Section 48-B confers discretionary power, not an enforceable right, for re-conveyance of lawfully acquired land.

The Appellant-Authority acquired 80.92 acres of land between 1982 and 1985 for developing an inter-city bus and truck terminal in Chennai.

While 64.80 acres were utilized for the notified purpose, 16.12 acres (including the 5.06 acres in dispute) remained undeveloped.

In 2005, the Appellant earmarked this residual land for relocating "Gunny Bag shops" to alleviate health hazards in residential areas.

The Respondent-landowners sought re-conveyance of the unused land under Section 48-B of the Land Acquisition Act, 1894 (as applicable in Tamil Nadu), which the State rejected in 2006.

A Single Judge of the High Court initially ruled that relocating shops was not a "public purpose" and directed the State to consider forfeiture under Section 16-B and subsequent re-conveyance.

On appeal, a Division Bench of the High Court directed the actual re-conveyance of the land, holding that the State could not introduce a "fresh reason" for public purpose after two decades.

1. Whether the High Court was justified in relying upon Section 16-B read with Section 48-B of the LA Act to enforce a perceived right of Respondent-landowners seeking re-conveyance of lawfully acquired land vested in the State.

2. Whether the Courts, in the exercise of judicial review, can prescribe a time limit for the utilization of acquired land for a public purpose or for changing the public purpose for which the land may be used.

The Court interpreted Section 16-B of the LA Act (Tamil Nadu Amendment), which provides the State an enabling power to forfeit land as a penalty if not used for the acquired purpose.

It further applied Section 48-B (Tamil Nadu Amendment), which grants the State discretion to transfer land back to the original owner only if it is satisfied the land is not required for the original purpose or any other public purpose.

The Court relied on T.N. Housing Board v. Keeravani Ammal (2007), establishing that Section 48-B must be strictly construed and does not create an enforceable right for the owner.

Additionally, the principle from Nandkishor Babulal Agrawal v. State of Maharashtra (2023) was applied, affirming that once land vests in the State, the public purpose can be changed, and no fixed time limit exists for its utilization.

The Court reasoned that Section 48-B is a discretionary enabling provision, not a mandatory right.

For the provision to trigger, a two-pronged condition must be met: the land must not be required for the original purpose and it must not be required for "any other public purpose".

In this case, although the original relocation of shops was questioned, the State subsequently decided to utilize the land for a truck parking yard, which complements the original bus terminal project.

The High Court erred by ignoring that the State never declared the land "unsuitable" for public use.

The Court rejected the High Court’s logic that a lapse of 20 years precludes the State from changing the public purpose, noting that planning agencies often hold land in a "reserve pool" for future urban needs.

Judicial review under Section 48-B is limited to examining whether the State's refusal was arbitrary or mala fide, which was not proven here.

It held that Section 48-B does not clothe an expropriated owner with a right to seek re-conveyance and that the State retains the power to divert land for any bona fide public use regardless of the delay in utilization.

The State’s decision to refuse re-conveyance was upheld.

The Court further clarified that the acquisition did not lapse under Section 24(2) of the 2013 Act because compensation had been duly deposited and offered, making any retention of possession by the owners inconsequential.

The Respondents remain entitled only to the original compensation deposited with the Authority.