THIRUVANANTHAPURAM: It has been found that ownership of lands allotted for industrial purposes in the state is being transferred without the mandatory clearance from the Department of Industries and Commerce (DIC). Nearly 80 such commercial deals of industrial lands, together making up over 50 acres, have come to the notice of the Department of Industries and Commerce. In short, land packets assigned to stoke entrepreneurial spirit in the state have instead become feast for real estate sharks. According to the rules for allotment of land for industrial purposes, transfer or alienation of industrial land is not permissible without the prior written consent of the state government. Any entrepreneur who desires to cease operation should intimate his intention to the director of Industries and Commerce, who will then resume the land and re-allot it to applicants from the priority list. An instruction had also been issued in 2015 to general managers of District Industrial Centres to the effect that special care should be taken to prevent industrial lands from being traded commercially as part of real estate deals.
The transfer, mostly to people involved in non-industrial activity, is done by changing the constitution of ownership of the firm by bringing in new directors or sub-leasing or by proposing transfer of ownership on the grounds of loan default. A telling example is that of 23.22 acres of industrial land allotted in August 2004 to Dhaan Ispat Pvt. Ltd. in the New Industrial Development Area (NIDA), Kanjikode, Palakkad. The original allottee was G.R. Elangovan who was also the managing director of the industrial unit. As the land was kept idle, the general manager of DIC Palakkad held a personal hearing of the allottee in October 2016. But instead of Mr Elangovan, the meeting was attended by C.K. Ismail Haji and Mr Abdul Rahiman, who introduced themselves as directors of Dhaan Ispat.
“The change of directors was in effect transfer of ownership and hence a land deal. The firm, which was originally allotted land for industrial activities, had not undertaken any industrial activity for over a decade and merely transferred it as part of a masked real estate deal. It is said that the original allottees are forced to make such underhand transfers because the DIC did not have an exit option for not just loss-making entrepreneurs, but also for profitable enterprises that want a way out. “If an investor surrenders his industry to the Department as prescribed by rules they will have no choice, but to pay up most of their investment by way of resumption interest payable to the state,” an industry source said.
