Malls on state land reserved for markets ought to share revenue with Civic Body: Bombay HC [Read Order]

The Bombay High Court recently observed that with the changing times of globalisation and industrialisation, the scope of traditional markets built on valuable state lands has been expanded to malls.Having observed so, the Court held that private commercial establishments offering services on state land are required to share revenue with the Municipal Corporation, even though they may have developed the facilities entirely at their own cost..The Court noted that under Section 21 (1) of the Urban Land (Ceiling and Regulation) Act, 1976, it is expected of the Municipal Corporation to consider framing of a scheme in this regard.A Division Bench of Justices SC Dharmadhikari and RI Chagla passed an order to this effect last week In a Public Interest Litigation (PIL) filed by one Pradeep Chandrakant Indulkar, an activist claiming that a plot of land in Thane had been reserved and was being used as a market.The Court was informed by the petitioner through advocate Gauri Godse that since 1992, the market had been replaced by a building which housed various commercial establishments that generated profit from the use of premises and caused loss of revenue to the Thane Municipal Corporation.On the other hand, Senior Counsel Atul G Damle, appearing for one of the respondent commercial establishments, argued that the market building houses shops as well as convenience areas commensurate with the development of the localities adjoining to this building. He submitted, “The understanding is that if huge residential complexes have come up, then, the people residing therein require a modern market housing not only shops, but providing other amenities such as banks, restaurants etc.”After perusing the submissions and material on record, the Court noted that it is expected from the civic body to consider framing a scheme to include such establishments which should share revenue with the Municipal Corporation. The Court observed, "Today, post 1992, in the era of globalisation, privatisation and industrialisation, the economy is witnessing a change of ideas. Even if the land was designated or reserved for a public purpose of market in a Development Plan, traditionally, market was understood as merely providing a facility in the form of open space/land to the traders to sell their products. This could be food and other articles of day-to-day use and consumption…Thus, today a market building has become a Mall and a Mall houses not only shops, but much more than that.”The Court directed the Municipal Corporation to explore the possibility of calling upon the parties who have developed said lands to share the income or revenue generated from them by permitting alterations carried out in the market building.It was observed by Justice Dharmadhikari, “…What was traditionally used only for construction of shops or/and commercial units has now partaken the character of a Complex housing marriage halls, branch of a bank etc.”Furthermore, the Bench noted that the revenue generated ought not to be pocketed entirely by private persons who have developed the plot of land, but equally by a public body. The Court said that it is more required when the records do not indicate prior or later permission for change of user.Justifying its suggestion, the Court noted that as the title of the land belongs to the state, no private entities could be allowed to exploit the potential of the land excluding the public, which is represented by the civic body.In this regard, a Division Bench observed, "If the land is valuable, then, commensurate with the value of the land, all dealings and transactions in relation to these structures or buildings constructed thereon or on portion thereof ought to be shared with the Municipal Corporation is our prima facie view."To this suggestion made by the Court to the Thane Municipal Corporation, Senior Counsel Ram S Apte submitted that the civic body is not opposed to it. He sought more time for broad consultations and deliberations.The Court posted the matter for further hearing on February 5. [Read Order]