The land at Hempur was allotted in February, 1987 on lease for 90 years, by the then Uttar Pradesh State Industrial Development Corporation to Nepa Limited, Nepanagar for setting up a bagasse based newsprint mill after remitting payment of Rs. 149.23 lakh at the then prevailing circle rate. However, lease deed could not be executed due to non-clearance from the Central Pollution Control Board on environmental grounds and the newsprint mill could not be established.
The Government of Uttarakhand (GoUK) has, therefore, sought return of the land for alternate use, and has agreed to pay current circle rate (which is substantially higher). Returning this land to the State Government is also justified as a large tract of land in an area short of this vital factor of production, is lying idle and can be put to productive public use by the State.