THE ongoing Enforcement Directorate (ED) probe into alleged irregularities in the Change of Land Use (CLU) approvals granted by the Directorate of Town and Country Planning (DTCP) — a wing under Punjab’s Department of Housing and Urban Development — has brought into sharp focus the deep-rooted politician-realtor-official nexus in the state, particularly in Mohali and New Chandigarh.
This allegedly facilitated dubious permissions as well as the manipulation of master plans and zoning regulations to inflate land prices for select developers and landowners.
CLU permission is the most critical clearance required for any realtor to proceed with residential, commercial or industrial projects. Without it, no development can legally take off.
At the heart of the ED investigation are two major real estate entities — Suntec City, promoted by the Indian Cooperative Housing Building Society, and Altus Space Builders Pvt Ltd. The Central agency is examining how these groups allegedly secured fraudulent CLU approvals, duped homebuyers and landowners, and indulged in money laundering on a large scale.
25 per cent rule and fake consents
Officials familiar with the probe point out that the main vulnerability in the alleged scam lay in a Punjab-specific rule that permitted realtors to obtain a CLU or layout plan approval with just 25 per cent land ownership in the project area. For the remaining land, a no-objection certificate (NOC) or consent from landowners was accepted.
It is here, sources say, that manipulation allegedly began with the active connivance of revenue and DTCP officials. Realtors allegedly managed to submit fake or bogus consent letters bearing forged signatures and thumb impressions to secure the approvals.
Call it a failure of the Punjab Real Estate Regulatory Authority (RERA) or the Housing Department, but the two realtors — armed with 25 per cent documented ownership and allegedly fabricated consents for the rest — went ahead and sold plots to homebuyers on land for which valid consent did not exist.
Permissions were granted despite serious complaints of forged documents and disputed land ownership.
Punjab was the only state in the country where this 25 per cent norm prevailed. In states like Haryana, Maharashtra and Uttar Pradesh, developers typically required collaboration agreements with landowners or 100 per cent ownership. The rules were amended only last year (2025) in Punjab, making 100 per cent ownership mandatory for CLU/layout approvals.
Modified land use change
The Enforcement Directorate, it is learnt, is also probing the role of departmental officials and possible political patronage enjoyed by the builders. After landowners approached the DTCP complaining that the promoters had submitted fake consent letters, the department proceeded to issue modified CLU orders. In these orders, permission for certain contested land parcels was revoked.
The agency is now examining why the department, despite acknowledging in the modified orders that the promoters had “failed to prove the validity of its title or consent” over the disputed land, did not initiate strict punitive action against them.
Scam predates CLU grants
The ED raids are not limited to the CLU permissions in Mohali and New Chandigarh. Investigators are also looking into frequent changes in Punjab’s master plans and zoning regulations. There are several instances where the DTCP allegedly changed land use from educational to commercial or residential zones.
Examples include Eco City-3 in New Chandigarh, where an educational zone was converted to residential use, changes in Sector 84 and the extension of Aerotropolis in Mohali. The Central agency is probing how such changes in land use or zoning sharply increased the market value of the land in question. In some cases, land compensation has reportedly been announced as high as Rs 9 crore per acre.
A former Chief Town Planner, Gurpreet Singh, said that under the master plan, land use for commercial, residential, educational or institutional purposes is defined after extensive study and analysis. “Frequent changes in the master plans disturb the required balance between residential and commercial uses to maintain population density and the carrying capacity of essential services,” he noted.