WP/7490/2021 of M/s.Camp Tech LLP Vs The State of Tamil Nadu on 3 November 2026

ORDER

The petitioner challenges the Advice Memo dated 20.09.2019 in Letter No.C3/(S)/15493/2019, quash the same in so far as it pertains to the demand of OSR charges contained in Sl.No.5 for property developed by petitioner at in plot No.25A and 25B, at SIDCO Thiru-vi-ka Industrial Estate, South Phase, 5th Cross Street, Guindy. Chennai 32. comprised in Survey No.24. 25 (Part), 26

(Part), 1/3 (Part).2/3 (Part).3/3 (part), Block No.5. Alandur Village, Adyar admeasuring 1.043 Acres and consequently direct 2nd respondent to refund the sum of Rs 75 lakhs collected under protest from petitioner, for the said purpose under the impugned order, with interest @12% per annum from 20.9.2019.

2. The petitioner submitted an application seeking planning permission for the construction of an IT Park comprising a basement, part stilt floor, part ground floor and 11 upper floors on the aforesaid property. By impugned communication, the second respondent called upon the petitioner to pay various charges, including open space reservation charges and premium FSI charges, as a condition for the grant of planning permission. The petitioner objected to the demand and submitted a representation challenging the levy. Nevertheless, the petitioner remitted the demanded amounts under protest and without prejudice to its rights. The present writ petition has been filed insofar as the demand relates to premium Open Reservation Charges.

3. Mr. Satish Parasaran, learned Senior Advocate representing the learned counsel for the petitioner submitted that the demand of OSR are made pursuant to the G.O.Ms.No. 743, Housing and Urban Development (UDI Department) dated 10.05.1979. However, the said G.O provides exemption for all layouts, sub divisions approved or effected before 05.08.1975. In the instance, the plot is situated in an Industrial Layout formed by the SIDCO as early as in 1966 and final approval was granted in 1971 and the lands were left out for open spaces under the layout scheme formulated in 1966 finalised in 1971. Therefore, the impugned communication demanding OSR charges of Rs.75 lakhs lacks statutory authority and the same is arbitrary and discriminatory.

4. In response, Mr.P.V.Balsubramaniam, learned Addl. Advocate General representing the State submitted that the amalgamated project site did not provide for OSR land and development regulations granting developers the beneficial option to pay OSR charges in view of physical land reservation. Since OSR land was reserved or gifted in the original layout for this plot, there is no double exaction and therefore, the demand made is in conformity with G.O.Ms.No. 743, Housing and Urban Development (UDI Department) dated 10.05.1979.

5. Though the industrial layout was formed before the said G.O came into effect, however the same does not provide for exemption in respect of subject plots before 05.08.1974, therefore the impugned demand is in conformity with G.O.Ms.No. 743, dated 10.05.1979, and therefore, cannot be interefered.

6. All the arguments of the learned counsel for the parties and the materials placed on record have been duly considered.

7. Before dwelling into the issue at hand, it is relevant to reproduce the relevant portion of G.O.Ms.No. 743, Housing and Urban Development (UDI Department) dated 10.05.1979 which reads thus;

“The Government have examined the whole question de novo in consultation with the Member Secretary, Madras Metropolitan Development Authority and the Director of Town and country Planning. consider that it is not justifiable to collect open space reservation charge from those who have made sub divisions in layouts without leaving the required open space reservation charge from those who have made sub divisions in layouts without leaving the required open space before the Development Control Rules were introduced. Moreover the Corporation will not be able to acquire the lands to an extent of 10% of the total layout area in the already built-up area with the amount collected from the people of that area as open space reservation charges for providing the needed open space for such people. In order to remove the difficulties referred to above, the Government direct that Rule 19 (a) (iv) of the Development Control Rules be modified as follows:- Extent of lands Reservation

Upto 3000 sq.metres Nil

Between 3000 sq.metres and 10,000 sq.metres 10% of the area, excluding Roads or in the alternative, He shall pay single rate of market value of equivalent land as per the valuation of the Registration Department.

Above 10,000 sq.metres 10% of the area, excluding Roads, shall be reserved and This space shall be maintained

As communal and recreational Open Space to the Satisfaction of the Authority Or transferred to

the

Authority

for maintenance. It is obligatory to reserve 10% of the layout area

4) The Government also direct that the above modification of the open space reservation rule be given effect to from 5th August 1975 (date of coming into force of Development Control Rules). Consequently, all layouts/sub divisions approved or effected before 05.08.75 will be exempted from the above requirements without insisting upon open space reservation. The Government also direct that no open space reservation charges need be collected in sub-divisions in areas earmarked for residential use in approved layouts provided the minimum prescribed plot extent is maintained.”

8. Admittedly, the subject plots are industrial plots situated in an Industrial Estate formed by SIDCO pursuant to an approval granted by the competent authority. Therefore, the industrial layout having been approved before 05.08.1975, is exempted from the payment of OSR charges though the extent of subject plots exceeds 3000 square meters. The Government also directs that the above modification of the open space reservation rule be given effect to from 5th August 1975 (date of coming into force of Development Control Rules). Consequently, all layouts/subdivisions approved or effected before 05.08.1975 will be exempted from the above requirements without insisting upon open space reservation. The Government also directs that no open space reservation charges need be collected in subdivisions in areas earmarked for residential use in approved layouts, provided the minimum prescribed plot extent is maintained.”

9. A plain reading of the aforesaid Government Order makes it clear that the Government, having considered the difficulties involved in collecting OSR charges from persons who had already formed layouts or subdivisions before the introduction of the Development Control Rules, decided to grant exemption to all layouts and subdivisions approved or effected before 05.08.1975. The exemption was intended to ensure that persons who had already developed their properties in accordance with the then prevailing requirements were not subsequently burdened with the obligation of providing open space or paying charges in lieu thereof.

10. The relevant date for determining the applicability of the exemption is, therefore, the date on which the layout or subdivision was approved or effected. The Government Order does not make the exemption dependent upon the extent of the individual plots forming part of such an approved layout. The classification based on the extent of land, namely, upto 3,000 square metres, between 3,000 and 10,000 square metres and above 10,000 square metres, governs the OSR requirements in cases to which the modified Development

Control Rules apply. It cannot be read in isolation so as to defeat the specific exemption subsequently provided in the very same Government Order for layouts and subdivisions approved or effected before 05.08.1975.

11. In the present case, it is not in dispute that the subject plots form part of an industrial layout developed by SIDCO in 1966 and that the layout received final approval in 1971. Thus, the industrial layout was approved well before 05.08.1975. The subject plots are not independent subdivisions formed after the introduction of the Development Control Rules, but form part of an already approved industrial layout.

12. Once the layout itself falls within the category of layouts approved before 05.08.1975, the exemption provided under G.O.Ms.No.743, dated 10.05.1979, would squarely apply. The fact that the extent of the subject plots exceeds 3,000 square metres would not take the petitioner outside the scope of the exemption. The respondents cannot rely upon the extent-based requirements under the modified Rule while ignoring the specific exemption granted under the concluding portion of the Government Order.

13. The contention of the learned Additional Advocate General that the present demand does not amount to double collection, since OSR land had been reserved or gifted in the original layout, does not alter the above legal position. The issue in the present writ petition is not merely whether the petitioner has provided OSR land or whether the present demand results in double collection.

The issue is whether the respondents are legally entitled to demand OSR charges in respect of a property forming part of an industrial layout approved before 05.08.1975. In view of the specific exemption contained in G.O.Ms.No.743, the answer has to be in the negative.

14. The object and effect of the Government Order cannot be defeated by applying the modified OSR requirements to layouts which have been expressly exempted from their operation. Any such interpretation would render the exemption granted by the Government otiose. Therefore, the demand for OSR charges in respect of the subject property is contrary to the specific directions contained in G.O.Ms.No.743, dated 10.05.1979, and cannot be sustained.

15. In view of the above discussion, this Court is of the considered view that the demand of Rs.75 lakhs towards OSR charges, contained in Sl.No.5 of the impugned Advice Memo dated 20.09.2019, is unsustainable and is liable to be set aside.

16. Accordingly, the writ petition is allowed and the impugned Advice Memo dated 20.09.2019, issued in Letter No.C3/(S)/15493/2019, is quashed insofar as it relates to the demand of OSR charges under Sl.No.5 in respect of the subject property. The second respondent is directed to refund the sum of Rs.75 lakhs collected from the petitioner towards OSR charges. The said exercise shall be completed within a period of twelve (12) weeks from the date of receipt of a copy of this order. In the event of default, the said amount shall carry interest at the rate of 6% per annum from the date of default till actual payment.

17. Consequently, the connected Miscellaneous Petition is closed. There shall be no order as to costs. 03-11-2026 Index: Yes/No Speaking/Non-speaking order Neutral Citation: Yes/No ak To

1. The Secretary to Government, Housing and Urban Development Department, Fort,St George,Chennai-9.

2. Chennai Metropolitan Development Authority Rep by its member Secretary, Thalamuthu Natarajan Maligai, No.1,Gandhi Irwin Road, Chennai- 600 008.

HEMANT CHANDANGOUDAR, J. AK WP No. 7490 of 2021 03-11-2026