Chief minister Prithviraj Chavan has axed the proposal to construct a five-star hotel on a former mill land in central Mumbai by a well-known realty firm, after he found that laws were bent to change the land use of the plot.
Chavan reviewed the 2009 decision that allowed a change in the land use of the plot through an amendment of development control rules. The amendment inserted the word 'hotel', making it permissible to construct a hotel on a plot reserved for industry.
With this change, the plot, which came under CRZ II, could have a Floor Space Index of 5, which was reserved for five-star hotels under earlier coastal norms.
The CM's decision will create ripples in the realty sector as it has been made with retrospective effect. Sources said the developer had not got building plans approved and not initiated on-ground work.
The state was made aware of this irregularity after National Textile Corporation (NTC) officials pointed it out during negotiations for the transfer of the 12-acre Indu Mills plot to the state.
Chavan on Sunday said the "illegal" decision was one of the reasons the transfer of Indu Mills land for the proposed Dr Ambedkar memorial was delayed.
The NTC and the state have been squabbling over the compensation of this sea-facing plot at Shivaji Park. While NTC claims the plot could fetch Rs3,600 crore through redevelopment, the state has rubbished it, saying the plot is governed by coastal norms and that because it's meant for industrial use, it can't be used for residential or commercial activities.
"I reviewed the decision and found it was illegal. It has been cancelled," said Chavan. "We are open to the Centre leasing out Indu Mills land to us while maintaining ownership."
Sources said the then civic chief had made the amendment.
The legal opinion is that this amendment was illegal.
Interestingly, the project had got a go-ahead from the state coastal body and the Union environment ministry's expert appraisal committee. The coastal body had recommended a change in reservation of land from industrial to residential to allow the building of the hotel.