HYDERABAD: A company owned by the family of Tata Sons chairman, Cyrus P Mistry, has accused the attorney it hired to take care of issues related to properties it bought from the Hyderabad Nizams of fraudulently selling them.
Cyrus Investments, which owns 9.2 per cent of the Shapoorji Pallonji stake in Tata Sons, bought the land from the heirs of the Hyderabad Nizam, Nawab Mir Usman Ali Khan, in 1967. Located in posh localities — Hafeezpur and Hashmathpet — the properties are now estimated to worth thousands of crore. As Cyrus Investments had to face constant legal suits over these properties, it had appointed PS Prasad as its attorney in April 2004 to identify its share of lands and buildings, secure the rights and manage them. It had given Prasad the power of attorney over these land parcels.
But a spate of recent complaints from many individuals who alleged they were sold properties without clear titles by Prasad or that the same land was sold to more than one buyer made Cyrus Investments realise that all was not right in Hyderabad. Subsequent internal investigations led it to believe that its attorney had not acted in its interests and sold properties worth at least a few hundreds of crores without its consent.
The Shapoorji Pallonji family-owned firm believes that the attorney not only caused serious financial losses to it but also damaged its reputation. In a notice served on Prasad on March 19, Cyrus Investments accused him of acting contrary to its interests "by indulging in unlawful activities to make unjust gains".
Accusing Prasad of "misusing the power of attorney", the company said it learnt that he was also "indulging in forgery by fabricating documents," including "non-existent" resolutions by Cyrus Investments. On Friday, the management of Cyrus Investments issued a public notice stating that the power of attorney issued in favour of Prasad was revoked and all those dealing with him did so at their own risk. The management said it would not be able to respond to ET's queries on the story as the matter is now subjudice.
However, NM Krishnaiah, legal counsel of Prasad, claimed that his client acquired the rights over the properties from Cyrus Investments in January 2005 through honest means after paying for them. The counsel claimed that Prasad fought legal cases, secured titles for some lands, and is on the job to secure clear titles for the balance properties. Over the last decade, Prasad had managed to settle legal disputes with several individuals and the state government involving hundreds of acres of land, said the lawyer. "After obtaining clear titles for certain properties, Prasad sold some 50 acres of land in favour of property developers including Prajay Engineers Syndicate and Aditya group," Krishnaiah told ET.
Cyrus Investments, which at its board meeting held on March 31, decided to revoke the power of attorney issued to Prasad, has served notices on him, asking him to submit details of all acts done by him on the properties. The board also decided to "take possession of all the immovable properties of the company at Hyderabad from any third party, initiate appropriate actions to take possession of the properties disposed of by Prasad." This could cause serious issues to the buyers and the property developers who bought the land and constructed huge apartments.
Moving the court against the notices of Cyrus Investments, Prasad obtained an interim stay. He argues that the acts of Cyrus would create "a total confusion in the minds of all who are concerned with the suit schedule properties." Claiming that he "had struggled hard to protect the suit schedule properties at the field level and also in courts of law," Prasad accused Cyrus Investments of having "ulterior motives."
The national president of real estate developers body Confederation of Real Estate Developers' Associations of India's, C Shekar Reddy, said the rights of both the developer and flat owners must be protected. "The government, which has been earning huge revenues from registration of properties, should ensure that the property titles are clear to protect the interests of both the property developers and the purchasers. The government should also put in place a transparent online documentation system to enable the interested parties to verify history and veracity of the property titles."