The Times of India 19.03.2013
Lucknow Municipal Corporation cancels lease to prevent auction of Uptron's property
LUCKNOW: The controversial sale of the Uptron premises by the Industrial Finance Corporation of India
(IFCI) to a Lucknow-based private builder has taken a curious turn with
the Lucknow Municipal Corporation (LMC) cancelling the 30-year lease
deed granted to Uptron in 1985. The cancellation which comes two years
before 2015 (when the lease was to expire), has technically brought the
property back in LMC's fold. The municipal body, while objecting to
further sale of property, has also decided to move the high court.
The cancellation of the lease agreement comes a fortnight after IFCI sold off the Uptron premises spread over an area of around 5.5 acres near Gomti barrage to a private builder, Shalimar Corp Limited. The IFCI had proceeded to sell the property on March 1. It also decided to sell off nine acres of land on Dewa Road. This land belonging to UP State Industrial Development Corporation was also leased out to Uptron in mid 1980s. Sources in UPSIDC said that the corporation is yet to object to the sale of this property.
The IFCI, however, informed the LMC on March 11. Speaking to TOI on Monday, municipal commissioner, RK Singh said that the LMC received the letter on March 15. "The lease deed has been cancelled and hence technically the property comes back to LMC under the Municipal Act," Singh said and added that they would be moving the high court in any case. The municipal commissioner said that they have also asked the IT department to stop the 'unauthorised sale' of property.
"Even if the lease was not cancelled, the property would have come back to LMC in another two years," the municipal commissioner said. As per the agreement, LMC had leased out the land to Uptron for "equitable use''. The behemoth entity, however, mortgaged the property in 1987 to lift around Rs 10 crore from IFCI and other financial institutions. This was, however, an unsecured loan for which the state government did not give any guarantee.
At the same time, liabilities continued to mount on UPTRON. By 2010, the total liabilities had piled up to more than Rs 200 crore even as Board for Industrial and Financial Restructuring (BIFR) intervened. Principal secretary IT, Jeevesh Nandan said that the liabilities include Rs 70 crore as employees' salary, Rs 45 crore as trade tax and Rs 10 crore as provident fund. Many employees have been adjusted in other departments, while there are around 50 employees who are a payroll of Uptron. Nandan said that the financial institution had even agreed for one-time settlement scheme under which Rs 32.7 crore were to be paid to the IFCI. "The settlement had been done," he maintained.
However, things took a twist on August 2, 2012, when IFCI slapped a demand notice on Uptron, seeking repayment of Rs 140,48,74,218 within a stipulated time of 60 days from the date of the issue of the notice. The outstanding on the company was calculated on July 31, 2012. When Uptron failed to comply with the notice, the financial institution toughened its stand and seized nearly 6 acre of its land in Jugauli in Gomtinagar under section 13(4) of the Securitization Act, 2002.
The IFCI in its seizure notice had said that Uptron defaulted on the payment of more than Rs 140 crore with further interest on contractual rates till payment. The institution also cautioned the state-owned electronics company and the general public against dealing with the property. "Any such dealing will be subjected to the charge of IFCI for over Rs 140 crore," the notice, which was pasted on Uptron building in Gomtinagar, said.
Sources in the department of electronics said that Uptron had even managed to avail the no-objection certificate (NOC) from the LMC while mortgaging the property with the financial institution. This raises a whiff of suspicion if LMC was in the know-how of the sale. "This is a matter of investigation. The LMC was not in the loop when the premises were auctioned to the highest bidder. At least the LMC should have been informed about this," said Lucknow mayor, Dinesh Sharma.
Set up in 1979, Uptron was a leading manufacturer in early 80s and its television sets were popular all over the country. But, unprofessional management turned it into a loss-making entity within a span of 10 years.
The cancellation of the lease agreement comes a fortnight after IFCI sold off the Uptron premises spread over an area of around 5.5 acres near Gomti barrage to a private builder, Shalimar Corp Limited. The IFCI had proceeded to sell the property on March 1. It also decided to sell off nine acres of land on Dewa Road. This land belonging to UP State Industrial Development Corporation was also leased out to Uptron in mid 1980s. Sources in UPSIDC said that the corporation is yet to object to the sale of this property.
The IFCI, however, informed the LMC on March 11. Speaking to TOI on Monday, municipal commissioner, RK Singh said that the LMC received the letter on March 15. "The lease deed has been cancelled and hence technically the property comes back to LMC under the Municipal Act," Singh said and added that they would be moving the high court in any case. The municipal commissioner said that they have also asked the IT department to stop the 'unauthorised sale' of property.
"Even if the lease was not cancelled, the property would have come back to LMC in another two years," the municipal commissioner said. As per the agreement, LMC had leased out the land to Uptron for "equitable use''. The behemoth entity, however, mortgaged the property in 1987 to lift around Rs 10 crore from IFCI and other financial institutions. This was, however, an unsecured loan for which the state government did not give any guarantee.
At the same time, liabilities continued to mount on UPTRON. By 2010, the total liabilities had piled up to more than Rs 200 crore even as Board for Industrial and Financial Restructuring (BIFR) intervened. Principal secretary IT, Jeevesh Nandan said that the liabilities include Rs 70 crore as employees' salary, Rs 45 crore as trade tax and Rs 10 crore as provident fund. Many employees have been adjusted in other departments, while there are around 50 employees who are a payroll of Uptron. Nandan said that the financial institution had even agreed for one-time settlement scheme under which Rs 32.7 crore were to be paid to the IFCI. "The settlement had been done," he maintained.
However, things took a twist on August 2, 2012, when IFCI slapped a demand notice on Uptron, seeking repayment of Rs 140,48,74,218 within a stipulated time of 60 days from the date of the issue of the notice. The outstanding on the company was calculated on July 31, 2012. When Uptron failed to comply with the notice, the financial institution toughened its stand and seized nearly 6 acre of its land in Jugauli in Gomtinagar under section 13(4) of the Securitization Act, 2002.
The IFCI in its seizure notice had said that Uptron defaulted on the payment of more than Rs 140 crore with further interest on contractual rates till payment. The institution also cautioned the state-owned electronics company and the general public against dealing with the property. "Any such dealing will be subjected to the charge of IFCI for over Rs 140 crore," the notice, which was pasted on Uptron building in Gomtinagar, said.
Sources in the department of electronics said that Uptron had even managed to avail the no-objection certificate (NOC) from the LMC while mortgaging the property with the financial institution. This raises a whiff of suspicion if LMC was in the know-how of the sale. "This is a matter of investigation. The LMC was not in the loop when the premises were auctioned to the highest bidder. At least the LMC should have been informed about this," said Lucknow mayor, Dinesh Sharma.
Set up in 1979, Uptron was a leading manufacturer in early 80s and its television sets were popular all over the country. But, unprofessional management turned it into a loss-making entity within a span of 10 years.
