The Bombay High Court last week ruled that 1,83,072 square metres of land at Magathane in Borivali (East) was vested with the state government under the Urban Land Ceiling Act (ULC), 1976, thus, significantly enhancing the government’s land bank in the city’s western suburbs.
The land has already been allotted to the Mumbai Metropolitan Regional Development Authority (MMRDA). The court dismissed a petition filed by Swayam Realtors and Traders (SRT), a limited liability partnership, which had challenged a July 2011 order of the Appellate Authority of Industrial and Financial Reconstruction (AAIFR) which asked the Board of Industrial and Financial Reconstruction’s (BIFR) to exclude the land from Khatau Makanji Spinning and Weaving Company Limited’s (KMSWCL’s) rehabilitation scheme, which entailed the transfer of the land to SRT.
On March 21, 1981, the state government had exempted the land, allotted to KMSWCL to run an industry, from acquisition under the ULC Act. On March 11, 2004 and May 6, 2005, however, the state government issued notifications for the encumbrance-free acquisition of the land, since a condition in the exemption order of 1981 gave the state government the power to withdraw the exemption if the land was not fully utilised. On February 14, 2007, the state government took over the possession of the land in Borivali.
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Meanwhile, KMSWCL was declared “sick” and the BIFR, on July 11, 2007, sanctioned a rehabilitation scheme for the company under the Sick Industrial Companies (special provisions) Act (SICA), 1985. The SRT had filed two writ petitions in the High Court challenging the government’s acquisition of the land. They were, however, withdrawn subsequently. The court recorded that the SRT then moved the BIFR seeking the implementation of the rehabilitation for KMSWCL and claimed the state government’s acquisition of the property was in fact, an “obstruction” in the way of the scheme under SICA.
Special government pleader A A Kumbhakoni, however, argued that provisions of both the Acts clearly stated that the ULC Act would have an overriding effect on SICA. SRT, however, claimed that while the exemption order of 1981 was in existence, the notifications for acquisition issued subsequently would be “null and void.”
Justices A S Oka and M S Sonak wrote in their order, “The petitioner (SRT), having failed to invalidate the notices, orders and action under ULC by resort to right remedy in the right proceedings and circumstances (High Court), cannot be permitted to urge that the authorities under the SICA ought to have gone ahead with the implementation of rehabilitation scheme on the premise that the said property was not affected by any notices, orders or action under ULC.”
The court also asked SRT to pay costs of Rs 50,000 to the state government. It, however, stayed its order for eight weeks, granting the petitioners time to move the Supreme Court.