“The Original Object of the Acquisition Has Already Been Lost and It Has Become Unworkable”: Madras High Court Quashes Entire Land Acquisition Proceedings Under Integrated Township Scheme
Sanchayita Lahkar
The Madras High Court, Single Bench of Justice N. Anand Venkatesh, allowed four writ petitions and quashed the acquisition proceedings initiated under G.O.Ms.No.905 dated 23.6.1986, G.O.Ms.No.196 dated 2.3.1988, and G.O.Ms.No.287 dated 23.3.1989 for the Sowripalayam and Uppilipalayam Integrated Urban Development Project. The Court recorded that the original object of the acquisition had become unworkable and observed that only a small portion of land remained available. It held that the Tamil Nadu Housing Board had not satisfactorily established the feasibility of implementing the original scheme. The Court further noted that neither possession had been effectively taken nor compensation properly tendered. It also initiated a separate inquiry into the alleged unauthorized withdrawal of compensation amounting to nearly ₹8 crores by two advocates.
The petitions—W.P.Nos.7423, 7424 & 8171 of 1986 and W.P.No.16510 of 1990—were filed under Article 226 of the Constitution of India, seeking the quashing of acquisition proceedings under G.O.Ms.No.905 dated 23.6.1986, G.O.Ms.No.196 dated 2.3.1988 and G.O.Ms.No.287 dated 23.3.1989. The petitioners challenged the notifications under Sections 4(1) and 6 of the Land Acquisition Act, 1894 (the “Old Act”) and sought exclusion of their respective lands in Sowripalayam and Uppilipalayam villages, Coimbatore, from Phase IV of the integrated township plan.
The landowners contended that the original object of acquisition—an integrated township with residential, commercial, educational and infrastructural facilities—had become defunct. The petitioners pointed out that urban developments had overtaken the planned layout, buildings had been constructed, and many lands had been released selectively.
A significant procedural point raised in W.P.No.8171 of 1986 concerned the non-payment of ₹5,000 costs imposed by the First Bench when impleading legal heirs of four deceased petitioners. The Court recorded that “this Court does not want to get hooked on such technicalities… parties must know where they stand at this length of time,” and accepted the impleading of legal heirs to proceed with the matter on merits.
In regard to Phase IV of the project, the acquisition covered 280.36 acres, divided into five blocks. Records revealed that vast portions had either been dropped, developed independently, or were left untouched. The Special Tahsildar’s counter affidavit and physical inspections confirmed that only 36.79 acres (Uppilipalayam) and 12.20 acres (Sowripalayam) remained available.
Arguments advanced by the petitioners emphasized the mechanical rejection of objections under Section 5A, lack of possession, and non-payment of compensation. It was urged that the proceedings stood lapsed under Section 24(2) of the 2013 Act. The petitioners also cited various precedents, including Velayuthamudaliar, L. Krishnan, and M. Palanisamy.
It was further argued that no alternative sanctioned scheme existed. Petitioners highlighted a 2003 communication from TNHB’s Executive Engineer recommending dropping the acquisition as the “funds allotted to the project were lying as a dead capital.”
The TNHB, represented by the Additional Advocate General, submitted that possession had been taken and compensation deposited. It maintained that it could implement a housing scheme instead of the original township. Inspection reports were produced, noting vacant land availability and proximity to civic infrastructure. The TNHB relied on judgments such as Indore Development Authority v. Manoharlal, Keeravani Ammal, and Afcons Infrastructure Ltd.
Respondents R3–R6 in W.P.No.16510 of 1990, purchasers of land post-1991, emphasized bona fide purchase after quashing of earlier proceedings and submitted that discrimination in land releases violated Article 14. Other respondents contended that buildings, roads, apartments and other constructions had substantially altered the landscape, making integrated development impossible.
The Court framed six issues. On the first, regarding the cost condition imposed by the First Bench, it held that “this Court does not want to get hooked on such technicalities” and accepted the legal heirs' participation.
On the second issue—whether the acquisition remained viable—the Court referred to the phased plan and recorded that “only an extent of 4.60 acres was utilized out of the total 280.36 acres.” Observing the impact of urban growth, it stated, “what are available today are some vacant lands at Uppilipalayam and Sowripalayam Villages to an extent of nearly acres 36.79 cents and acres 12.20 cents respectively.” It concluded that the TNHB had failed to explain the feasibility of continuing with the original scheme.
For the third issue—whether TNHB could proceed with a housing scheme in place of an integrated township—the Court noted: “The original object… has already been lost and it has become unworkable for the TNHB to satisfy the original object, for which, the acquisition proceedings were initiated… No such permission has been granted by the State Government.”
On selective release of lands, the Court held that “there is a discrimination among the equals without there being a reasonable classification. This obviously brings in the element of arbitrariness… thus, the retention of the lands belonging to the petitioners alone for coming up with a housing scheme suffers from patent arbitrariness, which is violative of Article 14 of The Constitution of India.”
While the Court refrained from deciding issues 5 and 6 independently, it observed that objections under Section 5A were mechanically rejected and that “neither the possession has been taken over effectively nor the compensation amount has been tendered effectively,” which justified quashing.
A crucial observation related to the alleged misappropriation of compensation. The Court stated: “a total sum of nearly Rs.8 Crores has been withdrawn from the Court without the concurrence of the clients… Notices were sent to both the advocates and a separate inquiry is under progress.”
The Court issued the following directives:
“In the light of the above discussions… the acquisition proceedings initiated under G.O.Ms.No.905 dated 23.6.1986, G.O.Ms.No.196 dated 2.3.1988 and G.O.Ms.No.287 dated 23.3.1989 are hereby quashed in respect of the lands of the respective petitioners.”
The Court further stated: “With respect to the alleged misconduct… if, prima facie, the materials satisfy this Court… this Court will independently pass orders directing the Bar Council of Tamil Nadu and Puducherry to initiate disciplinary proceedings.”
The matter was posted for further orders regarding the inquiry into alleged misconduct on 28.04.2025 at 2.15 PM.
No costs were awarded. The Court clarified that the compensation amount must be returned to the State based on the inquiry findings.
Advocates Representing the Parties:
For Petitioners: Mr. N. Chandrasekharan, Mr. T.R. Rajagopalan, Mr. V. Raghavachari, Mr. P.H. Aravind Pandian, Mr. V. Karthik, Mr. P.R. Ramakrishnan
For Respondents: Mr. J. Sivanandaraaj, Mr. Roshan Balasubramanian, Mr. V. Sanjeevi
For State: Mr. A. Selvendran, Special Government Pleader
For Housing Board: Mr. P. Kumaresan, Additional Advocate General assisted by Mr. V. Gunasekar
Case Title: R. Elangovan & Others v. State of Tamil Nadu & Others
Neutral Citation: 2025:MHC:878
Case Numbers: W.P.Nos.7423, 7424 & 8171 of 1986 and W.P.No.16510 of 1990
Bench: Justice N. Anand Venkatesh
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