Sucheta Dalal :Land ceiling Act repealed but litigation goes on
Sucheta Dalal

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Land ceiling Act repealed, but litigation goes on  

December 24, 2009

The repealed Urban Land Ceiling (ULC) Act has held up more than 100 projects across Maharashtra. The Maharashtra government came up with the ULC Act in 1976 to impose a ceiling limit on vacant land in urban areas. The Act was repealed in November 2007. However, the Bombay High Court is still hearing cases related to this repealed Act—on a daily basis.


You can’t but wonder about the sheer irony of the situation, when a law does not exist any more, but hearings on cases under a repealed Act are being conducted everyday.


According to industry sources, such cases against various developers are being struck down by the Bombay High Court, because the Maharashtra government had placed the names of the properties of various developers in its revenue record, so that it can show that it has a claim on these properties. This move by the government, say sources, was carried out after the repeal of the ULC Act.


Various developers claim that the government had simply acquired their properties by placing them under the revenue record. This was done without giving due notice to various developers. In a few cases, claim developers, the properties were not even physically acquired by the government, but they were simply placed under the revenue record.


Neptune Group has recently won four cases which were stuck under the repealed ULC Act. “We are happy that we have won the case filed under the ULC Act related to our Swarajya Ambivali project. We knew that we would win it, as the government had wrongfully placed these properties under their revenue record,” said Sachin Deshmukh, director, Neptune Group.


“It takes a minimum of four years to physically transfer a property between two parties. But the government finished the procedure of acquisition in two months after the law was repealed. Everyday, developers are winning cases (against the government). This is because the government either did not follow the full procedure of physical acquisition, nor did the developer receive a notice from the government,” said Rajesh Shukla, legal adviser, Neptune Group.


“Our projects were put under the ULC Act in February 2008 after the law was repealed in November 2007. In a number of such cases, the High Court has passed judgement in favour of the developer,” added Mr Shukla.


Godrej Properties Ltd and K Raheja Universal are also fighting similar cases in the Bombay High Court.


Whenever these cases come up in the Bombay High Court for hearing, the court refers to the Voltas Switchgear Ltd case. The company had about 27,000 sq metres of land in Thane which was stuck up under the ULC Act for almost two years. The company filed a case way back in 2006 against the acquisition of its land, and it subsequently won the case on 25 July 2008, as the court decreed that the land was not physically acquired by the government.


“We also have a few cases in the Bombay High Court, but we know we will win it as the government has not physically acquired our land. We are also thinking of developing a township on these lands,” said Mofatraj P Munot, chairman & founder-promoter, Kalpataru Group.


“In Thane, five to six projects on Ghodbunder Road are stuck up under this (repealed) law. The developers whose lands are stuck up in such cases, and who have (ownership of) 100 acres, are converting their land into townships. The UCL Act does not apply to townships anyway,” said Pankaj Kapoor, founder, Liases Foras.


Ergo, developers in possession of land above 100 acres are converting them into townships to stay on the right side of the law. In Pune, four such townships have come up. Hiranandani Constructions is coming up with a similar township in Panvel.


“If you have more than 100 acres of land, the ULC Act does not apply. But if you had been served a notice by the government for acquisition of your land (below 100 acres) before the ULC Act was repealed, you will have to go through the complete legal procedure to free your land from the government’s clutch,” said Omar Vanjara, associate partner, Solomon & Co, advocates and solicitors. 

— Pallabika Ganguly


-- Sucheta Dalal