The Garden of Five Senses was initially meant to be a leisure zone for Delhiites where the public could come for relaxation, watch cultural shows, participate in discussions and debates and admire art exhibitions.

However, what the city instead has is a collection of ultra chic restaurants, liquor serving bars and some of the city's best known party spots.

In August 2005, Delhi Tourism and Transportation Development Corporation Limited (DTTDC) entered into an agreement with M/s ITE India Pvt Ltd for operating 31 commercial food and craft outlets for 10 years at the Garden of Five Senses in Said-ul-Ajaib. According to the operational plan, the commercial outlets could not be used for any purpose other than those specifically permitted under the contract or as approved by the company. If ITE violated the rules, DTTDC could terminate the licence by issuing a termination notice after allowing for a cure period of 90 days.

The CAG report has said that in May 2006, the licensee went against the basic agreement and signed sub-lease agreements with 31 parties at a monthly rental of Rs 8 lakh. "The Licensee also allocated the common area called 'garden village' to the sub-lessees without the company's permission. The Licensee was also running the restaurants instead of food stalls by unauthorized use of the area meant for public use. Further, the sub-lessees obtained the excise licence from the excise department for serving liquor," the report has said.

Based on the purpose that the Garden of Five Senses was initially meant to serve, it was supposed to operate from 9am to 7pm each day though its present functioning has it operating till much later.

"Under these circumstances, the only appropriate action warranted against the licensee for violation of agreement terms was to terminate the contract immediately and invite fresh tenders for operation of the garden so as to attain the basic objectives of the project," the CAG report has said. What DTTDC did was to regularize the violations by imposing an enhanced licence fee of Rs 21.42 lakh for two years.

This indicates "impropriety and passing on of undue benefits to the licensee", the report has said.

DTTDC officials justified that a notice was issued to ITE India on May 18, 2010, though its activities were not terminated. The report has added DTTDC needs to take immediate action against the licensee and also fix responsibility internally on why it was so lax in taking action against ITE despite such blatant violations of rules.