Chennai Metropolitan Development Authority, Rep. By Its Member Secretary vs Dhamalingam and Ors. Etc. Etc.

2026 INSC 269 Reportable

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

Civil Appeal Nos. 3234 - 3251 / 2026 (Arising out of Special Leave Petition (Civil) Nos. 13905 - 13922 / 2015)

The Chennai Metropolitan Development Authority, represented by its Member Secretary …Appellant(s)

versus

Dharmalingam & Ors. etc. …Respondent(s)

JUDGMENT

SURYA KANT, CJI.

Delay condoned. Leave granted.

2. The Appellant-Chennai Metropolitan Development Authority is in

appeal against the judgment dated 12.07.2013 (First Impugned

Judgment) and the subsequent order dated 25.09.2014 (Second

Impugned Order) passed by two different Division Benches of the High

Court of Judicature at Madras (High Court). Vide the first judgment,

the intra-court appeals preferred by the respondent-land owners were

allowed, with a direction to release the acquired land in purported

exercise of powers under Section 48-B of the Land Acquisition Act,

1894 (LA Act), as applicable in the State of Tamil Nadu. The second Signature Not Verified

order was passed by the High Court, rejecting the Review Application Digitally signed by NITIN TALREJA Date: 2026.03.20 16:53:15 IST Reason:

preferred by the Appellant.

Page 1 of 17 A. FACTS OF THE CASE

3. The relevant facts giving rise to the instant Appeals are presented

hereafter:

3.1. The land of the respondent-landowners was sought to be acquired for

the public purpose of developing an inter-city bus and truck terminal

by the Appellant-Authority in Chennai City. To this end, different

notifications under Section 4 of the LA Act were issued in 1982-1985,

covering a total land area of 82.86 acres. The State Government,

thereafter, issued declarations under Section 6 of the LA Act, formally

acquiring an area of 80.92 acres. Compensation was granted through

different Awards by Special Land Acquisition Collector. After the land

stood vested free from all encumbrances in the State, administrative

sanction was also accorded in 1991 to revise the layout and utilise a

smaller portion of the land to construct the bus-cum-truck terminal at

Madhavaram, Chennai. It may not be out of place to record that some

of the respondents-landowners challenged the acquisition proceedings

and the same was quashed by a learned Single Judge in 1996 which

came to be reversed in 2002 by the Division Bench. Thereafter,

possession of the land was taken and after taking possession, the

Appellant-Authority utilised only 64.80 acres of the 80.92 acres of

acquired land for the notified public purpose. As such, an area of 16.12

acres remained to be developed, out of which the land in dispute

comprises 5.06 acres.

Page 2 of 17 3.2. It seems that on 17.09.2005, the Greater Chennai Corporation

(Corporation) informed the Appellant-Authority that 101 Gunny Bag

shops operating in residential areas of Chennai were creating a health

hazard for the general public, so the Appellant-Authority was requested

to allot suitable land for relocation of such merchants. After some

administrative processes, the unutilised land measuring 16.12 acres,

referred to above, was earmarked for the shifting and relocation of the

Gunny Bag merchants.

3.3. Some of the landowners, meanwhile, submitted a representation dated

02.07.2006 to the State Authorities and the Appellant, seeking re-

conveyance of the unutilised land in accordance with Section 48-B of

the LA Act. However, owing to inaction on the part of the authorities,

the landowners preferred two Writ Petitions before the High Court,

which were disposed of on 14.07.2006 with a direction that the

representations be considered and disposed of on merits.

3.4. This request was ultimately declined by the State Government through

a letter dated 23.10.2006, on account of the allotment of the land in

dispute for the relocation of Gunny Bag shops. This gave rise to a

second round of litigation, whereby WP Nos. 45821-28/2006 (2006

Writ Petitions) came to be filed by the landowners against the rejection

of their prayer for re-conveyance.

Page 3 of 17 3.5. The Appellant-Authority, meanwhile, tentatively proceeded with the

process for allotment of plots in the identified land to the Gunny Bag

traders through its letter dated 21.11.2006.

3.6. Concurrently, another landowner lodged WP No. 8350/2009 (2009 Writ

Petition) before the High Court, seeking reconveyance of her land

under Section 48-B of the LA Act.

3.7. The 2006 Writ Petitions were eventually allowed in part by a learned

Single Judge of the High Court on 04.08.2009, issuing, inter alia, the

following directions:

(i) The allotment of land to enable the relocation of the shops of the

Gunny Bag merchants does not amount to utilisation of the

acquired land for a ‘public purpose’;

(ii) The Government shall examine the request of the landowners in

terms of its obligations under Section 16-B of the LA Act and,

accordingly, issue an order of forfeiture of the lands in question

in favour of the Government;

(iii) If an order to forfeit the land was passed under Section 16-B,

the Government shall examine whether the land in question was

required for any other ‘public purpose’, and if it was found that

it could not be so utilised, the Government shall reconvey such

land to the land owners under Section 48-B of the LA Act,

Page 4 of 17 provided that the landowners were willing to fulfil the conditions

stipulated therein; and

(iv) In any event, the Government shall pass appropriate final orders

on the representation of the landowners within a period of six

months.

3.8. The Respondent-landowners were, however, not fully satisfied with the

directions issued by the learned Single Judge. As such, they preferred

intra-court appeals bearing WA Nos. 327-334/2010 (2010 Writ

Appeals).

3.9. Pending these appeals, the 2009 Writ Petition was also disposed of on

27.07.2012 by a different learned Single Judge, with a direction to the

State Government to consider and dispose of the landowner’s

representation, seeking action under Section 48-B of the LA Act, within

eight weeks. Aggrieved by the non-grant of substantive relief and relying

on the findings forwarded by the Coordinate Bench of the High Court

vide order dated 04.08.2009, this landowner, too, filed an intra-court

appeal bearing WA No. 150/2013 (2013 Writ Appeal).

3.10. Meanwhile, the State Government reconsidered its previous decision of

allotting the land to the Gunny Bag merchants. The original proposal

was finally dropped in light of the findings of the learned Single Judge,

but as recorded in G.O. (Ms.) No. 191 dated 31.08.2012, the land was

diverted to be utilised for the development of a truck parking yard

alongside the inter-city bus terminal already being developed.

Page 5 of 17 Consequentially, the decision of the State Government was duly

conveyed to the Gunny Bag Merchants Association, and formal orders

cancelling the tentative allotments were issued. These developments

were also placed on the record in the pending intra-court appeals.

3.11. A Division Bench of the High Court, thereafter, finally heard the 2010

and 2013 Writ Appeals. Vide the First Impugned Judgment dated

12.07.2013, the High Court initially observed that:

“26. The gist of the argument projected by the Learned Counsel for the Appellants is that the lands in question have not been utilised for the past 23 years for the purpose for which they were acquired and that the 1st Respondent passed the impugned orders dated 23.10.2006 rejecting the Petitioners claim for re-conveyance, by allotting the lands to Gunny Bag Merchants, which is neither a public body nor have any aid from the Government. Besides these, it is further contended on behalf of the Appellants that Patta, Chitta and Adangal stand in the name of the Petitioners till date.

xx xx xx xx

39. A mere running of the eye of the ingredients of Section 48-B of the Land Acquisition Act, 1894 in a clear cut fashion necessitates a mutual agreement between the erstwhile land owners and the State Government before it can re-convey the lands vested in it to them, on the return of money paid in regard to the acquisition in question. Also that, Section 48-B of the Act does not visualise an unilateral withdrawal from the acquisition by the State Government.” [Sic]

3.12. The Division Bench, thereafter, relied upon some previous decisions of

the High Court of the years 1999 and 2005 and opined as follows:

“42. Be that as it may, on going through the order dated 04.08.2009 in W.P.Nos.45821 to 45828 of 2006 passed by the Learned Single Judge, we are of the considered view that the Learned Single Judge is quite correct in coming to the conclusion that the allotment to Gunny Bag Merchants' is not a public purpose and rightly set aside the impugned order dated 23.10.2006 in Letter No.22014/UD3(1)/2006-3, passed by the 1st Respondent and in this regard, we are in agreement with the view so taken. However, we are of the considered view that the directions issued by the Learned Single Judge in paragraph 51(ii) to (iv) [……] are per se not legal in the eye of

Page 6 of 17 law, because of the simple reason that Section 48-B of the Act is an enabling provision enjoined only to the original land owners to secure the acquired land reconvey to them. Further, it is not open to the Government to come out with a fresh reason for public purpose after lapse of more than two decades viz., after the issuance of Section 4(1) Notification under the Land Acquisition Act, 1894 dated 27.03.1985 issued in G.O.Ms.No.306 by the Housing and Urban Development Department. Accordingly, this Court interferes with the said directions issued beginning from paragraph 51(ii) to (iv) as stated supra and sets aside the same, to prevent an aberration of Justice. Resultantly, the Writ Appeal Nos.327 to 334 of 2010 succeed.

43. Likewise, in the light of the view taken by this Court in allowing the W.A.Nos.327 to 334 of 2010 (relating to W.P.Nos.45821 to 45828 of 2006), this Court holds that the said view will equally apply to the facts of the present case concerned in W.A.No.150 of 2013 and accordingly, allows the W.A.No.150 of 2013, by setting aside the order of the Learned Single Judge in W.P.No.8350 of 2009 dated 27.07.2012.” [Emphasis supplied]

3.13. Consequently, the Division Bench allowed the 2010 and 2013 Writ

Appeals in the following terms:

“44. In the result, all the Writ Appeals are allowed. The Respondents are directed to reconvey the lands to the Appellants [provided, as land owners, they are willing to repay the amount paid to them or deposited in their favour as compensation], within a period of six weeks from the date of receipt of copy of this Judgment. There shall be no order as to costs.” [Sic] [Emphasis supplied]

3.14. The Appellant-Authority filed review applications against the First

Impugned Judgment, which came to be dismissed by the Division

Bench (one of the learned Judges changed in the interregnum) primarily

upon taking notice of the limited scope of review under Order 47 Rule 1

of the Code of Civil Procedure, 1908. The High Court opined that the

Page 7 of 17 review application was, in effect, an attempt to appeal the First

Impugned Judgment, which was impermissible.

3.15. The Appellant-Authority, being aggrieved, approached this Court

through the instant appeals. While issuing notice on 01.05.2015, a

Coordinate Bench of this Court had directed status quo to be

maintained re: possession as well as title. That interim order continues

to operate.

B. ISSUES

4. Having given our thoughtful consideration to the rival submissions

forwarded by Mr. V. Krishnamurthy, learned Additional Advocate

General representing the Appellant-Authority, and Mr. Narender Hooda,

Mr. Gagan Gupta, learned senior counsel, and Mr. Pradeep Kumar

Yadav, learned counsel, appearing on behalf of the Respondent-

landowners, and after perusing the material placed on record, we find

that two questions arise for our consideration:

I. Whether the High Court was justified in relying upon Section

16-B read with Section 48-B of the LA Act to enforce a perceived

right of Respondent-landowners, seeking re-conveyance of their

lands, which have been lawfully acquired and stood vested in

the State free from all encumbrances?

II. Whether the Courts, in exercise of their power of judicial review,

can prescribe a time limit for the utilisation of acquired land for

Page 8 of 17 the public purpose or for changing the public purpose for which

the acquired land may be used?

C. ANALYSIS

C.1 Issue I – Invoking of Sections 16-B and 48-B of the LA Act

5. Adverting to the first issue, it will be beneficial to reproduce Section 16-

B of the LA Act, as inserted through State Amendment by the

Legislature for the State of Tamil Nadu, which reads as follows:

“16-B. Land to be forfeited in certain cases.– Where the Government are satisfied that the land acquired under this Act for any public purpose as referred to in Sub-section (1) of Section 4 is not used for the purpose for which it was acquired, they may, by an order, forfeit the land as penalty and the land shall vest in the Government in Revenue Department free from all encumbrances:

Provided that no order under this section, shall be made unless the person or authority aggrieved has had a reasonable opportunity of being heard.”

6. It may be observed that Section 16-B addresses a situation where land

acquired has been allocated for a specific ‘public purpose’ but has not

actually been used for the said purpose. It emphasises an enabling

power given to the State to forfeit the land as a penalty, after which the

land shall vest in the State free from all encumbrances.

7. Section 48-B, which was similarly introduced into the LA Act through a

State Amendment, allows for the transfer of the land to the original

owner and reads as follows:

Page 9 of 17

“48-B. Transfer of land to original owner in certain cases.– Where the Government are satisfied that the land vest in the Government under this Act is not required for the purpose for which it was acquired, or for any other public purpose, the Government may transfer such land to the original owner who is willing to repay the amount paid to him under this Act for the acquisition of such land inclusive of the amount referred to in Sub-section (1A) and (2) of Section 23, if any, paid under this Act.”

8. On a plain reading of Section 48-B, we find that the State Government

must, at the outset, be satisfied that the land vested in it “is not

required for the purpose for which it was acquired, or for any other public

purpose”. This satisfaction on the part of the State is a sine qua non for

any action of the Government under this provision, and only thereafter

the Government ‘may’ decide to revert such land to the willing original

owner. The scheme of Section 48-B of the LA Act, in our considered

opinion, does not envisage any enforceable right in favour of the

expropriated landowner to seek transfer of the acquired land. Rather, it

confers a discretion upon the State to permit re-conveyance of the land

to the original landowner in certain circumstances, being that the

acquired land can neither be utilised for the original purpose of

acquisition nor for any other public purpose. Unless this two-pronged

condition is fulfilled, the question of exercise of the State’s discretion

does not arise.

9. We may hasten to add that a Coordinate Bench of this Court, in T.N.

Housing Board v. Keeravani Ammal,1 also considered the scope of

Section 48-B of the LA Act generally, holding that:

1 (2007) 9 SCC 255.

Page 10 of 17

“15. We may also notice that once a piece of land has been duly acquired under the Land Acquisition Act, the land becomes the property of the State. The State can dispose of the property thereafter or convey it to anyone, if the land is not needed for the purpose for which it was acquired, only for the market value that may be fetched for the property as on the date of conveyance. The doctrine of public trust would disable the State from giving back the property for anything less than the market value. [……]

16. Section 48-B introduced into the Act in the State of Tamil Nadu is an exception to this rule. Such a provision has to be strictly construed and strict compliance with its terms insisted upon. Whether such a provision can be challenged for its validity, we are not called upon to decide here.” [Emphasis supplied]

10. As such, the pre-condition expressly encapsulated within the text of the

provision must be mandatorily complied with, and Courts ought to

desist from issuing orders invoking Section 48-B in the absence of clear

material to indicate that the land cannot be utilised for a public

purpose.

11. Applying the plain and literal construction of Section 48-B to the facts

of the instant case, it is evident that the Division Bench of the High

Court has misdirected itself in directing the reconveyance of the

acquired land despite not meeting the discussed prerequisite. We say so

for the reason that a substantial part of the acquired land had already

been put to use for the originally envisaged public purpose. Moreover,

the State had made a consistent effort to assign the residual land to

another public purpose. Even if it is assumed that the initial allotment

of a parcel of land to the Gunny Bag Traders Association did not

amount to a ‘public purpose’, the Authorities did not let go of the utility

Page 11 of 17 of the land. Soon thereafter, the Government effectively rectified its

mistake; cancelled the allotment to the merchant’s association; and

decided to utilise the land for a truck parking yard, complementing the

original plan for the acquisition.

12. There is nothing placed on record to show that, at any point in time, the

Government was of the opinion that the land in question was not

suitable or usable for any public purpose. That being so, the mandatory

condition of Section 48-B was never satisfied. The High Court,

therefore, could not have invoked the said Section to issue sweeping

directions for the restoration of the land to the landowners.

C.2 Issue II – Time Limits for Utilisation of Acquired Lands/Change of

Public Purpose

13. Having observed that there was no occasion for the High Court to

invoke the rigours of Section 48-B, let us consider whether the conduct

of the Appellant-Authority or the State Government in the instant case

warranted interference from the High Court.

14. It is trite law that no timeline can be imposed on the Government or its

beneficial agencies for putting the acquired land to use for the public

purpose once acquisition is lawfully completed. Perhaps the only

exception in such a case would lie in situations where the urgency

provision under Section 17 of the LA Act has been invoked.

Page 12 of 17

15. The above postulate is a reflection of the general circumspection that

Constitutional Courts ought to undertake when exercising their

extraordinary jurisdiction to direct the release of lawfully acquired land.

This principle was also recognised by a two-Judge bench of this Court,

including one of us (Surya Kant, J., as he then was), in a case titled

Nandkishor Babulal Agrawal vs. The State of Maharashtra,2 the

relevant extract of whereof is reproduced below:

“11. In our considered view, the High Court would be extremely circumspect to issue a mandamus in the exercise of its extraordinary jurisdiction under Article 226 of the Constitution, directing to release a lawfully acquired land only on the premise that such land has not been utilized for the public purpose for which it was acquired. There is no gainsaying that once the land vests in the State or its authorities, the ‘public purpose’ of its acquisition can be changed at a later stage. All that is required is that such land should be utilized for public purposes only. In fact, there cannot be a time limit within which the authorities are expected to utilize the acquired land. The Municipalities or such other agencies are expected to have long-term plans for regulated development of urban areas and for that purpose, certain pockets of land are required to be kept vacant as reserve pool to cater the future needs.” [Emphasis supplied]

16. Adverting to the facts of the instant case, we may first notice that the

acquisition for the truck-cum-bus depot was not initiated under Section

17 of the LA Act. Furthermore, it is undisputed that the acquisition was

made for a bona fide public purpose, and all procedural necessities

were also duly completed. There is also no question about the

genuineness of the submission of the authorities that the land would

be used for building a truck parking yard. That being the case, we do

2 Supreme Court of India, Civil Appeal No. 7634 of 2023, judgment dated 10.11.2023.

Page 13 of 17 not find any ground whatsoever on the basis of which the actions of the

State or the Appellant-Authority can be faulted or which would justify

the reversion of the acquisition. Merely the acquisition having not

resulted in the land being utilised within a particular period of time is

no reason for the Court to direct the land to be released to the

landowners.

17. In the same breath, we are constrained to observe that the two

judgments relied upon by the Division Bench of the High Court,

extracted in paragraphs 40 and 41 of the First Impugned Judgment,

are based upon an incorrect interpretation of the law. To buttress the

directions issued by it, the Division Bench has cited those judgments to

hold that it is not open for the State or the acquiring agency to change

its mind after a request for re-conveyance of the acquired land under

Section 48-B is made. This interpretation of the law, in our considered

opinion, is entirely disjointed from the text of the provision and displays

unfounded reasoning. Similarly, unknown to land acquisition

jurisprudence is the submission that if the land is not put to use for a

specified long period of time, it is liable to be reverted to the landowners

under Section 48-B. Suffice it to say that there is no legal prohibition

under the said provision against keeping a portion of the acquired land

vacant for future development.

18. At the cost of repetition, we reiterate that Section 48-B of the LA Act

does not clothe an expropriated owner with any right to seek re-

Page 14 of 17 conveyance of the land. Therefore, even if such a landowner has made

an application purportedly under Section 48-B of the LA Act, that does

not take away the power of the State to revisit the original public

purpose or to divert the land for any other bona-fide public use. In the

absence of a positive right, what the Court ought to examine, while

undertaking judicial review over the action/inaction under Section 48-

B, is whether the exercise of discretion is founded upon mala fide or

arbitrary reasons or if the decision-making is tainted by a colourable

exercise of power.

19. To summarise, the scope of judicial review in cases where the State has

declined to exercise its discretion under Section 48-B of the LA Act is

limited. Further, neither the delay in using the acquired land nor the

representation of the landowners filed in the interregnum could sustain

the positive directions for exercise of such discretion under the said

provision. Thus, on this count too, the interference by the Division

Bench of the High Court is liable to be set aside.

D. CONCLUSION

D.1 Lapse of the Acquisition and Entitlement of Higher Compensation

20. Faced with this, learned senior counsel for the Respondent-landowners

urged that they should at least be held entitled to compensation as per

the Right to Fair Compensation and Transparency in Land Acquisition,

Rehabilitation and Resettlement Act, 2013 (2013 Act). To support this

contention, a half-hearted reference was made to Section 24(2) of the

Page 15 of 17 2013 Act, inter alia, to make out a case that neither compensation has

been paid nor possession of the acquired lands has been taken.

21. We do not find any merit in such contention, especially when there is a

categorical finding by the High Court that after the Award was passed,

the compensation amount stood deposited with the Land Acquisition

Collector. If the landowners did not approach the said Authority for

release of that compensation in order to challenge the acquisition or

seek relief under Section 48-B of the LA Act, the actions of the State

functionaries cannot be said to be within the mischief of Section 24(2)

of the 2013 Act. Since compensation had been offered, the possession,

even if retained by the owners, is entirely inconsequential.

D.2 Final Directions

22. For the reasons aforesaid, the instant Appeals are allowed, and the

following directions are, consequently, issued:

(i) The First Impugned Judgment and the Second Impugned Order

passed by the Division Bench of the High Court, as also the

orders of the learned Single Judge of the High Court in the 2006

and 2009 Writ Petitions, are set aside;

(ii) The decision of the State Government and the Appellant-

Authority to not re-convey the land in question to the original

landowners under Section 48-B of the LA Act is upheld; and

Page 16 of 17

(iii) It is clarified that if the High Court, in any other proceedings

pertaining to the same acquisition, has taken any view contrary

to that given by us through the instant Judgment, such view

shall also be deemed to have been set aside, ensuring that no

impediment is caused to the completion of the project.

23. It goes without saying that the Respondent-landowners shall be entitled

to receive the due compensation, which is lying deposited with the

Competent Authority, along with interest, if any, accrued thereupon.

Ordered accordingly.

………………...................…….........CJI (SURYA KANT)

........................................…….........J. (JOYMALYA BAGCHI)

NEW DELHI;

MARCH 10, 2026

Page 17 of 17