INDIA BUSINESS WORLD - JULY 2006
THE MONTH THAT WAS...

WAR OF CENTURY: WADIAS, BIRLAS IN PROPERTY DISPUTE

THE complex operated by Century Textiles in the heart of Mumbai could become a bone of contention between two of the country's oldest business houses, the Wadias and the Birlas, over ownership and land usage. While the Wadias claim the lease is for 99 years, the BK Birla group says it's for 999 years.

Part of the land that has housed the cotton textile facility of Century Textiles (owned by the BK Birla group) for around a century, was originally leased to them by the Wadia family. This was done on the condition that the operations would be limited to the textile sector alone.

“Whatever else they do on that land, they can only do it with our permission,” Ness Wadia, the elder son of Nusli and Maureen Wadia.

The lease is for 99 years, he added. About 10 acres of the 30-acre property belongs to the Wadia family. While they may have little say in what Century does with other parts of the land, they may raise serious objections over any attempts to develop non-textile related structures on their property.

The BK Birla group has been planning to develop real estate after moving the textile operations to Gujarat . The group is not believed to have drawn up detailed plans, but has indicated that it would like to capitalise on the real estate boom by developing other properties on that site.

“We may sell the land and buildings or build our own buildings,” Mr BK Birla has said before.

Mr Birla said, “We have moved out around half our looms from Century Mill but this has nothing to do with our plans in Gujarat . We will re-examine the situation in March-April 2007, meanwhile we will continue to cut down on our operations in Mumbai. The land is on a longterm lease and has many years to go before it expires.”

The BK Birla group has also been claiming that a third of the land has been leased to them by the Wadias and is on a 999-year lease. “Century Mill is spread over 30 acres of land, of which 10 acres has been leased to us by the Wadias on a 999-year lease and the rest is freehold land which belongs to Century Textiles and Industries. So, technically the entire land belongs to Century,” said Century Textiles and Industries president RK Dalmia. The issue is important as real estate development in the heart of Mumbai has become extremely attractive. Skyrocketing prices, the clamour for residential and commercial space means that land vacated by mills is considered prized territory by developers.

The Wadia family is also keen on developing residential and commercial property in this area though firm details have not been drawn up. The Bombay Dyeing board recently cleared plans to redevelop the textile mill property in Worli which lies adjacent to Century Mills. Bombay Dyeing, the Wadia group flagship, will develop 70 acres of prime property at its Spring Mill and Textile Mill properties in Mumbai for commercial and residential purposes..