03/28/2008 02:44 am ET Updated May 25, 2011

$500M "Palace In The Air" Under Threat: Indian Government Has Order To Confiscate Land

A plan by Mukesh Ambani to build what could be the world's most lavish private home on the site of a Mumbai orphanage has run into red tape, showing that even India's richest man is not immune to the complexities of Indian bureaucracy.

The Maharashtra state government has issued an order to confiscate the land, which it alleges was sold illegally to the oil and petrochemicals baron. He is already part way through building his 27-story "palace in the air" on the site.

Anees Ahmad, a minister with the state government, said the Ambani property "is really an orphanage house. As per the government constitution of this country, these lands cannot be sold or purchased."

The new Ambani family home would rise 570 feet -- the equivalent in height of a 60-story residential building -- and would have six levels of parking, a pool and a helipad.

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