Who will benefit from SC ruling on private forest land?

In a big relief for over 5 lakh families, and also developers like Godrej Properties and Oberoi Realty, the Supreme Court has regularised real estate on private forest land in eastern Mumbai. Builders will be free to develop on the land they own.In a landmark judgement the Supreme Court on the 30th of January struck down a 2008 Bombay High Court order that had declared illegal over 5 lakh homes in the city's eastern suburbs for encroaching private forest land.

The ruling comes as a huge relief to residents linked to hundreds of acres adjoining the Sanjay Gandhi National Park. Areas like Thane, Mulund, Bhandup, Nahur, Mahul, Borivali, Kandivali and Virar. In Mulund alone more than a 110 societies reportedly fell under the disputed land. By nixing the private forest tag developers like Godrej, Oberoi Realty and Runwal Group are now free to begin construction on their land. The 116 year old Godrej conglomerate is one of the biggest beneficiaries. The group's co-founder Pirojsha Godrej had started buying huge tracts of land in Vikhroli in the 1940.Adi Godrej said:”We have been a part of this case in the Supreme Court. A private company Godrej & Boyce owns the land. About 133 acres of our land was involved in this particular case with the Supreme Court that has now ruled in favour of the applicants. We will be able to develop this now. We have an agreement where Godrej & Boyce will develop all our Vikhroli land through Godrej Properties who will be the development manager.”The entire problem had started in 1957 when the State Forest Department issued notices to builders and residents to prove they were not encroaching forest land. These notices covered land measuring almost 6,300 acres. So what is the likely impact on prices going forward?According to Anuj Puri, Chairman & Country Head - India, Jones Lang LaSallem  it will be about Rs 16,000-18,000 at the sales price x 10 percent and as per Adi Godrej it is 2 percent of direct cost, so it will be Rs 16,000 x 8 percent will be the net profit. The only variable to that is how much they would be able to construct. So when I say Rs 16,000 - that is per square foot. So, how much will be the total size of the development that the developers will be able to develop at these sites is a question.The Supreme Court came down heavily on the state saying it had actively permitted construction on hundreds of acres for decades and it was thus natural for a reasonable citizen to assume that whatever actions are being taken are in accordance with the law. With the Supreme Court questioning the right of the state to demolish constructions made over the last half century legal - experts say the verdict is likely to have a far-reaching impact on other such cases including the controversial Campa Cola society.HDFC will initiate the auction proceedings of a 200 acre Chennai township belonging to the London AIM listed Hirco. The e-auction to be held on 3rd of March and the reserve price has been set at Rs 551 crore.The London AIM listed Hirco is in trouble again - HDFC has started auction proceedings of Hirco's 200 acre Chennai Township, the Hiranandani Palace Gardens under the SARFAESI Act to recover almost Rs 540 crore. In a public notice HDFC announced it will conduct an e-auction this coming week on the 3rd of March with a reserve price of Rs 551 crore. In the same notice HDFC said it has allowed the borrower; that is Hiranandani Palace Gardens to sell apartments in existing buildings, however the auction winner will have a step-in obligation of completing the remaining structures on the project land. Hiranandani Palace Gardens has another township at Panvel near Mumbai and that along with the Chennai project have been a big bone of contention between the Mumbai based Hiranandani Group and Hirco.Both the projects of Hirco have defaulted on their payments to their lenders. Hirco was floated at the London AIM by Hiranandanis back in 2006 as the family's investment tool in Indian projects. However, after a highly publicised spat, the family patriarch Niranjan Hiranandani was ousted from the board in 2010. His daughter also stepped down as the CEO, but that was just the beginning of the fallout between Hirco and Hiranandanis. Last year Hirco sued the father-daughter duo, alleged fraud and sought damages of 220 million pounds. Hirco has alleged it never received payments from the sale of apartments or dividends for its investments. Then last month following a default of Rs 76 crore loan to Tata Capital, the Bombay High Court had appointed a court receiver to manage the Chennai township and in an interesting twist sources say Niranjan Hiranandani is likely to participate in HDFC's e-auction.Moreover, Blackstone's global chief in an exclusive conversation to Prime Property says it is committed to Indian real estate and that the global private equity giant has big plans for 2014.Also on the show we have a tutorial on service tax and real estate transactions with BMR AdvisorsFor the entire show watch videos