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The Bombay High Court has upheld the validity of an amended regulation under the Development Control Rules (DCR) which does not allow conversion of an industrial plot to a residential or commercial one after an industry closes down until the dues of workers are paid.

The court told that the rule would apply even if the plot has changed hands after the closure.

The division bench headed by Justice A M Khanwilkar, which was hearing a petition against the new rule, however, made it clear that the rule would not apply to an open land in the industrial zone where industry never existed.

Petitioner Shubham Fabrics had contended that it was not a closed industry and no ‘No Objection Certificate’ from the Labour Commissioner (certifying that workers’ dues had been settled) was needed for converting an industrial zone plot, which it had bought earlier, for residential or commercial purposes.

The court told in Shubham’s case the rule would still apply because the previous owner of the plot had closed down an industry which stood there. The petitioner had purchased the property when the liquidation process was on.

“The argument that the regulations are unreasonable and they must apply only to the original owner does not commend to us as the language of the DCR is wide enough and empowers the state to decline request for conversion from industrial zone of the plot to residential or commercial zone until the ‘No Dues’ Certificate pertaining to the closed industry is granted,” the judges told in their recent ruling.


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