Real estate reforms

Lessons from Campa Cola colony

The Supreme Court’s stay till end-May next year of its own order regarding the demolition of extra, illegal floors in Mumbai’s posh Campa Cola colony is unlikely to end what has been a contentious episode even by the standards of Mumbai’s troubled real estate sector. The visuals of residents resisting the bulldozers and town officials carrying out their lawfully appointed work had moved the judges, according to reports: the Bench said that “we were badly disturbed by the events reported by the media last evening”. It is certainly the case that, in this day and age, residents of Mumbai defending their houses with makeshift barricades made for great television and helped feed online outrage. Naturally, many activists have pointed out that this instance has provoked outrage, whereas clearances of slums without compensation have not. It is true that many people who live in Mumbai’s vast shanty towns – one half of the city’s population, by many estimates – have succeeded in establishing title to the land, something denied to the residents of the Campa Cola colony. Many others, however, have not established such title; nor have they been offered entry into generous rehabilitation schemes or allowed sufficient time to appeal against demolition. On the other hand, the residents of the illegal floors in the Campa Cola colony reportedly bought their flats at a discount, precisely because of their dubious legal status — which means they entered into a dodgy contract with their eyes open.

It is best to view this occasion, and other similar cases – there may be more than 100 buildings with similar issues in Mumbai at the moment – as dispassionately as possible. The question must first be asked: while those who bought illegal flats should, of course, not be allowed to gain from participation in illegality, where are the officials who looked the other way, and the builder who sold the flat? Some residents have filed a suit against the builder in a local court; but are there no grounds for the police, too, to proceed against the builders and the officials? Residents willing to deal with illegality are not solely responsible for the dysfunctional state of Mumbai’s real estate. It is also worth asking: should the price of illegality be the destruction of an asset? There is a middle ground between rewarding those who have broken the law and destroying the asset they have built. That middle ground is confiscation of the property, examination as to whether it can be brought within the regulations — and, if so, its sale at open auction. This, too, should be considered.

The final point worth noting is that high-profile incidents like this must lead to reform, or they will end up further destroying real estate in India’s cities. Few of those watching the Campa Cola colony visuals will want henceforth to buy a house without a completion certificate that establishes its legality. But very few developers make that available, and officialdom’s regulations are slanted against making them easy to obtain. This must certainly change, and soon.