50 CMDA officials under the scanner for lapses in bank guarantees worth Rs 3.77 crore

C Shivakumar

Chennai:

More than 50 officials of Chennai Metropolitan Development Authority are under the scanner for expiry of Bank Guarantees worth more than Rs 3.77 crore.

Sources told Express that the government has sought an action taken report on the audit reports starting from 2006 to 2009-10 that highlighted the lapses in bank guarantees, which is taken towards remittance of security deposit to get planning permission. Interestingly, CMDA has yet to submit any report and the government has asked it to furnish the report next month.  

Sources said CMDA has fixed the responsibility for the lapses on 53 officials. They include 23 secretarial staff, 30 technical officials including chief planners, senior planners, deputy planners, assistant planners and planning assistants. In the case of secretarial officials, out of 23 officials, six have retired and two expired while in the technical side, 13 have retired.

As per norms, a builder has to provide bank guarantee instead of cash towards remittance of security deposit to get planning permission.

In the bank guarantee cases, the building has to be inspected to find out whether the construction is as per the approved plan or not. If the construction is as per the approved plan, the bank guarantees has to be returned otherwise the amount is forfeited by invoking the bank guarantee.

If no action is taken on any one of the two options, the bank guarantee gets lapsed and the bank is legally not bound to honour and oblige the request of invocation if any made after the expiry of bank guarantee.

Initially the lapsed amount involving bank guarantees was Rs 7.72 crore as per audit report of 2005-06. This included 152 cases. However, this was brought down to 89 cases involving an amount of Rs 3.77 crore.

During the enquiry it was also found out that the lapses occurred partly due to administrative lapses and partly due to lack of consolidation and coordination of intended system among units involved in the operation to manage bank guarantees.

Interestingly, CMDA is hinting at collective responsibility of the officials resulting in the bank guarantee lapses. This also brings to light lack of action in many cases due to lack of fixing of responsibility on any one individual.

The main issue for such lapses is lack of fixing the responsibility on any one official. Sources said the need of the hour is to decentralize the powers and delegate it at the deputy planner level. Sources said only the policy issues should be taken to higher level. The technical issues should be taken by the technical department heads. This would bring in transparency in CMDA.

Detail of Bank Guarantee Expiry year wise

S.No    Year of BG expiry   Cases         Amount in Rs

1.             1989                                3              239700

2.             1990                                2              64500

3.             1991                                5              1030500

4.             1992                                7              1344400

5.             1993                                7              648200
6.             1994                                7              3597300

7.             1995                                2              174600

8.             1996                                0              0

9.             1997                                5              1136600

10.           1998                                7              413000

11.           1999                                3              413000

12.           2000                                5              1818700

13.           2001                                3              490000

14.           2002                              10              3145000

15.           2003                                7              2575500

16.           2004                                6              4629200

17.           2005                                1              71200

18.           2006                                0              0

19.           2007                                0              0

20.           2008                                0              0

21.           2009                                2              3355000

22.           2010                                1              6861000

23.           2011                                2              595000

24.           2012                                4              5113000

                Total                                89            37715400