MUMBAI: Only the ultra-rich can afford it. R K Damani, owner of mega retail chain D-Mart, has paid Rs 65 crore to convert 1.4 acres (7,634 sqm built-up area) of leasehold land into freehold. The state revenue department has charged 25% of the ready reckoner rate as premium for the conversion.
This March, Damani and his brother Gopichand purchased a ground-plus-two floor bungalow at Malabar Hill for Rs 1,001 crore. The bungalow stood on land leased in 1939 to Govindlal Bansilal, later transferred to Premchand Roychand & Sons LLP.
An application was made on behalf of the company in 2019 for conversion from leasehold to freehold. The land was leased for 971 years and was to expire in 2910. This January, the Malabar Hill revenue division wrote to the Mumbai city collector to allow the conversion.
Govt urged to cut conversion premium to to 5%
In March, the collector’s office inspected the site and found there were no violations. Revenue documents obtained through RTI by Salil Rameshchandra, president, Federation of Grantees of Government Lands state, “There is only a bungalow (Gr +2) named Madhu Kunj and another Gr + 1 structure built on minimal area. Both were closed though the bungalow earlier had been used for residential purposes.”
In 2019, a government resolution was issued, allowing conversion of various categories of government land into freehold on payment of premium ranging 10% to 25% of ready reckoner rate, depending on class of land.
“There are around 3,000 housing societies on revenue land in Mumbai. Occupants are middle class. Most buildings are old and dilapidated... The majority [residents] can’t afford to pay these kind of premiums and the huge premium makes redevelopment financially unviable,” said Rameshchandra.
“We’ve been asking the government to reduce the premium to 5% as has been done for leased lands in Vidarbha. Residents will be able to pay and the government will also earn revenue. Today it is a deadlock,” he said.
Sources said Damani’s investments bear testimony to his foresight. “If he has decided to convert a leasehold land where the lease is valid for 800 years to freehold it certainly means he sees value in doing so.” As on Wednesday D-Mart was valued at nearly Rs 2.2 lakh crore. and his associates, as promoters, hold 75% in the organised retail chain. The value of their holdings in D-Mart translates to about Rs 1.65 lakh crore.