Oberoi Realty’s last year’s Borivali deal serves as benchmark
The value of the 460-acre, disputed Malad plot, which has been a bone of contention between industrialist Nusli Wadia and a group company of Mumbai-based real estate developer Gopal Raheja, may be valued at around Rs 50 crore per acre. The land is situated in a suburban area, 35 km to the north of Nariman Point.
According to real estate consultants, the going rate in Malad and the sister neighbourhood of Goregaon are in the range of Rs 50 crore per acre, which has recovered from the below Rs 50-crore level it had hit between 2008 and 2009.
Rohit Kumar, head-research, DTZ India, said, “In and around Inorbit mall (which is located on the disputed land), along the Link Road, land costs are hovering in the range of about Rs 50 crore per acre, depending on location and saleability of the product.”
Land rates in the area were at a peak of Rs 65-70 crore per acre before the global slowdown hit India, Kumar said. “Prices have definitely recovered but they are still way off the peak as prices in the micro-market have not seen significant escalation,” he said.
Last year, Oberoi Realty bought a marquee land parcel in Borivali, which is about 9-10 kilometers from Malad, paying Rs 46 crore for an acre.
This deal was instrumental in setting a benchmark for land transactions in the vicinity.
According to Ghulam Zia, executive director, Knight Frank India, the rents for office space in and around Inorbit range from Rs 40 per sq ft per month to Rs 90 per sq ft per month, with IT buildings quoting higher rents compared to non-IT development. Residential rates are in the range of Rs 15,000-20,000 per sq ft.
A rough calculation using these benchmarks shows that the value of the disputed land would stand at a staggering sum, reason enough for both parties to be at loggerheads over the last six years as they try to prove their ownership over the parcel.
The dispute between the two parties originated in 1970, when Eduljee Framroze Dinshaw, owner of the disputed land, died in the US, and willed his personal property to his sister, Bachoobai Dashkow. The will further said that following Bachoobai’s death, ownership of Dinshaw’s corpus would be distributed to two US-based trusts — Salvation Army, New York, and the American Society for Prevention of Cruelty to Animals.
However, two years later, Bachoobai appointed Nusli Wadia as the administrator of the estate. In 1995, Wadia, as the administrator of the land, entered into an agreement with Ferani Hotel, a Raheja-promoted company, allowing it to develop the land and pay 12% share of the sale realisation to Wadia.
But in 2000 Wadia moved court, citing certain provisions of the Indian Succession Act (ISA), according to which Dinshaw’s bequest to the US charities, as mentioned in his will, was invalid. A year later, the court did rule that the bequest was invalid. The US trusts appealed against this in 2002, but withdrew it in July 2003.
Since then, the Wadias have been contesting the ownership and usage of the land. In the meantime, Rahejas had developed Inorbit and Hypercity malls and Mindspace, a commercial complex, on part of the land parcel.
However, the Wadias wanted the land back and halting of further development on it. On the other hand, the Rahejas were claiming that Wadia’s role as the estate’s administrator had ended with the death of Bachoobai.
After a lot of negotiations, the two sides fell apart in 2008 with Wadia terminating the deal and alleging fraud, and the Rahejas going to court to have him removed as administrator, revoking a November 2003 order that allowed Wadia to continue as administrator of the estate.
In December 2010, the High Court passed a ruling in favour of the Wadia Group dismissing Gopal Raheja’s petition against Nusli Wadia continuing as an administrator of the land.
In June 2011, Ferani Hotels (FHL), the Raheja group company, filed a fresh plea in the Bombay High Court against the December 2010 order.
The High Court in July 2012 permitted the Rahejas to continue developing the land parcel and deposit 12% of the sales consideration in a designated bank account, till the final disposal of the case. Raheja had also challenged in the High Court that Wadia’s suit against them was barred by limitation, as Wadia approached the Court after the lapse of the three-year period of the arising of the dispute. The Bombay HC had ruled that the jurisdiction of the case had to be decided before hearing the merits of the matter. In 2012, Nusli Wadia moved Supreme Court against this order.
On April 8, in a major win for Fernani Hotels and separate cases of similar nature, the Supreme Court held that the issue of jurisdiction on grounds of bar by limitation has to be tried first by the High Court.
* In and around Inorbit mall, which is located on the disputed land, land costs are hovering in the range of about R50 crore per acre, depending on location and saleability
* rents for office space in and around Inorbit Mall are R40-90 per sq ft per month, with IT buildings quoting higher rents. Residential rates are R15,000-20,000 per sq ft
* The dispute between the two parties originated in 1970, when Eduljee Framroze Dinshaw, owner of the disputed land, died in the US, and willed his property to sister Bachoobai Dashkow