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Breathing space gets a new lease of life

Feb 01 2014, 10:29 IST
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A Supreme Court ruling on open spaces in Mumbai plugs a loophole exploited by developers, setting a precedent on development control norms across the country. A Supreme Court ruling on open spaces in Mumbai plugs a loophole exploited by developers, setting a precedent on development control norms across the country.
SummaryA Supreme Court ruling on open spaces in Mumbai plugs a loophole exploited by developers.

A recent ruling given by the Supreme Court has far-reaching implications for the construction of residential buildings and for the quality of life of residents. In one line, the order states “there is a need to restrict the additional pressure on existing infrastructure so that it does not affect the quality of life”. Although the order is primarily meant for Mumbai, it sets a precedent on development control that could be applicable for any civic body across the country.

Home buyers in Mumbai and experts The Indian Express spoke to, have welcomed the ruling for it bats in favour of increased green spaces. Developers, however, are disappointed with the order and are planning to appeal against it.

The Case

The Supreme Court in the case of Municipal Corporation of Greater Mumbai (MCGM) versus Kohinoor CTNL Infrastructure Company Pvt Ltd examined the relaxations given in the mandatory norms regarding open spaces to certain category of projects. In the judgement delivered on December 17, 2013, Justices Hemant Gokhale and J Chelameswar termed these relaxations that enable “more construction” and “concretisation” as leading “to the serious erosion of recreational space at the ground level, affecting the minimum necessities of life, and will therefore lead to violation of the right to life”.

To understand the import of these observations, it is necessary to look at how development is regulated by the civic body, the MCGM in this case.

Like every civic body in the country, the MCGM has laid down several development regulations for Mumbai known as Development Control Regulations (DCRs). These were revised in 1991. The issue placed before the Supreme Court in the Kohinoor CTNL case was the mandatory minimum recreational area to be left for the residents at the ground level.

Spaced out

A rule called DCR 23 states that each project must leave mandatorily, a minimum space of 15-25 per cent as open (recreational) space at the”ground level”.

The extent of open space is related to the size of the plot. For a plot size of 1,500-2,500 sq metres, the open space has to be minimum 15 per cent and for the plot of 2,500-10,000 sq metres, it should be at least 20 per cent and for plots larger than 10,000 sq metres, it must be at least 25 per cent.

However, developers began arguing that due to the high demand for parking spaces, they have to build parking lots in the basement and on the podium. This is a common feature in high-rise buildings in land-starved Mumbai. To access the parking space, ramps are built, which consumes space on the ground level, developers argue. But then, the trick is to compensate this loss of ground level open space, by replicating it on the podium so that they are in compliance with the DCR.

In 2012, MCGM amended a rule DCR 38 (34), which relates to the podium parameters. MCGM added a clause (iv) which relates it to DCR 23: “The recreational space prescribed in DCR 23 may be provided either at ground level or on the open-to-sky podium.” The developers exploited this provision to its fullest by reducing open space at ground level and increasing it at the podium level. This deprived the residents of open green spaces.

The apex court came down heavily on this practice. In the case of Kohinoor CTNL it observed that “The recreational space in the case reduced to almost 7.7 per cent on ground level. We are surprised that the Municipal Corporation did not look into it seriously, probably because of the rule that permits it on the podium… If this is treated as a correct interpretation than it is quite possible that recreational area left at the ground level could be zero.”

The Union government has recommended minimum 11 sq metres of open space per person and the National Building Code, 2005 prescribes at least 3 sq metres but Greater Mumbai has only 1.91 sq metres per person. The Supreme Court, concerned over the “excessive concretisation” emphasised on the need for open and green spaces at the ground level for the health of the residents and finally ruled that, “The minimum recreational space as laid down under DCR 23 cannot be reduced on the basis of DCR 38 (34). This space, if any, provided on the podium as per 38(34) (iv) shall be in addition to that provided as per DCR 23.”

As the implementation of the ruling cannot be retrospective, since many projects have already taken off and are at various stages of construction, the court clarified that this ruling of strictly following DCR 23 will be applicable to only those proposals which are yet not approved or have not been issued a Commencement Certificate.

“The developers have another hidden reason to oppose this,” says Ashok Chatiani, a broker. “This manipulation gives them extra profit. Consider this. The open space on ground level will not get them anything, but if it is converted into commercial spaces, he can get good money. The developer purposely keeps minimum space on ground level and blames it on ramps for parking. He then creates parking on the podium and sells them at a huge price to the buyers. He will not earn anything from parking lots on the ground level as it cannot be sold legally.”

Chaitiani adds that gardens and recreational spaces can be charged as super built up area, which would not be possible by creating them on the ground level. “In short, the order takes away their huge back-door margins. Developers cannot admit to this practice. They therefore say the order will delay projects and lead to price rise.”

The Impact

MCGM receives about 400-600 proposals for various types of developments every year. The civic body earns around Rs 1,500 crore from different charges and premiums. However, after the Supreme Court’s order, MCGM has stopped clearing files related to this DCR and has also sent a circular to concerned departments, associations of developers and architects to strictly follow the ruling.

The municipal commissioner Sitaram Kunte said the ruling is now the law of the land and the Corporation would not approve any proposal violating these rules. Practically all the proposed projects in the island city would be affected.

“This will further delay the projects and may push up the prices which are already very high. Besides, MCGM will lose huge revenue,” says a developer in central Mumbai who requested anonymity.

Buyers, however, have welcomed the order. “The ruling is for the newly proposed projects. Why should it delay projects already underway?” asks Nita Parikh a buyer who is waiting for the prices to correct in the western suburbs of the city. “The developers are scared about delay due to this order but why are they not explaining why almost all the projects are already delayed. They began much before this order. It is an excuse to justify future delay,” adds Parikh.

After the MCGM has started cracking the whip, plans are going back to the drawing board. This could delay projects by 4-6 months.

“No developer was in a hurry to start the construction before the results of the general elections. So frankly speaking, the delay will not be because of the ruling,” says Mahesh Mehta, a property consultant. “As far as the impact on prices are concerned, the prices are already so high that transactions are minimal. Raising them further will serve no purpose. Developers might have to offer bigger discounts to strike a deal,” adds Mehta.

What Next

According to industry sources, the Maharashtra Chamber of Housing Industry (MCHI) is planning to file a review petition while some developers and architects are planning to find an alternative by discussing the issue with the civic body. Another group of developers is looking at persuading the Maharashtra chief minister to either promulgate an ordinance to nullify the impact of the order or get the state government to appeal against the ruling.

The ball is now in the court of the state and the MCGM. “In an election year anything is possible. They will have to choose between profits or quality of people’s lives. It is sad to know that some are only worried about margins and do not care about the health of home buyers,” says Parikh.

- Anshumali Ruparel

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