009 was now complete and over, it does not qualify for exemption. In utter contempt of the CIC decision both the CPIO and FAA in the MoUD have refused to provide us with a copy of the file even twenty-two months after the CCI decision. Who all are being protected for their acts of omission and commission? No guesses required!

Why is the file being withheld by the Cabinet Secretariat and MoUD?

It is amazing that both the Cabinet Secretariat and Union Ministry of Urban Development are blocking access to public of the crucial file pertaining to the CCI decision wherein GNCTD was exempted from mandatory rental law reform and thousands of crores of rupees could be released to GNCTD under JNNURM. It may be mentioned that CCI in December, 2009 consisted of 15 ministers including the PM; Shri Pranab Mukherjee, Minister of Finance, Shri P. Chidambaram, Minister of Home Affairs (who is sought to be incriminated in the 2G scam), Shri S. Jaipal Reddy, then Minister of Urban Development and later shunted out of MoUD; Shri A. Raja, then Minister of Communications and Information Technology (now incarcerating in Tihar jail) among others.

There are three likely scenarios which necessitate Govt. of India to desperately hide this vital document from public gaze.

Scene 1: The alleged CCI meeting on 10 December, 2009 was attended only by the then Minister of Urban Development Shri S. Jaipal Reddy in which case – the decision cannot hold forth and has to be reversed at the earliest and the concerned Cabinet minister should exit from the Union Cabinet immediately. After all he has only duplicated – under the pretext of Cabinet sanction and the PM’s tacit concurrence – what A. Raja did in the 2G telecom scam. In fact if this scenario is the reality then the JNNURM scam would pale the 2G scam into insignificance.

Scene 2: If the PM had actually chaired the CCI meeting wherein the decision to exempt GNCTD from mandatory rental law reform was taken then it is thoroughly embarrassing for the father of economic reforms in India to be reversing the UPA’s reform policy as also the JNNURM policy; in which case he has no moral right to continue as PM anymore.

Scene 3: The alleged CCI meeting never took place so the file pertaining to exemption of GNCTD does not exist and hence is not being provided under the RTI Act.

The Cabinet’s Code of Omerta

The public has every right to know the parameters surrounding a Cabinet meeting viz what constitutes a quorum; whether ministers who are members of the Cabinet have to be compulsorily present in the meeting or they could send a note by way of an opinion on issues in the agenda; whether a single Union minister can decide on behalf of all other absentee members of a Cabinet Committee; whether such Cabinet meetings are held surreptitiously and no press release is issued; or the details of crucial decisions taken are made public; and finally why should the file pertaining to a Cabinet decision – which is complete and over – be not made public. Keeping Cabinet decisions secretive in this era of RTI Act gives credence to public assumption that the Govt. has a lot to hide for its wrongdoings to save its own skin. But then, truth like pregnancy has a habit of surfacing sooner rather than later!

Even at this late hour the Government could own up the acts of omission and commission and ensure that the guilty would be punished straightway.

Will the PM break his silence or will the code of omerta reign supreme?

GOEBBELIAN TACTICS AT WORK

As the JNNURM website gives no details of the RCL reform allegedly undertaken by States, through two separate RTI applications filed at the JNNURM Directorate, MoUD on 30 August, 2011 we inquired whether the State of U.P. and Gujarat have undertaken the mandatory reform of rent control legislation under JNNURM; and if it had been done so copies of final enactment of the legislation by the U.P. and Gujarat legislatures along with the notification issued by the two State Governments in this regard be provided. On not receiving any reply we filed first appeals in both the RTI applications on 14 October, 2011. Till date no reply has been received in the case of U.P. and there is deathly silence on the issue. Whereas in the case of Gujarat, Shri Rajesh Kumar, CPIO, MoUD had confessed in his communication dated 18 October, 2011 that the final enactment of the legislation by the Gujarat legislature and notification issued by the State Govt. of Gujarat are not available with this Ministry!

It is apparent from the foregoing that thousands of crores of rupees in JNNURM funds are going down the drain without checks and balances. Parliament has no control over it and as all State Governments are party to the massive fraud being committed there is no one to raise a voice against the skullduggery of the bureaucrats in the Union Urban Development Ministry. Why continue with the flagship scheme JNNURM if the reform agenda is to be completely bypassed? Let the money be doled out through the regular budget.

It is abundantly clear from the above analysis that the Government had been doling out lies to the press and Parliament. The websites of MoUD and the PMO have also been spreading disinformation amongst the public. In true Goebbelian fashion the effort was to repeat the lie ad infinitum over six years so that the lie gets accepted as the gospel truth. The Centre's contribution of sixty thousand crore rupees to States and UTs is part of the story. The States and UTs have to spend the remaining expenses on the projects. It is huge amount of exchequer's money going down the drain.

RESPONSE OF THE PMO – STONE-WALLING OUR RTI

On 4 March, 2011 we submitted a fresh petition at the PMO detailing our aforementioned research findings on the status of RCL reform under JNNURM. On 24 May, 2011 we filed an application under the RTI Act at the PMO on the said petition asking the following question:

Reference our communication dated 4 March, 2011 addressed to the Prime Minister of India on the subject of “False reports submitted by the Union Ministry of Urban Development to the Delivery Monitoring Unit on the status of reforms undertaken under Jawaharlal Nehru National Urban Renewal Mission – Demand for an enquiry” and duly received at the Prime Minister’s Office at the Dak section on 4 March, 2011 kindly let us know:

i. List of officials date-wise to whom the said communication was referred to along with their comments.

ii. The status of the enquiry at the PMO and the findings of the same including replies to the four queries raised in our communication.

iii. Have JNNURM funds to States/UTs – which have wilfully given false information about having undertaken RCL reforms – been withdrawn?

iv. What action has been taken against the officials (both at the level of MoUD and State Governments) responsible for filing false reports to the Delivery Monitoring Unit set up in the PMO?

Through a reply dated 22 June, 2011 Shri K. Salil Kumar, Under Secretary, CPIO, PMO informed that our letter had been examined by the Director, PMO and Joint Secretary to PM and that MoUD has been requested to give its comments vide ID no. 500/7/3/2009-ES.2(Vol.4) dated 26 April, 2011. To this interdepartmental note the only response from the MoUD has been that it “... has not come across any instance of a State furnishing 'false' information in connection with rent control law reforms ...” . We decided to pursue the matter with the PMO by filing a first appeal on 18 July, 2011 by reiterating “It needs to be reiterated that thousands of crores of rupees released under JNNURM funds are going down the drain and a massive fraud is being committed by the MoUD and State governments. It is expected that the PMO will take a pro-active stance in getting the information asked for by us. The PMO appears to be covering up the MoUD’s murky dealings. The PMO cannot take cover under the pretext of having asked for comments from the MoUD since April 2011 and the MoUD not providing the same to PMO. Subversion of flagship scheme JNNURM is bad enough; worse still is the subversion of the RTI Act by the MoUD.” Shri Amit Agrawal, Director and Appellate Authority, PMO was unable to provide any further information.

On 3 November, 2011 – hoping that by now MoUD would have sent its comments – we filed another RTI application at the PMO asking for a copy of PMO’s ID no. 500/7/3/2009-ES.2(Vol.4) dated 26.04.2011 and comments received thereof from MoUD. The CPIO, PMO instead of replying to our application just transferred our application to MoUD. Apparently MoUD even till 11 November, 2011 has not cared to send its comments to PMO!!!

RESPONSE FROM THE PRESENT MINSTER FOR URBAN DEVELOPMENT & SENIOR BUREAUCRATS

Shri Kamal Nath took over as the Union Minister for Urban Development in January, 2011 and inherited the legacy of his predecessor on the bungling of JNNURM funds. On 2 May, 2011 we wrote to Shri Kamal Nath, UDM informing him that no State in India has undertaken rental law reform under JNNURM. The MoUD responded by arranging a meeting with Smt. Nisha Singh, Joint Secretary (Mission) on 12 May, 2011. We shared with her the findings of our social audit of mandatory rental law reform undertaken at pan India level; and that no State in India has undertaken rental law reform under JNNURM. On 30 May, 2011 we wrote to the Joint Secretary (Mission) to set the process of notifying the DRA, 1995 and passing of Delhi Rent (Amendment) Bill, 1997 in motion by bringing all the facts before the competent authority.

Earlier on 22 January, 2011 we had petitioned to Shri Kamal Nath. This was followed by a reminder on 3 March, 2011 urging him to undertake rental law reforms in Delhi; and again on 30 May, 2011 we sent a third letter detailing the scandalous state of affairs during the tenure of his predecessor, Shri S. Jaipal Reddy. Finally on 9 June, 2011 Shri Kamal Nath had a meeting with us wherein Shri Arun Goel, Joint Secretary (DL) was also present. A memorandum was handed over demanding that no JNNURM funds should henceforth be released to States who do not undertake the mandatory rental law reform in the first place. In relation to Delhi the Minister assured the delegation comprising of Ms. Shobha Aggarwal, Jt. Secretary, Public Interest Litigation Watch Group; Shri M.N. Pittie, President, The Property Owners’ Association, Mumbai; & Ms. Suman Jain and Ms. Darshita Aggarwal from the Committee for the Repeal of Delhi Rent Control Act that “the Bill will not be kept hanging” and that “I am mentally with you on the issue”. The Minister asked the Joint Secretary (DL), to update him on Delhi Rent Act, 1995 and Delhi Rent (Amendment) Bill, 1997 within 10-15 days. On 3 August, 2011 a public notice was published in the Times of India and other dailies issued on behalf of MoUD, GoI inviting public comments on the DRA, 1995 and Delhi Rent (Amendment) Bill, 1997. Comments were to be sent within a period of four weeks. We learnt through a communication dated 27 October, 2011 (in response to our RTI application dated 27 September, 2011) from Shri D. Nagar, Section Officer, MoUD that the Cabinet Note pertaining to the issue has still not been prepared as the comments/suggestions received from the public are being examined!!! This has been substantiated through a communication dated 4 November, 2011 received from the Office of Standing Committee on Urban Development, Lok Sabha.

WE DEMAND:

A CBI enquiry into the fraud on the exchequer through release of JNNURM funds sans implementation of mandatory reform.

- to ascertain role of the former Minister of Urban Development, Shri S. Jaipal Reddy in subverting JNNURM by exempting Delhi from RCL reform; the buckling under political pressure of Shri Pranab Mukherjee, Finance Minister in allowing Delhi to be exempted from RCL reform;the role of senior most officials within PMO particularly the then Principal Secretary to PM, Shri T.K.A. Nair and those junior to him who effectively ensured that our memos since 2009 would not reach the PM – unless of course the PM was trying to keep himself at an arm's distance as he did in the 2G scam. These officials consistently failed to institute their own enquiry in spite of a persistent demand for the same indicating their collusion with the vested interests.

- The role of Chief Minister of Delhi, Smt. Shiela Dikshit and that of Deputy Chairman of Planning Commission of India, Dr. Montek Singh Ahluwalia for trying to influence the Union Ministry of Finance and MoUD to exempt Delhi from RCL reform.

- the role of officials both at the State and Central levels responsible for demanding JNNURM funds by submitting false statements about RCL reform or releasing funds without application of mind or cross-checking the statements of State officials particularly when the issue had been brought to their notice repeatedly.

- the role of officials in the MoUD and Cabinet Secretariat who knowingly and purposely scuttled our RTI queries – in spite of clear rulings of the CIC – in an attempt to prevent the truth from coming out ostensibly to protect the powers that be.

Pending This Enquiry We Demand

Stop all future funding under JNNURM to States/UTs.
Ensure States/UTs return JNNURM funds if the RCL reform has actually not been undertaken.
A halt to JNNURM with immediate effect and not to renew it till all States/ UTs undertake the RCL reform.
Immediate notification of DRA, 1995 as it is within power of MoUD to do without a second's delay.

PUBLIC INTEREST LITIGATION WATCH GROUP

Saturday 12 April 2014

JNNURM, Rent Control Law Reform and Lies

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