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

BOMBAY HC HALTS LAND GRAB BY LOCAL SELF-GOVTS

   IN A major decision that could halt the great land grab by politicians in the state, the Bombay High Court has ended the rule of local self-governments or municipal corporations in notified industrial areas with immediate effect.

   This means land available in such industrial estates now should be used only for industrial purposes and need to be serviced by MIDC alone. The HC order has made it clear that the powers of local urban bodies in notified areas cease to exist.

   Considering the fact that the state has as many as 226 MIDC areas spread across 53,000 hectare, the HC order has come as a huge relief to industries in Maharashtra.

   There was a long pending demand from the industrial community in the state to free MIDC areas from the clutches of municipal councils or corporations. To highlight their plight, the Association of Small Scale Industries approached the HC which upheld their contention.

   The issue has a long history of various local urban governing bodies encroaching upon the industrial areas as they expand. The state government under the Maharashtra Regional Town Planning Act of 1966 is empowered to notify industrial estates across the state. Chapter 6 of the Act created a special authority, the Maharashtra Industrial Development Corporation (MIDC) to run and manage these estates.

   The Act, section 113 sub-section 5, makes it clear that once industrial estates are created and handed over to the MIDC, local authorities will have no right to govern these industrial zones.

   The problem started when political masters of the state deliberately ignored the last part of the said Act resulting in MIDC estates being swallowed by adjoining municipal towns as they expand.

   It created a peculiar situation wherein industrial estates — which were away from the heart of the town — started getting surrounded by civic areas. This also added to industry's cost of operation as they had to make arrangement for octroi and property tax which were not applicable in MIDC areas.

   “It made us virtually orphans. We were neither served by the local municipal body nor by the MIDC. The former kept on pointing out that we were in MIDC while the latter says since town has expanded we should get our problems addressed by the local municipality,” said Shyam Agarwal, president of a small industrial association which decided to highlight their plight before the high court.

   “It was a double whammy. You pay and get no service in return,” said Mr Sheshan of the Thane Belapur small industries association.

   The NMMC last year collected around Rs 60 crore from industries but spent hardly anything for the industrial estate pointing its finger at MIDC.

   Justice A P Deshpande and R M Borde, of the Aurangabad bench of the Bombay High Court, while delivering the judgement, made it clear that the state government shall have to honour its own act that gave powers to MIDC.

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