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TMI Blog2013 (11) TMI 1572X X X X Extracts X X X X X X X X Extracts X X X X ..... d company called Gujarat State Financial Services Limited (GSFSL). The study report was prepared in February 2006 which strongly recommended for execution of the project after undertaking a feasibility study. Since the project was first of its kind in the country and involved commercial risk, the State Government thought of undertaking the project of a public-private partnership so that the responsibility and the risk, if any, could be shared. 2. The State organized the Vibrant Gujarat Urban Summit in the year 2007. The third respondent, Infrastructure Leasing Financial Services Ltd. (ILFS) showed its commitment for development of the national financial services centre and a Memorandum of Understanding was signed with the State Government on 16.2.2007. On 15.5.2007, a joint venture agreement was executed between the State represented by the Gujarat Urban Development Company Limited (GUDC) and the third respondent for forming a 50:50 joint venture company in the name of Gujarat International Financial Tech City Limited i.e. GIFT Company Ltd. on 22.3.2011 and 7.6.2011 the State Government issued and allotted 412 acres of land to the fourth respondent i.e. GIFT Company Ltd. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scertain and vacate encroachment cases. Relevant portion of the CAG report reads as follows :- 3.5.13 Inconsistent decision to allot land at token amount Gujarat Urban Development Company Limited (GUDC), a Government Company was authorised by Government in May 2007 to undertake the Gujarat International Finance City project (GIFT city) in a joint venture with Infrastructure Leasing Financial Services Ltd. (IL FS) for setting up an International Finance City. Subsequently, a Company called GIFT Company Ltd, (the Company) was formed by IL FS and GUDC as a joint venture. As per the direction of the Government in Revenue Department, Collector, Gandhinagar handed over advance possession of Government land admeasuring 26,77,814 sq.mt. valued by the DLVC/SLVC during September 2007 to December 2008 at ₹ 500 crore situated at fourteen survey numbers of four Talukas of Gandhinagar district to GUDC for setting up the GIFT city. The GUDC proposed (June 2007) to Government for relaxation in payment of occupancy price for the land. Chief Secretary, Principal Secretaries of Revenue Department, Finance Department and UDUHD opined that the land shall be allotted at market value as pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeking permission from the Collector/Government. Further, the State Government has produced no records to indicate that allotment for the GIFT city was on the basis of PPP. The State Government despite repeated requests did not produce to audit the Joint Venture Agreement signed between Government/GUDC and IL FS. Non production of the records to audit has the consequential effect of limiting the scope of audit. 3.5.14 Conclusion The performance audit revealed a number of system and compliance deficiencies. Government did not adopt a uniform policy in alienation and allotment of land. Delay in finalisation of valuation also resulted in blocking up of revenue of the Government. There was no mechanism for review and revision of incorrect orders issued by the subordinate officers to safeguard Government revenue. No proper monitoring system exists in the Department to ascertain and vacate encroachment cases. 5. The petitioner herein filed a Public Interest Petition before the Gujarat High Court primarily based on the report of CAG seeking a declaration that the action of the State Government for allotting land in favour of the respondent company was illegal and void and soug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be brushed aside as such, but it is equally important to examine the comments what respective Ministries have to offer on the CAG s Report. The Ministry can always point out, if there is any mistake in the CAG s report or the CAG has inappropriately appreciated the various issues. 8. CAG is a key figure in the system of parliamentary control of finance and is empowered to delve into the economy, efficiency and effectiveness with which the departmental authorities or other bodies had used their resources in discharging their functions. CAG is also the final audit authority and is a part of the machinery through which the legislature enforces the regulatory and economy in the administration of public finance, as has been rightly pointed out by the High Court. But we cannot lose sight of the fact that it is the Government which administers and runs the State, which is accountable to the people. State s welfare, progress, requirements and needs of the people are better answered by the State, also as to how the resources are to be utilized for achieving various objectives. If every decision taken by the State is tested by a microscopic and a suspicious eye, the administration wil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Zones Act, 2005, and we are in agreement with the High Court that it cannot be said that the State has acted against public interest. The Government has noticed the development and the employment opportunities that the project would bring into the State. The decision taken by the Government was also transparent and that the Government has also got substantial stake in the Public-Private Partnership and has also taken care of its interests while entering into the various agreements. Learned senior counsel fairly submitted that he is not attributing any motives or stating that the decision was taken for extraneous reasons, but contended that the Government had, without any application of mind, parted with a large tracks of land worth crores of rupees to the private party, which is not in the interest of the State. 12. We are of the view that these are purely policy decisions taken by the State Government and, while so, it has examined the benefits the project would bring into the State and to the people of the State. It is well settled that non-floating of tenders or absence of public auction or invitation alone is not a sufficient reason to characterize the action of a public au ..... X X X X Extracts X X X X X X X X Extracts X X X X
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