Urban development agency HSVP sealed the premises of the Kingdom of Dreams (KOD) on Friday after cancelling its land lease agreement for not clearing dues amounting to around Rs 208 crore.
Officials said while KOD had defaulted on paying Rs 108 crore in rent, HSVP had imposed a penalty of Rs 100 crore on it. Sources in the agency said HSVP might auction the property in future.
KOD, which has been in a protracted financial tussle, has been long past its heyday when its Bollywood musicals were a major crowd puller and opened a new dimension in the entertainment scene. One of them, Jhumroo, reached the 1,000 shows landmark in 2015. More recently, the premises were being rented out for weddings and gatherings.
Then known as HUDA, HSVP had in 2007 leased out 5.7 acres of prime commercial land in Sector 29 to the Great Indian Nautanki Company for an auditorium and entertainment complex, which was eventually developed as KOD. The lease was for 15 years, with a monthly rent of Rs 36 lakh and a provision to raise it by 10% every year. In all these years, the developers of KOD haven’t paid rent, officials said.
Several reminders and notices were issued to KOD in the past to clear the dues. One such notice was issued in September last year, when HSVP asked its developers to clear the total accumulated rent of Rs 107 crore, including interest. In July 2022, the dues had increased to Rs 108 crore. The developers of KOD were also accused of encroaching on 1.5 acres of government land.
When a series of notices failed to elicit any response from KOD, HSVP first terminated the lease of land on July 6 and then imposed the penalty for failure to pay rent. On Friday, an HSVP team sealed the premises and took back possession of land.
“Instead of clearing the dues, the developers encroached on land valued at Rs 114 crore. We have sealed the premises and terminated the lease agreement,” said Sanjeev Singla, estate officer 2 of HSVP. He added that it was the HSVP chief administrator who had asked for the premises to be sealed.
Singla, however, clarified that HSVP was not party to any of the disputes that KOD had with banks regarding repayment of loans. “It is between the banks and the company. We have taken back our land for failure to clear the dues,” he told .
Controversies have chased KOD right from the beginning. There were allegations of irregularities in the allotment of land by the government. In 2014, when the regime changed in Haryana, a complaint was lodged against the developers. It was also alleged that the developers had mortgaged government land to raise money from banks. A vigilance inquiry was initiated, but it has remained inconclusive.
In 2016 too, KOD was threatened with termination of the lease agreement. But the developers sought concession from the government, saying they were under extreme financial stress. A three-member panel of bureaucrats was formed to scrutinise the request.
As part of the concession, the KOD developers sought the extension of lease period from 15 to 99 years, the extension of rent moratorium from 12 (from the date of allotment) to 44 months and permission to sub-lease the land, among others.
In 2017, the three-member panel submitted its report, but it was never made public. KOD was allowed to continue and HSVP did not take any action on its notice either.
