The stalemate over mortgage of leased land by the industries has finally ended with the state government coming out with a notification saying the Odisha Industrial Infrastructure Corporation (Idco) is competent to give permission to industries for creation of mortgage.
Many industrial projects were stuck in the midst of implementation as industries were finding it tough to raise loans in the absence of land mortgage permission.
A notification by the revenue & disaster management department had laid down conditions for Idco to grant no objection certificate (NOC) for mortgage of the allotted land.
According to the notification, while granting permission for mortgage, the same has to be examined and approved by the board of directors of Idco on case-to-case basis.
The permission for mortgage will be issued by Idco only for the purpose of financing the project for which the land has been allotted. The financial institution will also ensure that the sanctioned loan is utilised for the project on the leased land and in the event of default in repayment of loan by the lessee, the financial institution or the bank concerned would obtain clearance from Idco for taking over the property.
The land mortgage row had snowballed into a controversy with the office of the Comptroller & Auditor General of India (CAG) raising objections over Idco allowing mortgaging of leased land by industries. The central auditor had pointed out that Idco is not empowered to do so as it requires government approval.
But the government had defended the right of Idco to allow mortgage of land, stating that in order to achieve the legislative intention of creating industrial infrastructure, the corporation has been giving NOC for mortgage of the land.
