Bombay HC Clears ₹30,000 Crore Motilal Nagar Redevelopment In Goregaon; Adani, L&T In Final Bidding

Mumbai: After more than a decade of deadlock, the redevelopment of Motilal Nagar in Goregaon—spanning 142 acres—has finally received the green light.

On Thursday, the Bombay High Court allowed the Maharashtra Housing and Area Development Authority (MHADA) to proceed with the redevelopment of one of Mumbai’s largest residential areas through private developers. This paves the way for MHADA to open the financial bids submitted by infrastructure giants Adani and L&T, both of whom had already qualified in the technical bidding process.

A division bench of Chief Justice Alok Aradhe and Justice Bharati Dangre allowed MHADA’s application seeking permission to execute the redevelopment through private developers. The court noted that since the Maharashtra government had designated the Motilal Nagar project as a “Special Project” — taking into account its “economic viability” and MHADA’s own “capability” to handle the redevelopment — it saw no reason to interfere.

The bench observed that MHADA had retained control over the project while choosing to execute it through a construction and development agency (C&DA) due to its own limitations in managing such a large-scale redevelopment. “In the absence of necessary potential to accomplish the huge project”, the court said, the housing authority had opted for an alternative route.

Emphasising judicial restraint in matters of government policy, the bench stated, “The Courts are expected to act with great caution while interfering with the priorities fixed by the Government, unless it is established that the decision taken by it is patently arbitrary and/or not in larger public interest.”

It further underscored that “the Government should be free to take policy decisions or to decide priorities and it is better left to the wisdom of the State, which is well advised by the bureaucrats… which may involve various factors like the availability of funds… etc.”

Reiterating the principle of non-interference in economic and fiscal matters, the court remarked, “The wisdom and advisability of such policy decisions are not ordinarily amenable to judicial review and it is time and again specifically held that economic and fiscal regulatory measures are a field where Judges should encroach upon warily, as Judges are not experts in these matters.”

MHADA had to seek clarification from the High Court due to a 2013 affidavit it had submitted in response to a Public Interest Litigation (PIL), wherein it had assured the court that it would implement the redevelopment project “on its own.”

Following this, on October 17, 2013, the HC permitted MHADA to proceed with the redevelopment. Subsequently, MHADA appointed a project management consultant, which estimated the total redevelopment cost at Rs 21,918.14 crore, later revised to Rs 36,295 crore. The rehabilitation and amenities plan was designed for an area of 7,95,516.57 square meters.

However, in 2022, MHADA returned to the HC to clarify that when it had stated it would carry out the redevelopment “on its own”, it had not necessarily meant it would undertake the construction alone. Senior counsel Darius Khambata and advocate PG Lad, appearing for MHADA, requested an amendment to the 2013 order, seeking permission to involve private developers.

The move faced resistance from several housing societies and residents of Motilal Nagar. Their primary concern was that if MHADA executed the project independently, original residents would receive free rehabilitation, and MHADA would acquire a significant housing stock, which could then be distributed to the public through its lottery system. In contrast, if a private developer handled the project, a large portion of the new housing stock would remain with the company for sale, reducing the number of homes available through MHADA’s lottery.

Earlier, two PILs had been filed in the HC regarding unauthorised constructions in Motilal Nagar 1, 2, and 3. The court had ordered the demolition of illegal structures. Over time, discussions shifted toward the colony’s comprehensive redevelopment. At that stage, MHADA had assured the court via an affidavit that it would execute the project “on its own,” leading to the 2013 High Court order reflecting that commitment.

On September 8, 2021, the Maharashtra Cabinet approved the redevelopment of Motilal Nagar by MHADA through C&DA, granting the project “Special Project” status. A Government Resolution (GR) to this effect was issued on October 6, 2021.

Following the Cabinet’s approval, MHADA initiated a tendering process. Three companies — Adani, L&T, and Naman Group — submitted bids. After the HC’s recent ruling, the technical bids were opened, with Adani and L&T qualifying. With judicial clearance now secured, MHADA can proceed with opening the financial bids and finalizing the developer.

The winning bidder will be responsible for rehabilitating 5,300 families, including 3,700 MHADA residents and 1,600 hutment dwellers. Each rehabilitated resident will receive a 1,600 sq ft home. In addition, the developer must construct a mini-township featuring schools, dispensaries, and open spaces.

MHADA will oversee the Rs 30,000 crore redevelopment project as the nodal agency.

Built in 1960 to accommodate economically weaker sections, Motilal Nagar originally consisted of 200 sq ft homes. Over the years, many residents have extended their homes illegally.

Benefits as per Government’s Decision

– Increase in built-up area for each residential unit holder from 833 sq. ft. to 1,600 sq. ft.

– Increase in built-up area for each non-residential unit holder from 502 sq. ft. to 987 sq. ft.

– A stock of 33,000 homes available for general public allotment after rehabilitating original residents and unit holders

– Comprehensive and integrated redevelopment with various amenities

– Special Project Status with 4 FSI (Floor Space Index)