How realtors Logix, 3C and Wave groups became the center of multi-crore scam
In the first Performance Audit Report on the functioning of Noida Authority, the Comptroller and Auditor General (C&AG) of India has highlighted the dismal performance of the authority in the land acquisition and allotment of properties in Noida city submitted to the Government of UP in November 2021. This is the first audit report of the C&AG since the jurisdiction of the audit of Noida and other development authorities was entrusted to the C&AG in July 2017.
In his comprehensive report, the C&AG has invited the attention of the stakeholders to the widespread corruption, undue favoritism to private firms, arbitrariness, and collusion between officials and builders in the functioning of the Authority in the allotment of plots during the period 2005-2018 leading to loss of tens of thousands of crores of rupees to the Authority/ Government, besides causing untold sufferings, distress, and despair among tens of thousands of families of the homebuyers. The C&AG has pointed out rigging in bids by several developers/ builders in collusion with the officials, major irregularities in the processing of applications & allotment, allotment to ineligible parties, leveraging net-worth of an entity for multiple allotments, illegal sub-division of plots/ transfer of ownership of allottees without ensuring payment of outstanding dues/ timely completion of projects, etc.
The period of the audit covered 2005-06 to 2017-18 i.e, the regime of four chief Ministers- Sri Mulayam Singh Yadav (2005-2007), Ms. Mayawati (2007-2012), Sri Akhilesh Yadav (2012-2017), and Sri Yogi Adityanath (2017-2018). There were 24 CEOs of the Noida Authority during this period. Of them, three CEOs – Rama Raman, Mohinder Singh, and Sanjeev Sharan had occupied the CEO position of Noida Authority for more than two years each.
During the period 2005-06 to 2017-18, NOIDA Authority allotted 2,761 properties measuring 188.34 lakh sqm under group housing (GH)- 37.72 percent, commercial-8.94 percent, sports city-17.07 percent, Institutional-8.14 percent, farmhouse (FH)- 9.75 percent and industrial-18.38 percent categories at the premium (cost) of Rs.39,443.41 crore excluding industrial plots cost. The C&AG has stated that during the audit period, the Authority acquired 80 percent of land under the Land Acquisition Act, 1894 applicable up to December 2013, providing a standard justification of industrial development for invoking the urgency clause, which enabled the Collector to dispense with the rights of landowners in respect of hearing on objections to proposed land acquisition.
53.34% plots were allocated on subsidized/ administrative rates
The authority allotted the plots for GH, commercial, and Sports city on a competitive bid basis (63.73% of allotments) to the highest bidders against a fixed Reserve Price (RP). In contrast, Institutional, FH, and Industrial plots were allotted at fixed administrative prices based on the interviews conducted by Plot Allotment Committee (PAC). Further, the RP of plots for Sports city and fixed price for FH, institutional and industrial purposes was kept significantly lower than the RPs kept for GH or commercial plots, i.e., after excluding many types of costs which the authority themselves incur. Thus, the Noida Authority in effect allotted only 46.66% of plots through competitive bidding based on market rates whereas 53.34 % of plots were allocated on subsidized/ administrative rates to private companies/ firms.
Group housing (GH) projects
NOIDA Authority allotted 67 GH plots1 measuring 71.03 lakh sqm primarily during 2005-2018 at the cost of Rs.14,050.73 crore, which was subdivided into 113 plots by the allottees with the approval of the authority. Of these, 71 projects (63%) were either incomplete or partially completed even after ten years of allotment as of 31.3.2020. The outstanding dues of developers/ builders have increased to Rs.18,633.21 crore as of 31st March 2020, including Rs.7281.89 crores of Unitech Ltd, Rs.2276.67 crore from Amrapali group, etc after ten years of allotment of plots.
Commercial properties
During the audit period, NOIDA Authority made 320 allotments in the commercial properties category admeasuring 48,98,440.47 sqm at the cost of Rs.25,264 crore through 41 closed-ended schemes. It includes an allotment of 4 plots for the development of sports cities in prime sectors of 78, 79, 150 & 152 for 33,44,193 sqm (826.34 acres) at the lease premium of Rs.5597.92 crores.
80 percent allotment of commercial plots to three groups
The C&AG has reported that about 80 percent of total allotments in commercial category plots measuring 39,10,376 sqm were made to only three groups viz. Wave group of companies, 3C group of companies, and Logix group of companies during 2008-2015.
Wave (Late Ponty Chadha) group of companies – Wave Infratech Ltd and Flora & Fauna Land Development Pvt Ltd were allotted prime commercial properties/ builders plots of 6,63,104 sqm (42 percent builder plots of all commercial allotments) at the cost of Rs.6570 crores in heart of Noida (Sector 25A/32 sectors) in 2010-2011. However, due to changes in government in March 2012 and the death of Ponty Chadha in November 2012, most of these projects were not completed due to one or the other reasons. and they have either surrendered the land (454131.63 sqm) in December 2016 or the authority has cancelled (108421.13 sqm) the allotment (February 2021) due to non-payment of the dues/ installments. Wave Group of companies had dues of Rs.4425 crore as of 31st March 2020.
Logix Group of companies promoted by Shakti Nath and his family members under the holding company of Logix Soft Tel Pvt Ltd (Turnover- Rs.12.25 crores in 2009-2010) were allotted 2 GH plots, 3 Commercial builders plots, and a Sports city plot (224 acres in sector 150) at the cost Rs.3246.50 crore during 2010-2011. Logix group had outstanding dues of Rs.5840 crores as of 31st March 2020.
Three C (3C) Group of companies promoted by Vidur Bharadwaj, Nirmal Singh, and Surpreet Singh Suri, were allotted 3 GH plots, 4 Commercial builders plots, and 2 Sport city plots (502 acres in Sectors 78, 79 & 150) at the cost Rs.6384.69 crore during 2010-2014.
Rigging of bids through the collusion of the bidders
49 out of 67 allotments (73 percent) of GH plots were made during the period 2008-09 to 2010-11. In 42 out of 49 allotments, only two bids were received, of which in 15 pairs of applicants (for 15 plots valuing Rs.2611.36 crore), the participating bidders were the same or of the same group. In nine of these cases, one allotment was made to each bidder while in the remaining cases the allotments were made to one bidder. The C&AG has found that the bid prices in all cases were very close to the RP and in 12 cases, the winner had bid less than two percent higher than the RP fixed for the plots. The C&AG stated that collusion between the participating bidders could not be ruled out, more so in those cases where alternate allotments were made to each of the participating bidders. Moreover, these allottees did not pay the premium timely and have dues of Rs.1625 crores after ten years of allotment.
The C&AG has further suspected rigging of competition through the use of group companies as competitors by Assotech Limited and Supertech Limited, for three plots (GH-93/137 of 51000sqm, GH-04/78 of 61430 sqm, and GH-01/74 of 249410 sqm and felt that the sanctity of the tender process was vitiated and compromised in these cases and hence liable to be summarily rejected.
Allotments to ineligible companies
The C&AG has observed that allotment of two plots (GH 01 & 02, Sector-143) of more than two lakh sqm worth Rs.471.57 crore was made to Logix group of companies promoted by Shakti Nath in 2011, who failed to even qualify the technical eligibility criteria of a turnover of Rs.200 crore from real estate development and construction activities. In both cases, the bids should have been outright rejected. The authority also failed to examine whether the Logix group consortium had the requisite aggregate net worth to qualify for allotment of multiple plots.
It was further noted that the authority had already earlier been allotted 3 commercial builder’s plots (A-1/124, C-03/105, and CC-04/32) of 143250 sqm to ineligible Logix group consortiums at the cost of Rs.1680.93 crore a few months ago in 2010-2011 even when they failed to meet the mandatory technical eligibility criterion of a minimum turnover of Rs.200 crore from real estate development and construction activities and aggregated net worth required for the plots. In addition, the authority allotted another much bigger plot of Sports city of 224 acres (907988 sqm) in Sector 150 in May 2011 to the ineligible Logix group consortium at the cost of Rs.1094 crores, overlooking the mandatory technical eligibility criterion of a minimum turnover of Rs.200 crores from real estate activities during the previous three years (2007-2010). The lead member of each Logix group consortium was a software development company namely Logix Soft Tel Pvt Ltd. It has paid-up capital of Rs.14 crores and a turnover of Rs.9.70 crores in 2009-10. Thus, the authority allowed the Logix group consortiums led by a small software company to grab six large plots aggregating more than 300 acres valuing Rs.3246 crores in 2010-11.
Multiple Allotments Made to Logix Group during 2010-11
| Types of Plot | Plot No/ Sector/ Area of the Plot | Date of Allotment/ Cost of the Plot | Lead Member (LM) | Name & DOI of Allottee | Number of Participants** in Consortium |
| GH | GH-01/ 143 100112 sqm |
17.8.2011 Rs.236 Cr |
Logix Soft Tel Pvt Ltd | Logix Infratech* 13.5.2010 |
4 |
| GH | GH-02/ 143 100081 sqm |
08.4.2011 Rs.236 Cr |
