The CAG report, tabled in Maharashtra Legislature today, said Mumbai Metropolitan Region Development Authority is yet to recover Rs 8.55 billion froms RIL and Starlight Systems Private Limited, as lease premium dues on additional built up area allowed to the lessees in Mumbai's Bandra-Kurla Complex.

The report said MMRDA also gave "undue favour" to RIL by not recovering additional premium and interest to the tune of Rs 4.28 billion for delay in construction in contravention to the terms and conditions of the lease deed and the premium.

It said MMRDA has been regularly recovering full additional premium, including interest, in respect of other allottees who had delayed construction of structures within the time specified in the lease deed. Therefore, the undue favour shown by the authority to Reliance industries in this regard is inexplicable, the CAG said.

"The MMRDA allotted (December 2007) plot no. C-66 in G-block, Bandra-Kurla Complex measuring 10,183.18 sqm on lease for a period of 80 years. The total lease premium payable was Rs 9.18 billion. The stipulated period for construction of the complex was four years i.e. by 14th July 2012," CAG said.

"The Metropolitan Commissioner, however, could permit extension of such time on payment of additional premium worked out at prescribed rates of lease premium i.e. 10 per cent per annum for delay in construction up to three years and 15 per cent beyond three years," it said.

Failure to pay the additional premium attracted penal interest of 14 per cent, the report said.

"Scrutiny of records of Metropolitan Commissioner, MMRDA revealed (March 2017) that the work was not completed within the stipulated period as per the terms of the lease deed," it said.

"The Authority issued (August 2014) a notice to the allottee to pay the dues as per lease agreement if they failed to pay the outstanding dues of Rs 3.12 billion by June 2014 towards the additional premium along with interest on account of delay in construction.

"MMRDA had not recovered the requisite additional premium of Rs 2.73 billion till date (July 2017) towards the delay of three years and one month in completion of the construction.

"MMRDA had not recovered the requisite additional premium of Rs 2.73 billion till date (July 2017) towards the delay of three years and one month in completion of the construction.

"Besides interest of 14 per cent for non-payment of the above additional premium as of July 2017 which worked out to Rs 1.54 billion was also recoverable. This resulted in undue benefit to the allottee," the report said.

The CAG pointed to various discrepancies in recovery of the amount by the MMRDA in other case.

"MMRDA did not recover lease premium dues as per the prescribed schedule on additional built up area allowed to the lessees resulting in non recovery of Rs 8.55 billion as of March 2017," the report said.

"MMRDA had allotted (March 2012) an additional built up area of 67,000 sqm for Rs 9.84 billion to RIL. The first installment of the 20 per cent of lease premium was to be paid immediately and balance in four equal annual installments with simple interest of 10 per cent of lease premium and penal interest at 14 per cent for delayed payments. The lessee was required to pay Rs 1181 crore by March 2016," the report said.

"Considering simple interest and delayed interest, the allottee was required to pay Rs 13.39 billion. However, it paid Rs 6.96 billion and MMRDA did not demand payment of remaining Rs 6.43 billion. After a year, MMRDA issued a notice when the dues had increased to Rs 7.70 crore," the report said.

In a similar case, the MMRDA failed to recover Rs 8.5 crore from Starlight Systems Private Limited, the CAG report said.