Twenty-six years after the state leased 230 acres of land in Powai to Hiranandani groupat 40 paise per acre to build affordable houses, the Bombay High Court on Wednesday restrained the developer from starting any construction on the remaining area without its permission.
In further trouble for Hiranandani, a division bench of Chief Justice Mohit Shah and Justice Roshan Dalvi has paved the way for the petitioners to file criminal cases against the developer and “errant” government officers. The state was also rapped for imposing a “paltry” Rs 3 crore fine.
The HC was hearing PILs by activists, including Medha Patkar, alleging violations by Hiranandani in building sprawling flats instead of affordable houses.
“Whilst we appreciate the elegance of the construction and the intent at creating an architecture marvel for the city of Mumbai, we see the specific intent of wholly ignoring the most vital, and perhaps the only, condition in tripartite agreement (to create affordable houses of 40 and 80 sq m),” the judges said. “The pamphlets only show palatial buildings of the art-deco architecture.”
The HC said though it found substance in the contention that “state government officers, in collusion with the developer, have turned a Nelson’s eye to the gross violations of the tripartite agreement by the developer, resulting in the aggrandisement of the developer, which smacks of acts of corruption in not heeding the report of the metropolitan commissioner and instead calling upon the developer to deposit a paltry sum of Rs 3 crores”, it would first focus on ensuring that the developer constructed affordable houses as per the agreement. The court has directed Hiranandani to construct around 3,100 affordable houses of 430 and 861 square feet.
The court gave the go-ahead for the petitioners to file criminal cases in the matter, saying they were “free to take up the issue of corruption in a criminal prosecution against any errant public officers and the developer”. The HC has said the issue of compensation to be paid by the builder for the violations will be decided by the court, which is hearing the appeal filed by the MMRDA against the order of an arbitrator.
The court’s order also brings in a bonanza for the state government, which will now be offered around 450 flats at a rate of Rs 135 per square feet. Flats in the Powai area currently go for around Rs 20,000 per square feet. These flats can then be sold to government employees.
The HC has focused its attention on ensuring that affordable houses are constructed in Powai as per the original agreement between Hiranandani, the state and MMRDA. The judges have directed Hiranandani to construct 1,593 flats of around 861 square feet and 1,511 flats of 430 square feet after obtaining permission from the court. It has restrained the builder from amalgamating the flats or selling two flats to one person or any member of his family. Only after constructing these flats and giving 15% share to the state government will Hiranandani be allowed to put up any further construction.
The court has also directed the MMRDA, the developer and the petitioners to submit a report on the total number of buildings constructed by Hiranandani in Powai so far, along with details of the flats. The parties have also been asked to submit a report of the vacant land available in the area.
Hiranandani had signed a lease for the 230 acres of land in 1986 in a tripartite agreement with the state and MMRDA. As per the agreement, Hiranandani was to construct 50% of the flats admeasuring 430 square feet and the remaining, 861 square feet. Instead, according to the petitioner, flats were allowed to be merged to as large as 4,000-5,000 sq ft and sold at prices touching Rs 7 crore.
Another violation was the promise to give the state 15% of the floor space index consumed-which would have worked out to 1,800 flats spread over 10 lakh square feet. This was not complied with.
“The MMRDA had initially imposed a fine of around Rs 2,000 crore on Hiranandani, which was brought down to Rs 89 crore and finally the state further pruned it to Rs 3 crore,” said advocate Sumedha Rao, counsel for Thacker.
The builders were also supposed to leave open spaces for schools, parks, service industry and hospital, which had to be handed over to the BMC. The petitioners said even these norms were not complied with. Moreover, the developer constructed commercial establishments in the area which were not provided for in the agreement. “None of the conditions was complied with,” said advocate Ashish Mehta, who was representing Patkar.
Hiranandani had denied the allegations and said the arbitrator appointed to look into the tripartite agreement between the land owners-the government and MMRDA-had found no irregularities in the project.