Private mills to contest public interest litigation

Mill owners up in arms against NGOs that protest the sale of mill land

Several private mills have decided to intervene in the public interest litigation (PIL) filed by the Bombay Environmental Action Group in the Bombay High Court in mid February.

Although the PIL has been filed against the Brihanmumbai Municipal Corporation (BMC), the National Textile Corporation (NTC) and the Maharashtra Housing and Development Authority (MHADA), the PIL sought a stay on the development of properties of the private mills as well.

So the private mills, including the Piramal group-controlled Morarjee Realities and the Nusli Wadia-controlled Bombay Dyeing, will file an affidavit in the case, said V Y Tamhane, secretary general of the Indian Spinners Association.

At stake here is the sale of mill land in the heart of Mumbai whose value runs to several thousand crore rupees. Textile mill owners want to develop this land and turn it into malls and upscale apartments.

But Mumbai's non government oraginsations and activists argue that the mill owners must hand over two thirds of the land to the BMC and MHADA for low cost housing and open spaces in this crowded metropolis.

The affidavit seeks the implementation of the 2001 amendment to Rule 58 of the Development Control Rules (DCR) which permits mill owners to retain most of their land. The PIL wants the 2001 amendment scrapped and a 1991 amendment, which wants more land from the mill owners for cheap housing and open space, to be implemented.

In the affidavit, which will be filed on Tuesday, the mill owners will pray for the dismissal of the PIL on the plea that "the petitioner moved court four years after the law was amended without offering any explanation," a leading mill owner here said.

He also said that a host of properties are under development and loans have been taken by mill managements to pay workers their dues.

"Any decision to stop the development, as sought by the PIL, will put the mill owners along with workers and financial institutions in a fix," the millowner added.

The amendment to rule 58 of the DCR was made after inviting objections and so on. The petitioners never raised objections when objections were invited in 2000, the mill owner said.

The PIL demands that a mill owner use only a third of mill land for commercial and residential development, keeping two-thirds aside for open space and cheap housing. The petition says that the demand is based on the amendment to rule 58 of the DCR of 1991.

The mill owners argue that the demand is unjustified and that no such formula was envisaged by the the amendment to rule 58 of the DCR of 1991.

"The textiles companies have four options under the DCR 58 of 1991. One, not to develop the land for commercial use. Two, develop the existing built up area which did not impose any obligation to share any land with BMC or MHADA. This option was used by Phoenix Mills and Kamala Mills. Three, develop the open land while keeping the existing structure. Under this structure, the obligation to share land arose in the case of open land only. This was exercised by Modern Mills which gave away about 15,000 sq feet to BMC and MHADA out of a total of 50,000 sq feet. Four, develop the entire land, including by demolishing the existing built up area. Only this option imposed an obligation to share the land on a 33 per cent basis. No company has exercised this option," the mill owner said.

Three private textiles mills and seven National Textiles Corporation (NTC) mills have put a combined area of nearly 130 acres of land up for sale. The private mills which propose to develop their properties, either through joint venture partners or through outright sale, include Bombay Dyeing.

On Thursday, Indiabulls Properties successfully bid Rs 276.51 crore for Jupiter Mills. Going by the bid offers attracted by the NTC mill on Thursday, the sale of all this land will bring in almost Rs 3,000 crore.

The NTC has decided to sell seven units "" Jupiter at Lower Parel (11 acres), Tata Mills at Dadar (8 acres), Elphinstone Mills at Elphinestone Road (8 acres), New Hind Mills at Reay Road (8 acres), unit II of India United Mills at Cotton Green (16 acres), unit VI of India United Mills at Dadar (12 acres) and unit III of India United Mills.

The sale proceeds will be utilised to settle payments to workers who opted for voluntary retirement schemes and meet NTC's dues to the financial institutions and banks. However, a part of the land may go to BMC for creation of cheap housing and open space.

The sale proceeds of all mills, private and public, will be put into an escrow account under the control of a monitoring committee. The committee consists of B V Chavan, a retired judge of the Mumbai High Court, secretaries of the concerned state government departments, the labour commissioner, the chief engineer of the Town Development Plan and trade union representatives.

Industry sources said the aggressive bidding for Jupiter Mills showed that Mumbai's real estate market is hotting up. Colliers International, the consultancy firm, found that IT, ITES and BPO industry was the driving force for the huge demand for real estate in Mumbai.

In a recent study, the firm estimated that Mumbai would witness an addition of 10-12 million square feet of office space in a couple of years. Nearly 2 million sq feet was transacted in 2004 and 1.5 miillion in 2003.