Godrej group stands to gain

The Godrej group is likely to be a major beneficiary of the Supreme Court’s decision in early October to uphold a Bombay High Court order to return to the original owners lands that were declared surplus under the Urban Land (Ceiling and Regulation) Act (ULCRA) but never taken over by the state, reported Daily News and Analysis (DNA) on October 8, 2009. Private builders will also benefit greatly as they will no longer need the land ceiling department’s clearance for their projects, DNA notes.

In December 2007 Voltas had challenged in the High Court the collector’s notice to take over 77,000 sq m of land declared surplus under ULCRA. The Act, introduced by former Prime Minister Indira Gandhi’s government in 1976 to acquire scarce urban land for public housing, was repealed by the state two years ago. Voltas’ lawyers had argued in the High Court that since the government had not taken over the land when it scrapped the Act, the company remained the rightful owner and the court accepted the argument. The government subsequently challenged the decision in the Supreme Court.

According to real estate experts, the Act had created huge land shortages and locked up thousands of acres in litigation, causing prices to escalate. They were hopeful that after its repeal, land prices would come down as acres of land would be available for development. A limit of 500-2,000 sq m, depending on the city, had been notified under the Act. In Bombay, holdings beyond 500 sq m could be declared surplus and acquired for a nominal amount. According to DNA repeal of ULCRA was a condition for Maharashtra to get access to Rs 12,800 crore in development funds under the Jawaharlal Nehru National Urban Renewal Mission.