G.O.(Ms) No.172, Land Alienation for Industrial Estates, 2017 (9 May 2017)

Purpose

Government Order (Ms) Number 172, issued by the Revenue Department, Land Disposal Wing, LD.5(1) Section on 9 May 2017, changes how land cost is fixed in covered government land alienation cases. Instead of using the present market value or guideline value at the time of alienation, the cost is based on the rate prevailing when Enter Upon Permission was granted, together with a notional increase calculated under the method in Government Order (Ms) Number 907 dated 13 December 1994.

Why the valuation policy was changed

Tamil Nadu Small Industries Development Corporation Limited explained that it may receive Enter Upon Permission, develop land and allot plots to entrepreneurs before the formal alienation process is completed. Delays in formal alienation could cause the land value payable by the corporation to rise substantially after plots had already been allotted using a tentative value.

The proposal stated that:

• Some land values had increased between two and fifteen times because of the later valuation date.
• Tamil Nadu Small Industries Development Corporation Limited could not readily recover the difference from allottees who had already made initial payments.
• The same issue could arise for other State Government bodies that develop alienated land and transfer it to further allottees.

Bodies and cases covered

Government Order (Ms) Number 172 applies to land alienation involving State Government bodies such as:

• Tamil Nadu Small Industries Development Corporation Limited.
• Tamil Nadu Housing Board.
• SIPCOT.
• Other similar State Government bodies covered by the decision.

The valuation approach applies where Enter Upon Permission has been granted and the alienation order is still pending. It also applies to future covered cases.

Treatment of earlier alienation orders

Government Order (Ms) Number 172 does not provide automatic reopening of every completed valuation. Where Enter Upon Permission was granted and an alienation order has already been issued, the case may be reviewed only on an appeal by the requisitioning agency.

Relevance to property buyers and allottees

The policy mainly governs the amount payable by the State Government body receiving the land. Entrepreneurs or other allottees in industrial estates or similar developments may be indirectly affected because the stated reason for the change was to avoid large later increases after plots had already been developed and allotted.