With the onset of the American Civil war there was a cotton famine at Manchester and Lancashire and the cotton industry was about to die when it was thought that the cotton supply from America could be replaced by supplies from the Indian coast. For this what was required was an expedite railway communication between Bombay and the hinterland where cotton was being grown. Towards this end, the B.B and C. I Railway Company was working by building a railway communication between Bombay and Surat. It was thought that if there was the cotton laden wagons could directly reach upto Colaba then they could be directly loaded onto the ships at the harbour. To build the railway line, instead of acquiring the land that existed, it was decided that foreshore lands would be reclaimed for which a Joint Stock Company was floated by the name of Bombay Land Reclamation Company popularly known as Backbay Reclamation Company.
The Company was to undertake the works of Backbay reclamation which involved in total 1500 acres of land, out of which 300 acres or one-fith was to be handed over to the government for free.