Sources confirmed that the inquiry has been initiated by the ACB following specific directions by the additional chief secretary (home).

According to a confidential ACB report submitted about two years ago, inquiries had revealed that the state government was cheated of nearly Rs 2 crore in the sale of two plots admeasuring 14,255 sq mt and 2,400 mt at Airoli and CBD Belapur respectively, to Shri Om Shanti Cooperative Housing Society (CHS). CIDCO allegedly sold the plots for much less than the prevailing market price. Sheer negligence by CIDCO officers had resulted in the CHS being allotted the entire land at Belapur for a song.

The report was submitted to the state Home Department after investigating the complaint lodged by an investor in the Airolischeme who had alleged that the society had deceived him and the state government.

Though the ACB declined to investigate the alleged cheating case between the investor and the society stating that it was a matter of civil litigation and not under its purview, it however made out a strong case against the society and CIDCO officials.

``It prima facie appears that the officers of CIDCO and the society cheated the government and caused loss to it. It also appears prima facie that the government has thus incurred losses to the tune of Rs 1,77,60,000 and the society has earned illegal gains to that extent,'' the report said.

``CIDCO officers misused their powers and posts acquired by them as government servants and caused loss to the government. In order to ascertain which officer of CIDCO is guilty, it is necessary to make an open inquiry into the said matter. Board members of the CIDCO are of IAS status, and it is required to make inquiry with them by asking them in this regard,'' the reportadded.

CIDCO had leased the land at Airoli node, Sector 1, Plot 1, admeasuring 14,255 sq mt to the chief promoter and chairperson of the society, for a scheme of bungalows and shops in 1984. While 11,855 sq mt were used for the scheme of bungalows, the remaining 2,400 sq mt were utilised for commercial purposes.

CIDCO sold part of the Airoli land, admeasuring 10,988 sq mt, for a mere Rs 77 per sq mt when the market price was Rs 300 per sq mt. The remaining land, admeasuring 3,267 sq mt, was sold at the rate of Rs 100 per sq mt. Thus, CIDCO sold the land for a total consideration of Rs 9,32,776, when it could have got Rs 35,56,500 for the same land.

Subsequently, in 1988, though no building plans were approved, the society illegally started construction at Airoli. When notices sent by CIDCO were ignored by the society, CIDCO cancelled all agreements with regard to the Airoli land.

The society moved the Bombay High Court (writ petition 4047/88) but opted for an out-of-court settlement with the UrbanDevelopment Departmentin 1991. Subsequently, on June 25, 1991, the deputy secretary, Urban Development Department, sent a letter to CIDCO vice-chairman stating that the society may be allotted the entire land as agreed earlier, and also be allowed 1.5 FSI for the 2,400 sq mt of land meant for commercial purposes.

When CIDCO intimated to the government that 1.5 floor space index(FSI) could not be given at Airoli, it was ordered to give to the society an FSI of 1 for the total area of land there. The government also ordered that another plot of 2,400 sq mt with 1.5 FSI should be allotted to the society under a separate agreement. It was then that CIDCO allotted the land at CBD Belapur, Plot no 10, Sector 23, having 1.5 FSI to the society. Again, though the market price of the said land at CBD Belapur was Rs 7,500 per sq mt, it was allotted to the society for a mere Rs 800 per sq mt on February 14, 1992.

Curiously, while the letter of possession dated February 14, 1992, for the CBD Belapur plot clearlymentions that the society has paid Rs 19,20,000, the break up of this amount mentions four payments made in respect of the land at Airoli!