Friday, November 25, 2005

DCR58 - Part I - The evil that men do.

The evil that men do lives on and on - Iron Maiden

On that note from an Iron Maiden classic, your author begins his series on the Bombay Mill Land verdict by the Bombay High Court. The series will run through the case of the petitioners, the defence of the respondents and finally the verdict.

My own interest in the issue stems from the fact that I’ve stayed in this city all my life and will for the foreseeable future. That’s good enough reason for me to be concerned on my quality of life, or rather lack of it, and that of my future generation. Read further only if you have similar interests.

First, a brief backgrounder.

What’s all this? It’s a Bombay High Court verdict in response to a public interest litigation (PIL) filed by The Bombay Environmental Action Group (BEAG) against various groups of people.

Who are these “various groups of people”? 32 groups which included among others, the State of Maharashtra, Bombay Municipality (MCGM), National Textile Corporation (NTC), Maharashtra Housing and Area Development Authority (MHADA), 2 Labour Unions, 9 mills and 4 builders.

What is the case about? On the interpretation and validity of DCR58 (as amended in 2001), the validity of constructions commenced by certain builders (without environmental clearance) and finally – how much land can NTC sell and the area it must surrender to MCGM and MHADA.

Duh?…use English please! Some people got pissed off that politicians are giving too much land to builders and too little to the city. These people (i.e. the BEAG) felt the city is in crying need of “open spaces” and “public housing” (the key phrases!) so they went to court to fight it out.

Then what’s all this “DCR58”? That’s the legal jargon. DCR58 stands for “Development Control Regulation 58” which controls everything on cotton mill land.

Why cotton mill land and not any other land ? Because it’s large (600 acres) and because the owners want to sell it.

Why do they want to sell it? Because these mills are almost defunct after the cotton textile industry got hit by various issues like labour strikes, etc. So the Government framed a law (DCR58) under which these mill owners could sell their land, but they had to share it with the Municipality (for open spaces) and the MHADA (for public housing).

Makes sense to me, then where’s the issue? The Government amended this DCR58 and issued a clarification.

So ? In this clarification, the Govt sought to increase the land available to sell for the builders and hence reduce that for the MCGM and MHADA.

Ok…so, who are the good guys and the bad guys? Dude, that’s for you to decide. Read on to make up your mind.

DCR58 - Part II - 14 years of pain

"But it's been 14 years of silence, it's been 14 years of pain, it's been 14 years that are gone forever and I'll never have again" - Guns n'Roses

Before outlining the BEAG's case, I'd like to run through a brief timeline of key events that shaped the 14-year long history of the Bombay Mill Land case.

1991 - Development Control Regulations formed by the Sharad Pawar-led Congress Govt. Under DCR58(1)(b) any cotton mill opting for redevelopment would have to share its land with MCGM and MHADA equally.

1996 – Shiv-Sena+BJP Govt freezes all mill-land developments and ordered a committee to prepare an integrated development plan (IDP) for mill lands. The IDP was never made since the Committee was not granted access to the mills.

March-2001 – The Congress Govt. (this time Vilasrao Deshmukh) amends DCR58(1)(b) replacing "lands after demolition of existing structures in case of a re-development scheme” of the old rule with "Open lands and balance FSI” in the amended rule.

August-2001 – The Municipal Commissioner sought clarification from the State Govt on the above amendment.

March-2003 – The State Govt issued a ‘clarification’ on Municipal Commissioner’s letter excluding post demolition open lands from sharing with MCGM and MHADA.

Feb-2005 – The BEAG files its public interest litigation on the mill land case.

April-2005 – Following BEAG’s PIL, Bombay High Court grants an interim stay on sale of mill lands.

March to July-2005 - NTC sells five mill land properties for Rs2,020crores (ref. table below)

May-2005 – Supreme Court allows sale of NTC mills as per plans approved by BIFR. However, the Bench made it clear that construction of buildings and all third party interests would be at the risk of owners and subject to ultimate result of the High Court.

October-2005 – Bombay High Court overturns NTC sales and orders all mill land sales as per old DCR58.

DateMillAreaSold forBuyer
Jun-05Apollo8acrRs180crLodha Builders
Jun-05Mumbai Textile18acrRs702crDLF
July-05Kohinoor5acrRs421crMatoshree Builders & Kohinoor Group

The next part in my series will run through the key arguments by the Petitioners, i.e. The BEAG.

DCR58 - Part III - Wide Open Spaces

“Ek akela is shahar mein, raat mein aur dopahar mein, aabodaana dhoondta hai, aashiyana dhoondta hai” (Lyrics: Gulzar. Movie: “Gharonda”, 1977)

Today’s blog looks at BEAG’s case. BEAG’s web site is under construction and a few web searches revealed that they were founded in 1977 to address the need for the sustainable development of the Greater Mumbai region. They filed their Public Interest Litigation in Feb-05 challenging DCR58. Just a brief (and dumbed-down) recap that the case is about builders getting more land and the city getting less land, thanks to a change in the law.

Here are key points of the BEAG case:-

  • Wide open spaces: Counsel for BEAG starts off by citing various Supreme Court decisions highlighting the importance of open spaces in urban planning and development. Here’s a statistic – As per planning norms, Bombay needs 0.5 acre of open space per 1,000 people. Roughly translated, that means each Bombayite needs 22sq. ft of open space – or – about the area of your grave. That’s the ideal. And how much does Bombay have now? 0.03 acre (the area of your 21 inch TV). And how much do Delhi, New York and London have ? 3 to 4 acres.

  • Cracking the code: Post-amendment of DCR58, BMC sought clarification on whether "open lands" includes lands vacant after demolition. The Govt clarified that the term would exclude such lands, thus implying a big cut in land to be given to BMC and MHADA. Funnily enough, this clarification was never notified by the Govt.

  • Demolition men: "Demolition" was not defined in the original law, which is why the older DCR58 specifies the concept of lands vacant after demolition. Since the "demolition" concept was introduced later in 1994, BEAG contends that the amended 2001 version, should also include land available after demolition to uphold the spirit of the law.

  • Going, going, gone: While sanctioning the rehab scheme for NTC in 2002, the Govt, BIFR and IDBI were all of the view that "open land" includes original structure post-demolition. Even the Supreme Court, in its May-05 verdict ordered NTC to sell the land as per the BIFR order. Yet, NTC modified the scheme to increase the share for builders, got BMC approval and sold the five mills for a whopping Rs2,020crores (ref. the table in Part II below of my series).

  • A tale of two committees: In 1996, when the Govt appointed a committee to prepare an integrated development plan, at least it froze development work. In 2005, while the Govt did appoint a committee, it did not freeze any development.
  • Clearance cleared: None of the builders, who bought the mill lands, took the required clearance from Ministry of Environment and Forests prior to starting any development. And no, the BMC didn’t let this get in the way while granting permission for development work.

  • Resting the case: The BEAG rests its case on the note that the amended DCR58 is unconstitutional (i.e. against Articles 48A – The State shall endeavour to protect and improve environment and Article 21 –which protects right to life as fundamental right) and ultra vires (outside the scope/authority of) the MRTP.

The next part in my series will look at the defence put up by the respondents, which as I mentioned earlier includes the Bombay Municipality, State Govt., NTC, builders, mill-owners, etc.

DCR58 - Part IV - Mill maange more

“Aamhi aamchya haathana Mumbai saari vikli” (From an HT article dated 17th August 2005, extract produced below)

"PADMASHRI SHAHIR Sable, balladeer and singer extraordinaire, is 83 years old. The son of a mill worker and a mill worker himself for a couple of years, Sable's early and later ballads are a mirror of what has happened to Girangaon (mill land) in the last four decades. His Mumbavatichi laavni written in 1967 is a paean to the city he loves, every landmark lovingly described. In 2001 he composed and sang a different tune--despairing and cynical. Here is the opening: Marathicha malvaat poosla rahili tikli/Aamhi aamchya haathana Mumbai saari vikli. (The kumkum of Marathi so proudly applied across the forehead has dwindled into an insignificant dot/With our own hands we have sold the whole of Mumbai)."

Today’s blog runs you through some key points of the respondent arguments.

Mill maange more: No development activity took place under the old DCR58 since it restricted the amount of land available to the mill-owner. Hence, the State Government specifically excluded post-demolition lands from the definition of “open lands” to make it more attractive for the owners and thereby kick-start development work. (Also refer the last point on the workers view)

Wasted time: What was the BEAG doing for four years (2001-2005) before filing its PIL? There are enough case laws stating that cases can be dismissed if filed too late.

Letter of the law: The amended DCR58 is not unconstitutional since it followed the due process of law, is in line with the spirit of the law and is not unjust towards anyone class of people.

Quit messing around: The Courts should not interfere with legislative matters and Government decisions.

Too much at stake: Bombay Dyeing estimates the dues of the mills at Rs6,696crores, with key components as follows -

For 2005(Rs cr)
To financial institutions2,997
All other statutory liabilities1,828
To workers1,201
To banks366
Additional statutory dues88

And finally the workers view: An eye-opener to me, so I am going to detail it a bit more. The workers union “Girni Kamgar Sangharsh Samiti” (GKSS) questions the first point above that no development happened for 10 years. It states that Phoenix Mills first fudged accounts to approve “recreation facilities” (incl. bowling alleys, sauna and steam, etc.) for its 1,200 employees which it then fired, obtained BMC approval and built new commercial structures.

Workers dues form a small proportion of money raised from sale of land. For example, Mafatlal was supposed to get Rs16cr from sale of 8th floor of Mafatlal Centre and Rs200cr from the built-up of Mafatlal Centre at Parel. And what were the legal dues of workers? Rs93cr.

In any case, workers interests were seriously hampered since (a) Laws were broken and money was siphoned off as no employment was given to the 3,000 workers who were fired and no training given to workers even though portion of funds was to be used for this and (b) Mill owners like Mafatlal, Hindustan and Piramal, first applied for redevelopment of their mills and then promptly shut them down.

Finally The GKSS believes that since the State Govt and BMC failed to fully and correctly disclose facts (like extent of textile land, rents being paid for those lands on leasehold), the Govt (I'm assuming Central Govt) should immediately take over this land use it for public housing.

My concluding blog will be on the High Court verdict

DCR 58 - Part V - The End

“This is the end, my only friend” The Doors.

Its tough (and unfair?) to shrink a 40-page verdict in a few paras, yet here goes....

Brave new world: Quoting from Aldous Huxley’s “Brave New World”, the verdict highlights the need for open spaces in Bombay, especially for future generations.

Kiss for the dying: DCR58 was made to rehabilitate textile mills. If the mill-owner wants to close the mill he has to share the land with BMC and MHADA for social objectives. The amended DCR58 even makes this share quite beneficial to the owners (FSI increased from 0.5 to 1.33).

How green is my valley: The Mill-owners claim that “private greens” addresses open spaces for public, cannot be upheld since the Supreme Court has held that "Public Greens" are more important.

Choking up: “No one disputes the fact that the mill areas are already congested. If further construction activity is permitted, then basic amenities, which are already minimal, would disappear altogether”.

Leave from duty: The State Govt, BMC and MPCB) had abdicated their legal obligations and duties in implementing the environmental notification.

Contrarians move: Since NTC’s modified scheme for the sale of its 5 mills were not approved by BIFR, they were contrary to the Supreme Court order.

Finally, for the record – here is the conclusion produced ad verbatim.

(a) In amended DCR58 (1)(b) “open lands” would include lands after demolition of structures.

(b) Clarification dated 28th March, 2003 is clearly violative of Section 37 of MRTP Act and Article 21of the Constitution of India.

(c) The issue whether the amended DCR 58 is contrary to Section 37 of MRTP Act or Article 21 of the Constitution of India, is kept open.

(d) All the constructions carried out by various Developers are clearly in violation of EIA Notification as amended on 7th July, 2004, as admittedly none of them have obtained clearance from Ministry of Environment and Forests.

(e) All sales of Mill lands carried out by NTC are clearly contrary to the Supreme Court orders dated11th May, 2005 and 27th September, 2002 and contrary to the sanctioned BIFR schemes.

Rule is accordingly made absolute with costs.

Epilogue: So now what? The Supreme Court can overturn the verdict and pave the way for constructions to begin all over again. The impact? A no-brainer, it will kill an already dying city. You don’t need to read a 368-page High Court verdict to figure that out. Or the Supreme Court can uphold the verdict. The impact? Party-time for the BMC and MHADA – both notorious for their carelessness and corruption. And what of the Bombayite? Well, for one, does he care? Does he have time to take any interest in his own city? As long as his home is nice and large and clean, why should the city matter? His house is his, but not the city.