Goregaon land belongs to Film City, not me: Ghai

A day after the Bombay High Court quashed the allotment of 20 acres in Film City, Goregaon, to producer Subhash Ghai's Mukta Arts, Ghai said that the land "still belongs to Film City and the government, not to Mukta Arts". The land was valued at a throwaway price of Rs 3 crore in 2000, when it was allotted.
Ghai told TOI, "Even today, the land belongs to Film City, I have only created the infrastructure for students from all over to come and study cinema." In a press release, Ghai added, "The land was never sold or allotted by the government to Mukta Arts, only the usage was granted to build a world-class school to promote film education and multimedia activities as per the aims and objectives of Film City, and we have used only 5.5 acres to build the institute."
The court also quashed the October, 24, 2000, joint venture agreement between Mukta Arts and Maharashtra Film, Stage Cultural Development Corporation (MFSCDC), through which Ghai's film institute Whistling Woods International was set up on the 5.5 acres.
Ghai told TOI that Whistling Woods was a "mission and not a business venture, aimed at educating youth who wanted to make a career in cinema and television". Asked why the market price (Rs 66.21 crore in 2000) was not paid, he said, "When I entered into a joint venture with Film City, I was told to invest Rs 20 crore, giving 15% equity (Rs 3 crore) to Film City." He added that his investment has been much higher till date. "I have ended up spending Rs 75 crore on the project and even today we lose Rs 5-7 crore every year."
"I have only created infrastructure for students who come from all over to study cinema. Whistling Woods is considered one of the top 10 film institutes in the world. Why am I being punished for creating a platform for education?" Ghai asked. "I have been asked to return the entire land. I want to specify that I have only occupied 5.5 acres, the rest of the land is still vacant. I have been asking for an expansion to build a hostel, but am told that the CAG has raised objections. So, it remains on hold."
Coming to the defence of Vilasrao Deshmukh, Ghai said, "I give full credit to Deshmukh for his vision. He favoured the younger generation and not his son, as has been alleged. His son was a student of architecture in 2000 and became an actor only later."
Other former CMs also supported his project, claimed Ghai. "Why am I being punished for somebody else's fault? The lower rung of bureaucrats is at fault. In fact, after the issue was raked up, a committee was formed to amend the agreement. However, somebody from Latur went and filed a PIL against Deshmukh," he added.
Deshmukh's Affidavit
In his affidavit to the court, Vilasrao Deshmukh said the joint venture agreement was signed in his presence only at the request of the MD of the MFSCDC Ltd. 'After the agreement was signed by the parties, the parties also requested me that since the same was signed in my presence, I may also put my signature on the document as a token of my good wishes for the project, which I did, on the spur of the moment, as requested,' Deshmukh said. The court noted that Deshmukh was lending his 'good will' and signing at the 'spur of the moment' a document that gave a large piece of prime land to a JVC even though no valuation of the land was made, rules or procedure were not followed, no resolution was passed by the MFSCDC board of directors and no provisions of the Maharashtra Land Revenue (Disposal of Government Land) Rules, 1971, were followed.
Whistling Woods: The Court Order
What the HC said about the joint venture between Maharashtra Film, Stage & Cultural Development Corporation (MFSCDC) Ltd and film producer Subhash Ghai's Mukta Arts:
The state owns 500 acres at Goregaon. This land is managed by, but not transferred to, MFSCDC Ltd
On May 30, 2000, the managing committee of MFSCDC resolved to establish a training institute in collaboration with Mukta Arts. Later, Ghai applied to chief minister Vilasrao Deshmukh for allotment of land
A GR dated June 30, 1992, provides for grant of lands to educational institutions at a concessional rate and the charges for occupancy are 50% of the market rate five years earlier
On August 29, 2000, another resolution was passed by the MFSCDC managing committee, saying the cost of the institute would be Rs 20 cr and 15% of this share capital (Rs 3 cr) would go to MFSCDC. The minutes say, 'Decision of the managing committee will be conveyed to the hon'ble chief minister'
The court states: 'What followed thereafter is more shocking.
Without any formal resolution of the MFSCDC, a document titled as Joint Venture Agreement dated October 24, 2000 was executed between MFSCDC Ltd and Mukta Arts. The said document contains recitals that the MFSCDC was seized and possessed of land admeasuring 20 acres or thereabouts bearing CTS No 1 of Goregaon (East)'
The agreement said MFSCDC has agreed to provide the land to the JV company. The parties will form Whistling Woods International (WWI) Pvt Ltd
MFSCDC's contribution (Rs 3 cr) would be the land used by WWI and MFSCDC declared that the land's title was clear and free from all encumbrances. Mukta Arts would bring its contribution Rs 17 crore in cash. Mukta Arts would have 85% shareholding
The agreement was signed in Deshmukh's presence. No resolution by MFSCDC's board of directors had been passed
The CAG said the transaction was entered into without any authority of law and the land was valued at a low Rs 3 crore. The CAG said the land should have been valued at Rs 31.2 cr
The court said the entire transaction was illegal and the role of the CM was 'unusual'
Market rate of the property on Jan 1, 1995 was Rs. 43.56 cr and on Jan 1, 2000 was Rs 66.21 cr
14.5 acres, which are unused, should be returned to MFSCDC by WWI immediately. 5.5 acres, on which the institute stands, must be returned by July 31, 2014
Rs 5.3 cr per year has to be paid for the 20 acres from the time the JV was struck till the 14.5 acres is returned. Thereafter, a proportionate amount should be charged for the 5.5 acres till it is returned
WWI building will be valued; Mukta Arts can recover costs
Verdict stayed for 6 months
Ghai's Claims
Mukta Arts agreed to invest Rs 17 crore, but has actually put in Rs 75 crore to date and Whistling Woods, the JV company, has had losses of Rs 45 crore