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Mumbai real estate gold mine shrinks

Mumbai, Oct. 17: Mumbai High Court today stunned real estate developers by putting out of their reach 400 acres in the heart of the cramped metropolis.

The court ruled that whenever textile mill land, spanning 600 acres in the city, is sold, one-third of it should be kept aside for open spaces and another third for public housing.

The two-judge bench also declared invalid the recent sale of five sick National Textile Corporation-owned mills ' standing on a combined area of about 48 acres ' which had together fetched Rs 2,020 crore.

One of them, the five-acre Kohinoor Mill No. 3, was bought by Bal Thackeray’s nephew Raj and fellow Shiv Sena leader Manohar Joshi’s son Unmesh for Rs 421 crore through a special purpose vehicle.

The judgment in the test case has hung a question mark on not only the five deals but also a rash of private development projects mushrooming on mill land ' the most prized and controversial asset in the financial capital.

Several states, including Bengal, have firmed up plans to unlock industrial land. All states have tried to squeeze in safeguards to prevent misuse but the Mumbai judgment could prompt a closer look at the plans.

The mill owners will challenge today’s judgment in the Supreme Court within two weeks. In May, the Supreme Court had allowed the sale of the NTC mills and six private mills subject to Mumbai High Court’s approval.

“The city is bursting at the seams and growing vertically. The order will restrict the supply of developed property,” rued Pranay Vakil of Knight Frank, a real estate consultancy.

Environment activist Neera Adarkar saw it differently: “This judgment is welcome because land can be put to use for the city and its problems, intensified especially after the July 26 deluge.”

The verdict came on a public interest litigation filed by the Bombay Environment Action Group, which had challenged an order ' issued by the Vilasrao Deshmukh government in 2001 ' that changed rule 58 of the Development Control Regulations (DCR 58).

Rule 58, which came into force in 1991, laid down the principle of three-way division of city mill land during sale and redevelopment. It said the mill owners, the Brihanmumbai Municipal Corporation and the Maharashtra Housing and Development Authority should each get a one-third share.

The mill owners could use their share for commercial development, the corporation for building open spaces and the development authority for public housing or rehabilitating people displaced by government projects.

The 2001 amendment altered a clause to state that only the “open land” ' that is, the land excluding the part on which the mill buildings and outbuildings stood ' was to be divided up. This came to just about a 10th of the total land.

The high court upheld the 1991 provisions, saying that “‘open lands’ would include lands after demolition of structures”.

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