Wadia, Raheja to settle dispute

MUMBAI: It's been one of the most keenly tracked property disputes in recent times. Now, after months of hard-knuckled negotiations, the fierce legal battle between tycoon Nusli Wadia and real estate baron Chandru L Raheja who owns Shoppers Stop, Renaissance Hotel in Powai and a number of well-known property brands over the joint development of more than 110 acres in Malad is likely to see an out-of-court settlement. Over the past decade, the Rahejas developed part of this land in Malad (West) into a major commercial hub comprising Mindspace, InOrbit mall, HyperCity store, and, as part of the deal, gave 12% of the gross sales and a minimum assured amount to Wadia, who is the sole administrator of this vast estate belonging to the late Eduljee Dinshaw. But early this year, Wadia approached the Bombay High Court, claiming that Rahejas had breached the agreement signed in 1995.According to highly-placed sources who have kept tabs on the protracted talks between the two warring parties, a breakthrough is soon expected in the form of an agreement once some of the remaining creases are ironed out.TOI has learnt that as part of the settlement under discussion, Raheja (who heads K Raheja Corp along with his two sons Ravi and Neel) has agreed to hand over four lakh square feet of space in an under-construction building at Mindspace in Malad to Wadia. At current market rates, this would work out to roughly Rs 200 crore. It is also believed that Wadia's share in the sale proceeds of future development of the residual land (estimates vary between 2.5 million sq ft and 3.5 million sq ft)-which was fixed at 12% in the early 1990s-will increase to 24%. Real estate analysts expect Wadia's 24% share to translate into another Rs 400 crore. Of course, these figures depend on market conditions at the time.The Rahejas were not available for comment. When contacted, a Wadia Group spokesperson said, "Owing to the case being subjudice, we are not in a position to share any comment currently.''Sources said the two parties were brought to the negotiating table by a top NCP leader. Another Mumbai-based builder, known to be close to this politician, also assisted in the negotiations. "One such meeting was held in Dubai some weeks ago,'' a source close to the development said. For the Rahejas, Chandru's elder son Ravi was at most times the chief negotiator, while on the other side, Nusli himself is said to have represented the Wadia group.Early this year, Wadia had moved the Bombay High Court demanding damages of Rs 350 crore from the Rahejas, alleging violation of the agreement they had signed in 1995. He said the agreement required the developer to sell or lease the land or any structure built by him on it only to genuine third parties. In the petition, Wadia claimed that the C L Raheja group fraudulently sold or leased it to their own sister concerns and shell companies created for the purposes of purchasing these properties.However, in their affidavit, the Rahejas claimed that Wadia approached the court with unclean hands and suppressed facts that he and four of his companies (and not the Dinshaw Trust) were the real sole beneficiary of the land development. Their affidavit contended that Wadia had moved the court only to exploit the rising real estate prices and seek renegotiation of the agreement terms despite having received substantial returns from it so far. The Rahejas also retaliated by saying that not only was Wadia trying to do wrongly and indirectly what he was not empowered to do directly but that he was also attempting to frustrate the arbitration agreement between the parties, which was already invoked.