Mindspace - malad... Developers at Loggerheads
RAHEJA BROTHERS IN BATTLE ROYALE SPREAD OVER 480 ACRES
Siblings Suresh And Gopal Take A Dispute Over Division Of Sprawling E F Dinshaw Estate To Court. Verdict Expected Soon
Swati Deshpande | TNN
Mumbai: It’s a property battle between brothers where the stakes are staggering. The Rahejas, Gopal, Chandru and Suresh—construction czars of the city—control around 680 acres of land in the western suburbs. Of this massive landmass, two-thirds is currently under litigation in a bitterly fought battle before Bombay high court. The adversaries are the youngest brother, Suresh, and his eldest sibling Gopal L Raheja, better known as GL in the realty business.
Suresh claims that around 100 acres (five times the size of Oval maidan), which once belonged to the family, is now due to him as part of a 20-year-old formula; either that or a whopping Rs 783 crore as compensation. Gopal has rubbished the claim, thus triggering off a legal battle that came to a head last week when a high court bench comprising Chief Justice Swatanter Kumar and Justice S R Sathe concluded hearing an appeal filed by GL against an interim order by a single judge in March 2007. A team of legal heavyweights including Iqbal Chagla, Janak Dwarkadas, Virendra Tulzapurkar, JJ Bhat and Darius Khambata and law firms Amarchand Mangaldas and Kanga and Co had lined up to represent the real estate barons.
While asking for the single judge’s order to be set aside, GL pleaded that it had virtually brought to a standstill construction work on 470 contiguous acres in and around Malad by his company. He said development had been on since 2000 and about 20 buildings had been built and occupied while 30 more were under construction, but the single judge’s interim order granting a status quo on all vacant land or plots where construction had hitherto taken place up to the plinth level had caused a huge setback to him. GL argued that the suit filed by Suresh was intended to cause him a “grave loss’’ as the two were fierce competitors in the realty business and had projects coming up in close proximity near the disputed site.
The magnitude of the tussle can be gauged from the fact that the entire land involved is more than the 400 acres of mill property across central Mumbai put together which opened for development in April 2006. Albeit, about 350 acres of it still falls in a No Development Zone (NDZ) and can only be developed for tourism or as infotech parks.
The duel began a year back with Suresh dragging GL and
Chandru or CL to court for what he claimed to be his share of family property meant to be divided between the three brothers years ago. This included vast tracts in Goregaon, Malad and Borivli which was originally owned by F E Dinshaw, one of Mumbai’s biggest landlords (see box: F E Dinshaw Land). After Dinshaw’s death in 1934, the land had been divided equally between his son Edulji and daughter Bachoobai before the Rahejas negotiated with mill magnate Nusli Wadia, an administrator of the Dinshaw estate, and acquired rights to share, title and development of large chunks of the land in 1984-85.
The problems started after the death of the patriarch Lachhmandas in 1983. Disputes arose between Suresh and his three brothers—GL, CL and Kishore — and in 1986, GL and CL decided to separate from Suresh.
This is where the bone of contention arises. According to Suresh, he was to get a fixed 21.42% rights in the ‘Dinshaw property’ while the rest would go to GL and CL as and when acquired. This arrangement, he said, was formalised in a written and sealed form in the presence of mediator Rajan Raheja, a cousin.
Edulji Dinshaw’s property was called the EF Dinshaw Estate and comprised 680 acres. In 1995, 200 acres out of this was given to CL under a lease executed by Wadia; of this, Suresh got 21.42%. Now he says that since GL and his son have got rights to develop the remaining 480 acres as well, he should get 21.42% share of this land too, as per the “written’’ family settlement. He says GL had promised him his share and his counsel Iqbal Chagla, citing a supreme court judgment, says a family arrangement in property matters should be governed by a special equity and ought not to be interfered with to ensure peaceful settlement of disputes and to prevent bad blood within family members.
GL and his company, represented by counsels Janak Dwarkadas and Darius Khambata, however contend that not only was Suresh’s demand akin to a delayed awakening, he had got it wrong as the ‘written arrangement’ was applicable only to land managed by the trust set up by Dinshaw’s daughter and not to any of the 480 acres from the son’s estate.
GL is also saying that in 2002, he terminated all negotiations with Suresh after the latter confirmed that he had no interest in the EF Dinshaw Estate. In his appeal, GL has said Suresh is “taking dishonest advantage of the phenomenal rise in prices of real estate in 2006...and had resorted to moving court for relief by twisting facts out of context.’’
A FAMILY SAGA
Gopal L Raheja Chandru L Raheja Suresh L Raheja Kishore L Raheja WHO OWNS WHAT:
Kishore Raheja
Also into real estate, but has other interests as well including a few hotels The 21.42% property compensation claimed by Suresh from GL Raheja Shopping/commercial units:
5 lakh sq ft area Gross estimated revenue: Rs 350 crore Residential component I: Saleable area: 4,99,235 sq ft Gross revenue: Rs 274 crore Residential component II Saleable area: 6,88,943 sq ft Gross revenue: Rs 310 crore NDZ area (for IT park) Saleable area: 14.5 lakh sq ft Gross revenue: Rs 580 crore Non-developable NDZ Saleable area: 26.7 lakh sq ft Gross revenue: Rs 26.7 crore In all, after accounting for various deductions, Suresh Raheja estimates loss of profit at Rs 783.1 crore