State gives up Glaxo ULC plot in Thane at premium

03 October, 2018

The state government has decided to surrender its claim over a portion of GlaxoSmithKline Pharmaceuticals' prime 60-acre industrial plot in Thane, which was to be used for public housing.

Around eight acres of the plot were to be handed over to the state under the now defunct ULCRA, the Urban Land (Ceiling & Regulations) Act, for public housing. The government, though, plans to collect a premium from the land owner based on a percentage of the ready reckoner rate.

The beneficiary of this move will be Oberoi Realty, which purchased this land parcel from Glaxo for Rs 555 crore last year, and will now use it for residential development.

Market sources said Oberoi will have to cough up anywhere between Rs 70 crore and Rs 100 crore to the government to get the surplus land of 32,000 square metres released from ULCRA's purview.

A government-appointed committee, comprising retired Supreme Court judge B N Srikrishna and former IAS officer B N Makhija, said that the state could earn Rs 12,000 crore revenue by allowing builders to retain their surplus vacant lands, which was reserved for public housing. A copy of the report the committee had submitted, made available to TOI, stated that the government could build more than one lakh affordable tenements with the money it collects from land owners.

"If we provide the one-time premium solution, the government would get substantial revenue and, in addition, these one lakh small homes will also come into the market but without the Urban Land Ceiling price restrictions. These houses will come in the affordable housing segment because of the small size," said the report. The panel recommended these tenements be 400 square feet to 800 sq ft in size.

In Mumbai itself, the Srikrishna Committee said the government can expect Rs 1,229 crore revenue by surrendering its claim over surplus land declared under Section 20 of the ULCRA Act. There are 131 incomplete schemes in Mumbai, where 5% of the private lands were reserved for public housing and were to be handed over to the government by land owners under ULCRA. Till 2012, the state had acquired only 262 acres of excess vacant land in the city over 30 years, but had granted exemptions for an astounding 1,851 acres of such "excess land".

On industrial lands such as Glaxo in Thane, the committee said most of these properties are now under the residential zone. "Lands exempted for industrial purpose under Section 20 may be released from the terms and conditions of exemption order by charging a premium at the rate of 15% of current ASR (annual statement rate or value of the land) of the total exempted land as one-time settlement," it said.

In 2014, the Bombay high court held that developers and land owners cannot escape the liability of surrendering their excess land despite the repeal of ULCRA in 2007.

The high court empowered the state to recover the excess land for public housing from private landowners for violations under the now defunct Act.

Several builders and the Maharashtra Chamber of Housing Industry (MCHI) had moved the high court with the plea that the state cannot take the excess as the law no longer exists.

The builders then moved the Supreme Court, which stayed the Bombay high court order. The case is still pending in the apex court.

A builder told TOI: "Although the case is pending in the Supreme Court, the government continues to illegally charge money on land owners. Everyone is paying under protest. They will eventually seek a refund if the government loses."


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