Mumbai High Court spikes Rs.5,500 crore mill land sale

18 Oct 2005

Mumbai: In a landmark judgment, the Bombay High Court has set aside the sale of 600 acres of surplus textile mill land in Mumbai at Rs5,500 crore by National Textile Corporation (NTC) in prime city locations.

NTC has sold five of its defunct mills in Mumbai — Jupiter, Mumbai, Apollo, Elphistone and Kohinoor — for Rs2020.75 crore over the last six months.

The judgment, delivered by Justices S Radhakrishnan and SD Dharmadhikari, said the sale was illegal as it was not in conformity with a Supreme Court directive in the matter.

The Bombay Environment Action Group had challenged the sale on the ground that development control rules had been violated in the process.

The court also held that whenever mill land was sold, one-third of it had to be reserved for open space, one-third for low-cost housing by the Maharashtra Housing and Area Development Authority (MHADA) and one-third for mill-owners' benefits.

Apart from the five mills it has already sold, the company is planning to bring another 10 mills under the hammer, once it receives clearance from the Municipal Corporation of Greater Mumbai (MCGM). There are 58 textile mills in Mumbai, of which 20 are owned by NTC and two by Maharashtra State Textile Corporation. The rest are private mills.

The judgment is also comes as a setback to private mill owners in the city as it sets aside the 2001 amendment to the municipal corporation's Development Control Rule (DCR) 58, under which mills whose original structures have not been pulled down can be redeveloped completely without two-third of the land being set aside for low-cost housing and open spaces.