SC takes Hiranandani to task Upholds HC Order Barring Powai Construction

New Delhi: The Supreme Court on Friday refused to dilute the Bombay high court order that stopped Hiranandani Developers from carrying out further construction at its Powai township without first providing affordable housing. 

    Abench of Justices H L Dattu and C K Prasad was severe in its criticism of the developers for blatantly breaching a 1986 agreement with the state government and the MMRDA by which the group was allowed to develop 230 acres of land in Powai to construct affordable houses and hand over part of them to the state at cheap rates. 

    "We feel so sorry that private land was purchased by the government and given to you for development. That place was meant for below middle class people. But you built palaces for those who can afford Bentleys and Ferraris," the bench said. 

    In 1986, the state passed an award determining the compensation at the rate of Re 1 per hectare for the lands acquired from landholders. In return, the Hiranandanis were to construct affordable flats—half of 431 sq ft (40 sq m) and the rest of 861 sq ft (80 sq m). Beyond this, 15% of the flats were to be given to the state at Rs 135 per sq ft. Do we encourage only a set of people, asks SC 

New Delhi: The palatial houses built by Hiranandani Developers in Powai in violation of the agreement with the state government had prompted the Bombay high court to pass an order on February 22, directing the developer to stop all construction activity on the remaining plots under the Powai Area Development Scheme (PADS) and specify the vacancy position before the court. The HC order came in the wake of a public interest litigation filed by a group of social activists led by Medha Patkar, and two local residents. 

    The high court had directed the Hiranandanis to construct around 3,100 affordable houses—1,593 flats of around 861 sq ft (80 sq m) and 1,511 flats of 430 sq ft (40 sq m). Around 450 apartments from this lot, the court said, have to be offered to the state at a rate of Rs 135 per sq ft, which the government can then sell to its employees. Once these instructions have been complied with, the court said, the developer would have to take its permission and only then can it can embark on making further construction on the remaining land. The could had also allowed the petitioners to file criminal cases against the builder and "errant" government officers. 

    The Supreme Court bench on Friday asked senior advocates Mukul Rohatgi and Gopal Subramanaim, "As it is, middle class people in Mumbai are residing on roads. Can they afford even a square inch of land?" 

    When Rohatgi attempted to justify the developer's action by referring to the buildings and hospital built by them as part of PADS, the bench said, "The quality of houses is bound to be the best as it is for those people who can afford Bentleys and Ferraris. What we see is palaces-…Can you show us if you have built even a single house of 40 or 80 square metre?" 

    MMRDA counsel Shekhar Naphade informed the bench that "there has been rampant collusion between the officials of MMRDA and the developer in how the agreement was breached." 

    Though the court permitted the Hiranandanis to withdraw their appeal and pursue options before the Bombay high court, the court did not mince words and said, "It is all an eyewash. What are we doing in this country…. Do we encourage only a set of people in this country. Do other persons not have a right too?" 

    It said, "This sort of collusion between the developer and officials of state is contrary to the specific understanding on which the lands were acquired. HC has said what you are expected to do, saying out of 230 acres earmark 92 acres for downtrodden." 

HOUSE THAT VIOLATIONS BY HIRANANDANI DEVELOPERS, AS ALLEGED BY THE PETITIONERS IN HC 

Few Affordable Houses Built 

    Hiranandani was to construct 50% of flats of 431 sq ft and the rest of 861 sq ft 

    Flats were allowed to be merged to 4,000-5,000 sq ft and sold for up to Rs 7 crore 

Government Deprived Of Share 

    State was to get 15% of the FSI consumed in the form of flats. This would have meant around 1,800 flats spread over 10 lakh sq ft. State was not given its share 

Infrastructure Promises 

    Within 10 years, builder was supposed to leave open spaces for schools, parks, service industry and a hospital, which had to be handed over to the BMC. This was not fully complied with 

Commercial Interests 

    Hiranandani constructed commercial spaces such as offices that were not mentioned in the original agreements