The Supreme Court of India, in a judgment delivered on October 8, 2025, has dismissed an appeal filed by the Chennai Metropolitan Development Authority (CMDA), upholding the Madras High Court’s decision to quash a demand of ₹1,64,50,000 for Open Space Reservation (OSR) charges. The bench, comprising Justice Aravind Kumar and Justice N.V. Anjaria, affirmed that OSR charges cannot be levied on a property that was demonstrably sub-divided and existed as an independent parcel prior to the implementation of the First Master Plan in 1975, especially when its area falls below the prescribed threshold.
Case Background
The case revolves around a property measuring 10 grounds and 2275 sq. ft. (approx. 2229 sq. m.) in Nungambakkam Village, Chennai. The property’s title traces back to a partition deed dated April 23, 1949, from the estate of Haji Syed Ali Akbar Ispahani. Through this partition, an extent of 21 grounds was allotted to Syed Jawad Ispahani.
Subsequently, through two registered gift deeds dated March 30, 1972, and February 20, 1973, Syed Jawad Ispahani gifted a total of 11 grounds to his son, Syed Ali Ispahani. The judgment notes that even before the First Master Plan came into force on August 5, 1975, separate pattas were issued in the name of Syed Ali Ispahani for his holding, signifying “official recognition of the sub-division.”
In 1984, Syed Ali Ispahani gifted a small portion of 125 sq. ft. from his holding, leaving him with the balance of 10 grounds and 2275 sq. ft. This remaining portion was purchased by the respondent, Dr. Kamala Selvaraj, on February 8, 2008, under a registered sale deed, with the intention of establishing a super-speciality hospital.
Dr. Selvaraj applied to the CMDA for planning permission on January 28, 2009. Although the application was initially rejected, the State Government granted an exemption. Following this, the CMDA, by a communication dated October 30, 2009, demanded ₹1,64,50,000 as OSR charges. Dr. Selvaraj’s representation, arguing that her site was less than 3000 sq. m. and thus exempt under Annexure XX of the Development Regulations, was rejected by the CMDA on February 3, 2010.
To avoid delays, Dr. Selvaraj deposited the amount under protest on April 6, 2010, and filed a writ petition in the Madras High Court. A Single Judge allowed the petition on July 13, 2010, finding the levy unsustainable and directing a refund. The decision was upheld by a Division Bench on December 21, 2011, leading to the present appeal by the CMDA before the Supreme Court.
Arguments of the Parties
Shri Balaji Subramaniam, counsel for the appellant CMDA, argued that the High Court had erred by not considering the property as part of a larger 21-ground holding. He contended that the 2008 purchase by Dr. Selvaraj amounted to a “fresh sub-division,” thereby attracting Regulation 29 of the Development Regulations. He further submitted that the exemption for sites below 3000 sq. m. could not be claimed since the “parent holding” was above the threshold.
Conversely, Shri Vikas Mehta, counsel for the respondent Dr. Selvaraj, supported the High Court’s reasoning. He argued that the registered partition and gift deeds from 1949, 1972, and 1973 conclusively established that the property was an independent parcel long before 1975. He emphasized that the issuance of separate pattas placed the matter “beyond the pale of controversy” and that the purchase in 2008 was not a fresh sub-division. As the respondent’s site measured 2229 sq. m., it was exempt under the plain terms of Annexure XX.
Court’s Analysis and Findings
The Supreme Court found no merit in the CMDA’s contentions. The bench held that the CMDA’s primary proposition—that the property must be viewed with reference to the “parent extent” of 21 grounds—was contradicted by the documentary record. The Court stated, “The partition deed dated 23.04.1949… and two registered gift deeds, namely, one dated 30.03.1972… and another dated 20.02.1973… executed years prior to 05 August 1975, are unimpeached… and signify a lawful familial conveyance or arrangement.”
The Court underscored the importance of the revenue pattas, observing that “the issuance of pattas, a public act of the revenue authority, evidences official acknowledgment of an independent parcel.”
The judgment established that once Dr. Selvaraj presented the registered deeds and pattas, the evidentiary burden shifted to the CMDA to prove the property was not lawfully sub-divided before 1975. The Court found that this burden was not discharged, describing the appellant’s assertion that the sub-division occurred in 2008 as a “mere ipse dixit, devoid of proof.”
On the applicability of the OSR regulations, the Court gave a clear interpretation of Annexure XX, stating it is “categorical: ‘for the first 3000 square metres – Nil.’ The respondent’s holding being 2229 square metres falls squarely within the Nil slab.” The bench rejected the CMDA’s attempt to notionally recombine the plot with the erstwhile parent estate as “contrary both to fact and to the text of the regulation.”
The Court also agreed with the High Court’s observation that Dr. Selvaraj had not formed any layout but was merely seeking to develop her individual site. Finding no “manifest illegality, perversity, or grave miscarriage of justice,” the Supreme Court concluded that the concurrent findings of the courts below were in consonance with fact and law.
Decision
The Supreme Court dismissed the appeal, finding it “bereft of merit.” The direction of the Madras High Court to refund the sum of ₹1,64,50,000 with interest at 8% per annum was affirmed. The CMDA was directed to pay the said amount to the respondent within six weeks from the date of the judgment.
