The Telegraph
Since 1st March, 1999
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Locks torn off mill gold mine
- SC go-ahead to sale and development of over 600 acres in heart of Mumbai

New Delhi, March 7: The Supreme Court has allowed the sale and development of mill land in Mumbai, unlocking more than 600 acres of prime real estate worth thousands of crores.

A bench of Justices S.B. Sinha and P.P. Naolekar today set aside a Bombay High Court order holding that the sale of five defunct National Textile Corporation (NTC) mills was illegal.

Welcoming the ruling, NTC chairman K. Ramchandra Pillai said the state-owned corporation would now go ahead and sell its remaining 18 mills, spread over 100 acres.

The NTC sale is expected to generate Rs 5,000 crore, out of which Rs 4,000 crore would be distributed among employees under the voluntary retirement scheme, Pillai said.

The order is a big blow to environmentalists who had alleged that the redevelopment was being carried out without environmental impact assessment and clearance from the environment ministry.

Hearing a PIL by the NGO, Bombay Environment Action Group, the high court had set aside the sale in October last year. The court held that the land sale by NTC, which owned 25 mills spread over 285 acres, went against Supreme Court orders and a revival scheme of the Board for Industrial and Financial Reconstruction.

Out of 58 defunct cotton mills in the heart of the megapolis, 25 were owned by NTC and the rest by private parties. NTC is left with 18 mills after selling five and handing over two to the Brihanmumbai Municipal Corporation (BMC) and the Maharashtra Housing and Development Authority (MHDA) for open spaces and public housing, respectively.

Allowing an appeal by NTC and several private mill owners ' Bombay Dyeing, Mafatlal Industries, Simplex Mills, Swan Mills and Prakash Cotton Mills among them ' the Supreme Court today said that apart from delay in challenging the sale, there was no merit in the PIL to warrant interference. Environmental concerns and sustainable development have to go together, it said.

The court also upheld changes made to rule 58 of the Development Control Regulations, NTC counsel B. Sunita Rao said.

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 BMC and the MHDA 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.

The 2001 amendment, brought by the Vilasrao Deshmukh government, 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. This considerably shrunk the land available for open spaces and housing.

The high court had upheld the 1991 provisions, but the mill owners appealed against the ruling in Supreme Court.

Chief minister Deshmukh today said: “I welcome the decision. Our stand has been upheld by the court.”

The court had indicated its mind by passing an interim order in favour of NTC after hearing arguments from both sides. Besides staying a part of the high court order, it had allowed the developers who had bought the NTC mills to apply and get clearance for their development plans from the authorities concerned. They were, however, asked not to go ahead with construction.

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