The State of Tamil Nadu vs M.Manickam

2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 14.07.2026
DELIVERED ON : 23.07.2026
CORAM :
THE HONOURABLE MR. SUSHRUT ARVIND DHARMADHIKARI,
CHIEF JUSTICE
AND
THE HONOURABLE MR.JUSTICE G.ARUL MURUGAN
W.A.No s .1551, 2017 and 2019 of 2026
and CMP No s .14522, 17528, 17533 and 17525 of 2026
1. The State of Tamil Nadu
Rep by its secretary to Government,
Highways Department, Fort St. George,
Chennai-600 009.
2. The Principal Secretary/
Commissioner of Land Administration,
Land Administration Department,
Chepauk, Chennai-600 005.
3. The Sepcial Deputy Collector, (Land Acquisition)
Tamil Nadu Urban Development Project-III,
Alandur, Chennai-600 016.
4. The Special District Revenue Officer
Land Acquisition, Highways Department,
Alandur, Chennai-600 016.
Appellant(s)
Vs
M.Manickam
S/o.Mahalingam,
No.134/137,St.Marys Road,
Alwarpet, Chennai-600018 Respondent(s)
in W.A.No.1551/2026
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
M. Balasubramaniam
S/o.N.Mahalingam,
No.134/137, St.Marys Road,
Alwarpet, Chennai-600018
Respondent(s)
in W.A.No.2017/2026
Karunambal Vanavarayar
W/o.Krishnaraj Vanavarayar,
D/o.Dr.N.Mahalingam,
No.134/137, St. Marys Road,
Alwarpet, Chennai-600018.
Respondent(s)
in W.A.No.2019/2026
PRAYER: Appeals filed under Clause 15 of the Letters Patent to set
aside the common order dated 30.07.2025 passed by the learned
Single Judge in made in WP Nos.16342, 16343 and 16345 of 2021.
For Appellant(s) in
all appeals:
Mr.T.Gowthaman
Additional Advocate General
Assisted by Mr.R.Veeramani
Government Pleader
For Respondent(s):Mr.AR.L.Sundaresan
Senior Counsel
for Mr. AR.Karthik Lakshmanan
for Respondent in W.A.No.1551/2026
Mrs.A.L.Ganthimathi
Senior Counsel
for Ms.R.Priyadharshini
for Respondent in W.A.No.2017/2026
Mr.Srinath Sridevan
Senior Counsel
assisted by Mr.L.Palanimuthu
for Respondent in W.A.No.2019/2026
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
COMMON JUDGMENT
THE CHIEF JUSTICE
These three interconnected writ appeals are directed against
the common order dated 30.7.2025 passed by the learned Single
Judge in W.P.Nos.16342, 16343 and 16345 of 2021. The learned
Single Judge had quashed Award No.1 of 2020, dated 23.11.2020,
to the limited extent that the appellants had applied a blanket
33.33% deduction towards "development charges" from the market
value determined for the lands of the respondents.
2. The lands in question measuring 5,450 sq.m
(S.No.406/80B), 6,500 sq.m (S.No. 406/79B), and 5,700 sq.m
(S.No.406/78B) situated at Okkiyam - Thorapakkam Village,
Sholinganallur Taluk, were acquired under the Tamil Nadu Highways
Act, 2001 [the Act], for the specific public project of forming a link
road and constructing a bridge across the Buckingham Canal to
connect Rajiv Gandhi Salai (OMR) at Neelankarai.
3. Learned Additional Advocate General vehemently
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
challenged the Single Judge's order on the following grounds:
(a) While zero deduction is the rule for previously
approved or fully developed layouts, the lands in
question are unapproved and, therefore,
development charges are liable to be deducted.
(b) The appellants acted in compliance with the
guidelines issued by the Commissioner of Land
Administration dated 23.5.2020, 16.10.2020 and
6.1.2021. Since these administrative circulars were
never challenged by the writ petitioners, the
statutory deduction remains valid.
(c) The Act provides an explicit statutory mechanism
for references to a Civil Court. Aggrieved individuals
seeking higher compensation must invoke this
reference pathway rather than approaching the Writ
Court.
(d) A linear acquisition is strictly confined to the
simple widening or expansion of an existing roadway.
The present project involves building a new link road
and bridge and, therefore, the standard "linear
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
acquisition exception" does not apply.
4. Learned Senior Counsel appearing on behalf of the
respondents, in unison, countered the aforesaid submissions with
the following points:
(a) The impugned order explicitly records in
paragraph (5) that the position of law regarding
linear projects was not seriously resisted by the
learned Special Government Pleader, who appeared
on behalf of the appellants at the writ stage.
(b) There is no specific provision within the statutory
framework authorizing the government to deduct
one-third of a property's market value under the
guise of development charges.
(c) By definition, "linear acquisition" simply denotes
acquiring land along a continuous path or straight
line for infrastructural projects like railways, roads, or
canals. It stands in contrast to spatial acquisitions for
factory layouts or housing colonies.
(d) The affidavits filed by the respondents herein
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
before the learned Single Judge establish that these
parcels of land were taken along an existing colony
road alignment and the said fact is not disputed in
the counter-affidavit filed in the writ petitions by the
appellants herein.
(e) Reliance was heavily placed on a decision of the
Supreme Court in Madhya Pradesh Road
Development Corporation v. Vincent Daniel and
1
Others , alongside another decision in Nelson
Fernandes and others v. Special Land Acquisition
2
Officer , to argue that applying the theory of
deduction to infrastructural amenities is illegal.
5. We have carefully examined the records and considered the
competing submissions.
6. The pivotal question presented for adjudication is whether
the State is legally justified in enforcing 33.33% deduction towards
development charges from the compensation determined for lands
1
(2025) 7 SCC 798
2
(2007) 9 SCC 447
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
acquired specifically for a linear road and bridge project.
7. To resolve this, we must look at the judicial evolution
governing land valuation. The "theory of deduction" originally took
shape under Section 23 of the Land Acquisition Act, 1894. It arose
out of the necessity that if the State acquires a massive agricultural
plot to build a housing colony or an industrial zone, it cannot pay
the retail price of a small, ready-to-build urban plot. The State must
sacrifice significant acreage for civic spaces such as internal roads,
parks, sewage treatment plants and electric grids. Thus, a value
deduction (often ranging from 20% to 50%) is applied to balance
the scale between the land value and finished plot value.
8. However, the Supreme Court has repeatedly drawn a bright
line separating spatial developments (like housing estates) from
linear infrastructure developments (like railways and highways). In
Nelson Fernandes v. Special Land Acquisition Officer , the Apex
Court held:
"30. We are not, however, oblivious of the fact that
normally 1/3rd deduction of further amount of
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
compensation has been directed in some cases.
However, the purpose for which the land is
acquired must also be taken into consideration.
In the instant case, the land was acquired for the
construction of new BG line for the Konkan
Railways . This Court in Hasanali Khanbhai &
Sons v. State of Gujarat [(1995) 5 SCC 422] and Land
Acquisition Officer v. Nookala Rajamallu [(2003) 12
SCC 334] had noticed that where lands are acquired
for specific purposes, deduction by way of development
charges is permissible. In the instant case,
acquisition is for laying a railway line. Therefore,
the question of development thereof would not
arise . Therefore, the order passed by the High Court is
liable to be set aside and in view of the availability of
basic civic amenities such as school, bank, police
station, water supply, electricity, highway, transport,
post, petrol pump, industry, telecommunication and
other businesses, the claim of compensation should
reasonably be fixed @ Rs 250 per sq m with the
deduction of 20%. The appellant shall be entitled to all
other statutory benefits such as solatium, interest, etc.
etc. The appellants also will be entitled to
compensation for the trees standing on the said land in
a sum of Rs 59,192 as fixed. IA No. 1 of 2006 for
substitution is ordered as prayed for."
[emphasis supplied]
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
9. The aforesaid principle was extended to road construction
in C.R.Nagaraja Shetty (2) v. Land Acquisition Officer and Estate
3
Officer , wherein it was held thus:
“15. The learned counsel appearing on behalf of the
respondents was also unable to point out any such
evidence regarding the proposed development. We
cannot ignore the fact that the land is acquired
only for the widening of the national highway.
There would, therefore, be no question of any
such development or any costs therefor .
...
18.  The situation is no different in the present
case. All that the acquiring body has to achieve
is to widen the national highway. There is no
further question of any development. We again,
even at the cost of repetition, reiterate that no
evidence was shown before us in support of the
plea of the proposed development . We,
therefore, hold that the High Court has erred in
directing the deduction on account of the
developmental charges at the rate of Rs 25 per
square foot out of the ordered compensation at the
rate of Rs 75 per square foot. We set aside the
3
(2009) 11 SCC 75
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
judgment to that extent.”
10. When the State takes a strip of land to build or widen a
road, it uses every square meter of that acquired land for the road
itself. The State does not carve out plots to sell to the public, nor
does it set aside land for community parks. The road is the
development. Consequently, deducting money from amount
awarded to fund the construction of the public project itself
amounts to an impermissible double tax on the land loser.
11. The attempt sought to be made by the appellants to
narrow this exception by claiming it applies only to the "widening"
of existing roads, but not to the "formation of a new link road", cuts
no ice. Whether widening a lane or laying down a brand-new link
road over a canal, the nature of the project remains structurally
linear. The entire acquired path is consumed by the public
infrastructure.
12. This legal reality is further underscored by the Supreme
Court in Madhya Pradesh Road Development Corporation (supra) .
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
The Supreme Court analyzed the modern statutory landscape,
noting that while valuation adjustments require evidence, public
authorities cannot arbitrarily impose deductions. It was observed
that circle and guideline rates are fixed by the State's own expert
bodies to reflect prevailing market rates. If the ordinary citizen
must pay stamp duty based on those baseline rates, the State
cannot claim those very same rates are too high or require a one-
third deduction when it is time to pay compensation. The relevant
observations made by the Supreme Court are quoted hereunder:
“6 . The theory of deduction, though not
statutorily prescribed, has been applied by
courts to compute the compensation payable
under the Acquisition Act, 1894 primarily for
two reasons. First, consideration of the
potential value of the land can result in arriving
at an enhanced or increased value, especially
for undeveloped lands . Secondly, in
acquisitions of large underdeveloped lands, a
significant portion of the land would have to be
utilised for making minimum amenities like
roads, drains, sewers, water and electrical lines
available . Thus, making the land usable would
involve a substantial expense for the buyer in
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
the form of development charges.
7. The theory of deduction was applied in Tribeni
Devi v. Collector of Ranchi, (1972) 1 SCC 480, which
was decided in 1971. Recently, in a 2017 decision
in Jag Mahender v. State of Haryana, (2024) 16 SCC
700, as well, the theory of deduction was applied to
arrive at a fair and reasonable market value. This
judgment also states that the prospective
prices of smaller developed plots cannot be
adopted to determine the value of
underdeveloped tracts of land . Further, the
peculiarities of the land — whether the same is
plain or uneven, the soil is soft or hard,
whether the land is situated on a hill or is low
lying, etc. are all relevant factors . A given parcel
of land has multiple dimensions — social, economic,
territorial, and environmental. Accordingly, the
market value must be computed through a valuation
model based on attribute pricing rather than fixed
prices. In some cases, sale deeds for adjoining lands
can be an “exemplar” i.e. lands that are similarly
placed and have comparable attributes. However,
computation of the market value may require
calibration, taking into consideration the advantages
and disadvantages of the acquired land relative to
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
the exemplars. The exemplars must be carefully
chosen, especially as lands are often heuristically
grouped in localities at the same rate due to a lack of
specific data.
...
42. We now proceed to apply the above analysis to
the facts of the present case, which is an acquisition
under the Acquisition Act, 2013. To determine the
compensation, the market value of the land
must first be computed under Section 26 of the
Acquisition Act, 2013 . This requires the application
of clauses (a), (b), and (c) of Section 26(1). Clause
(b) would have no application in the present case as
there are no exemplars in the vicinity to draw a
comparison and arrive at the average sale price in
terms of Explanations 1 and 2 to Section 26(1).
Further, as this acquisition does not involve private
companies or public-private partnerships, clause (c)
would also not apply. Therefore, the highest
value would be the one determined under
clause (a) i.e. the market value specified under
the Stamp Act. In the present case, this value
would be the circle rate fixed for the year 2014-2015
under the Collector's Guidelines framed under the
Stamp Act. The Commissioner has applied the
Collector's Guidelines by using the rate provided for
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
non-converted agricultural land. The Commissioner
has further supplemented this amount by accounting
for the assets attached to the land and adding the
solatium payable.
43. In view of the abovestated reasons, we hold
that the compensation has been calculated in
accordance with the mandate of the Acquisition
Act, 2013. Thus, no reduction in the amount
can be granted by applying the theory of
deduction . It has been left to the Collector's
discretion to make adjustments to the market value
determined through Section 26(1), if deemed
necessary in the opinion of the Collector. In the facts
of the present case, there was no such formation of
opinion by the competent authority or the
Commissioner.”
[emphasis supplied]
13. Furthermore, the learned Single Judge correctly relied
upon the administrative communication dated 6.1.2021, issued by
the Principal Secretary/Commissioner of Land Administration. This
internal directive explicitly clarifies:
"... this deduction shall not apply in case of
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
Linear Acquisitions such as the one undertaken
in State Highways Roads where lands to be
acquired are abutting the existing State
Highways Roads ."
[emphasis supplied]
14. The argument advanced by learned Additional Advocate
General that the landowners ought to have been directed to
challenge the award invoking the provisions of the Act fails to
impress us. The availability of an alternative remedy does not strip
this court of its writ jurisdiction under Article 226 of the
Constitution, particularly where the State authority has committed a
patent error of law by making an unauthorized statutory deduction.
There is no dispute regarding the baseline market value of the
property. The only dispute is pertains to the unauthorized 33.33%
deduction. Relegating the respondents at this stage to a reference
court would be a miscarriage of justice.
15. While the public interest requires the building of roads and
bridges to connect our communities, constitutional equity demands
that private citizens who surrender their properties receive full,
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
undiminished and fair compensation. The order passed by the
learned Single Judge warrants no intervention. The deduction of
one-third towards development charges for a linear road and bridge
project is wholly unsustainable in law.
Resultantly, Writ Appeal Nos. 1551, 2017, and 2019 of 2026
are dismissed. The order passed by the learned Single Judge is
affirmed. The appellants are directed to pay 33.33% of the
compensation that was deducted, if not already paid, to the
respective respondents within a period of four weeks from the date
of receipt of a copy of this judgment.
There shall be no order as to costs. Consequently, connected
interim applications are closed.
(SUSHRUT ARVIND DHARMADHIKARI, CJ) (G.ARUL MURUGAN,J)
23.07.2026
Index : Yes
Neutral Citation : Yes
sasi
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2026:MHC:3020
W.A.Nos.1551 of 2026 etc.
THE HON'BLE CHIEF JUSTICE
AND
G.ARUL MURUGAN, J.
(sasi)
W.A.Nos.1551, 2017 and 2019 of 2026

23.07.2026
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