Nagpur - In an era when the US banks are broke, stock markets are in choppy waters and bank interest rates un-alluring, Nagpur's land developers promise 'do saal mein dugna, teen saal mein teen-guna' (double returns in 2 years; treble in 3 years).

Take, for instance, the promise of a firm called Mahadev Land Developers, which has taken the land market in Nagpur by a virtual storm, floating full-page advertisements in the local dailies almost every second day and huge hoardings at every major city square.

The firm runs a recurring deposit-like scheme linked to land, which has, as per its own admission, drawn hundreds of small-time investors, including the slum dwellers and vegetable vendors. The scheme that appears to have no legal sanction from any authority is apparently linked to the plots on land outside the city limits and around the proposed project areas like MIHAN or metro region.

"You can deposit any amount upwards of Rs.1000 per month, and we assure you double returns in two years time," its agents tell the customers.

What the firm gives against the money is just a token receipt – no land title or legal holding deed. But you are supposed to be owner of one of the plots! That you'll never come to know of location of the land you own is your problem!

Tens of such chit-fund-like schemes have sprung up in Nagpur in the last two years, with unknown names promising astonishing returns from land plots. One of them ran a scheme during Diwali promising gold on booking plots!

No wonder, the wealth that some of these individuals have amassed by buying and selling the land, or by pocketing commission as middlemen, is phenomenal.

"Most of these deals are non transparent and fraudulent, and it hurts transparent business deals as well," admits Nitin Chhajed of Seven Heights Infrastructures, a real estate company that is coming up with township projects around Nagpur.

He says the investors should not invest blindly and in those projects where there is no basic amenity like road, water or electricity. "Or you stand cheated."

District collector Praveen Darade says since there is no record of the sale and purchase agreements, action could not be initiated against any realty firm. He instead cautions investors to verify if the developer has changed its use pattern to non-agricultural purpose and developed the land.

“I've instructed the administration not to issue NOCs (no objection certificates and NA-TP clearance (non-agricultural and town planning) to a developer until he provides four basic amenities at the layout sites – drinking water, sewer lines, electricity and roads, to the customers," Darade says. But the order comes in vogue from the time he took over as the district collector a few months ago.

By one estimate, about a million people from and outside Nagpur, including the NRIs, have bought the plots, but most don't have title deeds in their name. "The land Mafioso are exploiting farmers and cheating investors," alleges Vinod Tiwari, activist and chartered accountant. Last month, he petitioned Darade urging him to take action against such developers and ban land sales forthwith.

Darade has now asked block level officers to look into Tiwari’s complaint and verify all land records and transactions that have been made in a few years. Tiwari sees gross violation of provisions of Agriculture Land Ceiling Act and the Bombay Agriculture Land Tenancy (Vidarbha Area) Act of 1956 in the deals.

The developers, acting through individuals, firms, private limited companies, and or infrastructure companies are grabbing hundreds of acres of land in single name or under development agreements right under the nose of authorities, he alleges and demands a high level enquiry into such violations. “It’ll open a land-gate.”

"There are serious lapses in recording mutation entries by revenue authorities," alleges Tiwari, who is also a member of the Vidarbha Jan Andolan Samiti. It's mandatory that non-agriculturists get prior permission from the government to buy agriculture land for commercial or any other purpose. "Here it is neither being followed, nor questioned by the government machinery," he wonders.

Individuals and firms are becoming owners of several hundred acres of land directly or indirectly as the provisions pertaining to land holding restrictions under Agriculture Land Ceiling Act are violated. This is resulting in artificial escalation of prices of agriculture land and indirectly influencing farmers to sell their land, this – in the name of growth, when there is none in sight, he says.

"The revenue authorities can get the information about the violators at the click of a mouse now, but it is a mystery why no action is being initiated!" says Tiwari, who points to rigging of land rates by a handful of developers aided by the local politicians and bureaucracy. "There has been no development in and around the city for ten years, but if you look at land prices, appreciation is unjustifiable."

The party is on here in Nagpur, but real estate experts fear investors are headed for a trouble when the party gets over soon.

Since there are no regulatory mechanisms, the fraudulent firms and companies would escape free. For the investors, the game gets riskier now. The demand and price will collapse sooner than later in the face of a global recession.

Last month, the Maharashtra Airport Development Corporation (MADC), the nodal agency for MIHAN, swiftly issued a public notice cautioning the people to be wary of those using the project as a pretext to promise jobs and prices to sell land. It is this one project – still out of sight – that has triggered massive land sales in Nagpur and across Vidarbha. The fate of people is tied with the fate of this project that no one can guarantee.

"MIHAN has to happen," says Darade. But if it doesn't, plot owners are dead.