Madras High Court
R. Shanmugam vs The State Of Tamil Nadu on 2 August, 2006
 IN THE HIGH COURT OF JUDICATURE AT MADRAS           
DATED: 02/08/2006  
CORAM   
THE HON'BLE MR.A.P.Shah, CHIEF JUSTICE       
AND  
THE HON'BLE MR.JUSTICE D.MURUGESAN          
W.A. No.443 of 2006 
 to
 W.A. No.445 of 2006 
 and
 W.A. No.485 of 2006 
 to
 W.A. No.487 of 2006 
 And 
 WAMP. No.1002 of 2006   
 and
 WAMP. NO.1003 of 2006   
R. Shanmugam                   ..Appellant
                                  in WA 443 of 2006
Ammasi Kutty                    .. Appellant
                                   in WA 444 of 2006
1. M. Duraisamy 
2. M. Mani
                                .. Appellants
                                   in WA 445 of 2006
1. M. Manimekalai 
2. S. Maruthachalam             .. Appellants
                                   in WA 485 of 2006
1.  Perichiappa Gounder
2.  Kumarasamy  
3.  Maruchamy Gounder  
4.  A. Natarajan
5.  Ramasamy Gounder   
6.  Marathal
7.  Ganesh 
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8.  Radhamani 
                                .. Appellants
                                   in WA 486 of 2006
1. Sellappa Gounder 
2. G. Karunanidhi               .. Appellants
                                   in WA 487 of 2006
-Vs-
1. The State of  Tamil Nadu
    rep. by its Secretary
    Housing and Urban
    Development
    Fort St. George,
    Chennai 600 009
2. The Tamil Nadu Housing Board 
   represented by its
   Managing Director
   No.331, Anna Salai,
   Nandanam 
   Chennai-35.
3. The Special Tahsildar
   Housing Scheme Unit-II
   Coimbatore-18.
                                ..Respondents
                                  in all W.As.
        Memorandum of Grounds of Writ Appeals under Clause 15 of  the  Letters
Patent,  against  the  order  of  the learned Judge dated 23.12.2005 passed in
W.P.No.37583 of 2004,20237 of 2005,24968 of 2005,37578 of 2004,37580  of  2004  
and 20176 of 2005 respectively.
!For Appellants         :  Mr.K.Chandru
 in all Appeals            Senior counsel for
                           Mr.R.N.Amarnath
^For 2nd Respondents    :  Mr.R.  Vidhuthalai
 in all appeals            Advocate General
                           For Mr.D.Veerasekaran
For respondents         :  Mr.J.Rajakalifullah
1 and 3 in all appeals     Govt.  Pleader
:JUDGMENT   
D.MURUGESAN, J.
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These Writ Appeals raise the following points for our consideration.
1. Whether the Government have right to repossess the land acquired and transferred to the Tamil
Nadu Housing Board that remains unutilized by the Board for a long number of years in terms of
Section 16-B of the Land Acquisition Act 1894?
2. Whether the erstwhile land owners have vested right to seek for re-conveyance of unutilised land
under Section 48-B on expressing their willingness to repay the amount that was paid to them under
the Act for acquisition of land, inclusive of the amount referred to in Sub-section (1-A) and (2) of
Section 23, if any, paid under this Act, and the Government is obligated to accept the request as
such?
2. The following are the few facts that led to the controversy before us.
The Tamil Nadu Housing Board (hereinafter referred shortly as " TNHB") forwarded a proposal to
the Government for acquiring an extent of 1997.02 acres of patta land for the Kalapatti
Neighbourhood Scheme, Coimbatore. Notifications under Section 4(1) of the Land Acquisition Act
(hereinafter referred to as "the Central Act), were issued on various dates during the year 1991 in
respect of 821.33 acres of land in different survey numbers. An extent of 1175.69 acres of land was
not notified even as on today. After enquiry under section 5-A, Section 6 declarations were made
and awards were also passed in respect of 662.96 acres of land. An extent of 105.61 acres of land was
taken over by the Government and handed over to "Board" and an extent of 21.47 acres of land alone
was utilized for Housing Scheme. As large extent of lands were unutilized by the Housing Board, the
owners of the land approached the Government under Section 48-B of the Land Acquisition
Act(hereinafter referred to as "The State Amendment Act") seeking for re-conveyance of the
unutilized lands. Their common claim was that in the event, the lands acquired for construction of
houses by the Board remain unutilized for quite long number of years, the Government shall have
the power to take back the lands from the Board and re-convey the unutilised lands to the land
owners. By the orders impugned in the Writ Petitions, their claim was rejected on the ground that
awards were passed, compensation amounts were paid and the lands were still required for Housing
Scheme. On a challenge to the orders of the Government more or less on the same ground, the
learned Judge while dismissing the Writ Petitions, has held that there cannot be two vesting of the
same land, one in the Government and another in Housing Board. The learned Judge has further
held that in view of the specific provisions of Section 17-A, the claim for forfeiture of the land by the
Government under Section 16-B of the Act is unsustainable.
3. We have heard the respective learned senior counsel on either side. Before embarking upon the
issue, it is necessary to trace the history of TNHB Act and the object for which the Housing Board
was constituted. For improvement of the City of Madras, the Board of Trustees was constituted
under the Madras City Improvement Trust Act, 1950 and the Board of Trustees was in-charge of
Housing, Land Development and general improvement of the City. Every project proposed by the
Board must get sanction of the Government before i t is executed. Basically, the powers of the Board
are limited and only to formulate the project for land Development, Housing and General
improvement within the City and there was no independent power entrusted with the Board for
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execution of other Housing Projects of the Government not framed under the said Act. For the
purpose of implementing the Scheme by the Board of Trustees, the Government in exercise of power
of Eminent Domain, acquired the land under the provisions of The Central Act. Section 16 of the
Central Act empowers the Collector to take possession of the land in respect of which award is
passed under Section 1 1 of the Act. Once possession is taken, the land shall vest in the Government
free from all encumbrances. Under Section 17 of the Central Act, in case of urgency and if the
appropriate Government so directs, the collector, though no award is made, may on the expiration
of 1 5 days from the publication of the notice mentioned under Section 9, take possession of the land
needed for public purpose and such land shall thereupon vest absolutely in the Government free
from all encumbrances.
4. In order to enable the Government to hand over possession of the lands so acquired to the Board,
Section 17-A of the Madras City Improvement Act was introduced by the State Amendment Act to
the Central Act which reads as follows:
17-A Transfer of land to Board:- In every case referred to in Section 16 or 17, the Collector shall,
upon payment of the cost of acquisition, make over charge of the land to the Board; and the land
shall thereupon vest in the Board, subject to the liability of the Board to pay any further costs which
may be incurred on account of its acquisition
5. By the said provision, lands handed over to the Board shall vest in the Board. By the enactment of
TNHB Act and by virtue of the specific provisions of Section 162 of the Act, the Madras City
Improvement Trust Act, 1950, was repealed and therefore, the provision of Section 17-A of the
Madras City Improvement Trust Act also stood deleted after TNHB Act was enacted.
6. As both the Central and State Government felt that the minimum need of Housing Programme
should not be restricted only for the Cities and must also be extended to other areas as well,
constitution of a statutory authority having State wide jurisdiction for execution of Housing Project
was seriously considered. On the above backdrop, the Tamil Nadu State Housing Board Act, 1961
(Act 17/1961)( hereinafter referred to "the TNHB Act), was enacted with the object basically to
provide for execution of housing and improvement schemes and for establishment of State Housing
Board. Section 12 to 15 of Chapter III relates to transfer of assets and liabilities of the City
Improvement Trust to the Board. The Board is constituted under Section 4 of the Act. Chapter VII of
the Act relates to Housing or Improvement Scheme. Section 35 of the Act relate to the power of the
Board to undertake Housing or Improvement Scheme and incur expenditure. Under Subsection (1)
of Section 35, the Board may undertake works for the training and execution of such housing or
improvement schemes. Further, under Sub-Section (2) of Section 35, the Government may transfer
to the Board the execution of any housing or improvement scheme not provided under the Act and
on such transfer, the Board shall thereupon undertake the execution of such schemes, as if, it has
been provided for by the Act. Under Sub-Section (3) of Section 35, the Board may on such terms and
conditions as may be agreed upon, take over for execution of any housing or improvement scheme
undertaken by a local authority and the Board shall execute such scheme as if it has been provided
for by the Act.
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7. In addition to the above, under Section 36, when the Government considers it expedient or
necessary for the purpose of clearance or improvement of any slum area, transfer any land in such
area belonging to or vested in them or acquired under the provisions of the Madras Slum
Improvement Acquisition of Land Act, 1954 and they may do so on such terms and conditions as
they may think f it to impose and direct the Board to undertake the clearance or improvement of
that area and to frame and execute such housing or improvement scheme, as if, it has been provided
for by the Act. A housing or improvement scheme may be framed by the Board on its own motion or
at the instance of the Government or a local authority under Section 37 of the Act. A housing or
improvement Scheme framed by the Board under Section 37 of the Act may provide the following:
a)the acquisition by purchase, exchange, or otherwise of any property necessary for
or affected by the execution of the scheme;
b)the laying or relaying out of any land comprised in the scheme;
c)the closure or demolition of dwellings or portions of dwellings unfit for human
habitation;
d)the sale, lease or exchange of any property comprised in the scheme;
e)the construction and alteration of road, streets back lanes, bridges, culverts and
causeways;
f)the draining, water supply and lighting of the streets included in the scheme;
g)the provision of open parks, playing fields and open spaces for the benefit of any
area comprised in the scheme or any adjoining area and the enlargement of existing
parks, playing field, open spaces and approaches;
h)the provision of schools, parks, swimming pools, restaurants, shops markets, fuel
depots, laundries hair dressing saloons and other amenities in the scheme and
i)any other matter for, which, in the opinion of the Government, it is expedient to
make provision with a view to provide house accommodation and to the
improvement of any area comprised in the scheme, or of any adjoining area or the
general efficiency of the scheme.
8. The power of the Board for framing a Housing Accommodation Scheme is contemplated under
Section 41 of the Act. Under Section 44 of the Act, whenever the Board is of the opinion that it is
expedient to control and provide for the future expansion or development of a city, town or village, it
may frame an expansion scheme. The expansion scheme so framed may be in respect of an area
which has wholly within or wholly outside the limits of the city, town or village. Under Section 47 of
the Act, whenever the Board is of the opinion that it is expedient to provide building sites in any
area, the Board may frame a land development scheme. Such scheme shall specify the proposed lay
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out of the area to be developed and the purposes for which the particular portions thereof are to be
utilized. The Board may provide for roads, streets, open spaces drainage, water supply and street
lighting and other amenities for the scheme area.
9. In addition to the above, in terms of Section 66, the Board has further duties, such as, to plan and
coordinate all housing activities in the State and to ensure expeditious and efficient implementation
of housing or improvement schemes in the State and to provide technical advice and scrutinize all
projects under housing and improvement scheme sponsored by Central or State Government.
10. A conjoint reading of the above provisions and the scheme of " the TNHB Act" shows that the
primary duty of the Board is to frame a housing or improvement scheme in an area either within the
City or town or village and execute the Scheme. Framing of a housing or improvement scheme and
its execution is not only restricted to the scheme framed by the Board but also extended to the
execution of work under a scheme either by the State or the local authority. The Board has no power
to directly acquire the land for execution of the schemes, as it is the sovereign power of the State
Government or Central Government as the case may be, in their realm of Eminent Domain, to
acquire the land under the provisions of the Central Act. When once a scheme is framed by the
Board, a proposal is forwarded to the State Government as to the requirement of the lands in a
specified extent and on acceptance of the proposal by the Government, the lands are acquired by the
State and are handed over to the Board. Inasmuch as the Madras City Improvement Trust Act, 1950
was repealed under Section 1 62 of the Tamil Nadu Housing Board Act, a provision was made to
bring the Housing and Improvement Scheme as one of the public purposes and for applicability of
the provisions of the Land Acquisition Act, a provision is made under Section 70 of the TNHB Act
which reads as under:
Any land or any interest therein required by the Board for any of the purposes of this Act may be
Acquired under the provisions of the Land Acquisition Act,1894(Central Act of 1894)
11. Much reliance was placed on the provisions of Section 72 of the Act to sustain the plea that the
land handed over to TNHB shall vest with the Board and it has absolute power to dispose of the
land. The said Section reads as under:
Power to dispose of land:
(1)The Board may retain or may lease, sell exchange or otherwise dispose of any land vested in or
acquired by it under this Act, (2)whenever the Board decides to lease or sell any land acquired by it
under this Act from any person, it
a)shall give notice advertisement in one of the leading local newspaper in the State and
b)shall offer to the said person, or his heirs executors or administrators, a prior right to take on lease
or to purchase such land for an amount or at a rate to be fixed by the Board, if the Board considers
that such an offer can be made without reference detriment to the carrying out of the purposes of
this Act.
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c)If any case two or more persons claim to have the prior right referred to in clause
(b) of Sub-section(2) preference shall be given to the person who agrees to pay the highest amount
or rate for the land, not being less than the amount or rate fixed by the Board under that clause.
12. An incidental question therefore arises as to whether the land handed over to TNHB shall
absolutely vest in TNHB, and on such vesting, the Government would be disentitled from taking
back the possession of the unutilised land from the Board. The Central Act was enacted with the
object to empower the Government to acquire the land only for public purpose and for determining
the amount of compensation to be made for such acquisition. Planning for development,
improvement and housing by the Board is also a public purpose. At the request of the Board, the
State Government acquires the land by issuance of 4(1) Notification and after the award proceedings
are over under Section 11 and possession is taken by the Collector, the land shall absolutely vest in
the Government free from all encumbrances under Section 16 and only after such vesting, the lands
are handed over to the Board as contemplated under Section 70 of the "Housing Board Act".
13. Before we dwell upon the purport and meaning of the word vest employed in Section 16 of the
Central Act, it would be relevant to refer the use of the word vest in certain other enactments.
Section 61 of the Tamil Nadu District Municipalities Act contemplates vesting of public streets and
appurtenances in the Municipal Council. In terms of that Section, all public streets in municipality,
with the pavements, stones and other materials thereof, and all works, materials and other things
provided for such streets, all sewers, drains, drainage works, tunnels and culverts shall vest in
Council. Section 203 of the Madras City Municipal Corporation Act contemplates a similar provision
of vesting public streets and appurtenances in Corporation. In fact other City Municipal Corporation
Acts viz., Tiruchi, Madurai, Coimbatore and Salem have similar provisions for vesting public streets
and appurtenances in their respective Corporations. Section 126 of the Tamil Nadu Panchayats
Act,1994 contemplates a similar provision of vesting of public roads in Panchayat Union Councils.
14. The word vest has no fixed connotation, meaning in all cases that the property is owned by the
persons or the authority in whom it vests. It may vest in title, or in possession, or it may vest in a
limited sense, as indicated in the context in which it is used in a particular statute. It has variable
import depending upon the use in a given statute and the word vest used in different statutes,
should be construed in the context of the provision of particular statute. Insofar as the word vest
used in the law relating to local bodies like Corporation, Municipalities, Panchayats, it should be
construed to mean conferring the power on the Corporation or the council as the case may be, only
for the purpose of executing any improvement scheme which it has undertaken for maintenance and
in order to maintain such public streets and appurtenances and not with a view to clothing it with
complete title. In fact, when the provisions of the City Municipal Corporation Acts, District
Municipalities Act and Town Panchayat Act speak of the word vesting of the streets,
appurtenances in Corporation or Municipality as the case may be, it does not necessarily mean that
ownership of the land has passed on to any of them. Section 56 of the Provincial Insolvency Act ( 5
of 1920) empowers the Court at the time of the making of the order of adjudication or thereafter to
appoint a receiver for the property of the insolvent and to further provide that such property shall
thereupon vest in such receiver. The word vest employed therein is only for the purpose of the
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receiver to administer the estate of insolvent for payment of the debts after realizing, and the
property of the insolvent vests in the receiver not for all purposes but only for the purpose of the
Insolvency Act and the receiver has no interest of his own in the property. Referring to the
provisions of Section 134 of the Lunacy Act,1890 in the case of In re Brown, it has been laid down by
Lindley, L.J., that the word vested in that section included the right to obtain and deal with,
without being actual owner of, the lunatics personal estate.
15. With the above understanding of the word "vesting", let us now consider the word vest used in
Section 16 of the Tamil Nadu Amendment Act.
Power to take possession: When the Collector has made an award under Section 11, he may take
possession of the land which shall thereupon vest absolutely in the Government free from all
encumbrances"
The word vest used in Section 16 must include vesting of land in Government, not only in regard
to title but also possession. It is well accepted principle of interpretation that if the plain language of
the provision is clear and unambiguous, it would be only proper for the Courts to interpret and give
plain grammatical meaning to such provision. In our opinion, the word vest used in Section 16
means and includes not only conferring mere right to possess the land acquired by the Government
but also confer title on it. This is more so in view of the specific provisions of Section 16 of the
Central Act, which provides that once possession of the land is taken by the Collector, the same shall
absolutely vest in the Government free from all encumbrances.
16. Coming to the word vest employed in Section 72 of Housing Board Act, again the said word
must be construed in the context it is used. The object of the Act is only to enable the Board to frame
a Housing or Improvement Scheme and execute such scheme. In the above context, the word
vesting may relate to title or possession or some limited purpose of disposing of the same as
contemplated under Section 72. As the Board has also the power to sell or dispose of the plots/ flats
as the case may be, the word "vesting" employed in Section 72 shall be construed to mean and
include only the purpose of discharging its functions under the scheme. Such power of vesting
cannot be equated to the power of vesting of the land in Government under Section 16 of the Central
Act, where the lands acquired shall vest absolutely in Government free from all encumbrances.
17. This leads us to the further question as to the exercise of the power under Section 16-B by the
Government to forfeit the land vis-a-vis the power of the TNHB to exercise the power to sell,
mortgage etc., under Section 72 of the TNHB Act. In this context, it would be relevant to refer to the
circumstances under which the provision of Section 16-B was introduced and the object behind it.
Attention of the Government was drawn to the fact that the lands acquired by Government on behalf
of several requisitioning bodies and handed over to them are transferred to others without prior
permission of the Government. With a view to avoid the requisitioning bodies from transferring the
acquired lands or any part thereof by sales, mortgage, gift etc., without prior permission of the
Government, it became necessary for the Government to make a provision in the Central Act. The
attention of the Government was also drawn to the fact that in certain cases the requisitioning
bodies do not use the land acquired for them and the land is not put to use for the purpose for which
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it was originally acquired and the lands are kept idle for years together without utilising the same. In
order to prohibit such events, the Government decided to insert a new provision viz., Section 16-B in
the Central Act so as to provide that such land may be forfeited as penalty and on such forfeiture the
land shall vest in the Government in Revenue Department. Section 16-B of the Tamil Nadu
Amendment Act, 1996 ( Act XVI of 1 997) reads as under:
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.
18. Insofar as the lands acquired for public purpose for being utilised by the State Government,
there is no difficulty in holding that in the event, such lands are not utilized for the purpose for
which it was acquired, the Government may utilize the same for other public purpose. In the event
the Government decides not to utilize the land for any other public purpose, it may, in exercise of
powers under Section 48-B, re-convey the land to the erstwhile owners or may sell the land in public
auction. Can it be said that the same principle would apply to TNHB as well for disposal of
unutilised land by itself in exercise of power under Section 72 of the TNHB Act. In our opinion,
TNHB has no such power.
19. Whether Section 16-B could be invoked for forfeiting the land as penalty, when the land was
acquired and transferred to the Board for execution of the housing scheme or improvement scheme
by the Board and such land is not utilized by the Board, more particularly, in view of Section 72 of
the TNHB Act? As per Section 70, the land required by the Board for implementation of the scheme
shall be acquired under the Central Act. Once the lands are acquired and transferred to the Housing
Board, such lands shall vest in Housing Board in order to develop, to form layout, to construct
houses or to make plots and to dispose of such plots or houses under Section 72 under the Scheme.
A plain reading of Section 72 shows that the Housing Board is empowered to retain or lease, sell
exchange or otherwise to dispose of the land vested in or acquired by it under the Act. In the event
the lands are unutilized and are kept vacant, such lands cannot be dealt with by Housing Board in
exercise of its power under Section 72 as such disposal will be outside the scope of the scheme. The
power of the Board to dispose of the land under section 72 must be read in the context of the power
of the Board to frame a housing and improvement scheme and such disposal must be as per the
scheme and not otherwise.
20. It must be kept in mind that the Housing Board was constituted only for framing and
implementing Housing and Improvement Schemes. Incidentally, it is also conferred with the power
to dispose such land or houses to eligible buyers at the affordable market price. The legislature never
intended to confer a power on the Housing Board to frame schemes and to make profit out of such
schemes.
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21. Section 17-A of the Tamil Nadu Amendment Act which was later repealed, contemplates
payment of cost of acquisition by the Board constituted under City Improvement Trust Act.
However, there is no such provision for payment of cost of acquisition by Housing Board to the
Government as the entire cost of acquisition is borne by the Government. The provisions of Section
16-B must also be considered in this context. The lands are acquired under the Central Act only on
the proposal of Housing Board. On acquisition, the land vest in Government under Section 16 of the
Act and thereafter it is transferred to Housing Board only for the limited purpose of implementation
of the Scheme. In the event, the State Government is satisfied that the land acquired and transferred
to the Housing Board is not utilized for housing or improvement scheme for the purpose for which it
was acquired, in exercise of the provisions of Section 16-B, it shall forfeit the land as penalty and
thereafter the land shall vest with the Government in Revenue Department free from all
encumbrances.
22. Section 48-B was introduced by the Land Acquisition(Tamil Nadu Amendment Act, 1996-Act
16/1997), keeping in mind that there is no provision in the Central Act for re-conveyance of the land
to the original owner after taking possession of the land if the land is not required by the
Government. Section 48-B of the Tamil Nadu Amendment Act reads as follows:
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, 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 (1-A) and (2)
of Section 23, if any, paid under this Act
23. The inserted provision contemplates that in case the Government are satisfied that the land vest
in the Government is not required for the purpose for which it was acquired or for any other public,
they may transfer such land to the original owner who is willing to repay the amount paid to him for
the acquisition of such land inclusive of the amount referred to in sub-section(1-A) and (2) of
Section 23, if any, paid under the Act. When once the land vest in Government under Section 16-B, it
is obligated to consider the request of the original owner who is willing to repay the amount for
transfer of the land to such original owner.
24. The next question that arises for our consideration is as to whether the original owner has any
vested right?
25. Right to property is not a fundamental right after the insertion of Article 300-A by the
Constitution (Forty Fourth Amendment) Act, 1978, but such right is still a constitutional right. In
terms of Article 300-A,  No person shall be deprived of his property save by authority of law. The
provisions of the Principal Act provide such authority to the State and Central Government, as the
case may be, to acquire the land for public purpose. As the acquisition of land deprives the
constitutional rights of the land owners, stringent provisions are made for acquisition and payment
of reasonable compensation. The right to acquire land by the Government is sovereign power of
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eminent domain as held by the Supreme Court in JILUBHAI NANBHAI KHACHAR VS STATE OF
GUJARAT ( 1995 Supp.(1) SCC 596)
26.. In CHANDRAGAUDA RAMGONDA PATIL VS STATE OF MAHARASHTRA ( 1996(6) SCC 405)
the Supreme Court has observed as follows:
 We do not think that this Court would be justified in making direction for
restitution of the land to the erstwhile owners when the land was taken way back and
vested in the Municipality free from all encumbrances. We are not concerned with
the validity of the notification in either of the Writ Petitions. It is axiomatic that the
land acquired for a public purpose would be utilized for any other public purpose,
though use of it was intended for the original public purpose. It is not intended that
any land which remained un-
utilized, should be restituted to the erstwhile owner to whom adequate compensation was paid
according to the market value as on the date of the notification. Under these circumstances, the
High Court was well justified in refusing to grant relief in both the Writ Petitions
27. In S.P.SUBRAMANIA CHETTY VS K.S.R.T.C ( A.I.R.1997 SC 2076), the Supreme Court
observed that the Court cannot compel the Government to withdraw the acquisition proceedings or
to restore the possession to the owners of the land.
28. In C. PADMA VS DEPUTY SECRETARY TO THE GOVERNMENT OF TAMIL NADU ( 1997 (2)
SCC 627), the Supreme Court observed that when the acquired land having vested in the State and
the compensation having been paid to the claimant, the claimant was not entitled to restitution of
possession on the ground that either original public purpose had ceased to be in operation or the
land could not be used for other purpose.
29. In NORTHERN INDIAN GLASS INDUSTRIES VS JASWANT SINGH ( 2003(1) SCC 335), the
Supreme Court has held as follows:
If the land was not used for the purpose for which it was acquired, it was open to the
State Government to take action but that did not confer any right on the respondents
to ask for restitution of the land
30. In GOVERNMENT OF A.P. AND ANOTHER VS SYED AKBAR ( 2005(1) SCC
558) the Supreme Court has held as follows:
When the land is acquired under the Land Acquisition Act which is vested in the
State Government free from all encumbrances, the Question of re-conveying the land
as claimed by the respondent could not be accepted in view of the clear position of
law stated in the decisions of this Court aforementioned"
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31. In fact, the Supreme has observed that the Government is also entitled to dispose
of the unutilized land, of course, by public auction and necessarily need not be
re-conveyed to the erstwhile owner in the judgment reported in STATE OF KERALA
VS.M. BHASKARAN PILLAI ( 1997(5) SCC 432) The relevant portion reads as
follows:
 In view of the admitted position that the land in question was acquired under the
Land Acquisition Act, 1894 by operation of Section 16 of the Land Acquisition Act, it
stood vested in the State free from all encumbrances. The question emerges whether
the Government can assign the land to the erstwhile owners? It is settled law that if
the land is acquired for a public purpose, after the public purpose was achieved, the
rest of the land could be used for any other public purpose. In case there is no other
public purpose for which the land is needed, then instead of disposal by way of sale to
the erstwhile owner, the land should be put to public auction and the amount fetched
in the public action can be better utilized for the public purpose envisaged in the
directive principles of the Constitution. In the present case, what we find is that the
executive order is not in consonance with the provision of the Act and is, therefore
invalid. Under these circumstances, the Division Bench is well justified in declaring
the executive order as invalid. Whatever assignment is made, should be for a public
purpose.
Otherwise, the land of the Government should be sold only through the public auctions so that the
public also gets benefited by getting a higher value 
32. As the very object of the Amendment Act introducing Section 48B indicates that for insertion of
the said provision enabling the State Government to re-convey the unutilised lands to the erstwhile
owners subject to the conditions enumerated in that Section. This provision was inserted keeping in
mind that there is no provision in the Central Act enabling the Government to re-convey the
unutilised land. Of course, the Supreme Court in all the above judgments had considered the power
of the Government to withdraw the land acquisition proceedings under Section 48 of the Central
Act. That Section contemplates that the Government shall be at liberty to withdraw the acquisition
proceedings of any land of which possession has not been taken. While considering the scope of
Section 48, the Supreme Court has held that the Government is empowered to withdraw the
acquisition but even then, in the absence of any vested right on the erstwhile owners, the
Government cannot be compelled to withdraw the acquisition proceedings and re-convey the land.
Equally, the Government also cannot unilaterally withdraw the acquisition without the consent of
the erstwhile owners.
33. As the provision of Section 48B is unique and is contemplated only by Tamil Nadu Amendment
Act, the purport of that Section must be considered with reference to the object and reasons. By the
above provision, the erstwhile owners are entitled to make request to the Government for
re-conveyance of the land, of course, subject to their willingness to repay the amount paid to them
under the Act for acquisition of land inclusive of the amount referred to in Sub-section (1-A) and (2)
of Section 23, if any, paid under this Act. By the provision of Section 48-B an element of right to
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repossess the land by way of re-conveyance is conferred on the owners, of course, subject to the
compliance of Section 48-B. Issue of re-conveyance under Section 48-B, came up for consideration
before a Division Bench of this Court in the judgment reported in SOUTHERN RAILWAYS ETC., VS
S. PALANIAPPAN AND OTHERS ( 2005(2) LW 325). In the said judgment, the Division Bench
while considering the issue as to the willingness of the land owners and the right of the Government
to accept the willingness, has held in para 33,34 and 35 as follows:
33. Mr. R. Krishnamoorthy, learned senior counsel for the respondents-land owners placed reliance
on the decision of a learned single Judge in M. Manimegalai vs State of Tamil Nadu,2004 Writ
L.R.789 (vide paragraph-10) wherein it was observed:
"Section 48-B has been introduced with a view to protect the interest of the persons from whom the
land has been acquired but not utilised. Such provision is a benevolent provision. Even though it is
not specifically indicated in Section 48-B regarding the right of such a person to file application, it is
obvious that such a person has to indicate his willingness to get the land back subject to repayment
of the compensation"
34. We respectfully do not agree with the learned single Judge that Section 48-B has been
introduced only to protect the interest of the persons from whom the the land has been acquired. In
our opinion, Section 48-B can also protect the interest of the State Government which wants to
re-convey the land which it had acquired, but in such a case the State Government must get the
consent of the erstwhile land owner before it can re-convey the land to him under Section 48-B. The
State Government cannot act unilaterally in this connection as already held above.
35. For the reasons given above, we are of the opinion that the impugned order dated 3.12.2003
does not fall within the ambit of Section 48-B as it is a unilateral act and hence, it has to be declared
as invalid, because by a mere executive order, unsupported by statute, land which stands vested in
the State Government under Section 16 of the Land Acquisition Act cannot be unilaterally
re-conveyed by the State Government to the erstwhile land owners.
34. It is well settled principle of law that ordinarily the Court should give a plain and literal meaning
while interpreting the statute. In SWEDISH MATCH AB VS SECURITIES AND EXCHANGE
BOARD, INDIA ( AIR 2004 SC 429), the Supreme Court has held that where the words of a statute
are absolutely clear and unambiguous, recourse cannot be resorted to the principles of
interpretation other than the literal rule. In PRAKASH NATH KHANNA VS CIT (2004(9) SCC 686,
the Supreme Court has held that the language employed in a statute is the determinative factor of
the legislative intent. The legislature is presumed to have made no mistake. The presumption is that
it intended to say what it has said. Assuming there is a defect or an omission in the words used by
the legislature, the Court cannot correct or make up the deficiency especially when a literal reading
of produces an intelligible result.
35. In order to apply the provisions of Section 48-B of the Tamil Nadu Amendment Act, 1996, firstly,
the land must vest with the Government under the Act in Revenue Department, and secondly, in the
opinion of the State Government, such land is not required for any other public purpose and thirdly,
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the said land can be re-conveyed to the original owner who is willing to repay the amount that was
paid to him under the Act for the acquisition of such land inclusive of the amount referred to in
Sub-section (1-A) and (2) of Section 23, if any, paid under the Act. The power of the Government to
transfer such land to the original owner is only discretionary. Where the lands are forfeited by the
Government from the Housing Board, it can be utilised by the Government for any other public
purpose. In the event, the Government is of the opinion that the lands are not required for any other
public purpose, then it must consider re-conveyance of the land under Section 48-B. Only in the
event, the Government is of the view that the lands cannot be re-conveyed, it may resort to dispose
the land by public auction. However, the exercise of the power under Section 4 8-B cannot be
mechanical and whenever the discretion to take a decision is conferred on the authority by a statute,
concept of fairness inherent in the guarantee of equality under Article 14 of the Constitution of India
must be ensured. Exercise of such discretion could be tested on fairness and reasonableness. This is
more so when such authority is bound to determine the questions affecting the right to property of
individual. The decision must be supported by reasons with materials and necessarily be an
informed one. In this context, the exercise of such discretionary power as to whether the land should
be re-conveyed to the original owner or should it be sold by public auction, should not be arbitrary
and unreasonable and fairness must prevail in such decision. Though the land owners cannot have
any vested or absolute right to seek for automatic re-conveyance of the land, they have an element of
right for consideration of their claim for reconveyance in terms of Section 48-B.
36. . In view of the above discussions, we hold that the Government in exercise of the power under
Section 16-B of the Act can forfeit the land from the Tamil Nadu Housing Board as penalty and on
such forfeiture, the land shall vest in the Government in Revenue Department free from all
encumbrances. Once such vesting takes place, the Government shall consider the request, if any,
received from the land owners expressing their willingness for re-conveyance and may accept or
reject. Such exercise of power is discretionary and the owners have no right to seek for automatic
re-conveyance of land. The Tamil Nadu Housing Board has no power under Section 72 of the Act to
dispose of unutilized land and such power shall only vest with the Government under Section 16-B
of the Land Acquisition Act.
37. Coming to the facts in issue in all these Writ Appeals, though award was passed in respect of
662.96 acres of land, possession was taken only in respect of 105.61 acres of land and handed over to
the Board, out of which, only an extent of 21.47 acres of land alone was utilised. The acquisition
proceedings were completed in the year 1991 and the award was passed in the year 1994. Possession
was taken and compensation was also paid to the owners. It is the specific case of the appellants that
large number of buildings have come up in the land notified, and the implementation of the scheme
is not really possible. By the impugned orders, the respondent-State Government has rejected the
request of the erstwhile land owners for re-conveyance on the ground that possession of the land
was taken and handed over to the Housing Board and the compensation was also paid to the
erstwhile land owners and that the lands are still required for Housing Scheme. Except the above,
we do not find any consideration of the individual grievance of the appellants.
38. For rejecting the request of the land owners,the Government has given two reasons viz.,(1) the
land owners have been awarded compensation and possession of the land has been given to the
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Housing Board and (2) the land is still required for Housing scheme. Insofar as the first reason, we
are of the opinion that the same cannot be held good in view of the specific provisions of Section
48-B enabling the land owners to make the application for reconveyance. Mere fact that they have
received compensation does not prevent them from making a request to the Government invoking
Section 48-B of the Act for reconveyance of the unutilised lands. Insofar as the second reason, it
must be kept in mind that though the proposal was made by the Housing Board to the Government
for acquiring an extent of 1997.02 acres of patta land, ultimately, the Government could pass award
only in respect of 662.96 acres and even out of the said extent of the land, only an extent of 105.61
acres was taken possession and handed over to the Housing Board. But the Board could utilise only
an extent of 21.47 acres of land for Housing Scheme. In view of the above undisputed facts, we are of
the considered view that the Government have not applied their mind to the above aspects while
they came to the conclusion that the land is still required for Housing Scheme.
39. In our opinion, merely because possession is taken and the lands are handed over to the
Housing Board, the power of the State Government to forfeit the land under section 16-B of the Act,
is not curtailed. The said power is independent and exclusive. In the event, the lands are unutilised
by the Board for quite long number of years, the State Government has the power to forfeit the lands
by way of penalty. Of course, the fact that Section 17-A was repealed was not brought to the notice of
the learned single Judge and consequently, the learned single Judge has held that there is vesting of
land in Housing Board under Section 17-A. In view of Section 162 of TNHB Act, 1961 the City
Improvement Trust Act, 1950 was repealed and consequently, Section 17-A was also repealed. In the
circumstances, there cannot be any vesting of the land on the Housing Board under Section 17-A as
well as the Government under Section 16 of the Central Act simultaneously.
40. On a challenge to the above impugned orders, the learned Single Judge has dismissed the Writ
Petitions mainly on the ground that the land handed over to the Housing Board shall vest in the
Housing Board under Section 17-A of the Act and there cannot be a further vesting in the State
Government under Section 16-B. In our opinion, the said finding is unsustainable in view of the fact
that Section 17-A was repealed by the provisions of Section 162 of the Tamil Nadu Housing Board
Act which was enacted in the year 1964. As on today, Section 1 7-A is not in the Text Book and the
only provision holding the field is Section 16-B, empowering the State Government for forfeiture of
the unutilised lands from the Housing Board by way of penalty.
41. For the foregoing reasons, all the Writ Appeals are allowed and the impugned orders are set
aside and the matters are remitted to the State Government for reconsideration of the applications
made by the appellants for re-conveyance under Section 48-B of the Act on merits in accordance
with law and in the light of the findings rendered by us in this judgment. Such exercise shall be
completed within a period of three months from the date of receipt of copy of this judgment. No
costs. Consequently, W.P.M.P.Nos.1002 and 1003 of 2006 are closed.
vbs To
1.The Secretary State of Tamil Nadu Housing and Urban Development Fort St. George, Chennai 600
009
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2.The Managing Director Tamil Nadu Housing Board No.331, Anna Salai, Nandanam Chennai-35.
3. The Special Tahsildar Housing Scheme Unit-II Coimbatore-18.
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