No vested right to reconvey acquired land: Supreme Court holds Section 48-B confers discretion on State and courts cannot impose utilisation timelines

Case Name: Chennai Metropolitan Development Authority v. Dharmalingam & Ors.
Citation: 2026 INSC 269
Date of Judgment/Order: 10 March 2026
Bench: Chief Justice Surya Kant and Justice Joymalya Bagchi

Held: The Supreme Court held that Section 48-B of the Land Acquisition Act, 1894 does not confer any vested or enforceable right upon landowners to seek reconveyance of acquired land, but merely vests discretionary power in the State subject to strict statutory conditions. The Court further held that reconveyance can be considered only when the State is satisfied that the land is not required either for the original purpose or any other public purpose, and courts cannot compel such reconveyance in the absence of this satisfaction. It was also held that no time limit can be imposed by courts for utilisation of acquired land, and the State is entitled to change or modify the public purpose for which land is used, provided it remains a bona fide public purpose.

Summary: The dispute arose from land acquired by the Chennai Metropolitan Development Authority for development of a bus and truck terminal, of which a portion remained unutilised for several years. The respondent landowners sought reconveyance under Section 48-B of the Land Acquisition Act, and the High Court directed the State to reconvey the land, holding that the original purpose had not been fulfilled and subsequent allotment to private traders did not constitute a public purpose. The Supreme Court examined the statutory scheme of Sections 16-B and 48-B, holding that these provisions confer limited discretionary powers on the State and do not create enforceable rights in favour of landowners. It found that the State had consistently intended to utilise the land for public purposes, including development of a truck parking yard, and had never concluded that the land was not required for public use. The Court further held that the High Court erred in directing reconveyance and in implying that delay in utilisation or change in public purpose justified return of land. It reiterated that once land vests in the State after lawful acquisition, courts must exercise restraint in ordering its release and cannot impose rigid timelines for utilisation.

Decision: The Supreme Court allowed the appeals, set aside the judgments and orders of the High Court directing reconveyance, upheld the decision of the State Government and the Authority refusing reconveyance under Section 48-B, clarified that landowners are entitled only to receive compensation already deposited with interest, and directed that any contrary views taken in related proceedings shall stand overridden, thereby ensuring completion of the public project and disposal of all issues.