In a significant ruling that could impact property owners and developers in Chennai, the Supreme Court has dismissed an appeal filed by the Chennai Metropolitan Development Authority (CMDA) and directed it to refund ₹1.64 crore with 8% annual interest to renowned gynaecologist Dr. Kamala Selvaraj. The dispute centred on “Open Space Reservation” (OSR) charges levied by the CMDA while granting planning permission for her proposed hospital project.
Background
The controversy began when Dr. Selvaraj purchased around 10 grounds and 2,275 square feet of land in Nungambakkam in 2008, intending to build a super-speciality hospital. The land originally belonged to the Ispahani family and had been subdivided as far back as 1949 through a partition deed, followed by registered gift deeds in 1972 and 1973.
Despite these clear documents, CMDA demanded a hefty ₹1.64 crore in OSR charges, claiming the site was part of a larger 21-ground property and therefore not exempt under city development regulations. The High Court of Madras quashed this demand in 2010, calling it unsustainable, and ordered CMDA to refund the amount with interest - a decision later upheld by its Division Bench in 2011. CMDA then approached the Supreme Court.
Court’s Observations
Hearing the matter, a Bench of Justices Aravind Kumar and N.V. Anjaria examined a detailed trail of documents dating back several decades. The Court noted that the sub-division of the property had occurred well before 1975, the year when Chennai’s first Master Plan came into effect.
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“The documentary record demonstrates otherwise,” the Bench remarked, rejecting CMDA’s claim that the land became a separate holding only in 2008. It emphasised that registered deeds and separate pattas issued long before 1975 clearly proved that the property was recognised as an independent parcel.
The Court observed that once the respondent produced these records, the burden shifted to CMDA to prove that the sub-division was unlawful - a burden it failed to discharge. “The appellant’s bald assertion that sub-division occurred in 2008 is a mere ipse dixit, devoid of proof,” the judgment stated.
Furthermore, the Bench referred to Annexure XX of the Development Regulations, which exempts the first 3,000 square metres from OSR liability. Since Dr. Selvaraj’s property measured only about 2,229 square metres, the Court said the levy of OSR charges was “contrary both to fact and to the text of the regulation.”
Decision
Concluding the hearing, the Supreme Court upheld the High Court’s findings, calling them “well reasoned and supported by public records.” It held that no illegality or perversity had been shown to justify interference under Article 136 of the Constitution.
“The appeal being bereft of merit is accordingly dismissed,” Justice Aravind Kumar pronounced, directing CMDA to refund ₹1.64 crore with 8% annual interest to Dr. Kamala Selvaraj within six weeks. The Court made no order as to costs.
The ruling effectively reaffirms that developers and landowners cannot be compelled to pay open space charges where their plots are below the exempted threshold and historically recognised as independent holdings - a clear signal against arbitrary levies by planning authorities.
Case: Chennai Metropolitan Development Authority vs. Dr. Kamala Selvaraj
Citation: 2025 INSC 1200
Appeal No.: Civil Appeal No. 3051 of 2015
Date of Judgment: October 8, 2025
