Full-payment allottees remain entitled to compensation when acquisition prevents execution of the sale deed.

The Tamil Nadu Slum Clearance Board (now the Tamil Nadu Urban Habitat Development Board) allotted Plot No. 150 in its approved “Chelliamman Nagar” layout to A.R. Farida under a lease-cum-sale agreement. Farida paid the full consideration, took possession, and built and occupied a house on the plot.

After the State required the land for a Railway Over Bridge project, the District Collector offered her an alternative site, which she did not take possession of; Farida later died.

Her legal heirs sought monetary compensation, but the Special Tahsildar rejected the request, citing the land’s classification as “Eri Ulvai” and the absence of a final sale deed.

The Single Judge quashed that rejection and directed compensation. The State authorities appealed.

1. Whether Farida’s legal heirs were entitled to monetary compensation for Plot No. 150 despite the absence of a final sale deed and the State’s contention that the land was watercourse poramboke.

2. Whether the State could rely on documents and factual grounds first presented in the intra-court appeal to challenge the Single Judge’s decision.

Under Clause 15 of the Letters Patent, an intra-court appeal enables the appellate Bench to review and correct the Single Judge’s decision on the material presented to that court; it is not an opportunity to construct a new factual case.

In Baddula Lakshmaiah v. Sri Anjaneya Swami Temple, (1996) 3 SCC 52, the Supreme Court characterised a Letters Patent appeal as an intra-court appeal in which the Bench acts as a “Court of Correction”.

Under Order XLI Rule 27 of the Code of Civil Procedure, additional evidence may be admitted only in exceptional circumstances and at the court’s discretion; it should not ordinarily be used to enable a party to raise a new point or remedy a failure to discharge its burden. The Court applied these principles from Union of India v. Ibrahim Uddin, (2012) 8 SCC 148.

The Housing Board had acknowledged before the Single Judge that it received the full sale consideration and was to execute a sale deed, but the State’s acquisition of the land prevented execution.

The Court held that the State could not rely on its own administrative delay in completing the transfer to deny compensation to the allottee’s heirs, who had paid the full price to a statutory board.

The State’s additional documents concerning the alternative site and patta had existed before the writ petition was decided but were not presented to the Single Judge; the appellate Bench therefore declined to allow them to form the basis of a new factual case.

The Court also noted that compensation had been paid for adjoining Plot No. 149 in the same layout and considered different treatment of Plot No. 150 unfair and discriminatory.

No costs were awarded.