The land was given to Mr Ghai in 2000 by then chief minister Vilasrao Deshmukh. The Supreme Court said, "The state government has given land to its blue-eyed boy for a paltry sum of money." The judges added about Mr Ghai, "You are a great film-maker, but there are greater film makers also. Why you have been chosen?"
Mr Deshmukh is currently a Union minister. The Supreme Court pointed out that "Three Chief Ministers did nothing on the proposal of (Ghai) and kept it in cold storage... but this Chief Minister comes and the next day, the process starts."
The Supreme Court has agreed with the Bombay High Court's decision in February that said Mr Ghai would have to return 14.5 acres that are currently vacant at his academy immediately to the government. Another 5.5 acres that are in use are to be given back in 2014 so that students currently enrolled can complete their courses without any disruptions. The High Court had ordered Mr Ghai to pay 5 crores in rent per year since 2000. The producer-director had appealed to the Supreme Court against the High Court's ruling.
The High Court had also been severely critical of Mr Deshmukh, describing the deal between the government and Mr Ghai as "illegal, arbitrary and without authority of law." They stressed: "It is not acceptable that a Chief Minister will personally sign such an agreement, which is illegal. It is clear that Vilasrao has extended undue favours to Ghai's Whistling Woods." The judges had referred to a report by the government's auditor that said the land bought to have been valued at Rs. 31.20 crores as opposed to the three-crore price tag used by the government.
Mr Deshmukh has appealed to the Supreme Court to have those remarks against him expunged.
Mr Ghai's lawyer argued that more than Rs 50 crore has already been invested in the film academy. Therefore, he said, it should not be destroyed and that the property should be leased to the film-maker. The judges refused this and suggested that Mr Ghai participate in a bidding process for the land.