City’s lungs expand by 200 acres

In a judgment that will change the quality of life in the city, the Bombay high court on Monday gave Mumbaikars 200 acres of open space.

Taking a bold stand, which is likely to upset mill redevelopment plans (one crore sq ft real estate) with an investment of more than Rs8000 crore, a bench comprising Justice S Radhakrishnan and Justice SC Dharmadhikari ordered that two-thirds of the mill lands being opened up for redevelopment must be reserved for open spaces and public housing.

Commenting on the importance of green spaces and public housing, the bench noted, "We should not forget the duty of the present generation towards posterity and the principle of inter-generational equity."

Monday's verdict means that of the 602 acres of mill land in the heart of the city, one-third will go to the state for low-cost housing (200 acres), one-third for developing open spaces like public parks and amenities (200 acres), and one-third for commercial exploitation by mill-owners (200 acres).

The order restores the plan as envisaged in 1991 under which mill-owners had to give up two-thirds of the land under their occupation to the city and develop/sell the rest.

The high court, in another important order, expressed complete distrust in the functioning of MHADA and constituted two committees to monitor the reconstruction of dilapidated and cessed buildings in the island city. Cessed buildings are those where the housing board charges a fee for carrying out structural repairs (details, p3).

In the mill lands case, the court struck down the sale of five mills by the National Textile Corporation (NTC) as being contrary to the Supreme Court's orders and the scheme of the Board for Industrial and Financial Reconstruction (BIFR). The order also declared as illegal the construction work carried out by various developers on mill lands without obtaining the mandatory Environmental Impact Assessment (EIA) clearance.

The 368-page order was issued on a public-interest litigation initiated by the Bombay Environmental Action Group (BEAG)  in February 2005 challenging a modification made in 2001 to DCR 58(1)(b), allowing mill-owners to retain most of their lands for development while reducing the city's share of open spaces and low-cost housing. BEAG also demanded that the lands' sale be monitored carefully so that Mumbai's 16 million citizens benefit.

During the hearing, it was found that construction was being undertaken on various mill lands without environmental clearance. The Union environment ministry had issued a notification in 2004 saying all new projects and expansions of specific industries require environmental clearance. The state had said that all mill redevelopment projects would need clearance.

Reprimanding the authorities, the high court order said the BMC, state government, and Maharashtra Pollution Control Board had "virtually abdicated their legal obligation and duties" in implementing the EIA notification.

Chastising NTC for acting like a "private mill-owner only keen on trading its land for high profits", the court struck down the sale of five mills - Apollo, Mumbai, Elphinstone, Kohinoor, and Jupiter.

Property prices will shoot up, say realtors

Rajshri Mehta

Private realty firms reacted with dismay to the Bombay high court's order to reverse Development Control Rule 58 to its 1991 formula. Painting a dismal picture of stagnation in real estate supply, most such realtors said property prices will rise by 25 per cent.

Pranay Vakil, CMD, Knight Frank International, said, "Prices will go up as you are constricting supply."

Vakil said the order would have an adverse impact on foreign direct investment. "Many developers like IndiaBulls, who have bought mill lands, have foreign tie-ups," he said. "Investors will go to other cities as this issue will linger in the courts."

If that happens, housing finance companies will be affected. HDFC, ICICI Bank, and IL&FS are  the three major companies to have loaned crores of rupees to developers working on mill land.

The third section to be affected will be the buyers. For instance, buyers have booked flats worth Rs90 crore at the multi-storey Ashok Towers at Lalbaug, being developed by Piramal Constructions. "It is unclear what will happen to them," said Rajeev Piramal. "The delay is bound to affect property prices and delay payment of workers' dues."