Hiranandani faces penalty, denies land misuse charge

Hiranandani faces penalty, denies land misuse charge
Hindu Business Line, February 06, 2009, Page 17

S. Shanker

In what could be the highest penalty imposed on a builder for alleged gross violation of land misuse, the Mumbai Metropolitan Region Development Authority (MMRDA) has recommended to the state urban development department that developer Mr Niranjan Hiranandani be made to pay a penalty of Rs 2,000 crore.

The metro authority has charged the builder with constructing large apartments instead of the 40 sq m and 80 sq m flats, for which permission was accorded. The second charge is building commercial complexes in violation of the original agreement and the third, an add-on penalty component, for utilisation of transfer of development rights.

Though the developer is yet to receive a notice of levy for the amount, Mr Hiranandani has denied the charge in totality, stating that the state agency was unaware that no development in the area had been done without obtaining the necessary permissions and sanctions of government departments.

He said development rules and notifications, since the 23-year-old Powai Area Development Scheme, comprising 92.2 hectares, was signed, had undergone changes and consequently implemented after sanctions during different periods. The MMRDA has used the current ready reckoner rates to compute the alleged violations to arrive at the penal sum of Rs 1,993 crore.

The Powai Area Development Scheme was not classified under any scheme for weaker section / lower income group of the society, he said adding that a Bombay High Court decision in 2005 stated that the development at Powai was not for any weaker section / lower income group of the society and the same does not apply to the said lands.

On increase in the size of tenements, he said the scheme came after a tripartite agreement was signed on November 19, 1986. Under the agreement, there was a condition restricting sizes of the tenements. However, the MMRDA permitted the amalgamation of tenements as per its order dated August 18, 1989.

The larger premises were constructed utilising transfer of development rights subsequently, when the TDR concept was introduced in 1991. During the period when the tripartite agreement was executed, the development by TDR was not available.

Petitions

The Bombay High Court is hearing public interest litigation petitions pertaining to the project development.

The MMRDA has also recommended that all concessions extended to the builder be withdrawn, to which Mr Hiranandani said he had not availed himself of any concessions thus far.