Sucheta Dalal :Realty projects on Mumbai forest land get SC nod
Sucheta Dalal

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Realty projects on Mumbai forest land get SC nod  

January 27, 2010

The Supreme Court of India has given a green signal to real-estate construction in Maharashtra for residential and commercial properties stuck under the Maharashtra Private Forest (Acquisition) Act, on Wednesday. But developers have to still wait for the clearance from the ministry of environment and forests (MoEF) before going ahead with construction or selling of projects in these forest lands.

“It is not an interim approval to all the projects built on forest land. It is only certain sections at Nahur and Bhandup which have got the green signal. Projects in Borivali, Goregaon and Kandivali (all Mumbai suburbs) still have to wait for clearance from the legal body,” said Pankaj Kapoor, founder, Liases Foras.

A bench comprising Chief Justice K G Balakrishnan and Justices Deepak Verma and B S Chauhan said that the interim order allowing construction activity is subject to the outcome of the pending petitions before it.

The Maharashtra Private Forest (Acquisition) Act came into force on August 30, 1975. Under the Act, land categorised as a ‘private forest’ could be acquired by the forest department to conserve forests.

Earlier, developers ignored the legislation till the Bombay Environment Action Group, a non-government organisation, filed a complain in the High Court stating that the state was ignoring the law and was not taking any action to acquire the 305 plots, that the state forest department had notified. 
In 2006, the Brihanmumbai Municipal Corporation (BMC) had issued a stop-work notice to the projects on these plots, but a few developers went ahead with their projects.

“The developers have got a sign of relief from the judgement passed by the Supreme Court but have to wait for the MoEF’s decision. The MoEF will take some time to give a go-ahead to such projects. There will be proper due diligence. The developers have to wait till MoEF responds,” said Subhankar Mitra, AVP—strategic consulting, Jones Lang LaSalle Meghraj.

Earlier, the court had already announced that the developers had to pay a net present value (NPV) as a penalty  for their properties. It also appointed a central empowered committee (CEC) to suggest a solution to this issue. The CEC recommended that residents living in houses constructed before 22 June 2005 pay an NPV of Rs8 to Rs12 per square foot for regularisation, while builders whose projects were completed before this date, but have not yet been given occupation certificates, pay five times the NPV—Rs40 to Rs60 per square foot. Builders who wanted to redevelop factories and commercial establishments into residential complexes were asked to pay an NPV of Rs80 to Rs120 per square foot.

“The judgement of the court was in favour of the customers who had booked their properties long time back but could not own them due to the litigation. At least, consumers will not feel that the developer has cheated them. Developers have got a positive signal from the legal body and we expect the MoEF will soon give the clearance,” said Mayur Shah, chief, sales business unit, Ackruti City Ltd.

According to media reports, there are about 150 large projects being constructed over about 200 acres of forest land in the city by builders, with a market value of Rs25,000 crore.

“It is a great relief for developers and a lot of actual users,” said Dharmesh Jain, chairman and managing director, Nirmal Lifestyle.

However, sounding a note of caution, Parimal K Shroff from Parimal K Shroff & Co, said, “It is an interim order which has been passed by the Supreme Court. The court has permitted a few people to pay the NPV in a certain period of time. Thereafter, the decision will be taken by the CEC appointed by the court.”
— Pallabika Ganguly

-- Sucheta Dalal