What is the Karnataka MUDA scam? | Explained

MUDA faces public scrutiny over alleged irregularities in compensatory site allotments, sparking political controversy and demands for investigation.

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.

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.

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.