Andhra Pradesh High Court Rejects Forced TDR Bonds : Landowners Entitled to Cash Compensation

In a swift ruling on February 24, 2026 , the High Court of Andhra Pradesh at Amaravati allowed three writ petitions, directing authorities to drop attempts to impose Transferable Development Rights (TDR) bonds on reluctant landowners. Justice Gannamaneni Ramakrishna Prasad emphasized that TDRs are voluntary, not compulsory, forcing the state to pursue formal acquisition under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ( RFCTLARR Act ) for road widening in Ongole.

Road Widening Dreams Clash with Property Realities

The disputes arose when the Ongole Municipal Corporation targeted properties for Trunk Road expansion. Petitioners—Kollipalli Susmith Kumar (WP 5188/2026), Grandhi Eswaramma (WP 5333/2026), and Nalluri Padmavathi (WP 5338/2026)—received a demolition notice ( Roc.No.3535/2025/G1 dated November 29, 2025 ). Despite their explicit rejection of TDR bonds via replies like January 6, 2026 , officials pushed TDRs to sidestep cash payouts. The petitioners approached the court, arguing this violated constitutional safeguards and prior orders in WP No.21175 of 2025.

Petitioners' Stand: No Bonds, Only Fair Pay

Represented by advocate Shaik Asif , the petitioners contended that coercing TDR acceptance bypassed statutory acquisition processes. They invoked Articles 14 (equality), 21 (life and liberty), and 300A (property deprivation only by law), claiming the move was arbitrary. Rejecting TDRs, they demanded market-value compensation under the 2013 Act, halting any demolition until lawful proceedings.

State's Defense: TDR as Efficient Alternative?

The state, via Assistant Government Pleader M. Srinu Babu , and Ongole Municipal Corporation , through counsel S. Vijay Kumar , likely justified TDRs for efficient infrastructure without fiscal strain—though the judgment notes no detailed counter-arguments, focusing on settled law .

Decoding the Law: Agreement First, Acquisition Next

Justice Prasad dissected Sections 145-147 of the Andhra Pradesh Municipal Corporations Act, 1955 . Section 145 empowers property acquisition; 146 allows voluntary agreements (like TDRs); but 147 mandates RFCTLARR proceedings if no deal. No precedents were directly cited beyond this framework, but the court affirmed " settled law " that TDRs cannot be imposed. As a news summary noted, this aligns with the 2013 Act's emphasis on transparency and fair compensation over alternative incentives.

Key Observations from the Bench

The judgment pulls no punches with these pivotal lines:

"It is a settled law that the Respondent Authorities cannot thrust TDR bonds on the claimants/affected parties. TDR bonds are only optional against seeking of compensation under Act No.30 of 2013 ."

" TDR bonds are not mandatory but they can be voluntarily accepted by the claimants/affected parties."

"In cases where the claimants or the affected parties who decline to accept TDR bonds , the only option that is available to the Government Authorities is to initiate the Proceedings under Act No.30 of 2013 ."

"The provisions of law... are clear to the effect that the affected parties are entitled for compensation under Act No.30 of 2013 ."

Victory at Admission: Due Process Enforced

At the admission stage, the court allowed the petitions without costs, ordering: "directing the Official Respondents to follow the due process of law namely to invoke the provisions of Act No.30 of 2013 for acquiring the property by determining the market price." No interference with possession until compensation flows.

This sets a precedent for Andhra Pradesh: infrastructure can't bulldoze rights. Landowners refusing TDRs now hold stronger ground, compelling municipalities to budget for market rates—potentially slowing projects but upholding fairness in public purpose acquisitions.