March 8, 2006
Setting aside the Bombay High Court verdict and removing the question mark on the fate of almost 600 acres of land in Mumbai, the Supreme Court today upheld the legal validity of the sale of surplus mill land by National Textile Corporation (NTC).
A division bench, of Justices S B Sinha and P P Naolekar, also upheld the state government’s changes to the rules for the development of the mill lands.
According to the original development rules (called DCR-58 after Development Control Regulation), one-third of the mill plot was to be handed over to the BMC for civic amenities, another one-third to MHADA for low-cost public housing. This was amended in 2001 to give more flexibility to millowners by ensuring that the three-way split apply only to “open land” in a mill complex.
In 2003, the government clarified that “open land’ does not include lands accruing after the demolition of the mill structure.
The Bombay High Court struck down the clarification as unconstitutional and held that the entire land be shared three-way.
Setting this aside, the Supreme Court today said that the clarification was not violative of the constitution and that the changes made to DCR 58 are not contrary to “the principles of sustainable and planned development.”
In its 188-page ruling, the bench also held that “sale of NTC mills was not contrary to the Board of Industrial and Financial Reconstruction (BIFR) scheme.”
As far as workers’ dues are concerned, the judges said that the “contentions shall remain open” meaning they could approach an appropriate forum, either the labour court or the Bombay High Court, which ever the case may be, for the settlement of dues. With the judgment, NTC can now “complete transaction” of sales and other transactions relating to development of the land as per the plan approved by BIFR.
Today’s judgment also paves the way for construction including residential complexes, shopping plazas, malls and other commercial and business blocks after obtaining necessary approvals.
The total area under the 58 mills, closed after prolonged workers’ strike in the 1980s, is estimated at 600 acres.
The genesis of the case was a PIL by the Bombay Environmental Action Group (BEAG) which contended that more space for greenery should be left by the mills. Along with NTC, Mafatlal Industries, Bombay Dyeing, Simplex, Ruby Mills, Swan Mills, Prakash Cotton Mills and a score of other mills challenged the High Court order.
Over Rs 10,000 crore were pumped in for the development of the sick mill lands and about Rs 2000 crore were paid to workers as wage arrears.
Mills whose layout plan for development has not yet been sanctioned, the court said, could apply to the authorities concerned for approval. TC counsel Sunita Rao said that her client would sell 10 more mills as allowed by BIFR scheme and would pump in the money to the rest of the mills for “modernisation and rehabilitation”.
What the SC ruled
What does this mean
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