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Plot in Mumbai goes for 750 cr

A seven-acre plot of Mafatlal Industries next to the Byculla zoo was sold for Rs 750 crore a few weeks ago, said a real estate source. The land was bought by Piramal Sunteck Ltd, a joint venture with Piramal Enterprises Ltd promoted by the Ajay Piramal Group.

Plot goes for 750 cr “The deal was signed almost a month ago. However, a formal announcement is awaited,” said the source. However, a Mafatlal Industries spokesperson said, “We are in an advanced stage of negotiations with parties. However, nothing has been finalized.”
Last year, Mafatlal invited bids for the land and shortlisted three developers, Lodha, Peninsula Land and Kanakia. The price quoted was in excess of Rs 1,100 crore. However, the transaction could not proceed after the city collectorate, which owns the land, objected as the land was given on a 99-year lease to Mafatlal in 1913. A major portion of the term will expire in 2012. Meanwhile, in 1999, Mafatlal Industries was declared sick by the Board of Industrial and Financial Reconstruction.
When the collector’s office learnt about the impending sale in September 2010, it issued a statement that the company did not have the permission to sell the land. “The land belongs to the collector and the state revenue department. They cannot sell the land,” Mumbai city collector C V Oak had said, adding that the plot, totalling 58,197 sq m or about 14.5 acres, was leased to then Sassoon Spinning and Weaving Company (current Mafatlal Industries) from 1913.

“The lease will come to an end on August 30, 2012 when, according to the agreement, the lessee has to hand over the premises, including the buildings on the land, to the state. Further, there is express provision in the lease agreement that in case of a breach of any covenants by the lessee, the government has every right to re-enter the premises and the agreement will cease,” said the statement.
“As per the lease agreement, Mafatlal Industries cannot sell or assign the said piece of land to anyone without the express permission of the government. Any transaction entered into without the permission of the government shall be null and void.” It is not known how new owners will handle the issue with the government.

Source: April 29, 2011, TNN