Nagaland house Kolkata: High Court rejected the plea from CEEPL and referred the case for arbitration

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Purpose of Nagaland house in the city

Nagaland House in Kolkata which provides accommodations to students, officials and others VIPs on tour. It served Naga cuisine at the house for people staying in the house, Nagas in the city and also for everyone to have a taste of the Naga’s cuisine. It is the commercial complex at Kolkata’s Shakespeare Sarani located at the most prime location with valued approximately at around Rs.300 crore.

Ownership and the lease agreement

The government of Nagaland had bought the property from an erstwhile royal member of Nepal. The genesis of the infamous deal began when the then Naga National Democratic Party(NNDP) government signed a lease agreement with Engineers India Pvt Ltd(EIPL) Calcutta in 1982 (now Civil Engineers Enterprises Pvt.Ltd) for construction project. EIPL was a venture started by Shyamalendu Ghosal, a retired engineer of the government of Nagaland and reportedly close with the then political rulers.

The building

The Nagaland House complex was a turnkey project under Development Authority of Nagaland (DAN). As per the narrative description of the project, it was proposed to be a commercial-cum-guest House complex, comprising of an 11 storied office building of 12,764 square meters, a four storied Nursing Home of 832 square metres, a six-storied VIP guest house of Nagaland government, a three storied office building of Nagaland government and a four-storied staff quarters of Nagaland government. The total area rented for the premises is 1,05,000 sq. ft at the heart of Calcutta. Archtech Consultants Pvt.Ltd, also floated by the same director of EIPL(now CEEPL) had prepared the project, work started in 1979 and Phase-I was to be completed in September 1984 (phase I) and Phase-II was to be completed by May 1988. However, mid-way during construction, the state government “ran out of money”. The contractor, M/s EIPL then offered a sugar coated pill to the state government(NNDP) -that he can arrange loan to complete the project from the State Bank of India(SBI).

Court case

However, the bitter pill inside, was that the Bank would only provide the loan if he was given power of attorney of the property through a lease deed. The EIPL’s advocate prepared the lease agreement for both the firm and the state government that was signed in 1982 for the entire property for a period of 20 years. The one-sided sell out lease is revealed by the clauses such as- the lessee(EIPL) will enjoy 1500 sq. ft space free of rent; use the premises for business purpose/ sublet without any reference to the Lessor; allow the Lessee to make alterations, extensions, etc. ; allow the Lessee to use entire complex premises as collateral security to Public Financial Institutes/Agencies, National Banks and that the lease shall be extended for another 20 years after expiry of the first deed. When CEEPL(earlier EIPL) wanted to renew the lease under the West Bengal Tenancy Act but the NPF government in 2018 refused since the Act does not cover properties of state and central government.

The present NDPP-led UDA coalition government achieved a breakthrough when the High Court rejected the plea from CEEPL and referred the case for arbitration. Hopefully, the arbitration will ensure that sale deed becomes lease deed and biggest fraud will restore ownership of the Kolkata Nagaland House Complex back to Nagaland.