Explained: What is the Karnataka MUDA scam?

Explained: What is the Karnataka MUDA scam?

The Mysuru Urban Development Authority has been alleged of gross irregularities in the allotment of residential sites to land losers as compensation, including to Chief Minister Siddaramaiah’s wife.

Karnataka Chief Minister Siddaramaiah speaks as BJP and JD(S) MLCs protest in the well against alleged corruption in MUDA and Valmiki Corporation during the Karnataka Legislative Council session at Vidhana Soudha in Bengaluru on July 25, 2024.
| Photo Credit: PTI

The story so far: The Mysuru Urban Development Authority (MUDA), one of the State’s first urban planning and development bodies established as City Improvement Trust Board (CITB) in 1904 during the rule of the Mysuru Maharajas, has come under intense public glare during the last few weeks after media reports alleged gross irregularities in the allotment of residential sites by MUDA to land losers as compensation.

Amid the public uproar against allegations of misuse of provisions relating to compensatory allotment of residential sites to land losers, the name of Karnataka Chief Minister Siddaramaiah’s wife, Parvathi, surfaced. It was alleged that she had been allotted 14 sites in an upmarket residential layout in lieu of her 3 acres and 16 guntas of land that had been acquired by MUDA to develop a layout.

Even though Mr. Siddaramaiah and the Congress leaders have clarified that the allotment of residential sites to Ms. Parvathi was within the legal framework of the 50:50 ratio scheme envisaged by the cash-strapped MUDA to compensate land losers, the Opposition comprising NDA allies BJP and JD (S) have been using the instance as a stick to beat the ruling Congress.

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What necessitated the incentive scheme for land losers?

MUDA, which is expected to acquire land, develop residential layouts and allot sites to applicants at a reasonable price, had been facing a number of litigations for developing layouts in Mysuru city during the last few decades without completing the land acquisition formalities.

As MUDA does not have financial capability to compensate land losers, many had moved the courts. In one case, the High Court directed MUDA in 2020 to return to the original owner more than two acres of land it had developed in Srirampura in Mysuru without completing the acquisition formalities.

The Mysuru Urban Development Authority (MUDA) building in Mysuru.
| Photo Credit:
SRIRAM MA

Citing the High Court order and the ruling of a five-judge bench of the Supreme Court, also in 2020, to determine compensation to land owner under the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013 or by mutual consent, former Chairman of MUDA H.V. Rajeev said MUDA faced the prospect of paying almost three times the market value or the guidance value fixed by the Sub-Registrar.

Under the provisions of the Land Acquisition Act of 2013, Mr. Rajeev said MUDA would have to pay not only the market value of the entire acquired property in terms of square feet or acres, but also 100% solatium (compensation) with 12% interest since the day of the acquisition, which in many cases was decades ago.

Hence, the MUDA, at a meeting of its Board in September 2020, decided to approve the 50:50 ratio incentive scheme for land losers to avoid the prospect of coughing up large sums of money as compensation.

What is the 50:50 ratio incentive scheme?

The 50:50 ratio incentive scheme envisages allotment of 50% of developed land to the land loser.

While an acre of land comprises around 43,000 to 44,000 square feet, only about 23,000 square feet of developed land is available for residential sites as the remaining goes towards roads, parks, civic amenities (CA) site and other amenities. Out of the 23,000 square feet of developed land for every acre, 50% or 11,500 square feet is allotted to the land loser and the remaining 11,500 is retained by the MUDA, according to officials familiar with the 50:50 ratio incentive scheme.

BJP workers gathered near Maharaja’s College grounds in Mysuru to protest against the MUDA scam.
| Photo Credit:
M A Sriram

If MUDA had developed a layout on one acre of land without completing the acquisition formalities, the land owner was entitled to 11,500 square feet of developed land, which for example translates into nine sites of 30×40 dimension plus another site measuring 700 square feet.

What is the MUDA scam?

The 50:50 scheme, when approved, envisaged each case of allotment of sites under it to be brought before the MUDA board. However, there have been allegations that the sites have been sanctioned to ineligible persons based on forged and bogus documents through middlemen in connivance with MUDA officials without the knowledge of the board.

The continued allotment of sites under the scheme even after the Congress government issued directions to MUDA, twice in 2023, to stop it has brought the role of the MUDA officials in the alleged irregularities under public glare and scrutiny.

Apart from allotting sites under 50:50 ratio incentive scheme, MUDA had been allotting sites as an incentive to land losers who had already been compensated. A land owner surrendering one acre of land to MUDA is entitled to one site as an incentive.

It has been alleged that the MUDA was misusing this provision as well to allot sites to ineligible persons.

How are CM Siddaramiah and his wife involved?

Chief Minister Siddaramaiah addressing the press conference on the allged MUDA site alloting issue, in Bengaluru.
| Photo Credit:
Special arrangement

Chief Minister Siddaramaiah’s wife Parvathi had been gifted three acres and 16 guntas of land in Kesare on the outskirts of Mysuru by her brother Mallikarjuna Swamy in 2010. But, MUDA had developed the Devanur III Stage Layout without acquiring this piece of land.

Based on Ms. Parvathi’s application for compensation, the MUDA allotted 14 sites in Vijayangar III and IV Stage Layouts, measuring a total of 38,284 square feet under the 50:50 ration incentive scheme, in lieu of her land that was used for developing Devanur Layout. However, the Opposition has alleged irregularities even in the allotment of these sites to Ms. Parvathi by MUDA.

What has been the Opposition’s allegations?

The BJP and JD(S) leaders are not only questioning the legality of the denotification of the piece of land in 1998 before Ms. Parvathi’s brother Mallikarjunaswamy purchased it in 2004, but also the allotment of compensatory sites to her in the upmarket Vijaynagar Layout even though the land used for developing Devanur layout holds a comparatively less market value.

Opposition party leaders protesting in the Assembly hall against the Congress government’s involvement in MUDA site scam at the Legislators Assembly in Bengaluru.
| Photo Credit:
Special arrangement

Mr. Siddaramaiah has argued that his wife had not preferred allotment of compensatory sites in Vijayangar Layout and also pointed out that the allotment was made during the BJP regime in October 2021. MUDA had similiarly allotted 1,328 compensatory sites to others, he has said. However, the Opposition has sought a CBI probe to unravel the extent of alleged malpractices.

After the Opposition was denied an opportunity to raise the issue in the recent Legislature session, the BJP and JD(S) jointly announced a seven-day-long Bengaluru to Mysuru padayatra from August 3 against the alleged scams by the Congress government in the State including the irregularities in the allotment of MUDA sites.

However, the JD(S) has now withdrawn its support to the foot march questioning the timing in the middle of heavy rains that have been battering the State. Union Minister for Heavy Industries and Steel H.D. Kumaraswamy has also claimed that he was hurt by the manner in which BJP leaders have treated him, particularly targetting former BJP legislator of Hassan Preetham Gowda

JD(S) leader and Union Minister H.D. Kumaraswamy, with BJP State president B.Y. Vijayendra, former CM B.S. Yediyurappa, and other leaders from both parties, during coordination meeting between BJP and JD(S) to chalk out a strategy for the proposed padayatra to Mysuru from Bengaluru, over the alleged MUDA scam, in Bengaluru on July 28, 2024.
| Photo Credit:
MURALI KUMAR K

How has the government responded?

Even as Congress leaders have been claiming that leaders of BJP and JD(S) too have been beneficiaries of MUDA site allotment, the State Government has announced a one-man judicial commission headed by retired judge of Karnataka High Court P.N. Desai to probe into the alleged irregularities and submit its report in six months.

While JD(S) leader and former MUDA Chairman S.R. Mahesh said irregularities in the MUDA can never be brought to light by either the Government inquiry or the judicial probe, Union Minister for Heavy Industries and Steel H D Kumaraswamy said the judicial commission announced by the Government is aimed at only safeguarding Mr. Siddaramaiah’s interests.

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