The Bombay High court week rejected a plea filed by Khatau Makhanji Spinning and Weaving Company seeking possession of its 1.35-lakh-sq-m plot at Borivli.This paves the way for the Mumbai Metropolitan Region Development Authority’s ambitious rental housing project for the low-income group.
Panna Khatau, the company’s chairperson, had moved the HC in the wake of the state government repealing the Urban Land (Ceiling and Regulation) Act, 1976, and sought interim orders to hand over possession of the mill plot back to the company.
Khatau contended that the ULC Repeal Act allowed landlords to retain surplus land if physical possession of the land was not taken before its lapse.
A single-judge bench of Justice S.C. Dharmadhikari rejected the plea, saying the Khataus were not in possession of the property on the date the Act was repealed.
In December 1979, 3,28,564.78 sq m of the company’s land at Borivli was declared surplus under the ULC Act. The state later exempted a large part of that plot while clearing its scheme for rehabilitation. The company, however, could not implement the scheme — to construct industrial buildings — resulting in the scheme being cancelled. Although the state took possession of the plot in February 2007 — well before the ULC Act was repealed on November 29, 2007 — the company’s lawyer Rajiv Narula argued that the possession was not valid and that they should get the benefit of the Repeal Act.
Senior lawyer Narendra Walawalkar, representing the state, however, pointed out that all the formalities stipulated in the ULC Act had been completed before the Act was repealed, and that the mill was not entitled to any benefit from the Repeal Act.
The state has given the plot to MMRDA, which plans to use it for the low-income group rental housing project, which is to be housed over 1,60,591 sq m, and the houses will be provided to low-income groups for nominal rents.
It’s a similar story in Borivli (W), where prices have risen to Rs 8,500 per square foot from Rs 7,500 in 2008. Malad and Goregaon are now commanding Rs 8,000 per square foot from the 2008 high of Rs 6,800. Kurla properties are going for Rs 8,000 per square foot from Rs 6,500 in 2008. Lalbaug and Parel, which commanded Rs 9,000 per square foot in 2008, are being quoted at Rs 11,000. In Khar, the rate is Rs 20,000 per square foot from Rs 19,000 in 2008.
Builders attributed it to higher demand. “Prices are related to demand.
Every builder wants to sell off his flats,” said Mofatraj Munot, chairman, Kalpataru Group.
The Builders Association of India (BAI) justified the hike, pointing out that construction was a high-risk business. “Just as profits are high, so are losses. We went through a rough patch over the last two years, so there is nothing wrong with the increase,” said Anand Gupta, BAI secretary.
Abis Rizvi, CEO of Rizvi Builders, said realty is ruled by sentiment.
“Currently, the sentiment is positive, so there is an upswing,” he said.
However, real estate experts say prices are being exaggerated. In 200708, builders jacked up prices to attract private equity. Now, the experts said, the focus is on stock market listings.
Valuation of construction firms is directly related to property prices. The higher the prices, the greater the valuation.
“The builders are only interested in securing high valuations for their companies through initial public offerings (IPOs). Most of them are not interested in sales. This is why they are keeping rates high,” said Pankaj Kapoor, CEO, Liases Foras, a leading real estate research firm.
