The abrupt ban on sale of property in the prime industrial areas of Baddi-Barotiwala-Nalagarh has left both the financers and realtors in a quandary while the investors have welcomed the move. The ban imposed by the Financial Commissioner (revenue) puts on hold all sale, lease, mortgage, exchange and gift of land from November 25.



Large-scale sale and purchase of land had been going on in the area ever since 2003 when the central industrial package was announced. The local landowners had been selling agricultural land through the property dealers. Although the landowners minted lakhs but it was being felt that it was the realtors who benefited the most as they had passed only a small share of profit to the landowner. The sale of land through the general power of attorney (GPA) had become the most potent tool for transacting land. The lure of making a fast buck had enticed the local agrarian community to pass on their GPA to realtors.

A cursory survey of the area revealed that the realtors initially gave 10 to 25 per cent advance to the landowners promising to pay the rest soon after the sale of land. Later this percentage rose to as much as cent percent. The realtors paid the owners the entire amount, which was often much lower than the land’s selling value, and procured the GPA. They then further sold the land at much higher rates. So now with ban in place it is realtors and financiers like these who have been caught unawares. Not only have they got large sums of money being blocked in the process but also an uncertainty about the land value looms large in front of them now.

The large-scale sale and purchase, made on GPA, had also led to many fraudulent land sale deeds. The irregularities included sale of land to non-Himachalis, which is forbidden. The Revenue Department also detected revenue loss worth crores of rupees in the process.

The state CID Department has finally initiated an inquiry recently to look into the matter. According to senior officials of the CID department as many as 2,300 notices have been served to individuals, mostly comprising property dealers, for verifying their Himachali status.

The government was also facing revenue loss worth crores on account of stamp duty evasion. Since the land deals were registered on amounts much lower than actual deals, the stamp duty paid was also proportionately much lower. This too had accounted as a significant reason for this ban.

The move has been impelled by a number of other factors as well. The Town and Country Planning (TCP) Department had prepared a draft development plan in 2003, which specified land use in the area. The plan, however, lost its significance, as there was an influx of industries after the 2003 central industrial package. Lack of coordination between the TCP department and revenue department led to haphazard development. Many industrial units came up in areas, which were specified for green belt and open spaces. Even places, which were earmarked for sector roads, saw development of industrial units.

The TCP department had to grant a land-use change for allowing industrial activity on agriculture land due to this lack of coordination. The State Town Planner, Mr A.R. Sankhyan, while explaining the rationale behind this move said, “ The step to ban sale of land would help the department to devise a master plan for the area. The earlier draft development plan had been rendered ineffective due to large-scale industrialisation. The new plan, while enhancing the scope of the earlier plan, would incorporate the existing structures. The new plan would be applicable till 2021 and would include the entire area falling under the Nalagarh Baddi Barotiwala Development Area (NAABDA)".

The current investors have ambivalent views on this ban. While it has been welcomed in the larger context as it would enable planned development, it has put a spanner in the expansion activities. Investors opined that since this was the only area where large-scale plain level land was available it would encourage investors to move to Uttaranchal.

The government agencies like Himachal Pradesh Housing and Urban Development Authority can, however, continue to acquire land for developing the area. This would bring about some planned development and would help offset the impact of haphazard development.