HC paves the way for city institution to get CIDCO plot in New Panvel

The Bombay High Court has directed CIDCO to allow Mahatma Education Society to exercise its right of first refusal for a plot in New Panvel East.

MUMBAI: The Bombay high court (HC) recently directed the City and Industrial Development Corporation (CIDCO) to allow Chembur-based Mahatma Education Society (MES) to exercise the right of first refusal with respect to an 8,962 square meters plot in Sector 16 of New Panvel East which the corporation had allotted to (Vile Parle Kelwani Mandal (VPKM).

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Right of first refusal, also known as first right of refusal, is a contractual right to enter into a business transaction with a person or company before anyone else can. If the party with this right declines to enter into a transaction, the obligor is free to entertain other offers.

MES had approached the high court in May this year, days after CIDCO rejected its plea to allow the educational institute to exercise the right of first refusal and instead on April 26 allotted the plot, reserved for a professional college, to VPKM.

MES has already developed a campus in Sector 16 where it has been running a BEd college, an architecture college and an arts, science and commerce college. The society has also obtained permission from the All India Council for Technical Education (AICTE) to set up an engineering college in the campus but has not been able to meet the land requirements of AICTE for starting the college.

Therefore, it stated in its petition before the high court, that since 2000 it has been requesting CIDCO to allot the 8,962-sq-mtr plot, which has been reserved for a professional college. It added that it pursued the matter with CIDCO and also with the state government and eventually, the Board of Directors of CIDCO in July 2009, passed a resolution to allot the plot to MES by charging premium, but the resolution was not acted upon.

Eventually, on April 27, 2022, CIDCO issued a public notice inviting bids for allocation of the plot in question – Plot No. 22. Like some other educational institutes, MES too submitted its bid for the plot and also sought to exercise the right of first refusal, but on April 26, 2023, the corporation allocated the plot to VPKM.

The right of first refusal refers to right conferred under state government’s policy decision of September 2014 to enable educational institutions to obtain leasehold rights on adjoining plots by matching the highest bids. MES claimed that though the plot was adjoining their campus, CIDCO rejected their plea and allotted the plot to VPKM.

VPKM opposed MES plea, contending that Plot No. 22 was not contiguous with MES campus in New Panvel and since a road passed between the plot and the campus, the education society could not have claimed the right of first refusal. CIDCO too opposed the petition on technical grounds that Plot No. 22 could not be allotted for an engineering college.

The argument, however, failed to impress upon the division bench of chief justice Devendra Kumar Upadhyaya and justice Arif Doctor, which held that the right of first refusal could not be denied only because of passing of the road between the existing plot and the new plot.

“These two plots appear to be separated only by a road and thus, it cannot be said that Plot No.22 i.e. the plot in question in this Petition is not adjacent to the land earlier allotted to the Petitioner – society,” the bench said. “The (CIDCO) resolution (on the right of first refusal) uses the word ‘adjacent’ and not ‘contiguous,’” it added.

As regards CIDCO’s objection to setting up an engineering college on the plot, the bench said the plot is reserved for a “professional college” and the corporation’s own definition of the term includes engineering colleges and therefore the argument was liable to be dismissed.

The court has therefore held that MES had the right of refusal and directed CIDCO to decide in two months the institution’s proposal for matching VPKM’s highest bid for the plot.