State Bank of Travancore profits, but Kerala loses

THIRUVANANTHAPURAM: With SBT a mere memory, a longstanding rent dispute the bank had with the state government will remain unresolved. The net result: the state can never hope to lay its hands on the lost Rs 4 crore. It was in 1994 that the state government had decided to let out a portion of Travancore House in New Delhi to the SBT. Though both the PWD and transport department had issued rules stating that ‘plinth area’ should be considered for rent, the state’s representative entered into an agreement with the SBT in 1995 to let out an area of 3,370 sq ft ‘carpet area’ for a period of three years from September 1, 1994, at a mutually agreed rate of Rs 50 per sq ft per month.

It began as a three-year lease, but the agreement was terminated only in 2015, 21 years later. An audit has found that during this period, the state’s resident commissioner had executed an agreement with SBT only twice. The first lease period expired in 1997, but SBT continued to occupy the building without a legal deed for more than a decade. The next agreement was struck only in 2008, for a period till September 2011. But SBT held on to the building till 2015. In the 2008 agreement, too, ‘carpet area’ was considered the basis for rent. (Carpet area is the area enclosed within the walls of the house, the plinth area includes the width of the walls too. In other words, carpet area will be around 85-90 percent of the plinth area.)

However, in between, the state raised doubts about the actual extent occupied by SBT. A joint measurement conducted in August 2013 found that the plinth area occupied by SBT was 4,808.47 sq ft. The state government in September 2014 re-fixed the rent as Rs 150 sq ft for 4,808.47 sq ft, applicable from October 2011. The SBT was also told to pay up the extra money it had to under the ‘plinth’ area calculation right from 1994. SBT contested the state’s orders on the ground that the agreement was on mutually agreed terms. It was found that the ‘carpet area’ calculation was made on the faulty advice of the Kerala House assistant engineer. A meeting held on December 21, 2016, failed to resolve the issue, and by the end of March SBT ceased to exist.