Is Maharashtra Govt a Silent Partner in Prime Land Grab by Corporates?

In Thane city of Maharashtra – adjoining capital city Mumbai – the famous textile giant Raymond had set up a unit sprawling over five lakh square metres (123.5 acres). The plant was closed in 2009.

In 2007, the Maharashtra government repealed the Urban Land (Ceiling and Regulation) Act, 1976 (ULC Act). There were thousands of companies in Maharashtra which had extra land under ULC, and Raymond was one of them. As per Section 20 of the Act, it was compulsory for the state government to take the extra land back from companies that have shut operations. Anything above 500 square metres is extra in Mumbai's context. For Thane, this limit is 1,000 square metres.

A bench of Bombay High Court too had clearly said in a 2014 order that the rule on taking extra land from the companies was applicable even after the repeal of the ULC Act. In its order, the HC had asked the state government to take control of the land, and use it for housing for the poor.

In accordance with the order, the state government should have recovered the extra land from Raymond.

However, in 2016, the Revenue Ministry of the state looked at a 'development' proposal. Following the HC order, the then Revenue Minister Eknath Khadse should have rejected this proposal, and should have taken control of the land. However, Khadse passed an 'interim order', which is almost a permission for development with a condition. And what was that condition? The applicant's proposal should be presented before the land acquisition committee. This meant that the transfer of land was being treated as an ‘acquisition’.

Here, the company has no right over the extra land because it was allowed to retain the land beyond permissible limit only under Section 20 exemption – for industrial use only. So, this was clearly not a case of ‘acquisition’.

The Maharashtra Chamber of Housing Industry (MCHI) had challenged the Bombay HC order in the Supreme Court in 2015. And while admitting the appeal, the apex court had passed an order restraining any ‘coercive action’.

So, while asking the land acquisition committee to look at the ‘development proposal’, Khadse overlooked the HC order as well as the Supreme Court stay – possibly in contempt of both the courts. Now, unless the SC upholds the HC order, the government is bound to maintain status quo on this issue.

Strangely, the state government, which was supporting the HC order while opposing the MCHI’s appeal, has taken a complete U-turn in 2019. It has now filed an affidavit – presenting a contrary stance – signing consent terms with MCHI to allow development of this land, charging a dismal premium of 10-15%.

However, in an order dated March 16, 2018, the Thane district ULC authority has cleared the proposal of housing on the land previously held by Raymond, allowing construction on 37,800 square metres of the land despite the stay by the SC.

It should be noted that Thane collector’s office has been emphasising from time to time that the government will gain huge revenue if such land at prime locations is auctioned.

Beginning in the late 80s, many big companies subscribed to the trend of shutting the factories down – in order to the ride the real estate boom in and around the capital city of Maharashtra. Many companies turned into real estate developers in order to maximise their profits. However, this was at the cost of job loss of thousands of factory workers. This defeated the purposed of the ULC Act that had allowed these companies to hold land beyond a permissible size only for ‘industrial use’.

Raymond is a classic example of such a trend.

Now, let’s look at the development project proposed for the land held by Raymond.

The said project is located in Pachpakhadi area of Thane city. Ready Reckoner rate [used to determine stamp duty] for this area is Rs 80,800 per square metre or Rs 8,080 per square feet. If we calculate using this rate, the cost of this land comes to Rs 3,28,75,50,000 or over Rs 328 crores! Market rates are commonly higher to up to two times than the Ready Reckoner Rate.

Hundreds of workers of the Raymond Group companies have started agitating on this issue calling it 'criminal manipulation' on behalf of the government as well as local bodies and the land holders. "How did the state government ignore, Thane municipal corporation overlook and district collector/ULC authorities keep mum on the Bombay High Court order and the Supreme Court interim stay? How can they allow the company to go into such a creamy project? This is a huge money, and so, all the authorities are just washing their hands off. We expect the Court to give strict orders on this issue," said representatives of Raymond workers namely Anil Mahadik, Raghunath Salave and Jitendra Patil.

When contacted, Raymond Realty’s spokesperson told NewsClick: "We are in receipt of all lawful permissions duly approved by UDD and state Govt. The subject land has been cleared from the purview of ULC Act subsequent to which the municipal corporation have sanctioned building permissions."

There are many such companies in Mumbai, Thane, Palghar and Raigad districts of Maharashtra – together called MMR (Mumbai Metropolitan Region) area. NewsClick has come across about 10 similar ongoing cases. If one project of such a company can make up to Rs 600 crore, as per the market value, we can only imagine the extent of this entire money game. 

On the other side, if this land is to be utilised to build affordable houses, at least 711 houses of 450 sq feet area each can be built on just the land owned by Raymond. And as per Bombay High Court order, 2,808 hectares of land is available only in Mumbai for affordable houses. This could be enough to accommodate almost every poor person in the city. But only if Maharashtra government can stop being a silent player in big corporations’ money games.