Forest dept pays Rs 23 cr to Gateway Hotels, settles decades-old dispute

Forest dept pays Rs 23 cr to Gateway Hotels, settles decades-old dispute

Submitted by alvin on Fri, 2016-10-14 10:18 Photo: Subhash Chandra NSBengaluru: The state forest department recently settled a decades-old dispute by coughing up Rs23 crore to Gateway Hotels and Resorts (GHR), which was stopped from operating in Nagarhole tiger reserve.The litigation began way back in 1975 over the setting up a luxury hotel and resort at Moorkal in Nagarhole tiger reserve. GHR was allowed to construct a complex for accommodation and a food court in order to develop tourism at a cost of Rs 2.2 crore.The land on which a government saw mill and a workshop existed was transferred to Karnataka State Forest Board (KSFB), which subsequently handed it over to GHR while retaining the ownership. The board entered into a lease agreement with the GHR, according to which GHR would operate the place for eighteen years by paying an annual security deposit of Rs5 lakhs. Accordingly, GHR paid a sum of Rs 4.25 crores for the project. The problem began when KSFB, which did not have the ownership of the land, found that it cannot lease or enter into an agreement with any agency which is not from Karnataka. On 30 August 1993, the hotel was told to hand over the property to the state government and told that the expenditure incurred would be reimbursed. Interestingly, on November 29, 1994, the then Principal Chief Conservator of Forests (PCCF) wrote that the GHR had already implemented the lease agreement. Subsequently, the lease of the hotel was renewed in 1995 after the agency credited Rs5 lakhs as a security deposit as per the norms.Meanwhile, a local tribal association, Budakattu Krishikara Sangha, moved the High Court challenging the very existence of the resort. The association argued that the presence of the resort violated section 2 of the Forest Conservation Act, which mandates permission from Ministry of Environment and Forests (MOEF) for the transfer of forest land for non-forest activities. It also pointed out that the MOEF has rejected the proposal on 28 May, 1998.The petition was allowed by the HC, which ordered the state forest department to take back the land and confiscate the rent of Rs 47.39 lakhs and the annual security deposit of Rs5 lakhs.However, the story did not end here as GHR filed an arbitration suit at the Madikeri district court seeking a settlement. The sole arbitrator ordered the state government to pay a sum of Rs10.02 crore as compensation to the firm along with an interest of ten percent calculated from 29 June, 2002 - the day the government took back the leased land from GHR’s possession. The state forest department then moved the HC and Supreme Court challenging the order but the order went in favour of GHR. The government had to pay a sum of Rs 10.02 crore as compensation along with an interest which amounts to Rs 13.81 crore rupees.Accordingly, an order dated 15 Sept, 2016 was issued by the State Department of Ecology, Environment and Forests ordering payment of Rs 23.83 crore to GHR.