D-Mart owner pays Rs 65 crore for freehold land conversion in Mumbai.

An only extremely rich individuals can afford this. R K Damani, the owner of the big retail chain D-Mart, has paid Rs 65 crore to convert 1.4 acres (7,634 sqm built-up area) of leased land to freehold. The state revenue department has levied a surcharge of 25% of the ready reckoner rate for the conversion.

Damani and his brother Gopichand paid Rs 1,001 crore for a ground-plus-two-floor mansion in Malabar Hill in March. The bungalow was built on land leased to Govindlal Bansilal in 1939 and then passed to Premchand Roychand & Sons LLP.

In 2019, an application for conversion from leasehold to freehold was submitted on the company’s behalf. The land had been leased for 971 years, with the lease set to expire in 2910. The Malabar Hill revenue division wrote to the Mumbai municipal collector in January to request permission for the conversion.

The government has been urged to reduce the conversion fee to 5%.

In March, the property was examined and no breaches were detected. The revenue documents obtained through the RTI by Salil Rameshchandra, President of the Federation of State Grantors: “The only construction built in a small space was a bungalow (Gr+ 2) named Madhu Kunj and another Gr + 1 structure built on the smallest area. Both were closed, although, for residential purposes, the bungalow was used sooner.”

In 2019, the government announced a resolution authorizing the conversion of certain categories of government land into freehold for a premium ranging from 10% to 25% of the ready reckoner rate, depending on the class of land.

“In Mumbai, there are over 3,000 housing societies on revenue land. Occupants are from the middle class. The majority of the structures are ancient and decaying. The bulk of residents cannot afford to pay such high premiums, and the high premium makes redevelopment financially unviable,” Rameshchandra explained.

“We have been requesting that the government cut the premium to 5%, as it has done for leased lands in Vidarbha. Residents will be able to pay, and the government will generate income as well. “We’re at a stalemate right now,” he explained.

Damani’s investments, according to sources, demonstrate his insight. “If he has opted to change a leased land with an 800-year lease to freehold, it surely indicates that he finds value in doing so.” D-Mart was valued at about Rs 2.2 lakh crore as of June 30. As promoters, he and his associates own 75% of the organized retail network. Their stake in D-Mart is worth around Rs 1.65 lakh crore.