No Notional Aggregation for OSR; Pre‑1975 Sub‑divisions Recognized; OSR Charges Nil for Plots under 3000 m²

Case: Chennai Metropolitan Development Authority v. Dr. Kamala Selvaraj, 2025 INSC 1200

Court: Supreme Court of India (Civil Appellate Jurisdiction) | Bench: Aravind Kumar, J.; N.V. Anjaria, J. | Date: 08 October 2025

Introduction

This decision addresses when Open Space Reservation (OSR) charges may be levied under the Chennai Metropolitan Development Authority’s (CMDA) Development Regulations. The Supreme Court clarifies two interlinked points of planning law: (i) lawfully recognized sub‑divisions existing prior to the First Master Plan (05.08.1975) cannot be disregarded or “notionally aggregated” with the parent estate to create OSR liability; and (ii) under Annexure XX of the Development Regulations, sites under 3000 square metres fall within the Nil slab for OSR, unless other conditions independently trigger liability.

The dispute concerns a hospital project on a plot historically carved out from a larger estate through registered instruments and recognized by separate pattas well before 1975. CMDA nevertheless demanded OSR charges of ₹1,64,50,000, treating the site as part of the original 21‑ground parcel and contending that a fresh sub‑division occurred in 2008. The High Court quashed the demand and ordered refund with interest; CMDA appealed.

Background and Parties

Property lineage: The land traces to the estate of Haji Syed Ali Akbar Ispahani. A registered partition deed of 23.04.1949 allotted 21 grounds in S. No. 126/2, Nungambakkam Village, to Syed Jawad Ispahani.
Pre‑1975 sub‑division: By registered gift deeds in 1972 and 1973, Jawad gifted an aggregate of 11 grounds to his son, Syed Ali Ispahani. Separate pattas were issued recognizing this 11‑ground holding in Syed Ali’s name. In 1984, 125 sq. ft. was gifted out, leaving 10 grounds and 2275 sq. ft.
Respondent’s purchase: On 08.02.2008, Dr. Kamala Selvaraj purchased the 10 grounds and 2275 sq. ft. (about 2229 m²) to develop a super‑speciality hospital.
Planning permission: The application was initially rejected under Regulation 26(2); the State granted exemption by G.O.Ms. No. 84 (02.06.2009). CMDA then demanded OSR charges, asserting the site should be assessed as part of the parent 21 grounds and/or as a fresh sub‑division.

Issues

Whether the respondent’s 2008 purchase amounted to a fresh sub‑division attracting CMDA’s sub‑division controls (e.g., Regulation 29) and consequent OSR liability.
Whether Annexure XX’s “first 3000 square metres — Nil” OSR slab applies to the respondent’s site (about 2229 m²), or whether the site must be notionally recombined with the larger 21‑ground parent estate to cross the threshold.
Whether separate pattas and pre‑1975 registered conveyances suffice to establish a recognized, independent parcel for planning purposes.
The scope of Supreme Court interference with concurrent factual findings under Article 136 of the Constitution.

Summary of the Judgment

The Supreme Court dismissed CMDA’s appeal and affirmed the High Court’s order quashing the OSR demand. Key holdings:

Pre‑1975 recognition matters: Registered gift deeds (1972, 1973) and separate pattas established that the 11‑ground holding of Syed Ali existed and was recognized prior to 05.08.1975. The respondent’s 2008 purchase was not a fresh sub‑division; it was the culmination of a historical chain of lawful transactions.
Annexure XX applies as written: Annexure XX prescribes Nil OSR for the first 3000 m². The respondent’s site, at about 2229 m², falls squarely within the Nil slab. Notional aggregation with the 21‑ground parent estate is impermissible.
Burden of proof on the Authority: Once the respondent produced registered instruments and pattas, the evidentiary burden shifted to CMDA to prove the absence of lawful pre‑1975 recognition. CMDA furnished no such proof.
No layout formation: The respondent did not form any layout; provisions aimed at layout promoters do not apply.
Article 136 restraint: With concurrent findings backed by public documents and no perversity shown, the Court declined interference.

The Court directed CMDA to refund ₹1,64,50,000 with 8% interest (as ordered by the High Court) within six weeks; no order as to costs.

Analysis

Regulatory Framework and Context

First Master Plan (effective 05.08.1975): Introduced a formalized planning regime.
Regulation 26(2): Initially cited to reject the respondent’s application; the State granted an exemption by G.O.Ms. No. 84 (02.06.2009). The exemption is not central to the OSR dispute but underscores the State’s role in resolving technical hurdles.
Regulation 29 (as invoked by CMDA): CMDA argued a fresh sub‑division occurred in 2008, hence sub‑division controls and OSR applied.
Annexure XX (OSR schedule): Categorically states: “for the first 3000 square metres — Nil,” establishing a threshold below which OSR is not payable.

Why “Notional Aggregation” Fails

CMDA’s central theory was to treat the respondent’s plot as part of the original 21‑ground extent to cross the 3000 m² threshold and trigger OSR. The Court rejected this because:

Facts and documents contradict aggregation: The 1972 and 1973 registered gifts, followed by the issuance of separate pattas, show a recognized 11‑ground parcel existed well before 1975. This parcel was further reduced in 1984 and ultimately sold in 2008.
Legal significance of pattas: While not conclusive proof of title, pattas are public revenue records that corroborate possession, demarcation, and administrative recognition of an independent holding.
No evidence of post‑1975 manipulation: CMDA provided no material to discredit the pattas or to show that the sub‑division lacked recognition under the planning law as it stood pre‑1975.
Prospective application of planning controls: Applying post‑1975 sub‑division controls to undo pre‑1975 recognized parcels would amount to impermissible retroactivity.

Annexure XX: Plain Text Prevails

The Court relied on the unambiguous language of Annexure XX—“for the first 3000 square metres — Nil.” The respondent’s site (about 2229 m²) falls within this slab. Two interpretive points underpin the outcome:

Textual clarity: Where the regulation is clear, administrative agencies cannot add conditions or devise aggregation methods that enlarge liability.
Plot‑specific assessment: OSR liability attaches to the plot under development as recognized in law, not to a reconstructed, historical parent estate.

Burden‑Shifting and Evidentiary Standards for Administrative Exactions

The respondent discharged the initial burden by producing registered conveyances and pattas evidencing a pre‑1975 recognized parcel. The burden shifted to CMDA to rebut this with cogent evidence (e.g., showing the pattas were post‑1975 or lacked legal effect in planning law). CMDA’s assertion that a fresh sub‑division occurred in 2008 was characterized as a bare ipse dixit—insufficient to sustain a monetary exaction.

Layout‑Based OSR vs. Plot Development

The Court emphasized that the respondent did not form a layout. Many OSR obligations are designed for layout promoters who carve multiple plots and create infrastructure. Imposing layout‑oriented OSR demands on a single pre‑recognized parcel—especially within Annexure XX’s Nil slab—misapplies the regulatory scheme.

Appellate Restraint under Article 136

The Court noted the consistent principle that it will not reappreciate evidence or overturn concurrent factual findings absent perversity, manifest illegality, or grave miscarriage of justice. Here, both the Single Judge and Division Bench relied on public documents and a coherent evidentiary record; no exceptional ground for interference was demonstrated.

Precedents Cited

The judgment text does not cite specific earlier decisions. Instead, it draws on established principles: adherence to the text of regulations, proscription of retroactive application of planning controls to pre‑recognized parcels, burden‑shifting once public documents support the claimant, and the Supreme Court’s restrained Article 136 review. The decision thereby situates itself within the broader jurisprudence emphasizing legality, evidence‑based administrative action, and deference to concurrent factual findings.

Impact and Implications

For Planning Authorities (CMDA and analogues)

No notional aggregation: Authorities cannot recombine a legally recognized plot with its historical parent estate to manufacture OSR liability or to defeat Annexure XX thresholds.
Evidence‑based exactions: When confronted with registered instruments and pattas indicating pre‑1975 recognition, authorities must produce contrary evidence; bare assertions will not justify a levy.
Prospective regulation: Planning controls must be applied prospectively unless the statute/regulation clearly provides otherwise.

For Landowners and Developers

Value of documentary trails: Maintain and produce registered deeds and pattas to evidence historical recognition of plots. Such records can decisively determine regulatory obligations.
Assess OSR correctly: Where a site is below 3000 m² and no other triggering conditions apply, Annexure XX supports a Nil OSR. Authorities cannot enlarge liability via aggregation rationales.
Distinguish layout formation: If not forming a layout, resist application of layout‑specific OSR provisions.

For Future Litigation

Burden allocation clarified: Once public records show pre‑1975 recognition, the onus shifts to the authority to prove otherwise.
Concurrent findings respected: Appellate challenges under Article 136 should focus on demonstrable perversity or legal error, not mere re‑argument of facts.

Complex Concepts Simplified

Open Space Reservation (OSR): A planning requirement that mandates reserving a portion of land as open space (or paying charges in lieu) to ensure adequate civic amenities. OSR schedules, like Annexure XX, specify thresholds and rates.
Annexure XX “first 3000 square metres — Nil”: If a development site is under 3000 m², OSR is not payable for that site, absent other applicable requirements. The rule focuses on the plot under development, not historical estates.
Pattas: Revenue documents recording possession and recognized holdings. While not conclusive of title, they corroborate the existence and recognition of a separate parcel, especially when read with registered deeds.
Notional aggregation: An administrative device that artificially combines a plot with a larger parent tract to increase regulatory burdens. The Court rejects this where the plot has long been lawfully recognized as independent.
Sub‑division vs. fresh sub‑division: A sub‑division created and recognized pre‑1975 remains valid; a later sale of that recognized plot is not a new sub‑division attracting current controls as if from scratch.
Article 136 restraint: The Supreme Court typically avoids interfering with concurrent fact findings unless there is clear perversity or legal error.

Conclusion

The Supreme Court’s decision establishes a clear planning‑law principle for the CMDA regime: authorities cannot bypass Annexure XX’s “first 3000 m² — Nil” rule by notionally aggregating a recognized plot with its parent estate. When registered instruments and pattas show pre‑1975 recognition, the onus lies on the authority to prove the contrary. The case underscores that OSR is a planning tool, not a revenue expedient; its application must be faithful to the text of the regulations, the factual history of the plot, and the prospective nature of planning controls. For small sites and non‑layout developments, this judgment provides certainty and shields against overbroad levies. For authorities, it emphasizes evidence‑based decision‑making and adherence to statutory thresholds. The refund order, with interest, further signals judicial intolerance for exactions lacking a sound legal and evidentiary foundation.

Key Takeaways

Pre‑1975 recognized sub‑divisions, evidenced by registered deeds and pattas, cannot be treated as fresh sub‑divisions upon later sale.
Annexure XX’s “first 3000 square metres — Nil” OSR slab applies to the plot under development; no notional aggregation with a parent estate is permissible.
Layout‑specific OSR provisions do not apply to single‑plot developments absent layout formation.
Administrative levies must rest on proof; mere assertions by authorities will not suffice when public documents support the claimant.
Supreme Court will not disturb concurrent factual findings absent perversity, manifest illegality, or grave injustice.