Facts about Nagaland House at Kolkata

22 September 2018, Kohima

Facts about the CEEPL case at Kolkata Nagaland House

In view of the issues raised by Leader of Opposition during the 2nd Session of Nagaland Assembly on the 20th September 2018, it is essential that facts of the matter are brought to light for one and all. The Lease Agreement signed in 1997 with M/S CEEPL is bad in law and necessary corrective action needs to be taken to ensure that Rights of Government of Nagaland is protected.

In view of the matter being taken to Kolkata High Court by CEEPL, Government of Nagaland has already filed the counter affidavit and we are confident of winning the case and ensuring that the rightful rent is paid to Government. The brief background of the case is as below:

1. The 1997 Agreement was signed as a consequence of decision taken in Cabinet Meeting convened on 29th January 1997 to discuss Nagaland Commercial complex, Kolkata. A Cabinet Sub Committee was formed to look into the matter.

2. The then Cabinet Sub- Committee that included Shri S.K Sangtam, Hon’ble Minister (H&FW), Shri Imtisungit, Hon’ble Minister (Forests) Shri K. Therie, Hon’ble Minister (PHED) Shri I. Imkong, Hon’ble Minister (RD) Shri P. Enyei, Hon’ble Minister (YRS) Shri Chuba Chang, Hon’ble Minister (Home) and Shri T.C.K. Lotha, Chief Secretary had a meeting with Shri S. Ghosal of M/S Engineers Enterprise on 17th February 1997 in Kolkata and agreed to the following conditions:

a. The Lease agreement has to be for 20 years as per the West Bengal Tenancy Act
b. Annual rent be fixed at Rs 60 lakhs per annum
c. Enhancement of rent will be as per Tenancy Act
d. M/S Engineers Enterprise will bear 50% of the cost of registration including stamp papers.
e. M/S Engineers Enterprise requested that if State Bank of India enhances rent they would also agree to proportionate increase of rent.
f. M/S Engineers Enterprise agreed to execute the lease directly with Govt of Nagaland and bear all expenses after paying Rs 60 lakhs annual rent.

3. The Draft Lease deed was approved by the State Cabinet on 6th December 1997 and subsequently the Lease Deed was signed on 24th December 1997 by the then Chief Secretary Shri A.M Gokhale who also advised Advocate General, Nagaland vide his letter dated 24th December 1997 to withdraw all cases pending with M/S Engineers Enterprise in Calcutta High Court. The Lease was effective from 1st January 1998 for a period of 20 years which expired on 1st January 2018.

4. The terms & conditions 24th December 1997 Lease which are heavily disadvantageous, unfair, unjust are as below:

a. Clause 2.1: The present lease shall be for a period of twenty years (20) with effect from 1st day of January 1998 and on expiry after twenty years, the Lessor shall renew for the 2nd term on existing terms & condition.
b. Clause-3: The lessee shall pay Rs 5 lakhs per month on or before 7th day of every succeeding month.
c. Clause -4.7: To do repair & maintenance (painting /white washing, cement painting etc.) after every 3rd year and replacement of capital equipment, the Lessee is permitted to deduct the said amount from the monthly rent after 30 days of presentation of bills/estimate.
d. Clause -5.2: Allow Lessee to enjoy 1500 sq. ft space free of rent
e. Clause- 5.3: Allow the Lessee to use the premises for business purpose/ sublet without any reference to the Lessor.
f. Clause- 5.8: Allow the Lessee to make alterations, extensions, etc.
g. Clause – 5.10: Allow the Lessee to use entire complex premises as collateral security to Public Financial Institutes/Agencies, National Banks.

5. It is pertinent to note that the then Congress Government was over eager to sign this agreement which amounted to selling the interests of the State. The Cabinet Sub Committee went to Kolkata to have a meeting and the Agreement was also signed in Kolkata on 24th December 1997 on the eve of Christmas – which is a holiday in Nagaland. It is a matter of shame that such illegal acts were taken up on such an important Day.

6. It is also pertinent to note that the present Chief Minister Shri Neiphiu Rio was the PWD Minister but was not included in the Cabinet Sub Committee. In spite of this fact, the Leader of Opposition made the allegation in the Assembly that Shri Neiphiu Rio was the Home Minister in 1997 – which is incorrect and is a statement made with malafide intent. One wonders if the real target of Leader of Opposition is CEEPL or the present Chief Minister Rio.

7. It is unfortunate that the Opposition has tried to make this issue into a Political issue when the interest of the State is involved. As mentioned in the Assembly the Government of Nagaland is committed to protect the interests of the State and will take all legal measures to ensure that M/S CEEPL pays the due rent and in case of default is evicted from the premises.

8. A mistake was made in 1997 by signing an agreement which is not only one sided but is also unfair, unjust, illegal and unconstitutional. The Agreement is based on West Bengal Tenancy Act which itself is not applicable to properties owned by State Governments.

9. The scale of fraud committed through this Rent Agreement is appalling. CEEPL runs Nightingale Hospital in the premises which is a 100 bedded Super Specialty Hospital. The daily rentals of just the room charges amounts to Rs 8 lakhs @Rs 8000 per day which is much more than the rent of Rs 5 lakhs or Rs 7 lakhs being paid by them. Further there are many other commercial establishments in the premises from which CEEPL is collecting rentals.

10. The State Government is following up the case with utmost sincerity. CEEPL had filed the case on 14th February 2018 when the State was going through Assembly Elections. Case came up on hearing on 14th May 2018 when the interim orders with regard to payment of rentals @ Rs 7 lakhs per month was passed by the High Court. Counter Affidavit has been filed in Kolkata High Court on 16th July 2018. The rentals at the rate of Rs 7 lakhs have been accepted as per interim orders of High Court without any prejudice to rights of Government of Nagaland to get the rentals at Rs 2.2 Crores per month with effect from 1st January 2018.

11. It is indeed commendable that Chief Minister Shri Neiphiu Rio announced on the floor of the House that a Joint Parliamentary Committee will be constituted to supervise the follow up action and to ensure that the interests of the State is protected. This is clear proof and evidence of the transparency being adopted by the Government in the matter and the Government should be congratulated and appreciated for this bold initiative.

Issued by:
Media Cell,
Chief Minister's Office,
Nagaland, Kohima