In Tamil Nadu, a court case has highlighted misuse of farm land – and brought real estate to a halt

During his many travels across Tamil Nadu, Advocate G Rajendran would pass by fertile fields of full-grown paddy, pulses and chillies, ripe and ready for harvest. But just a month later, he would find piles of construction material covering the ground where the crop had stood and large machines laying out a gravel road, stifling the fertile soil.

The seemingly rampant and unplanned conversion of agricultural lands into residential plots in the state prompted Rajendran to move court.

“Forget foreign countries, even in neighbouring states like Kerala, Karnataka or Andhra Pradesh, you cannot simply erect housing plots on agricultural land,” the lawyer said.

When the Madras High Court heard Rajendran’s PIL on September 9, it passed an interim order that sent shock waves across the real estate sector of Tamil Nadu – it banned the registration of plots and houses (for the sale deed, the transfer of ownership from seller to owner) that had not secured approval for the change in land use from agricultural to residential from appropriate authorities such as the Directorate of Town and Country Planning or the Chennai Metropolitan Development Authority.

The interim order has reportedly brought real estate activity to a near-halt. There has been panic among lakhs of homeowners across Tamil Nadu who had bought housing plots on agricultural land without the necessary approvals and developers who have been unable to get their plots registered and sell them.

"Our business has been very badly hit because we are unable to register our land," said T Kulasekaran, a developer in Chennai. Kulasekaran owns more than 30 acres of land spread across suburban districts of Chennai - Minjur and Red hills in the north, and Tambaram in the south and is one among many developers who have appealed against this court order.

The court is expected to give its final order on November 16.

Why so many unapproved layouts?

The PIL has shed light on a widespread problem that has gone on unchecked for decades – the arbitrary use of agricultural lands to build houses without following due procedure in getting the land use of the plot changed from agricultural to residential.

“More than 90% of the layouts in the state do not have approval from the town planning authorities,” said KM Sadanand, President of Association of Professional Town Planners.

G Shyam Sunder, a Chennai-based advocate, who has also authored the book Property Registration, Land Records and Building Approval Procedures Followed in Various States in India said this problem is peculiar to the state. "Tamil Nadu is the only state in India where there is a rampant misuse of agricultural lands which are being converted into residential plots," he said. "Highly fertile land is being converted into residential plots left, right and centre."

To use an agricultural land for a non-agricultural purposes, the land has to first be reclassified by a planning body. For this, developers need to adhere to stringent norms laid out by the town-planning authorities and secure their approval. This includes setting aside about 10% of the land for roads and paths. In particularly large layouts, the developer must provide public utility plots to be used by government departments to build facilities such as post offices, clinics or police stations. Only then can the land use be changed and the land then registered with the Registration Department.

But most developers do not take this long and complicated route, said Sunder. Instead, they just get the approval of the panchayat president of an area to convert agricultural land into house sites – even though that sanction has no legal value, Sunder said.

Kulasekaran said getting approval from the panchayat office is also more affordable. "If we spend one lakh to buy a piece of land, we'll be spending an additional two lakhs to get it approved by the Chennai Metropolitan Development Authority," he said.

But according to Tamil Nadu Panchayat Building Rules, 1997, only the Directorate of Town and Country Planning can sanction housing plots, not the panchayat president.

“But the government turned a blind eye to this rule,” said Sunder. “Effectively, these panchayat presidents blatantly started granting approvals on their own. In the process, they were also giving permission for construction of buildings on those unapproved lands.”

According to Sunder, the panchayat presidents make a tidy sum of money while granting these approvals.

“Panchayat presidents were invariably political representatives,” said Sunder. “So why would the party in power stop their party members of lower orders from earning a bit of money?”

Turn around?

The Madras High Court had passed its interim order keeping in mind the last year's catastrophic floods in Chennai, brought on by torrential rainfall in November and December – which killed about 300 and damaged property worth several thousand crore – which served as a wake-up call on the need to protect the state's ecology.The court then asked the government to work out a scheme and legislative changes to tackle the mushrooming of unapproved layouts.

A day after the next hearing on October 21, government brought in an amendment to Section 22-A of the Registration Act, 2008, according to which only those unapproved plots that had not been registered yet would not be cleared. For housing layouts that had already been registered – even those that came up on agricultural land without necessary clearances – before October 20, status quo would be maintained and such plots could be bought and sold.

“But now the general public is aware of all the problems with unapproved land,” said Sunder. “Nobody will be interested in buying unapproved land,” he said adding that the prices of these lands are sure to drop by a minimum of 25% of their cost price.

Larger issue ignored

Sadanand said that it is not enough to simply look at this issue in terms of registration of agricultural land being sold as an unapproved plot.

“We have to see why agricultural land is being converted into unapproved layouts,” said Sadanand. “These kind of illegal activities are to be looked into.”

He said that urbanisation and population growth has led to an increased demand for residential layouts, but this needs to be met in an organised, planned manner.

The only solution, Sunder said, is to scrutinise each of these layouts and decide on a case-to-case basis whether or not to grant them approval.

Sunder, however, said that the recent government order allowing registered unapproved plots to be transacted is a mockery of the whole intention behind the court order.

“This is an ad hoc arrangement which dilutes the intention with which the high court judgement has been passed,” said Sunder. "In their response to the court order, the government has neglected to address the crux of the issue, which is to give directions to panchayat presidents stating that they have no authority to sanction layout approvals.”