The INS was allotted about 20,000 square metres of land by the Maharashtra government in 2005 on concessional terms and was required to shell out 25 per cent of the land cost, amounting to Rs 22.13 crore (Rs 221.3 million) by December 2005, failing which the allotment would have lapsed.
With the deadline closing in, Orbit Developers, a private developer, was roped in to pay for 25 per cent of the land on INS' behalf by Vijay Darda, chairman of the Bombay Building Project Committee and the architect of the deal.
D Murali and N Ram of The Hindu Group, Mathrubhumi's MP Veerendrakumar and Ravindra Kumar of The Statesman Group have expressed strong reservations on the transparency of this deal.
Darda has defended it by saying they had approached all the top Mumbai builders but no one except Orbit was interested. Opinion was also taken from former Attorney-General Soli Sorabjee.
"The agreement with Orbit Developers had to be signed at gun-point....the only criterion for selection of the developer ...(being)...the willingness of the party to deposit 25 per cent of the lease premium," Darda stated at a Bombay Building Project Committee meeting on March 17 this year.
Orbit, of course, will pay the entire cost of the land and also construct the building . But 60 per cent of the built-up area will be reserved for INS members, who will have to pay a concessional rate of Rs 5,750 per square feet. Orbit will also build 7,100 square feet, which will be given at zero cost to the INS secretariat. The remaining 40 per cent can be sold by Orbit at commercial rates.
The deal's opponents claim the agreement has one-sided terms favouring the builder (the part stating 40 per cent of the built-up area can be sold at commercial rates) and will enable him to
They have also raised the issue of transparency of an agreement with a builder that was hastily signed, and of payments made without the clearance of the executive committee.
"The deal lacks transparency and needs investigation. Let the facts come out and be laid before the executive committee and the public at large," said Ram, adding that the deal should be scrapped if required and that it was threatening to break up the association. Darda also contended in the March 17 meeting that scrapping the deal would expose the INS to "the near-certainty of additional liabilities and damages" over and above the sum of Rs 22.13 crore (Rs 221.3 million).
The larger issue in the INS, which accredits advertisement agencies for newspapers and blacklists defaulters, has been the polarisation of big and small newspapers.
The small and medium newspapers have voted their representatives into the executive committee on the sheer strength of numbers, beating the bigger ones.
"Newspapers with larger circulations are without representation, while entities without a presence in the market are on the executive committee," Ram said, labelling it "proxy trafficking".
Rebutting the charge, Darda, who heads the Lokmat Group, said: "Of the Times of India, Hindustan Times, Jagaran Prakashan, Amar Ujala, Statesman and Malayala Manorama...which publications are small? They are all on the committee."
While some industry sources have hinted at the possibility of the INS breaking up, Ram abstained from commenting and merely said the INS needed a new mandate.
Commenting on the rift, Hormusji Cama, current president of the INS and director of Bombay Samachar, said: "With the smaller newspapers demanding greater representation, it was clear that they would join the committee. As the president, I am unhappy with the turn of events but hope to keep the association together."