The CAG had made the revelations in a report tabled in the Maharashtra Legislature on June 8, 2004. A Division Bench of Chief Justice Mohit Shah and Justice Girish Godbole held the transaction between the two sides as “illegal, arbitrary and without authority of law”.
Deshmukh, the then Chief Minister, was present at a ceremony where the joint venture agreement — dated May 30, 2000 — was signed between the State-run Maharashtra Film Stage & Cultural Development Corporation (MFSCDC) and Ghai’s Mukta Arts Limited, as a witness.
Ghai and Whistling Woods International Institute, Research Centre & Studios (WWIIRCS) were ordered to “vacate” 14.5 acres immediately so the Maharashtra Government could take possession and asked the Government to take over the remaining 5.5 acres, where the institute is located, on July 31, 2014, “by when all ongoing courses at the institute shall be completed”.
The judges also restrained Whistling Woods from granting admission for courses which go beyond 2014. They also directed Ghai to pay rent of Rs 5.3 crore annually since 2000.
In a stinging indictment of the former Chief Minister, the judges noted, “Vilasrao Deshmukh has clearly misused his official position as Chief Minister and it is not acceptable that a CM will personally sign such an agreement, which is illegal. It is clear that Vilasrao has extended undue favours to Ghai’s Whistling Woods.”
“Here is a case where all norms of transparency and reasonableness have been given a complete go-by. The present case is a classic example of arbitrary, unreasonable and illegal decision of permitting use of available land owned by the Government without any authority of law,” said a judge.
Rejecting the claim of Deshmukh, current Union Science & Technology Minister, that he was innocent, the Bench added, “The defence of innocence raised by respondent number 7 (Deshmukh) cannot be accepted. It appears that the managing director of MFSCDC and Mukta Arts were emboldened by the fact that their illegal action has the blessings of the highest functionary of the executive arm of the State.”
However, the judges also observed that there was no material to indicate that these “undue favors” were granted by Deshmukh as quid pro quo to get his actor son (Ritesh Deshmukh) established in the film industry. “Hence, there is no need to send the case to CBI for investigation,” the high court said.
The Bench was hearing a PIL filed by Rajendra Sontakke and four other agriculturists from Latur and Osmanabad districts.
The judges pointed out that the joint venture was signed without any formal resolution passed by the board of directors of MFSCDC, without any valuation of the land in question and without following any rules or procedure.
Alluding to the CAG report, the judges said that MFSCDC’s contribution to the joint venture capital was wrongly shown as Rs 3 crore instead of Rs 31.20 crore. “Policies of Government provide for grant of land at a concessional rate to educational institutes but Mukta Arts is not eligible for it as it is not registered under the BPT (Bombay Public Trust) Act,” the judge said.
The Bench has stayed its order for eight weeks to facilitate Ghai in a higher appeal. Ghai said, “We respect the high court judgement and will appeal to the Supreme Court for our lawful rights. We are at no fault and have done nothing wrong. We had a legal joint venture with Film City to use the land for building an institute, which was challenged by a PIL after 10 years.”
We hope we will get full justice from the Supreme Court.”
The CAG had had said the questionable deal had resulted in a loss of Rs 28.20 crore to the State exchequer. The report had also said that the MFSCDC had extended “undue benefit” to the Mukta Arts by undervaluing the land. MFSCDC had “wrongly” valued the land rate at Rs 375 per square meter as against the prevailing rate of Rs 3,900 sq metre of land as notified by the Brihanmumbai Municipal Corporation (BMC) in that area.
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