REAL ESTATE SCAMS IN MADURAI

on

  1.  kalaimagal sabha
  2. Neo Max
  3. PACL

Kalaimagal Sabha,

No.17(Old No.48),

North Usman Road,

T.Nagar, Chennai.

+91-9944098582 / +91-9944098572

 kmsmembers1684@gmail.com

 

The Kalaimagal Sabha scam has affected over 5.33 lakh to 6.4 lakh investors and members in Tamil Nadu, Karnataka, and Delhi, many of whom are low-income individuals unable to retrieve their deposited money for over two decades. The scandal involves over 3,000 properties, leading to widespread financial distress and prolonged legal battles.
Impacted Individuals and Key Details
  • Investors: Approximately 5,33,356 to 6,39,460 members, mostly poor or middle-class investors, deposited hard-earned money and haven't seen returns for over 22 years.
  • Properties Affected: Over 3,088 property parcels spanning 33 districts in Tamil Nadu, along with locations in Karnataka and Delhi, were designated as "prohibited properties" to prevent illegal sales.
  • Legal Action: The Madras High Court has appointed a Special Officer and a one-man commission, led by a former judge, to oversee the valuation and e-auction of these properties to pay back investors.
  • Current Status: As of early 2026, the government is actively holding e-auctions to liquidate these assets, with property valuations often disputed, as some members claim the land is worth over ₹44,000 crore, significantly higher than earlier estimates.

The legal proceedings involve the Kalaimagal Sabha Uruppinargal Pathukappu Sangam (Investors Protection Association), which has petitioned to ensure a fair return of their investments based on current market values.

The western side of the property was purchased by a Trust, namely Kalaimagal Sabha. The Kalaimagal Sabha is facing several litigations and therefore in W.P No.514 of 1999, a Joint Receiver was appointed by the Principal Bench of this Court. The grievance of the petitioner is that the property of Kalaimagal Sabha is only to an extent of 2.38 cents in the said Survey number on the western side and it is nothing to do with the property of this petitioner. the Inspector General of Registration has issued instruction, vide letter No.62654/E1/09, dated 10.12.2009, by which, all the registering Officers were instructed not to register any document of the properties of Kalaimagal Sabha, without getting No Objection Certificate from the Joint Receiver. Based on these instructions of the High Court and as per the letter of Inspector General of Registration, dated 10.12.2009, the petitioner was insisted to obtain No Objection Certificate. The issue with regard to Kalaimagal Sabha is nearly a two decades old. This Court has also appointed a Receiver and based on the instructions of the receiver, the impugned orders came to be passed. Even after 16 long years, it appears that the Receiver appointed by the Court has not acted upon and virtually there is no progress in identifying the properties of Kalaimagal Sabha and disposing the same. 

The Court appointed Receiver to administer the properties of Kalaimagal Sabha with an object to see that the properties are disposed and the depositors are refunded with their deposits. It appears that the administrators, taking advantage of the orders of this Court are not acted diligently and have not decided the issue for the past 10 years and therefore, this Court cannot simply shut its eyes and to mechanically dispose of this writ petition, based on these memos issued in the strength of the High Court orders.  wherein, it has been stated that that the Kalaimagal Sabha has 5.3 lakh members and owns around 13000 acres of lands and buildings spread across Tamil Nadu, Puducherry, Kerala, Karnataka and Delhi Regions. After taking charge of the Kalaimgal Sabha, the Joint Receivers identified properties, made auctions and sold 870.13 acres of lands and few buildings to the higher bidders. The amount collected from the sale of lands and buildings is Rs. 43,34,33,358/- (Rupees Forty Three Crores, Thirty Four Lakhs Thirty three Thousand three hundred and fifty eight only) deposited in Indian Bank, T.Nagar and with the available fund, 40% of the amount has been disbursed to nearly one lakh members as first installment and Rs.95,00,00,000/- (Rupees Ninety Five Crores Only) has been deposited in Indian Bank, T.Nagar and High Court Branches, as fixed deposits. It is also stated that lot of agreements towards purchase of lands and advance amount paid to the respective sellers have been found and in order to recover the advance amount, suits were filed in various Subordinate Courts. It is further stated that there were lot of encroachments in the lands of Kalaimagal Sabha and the Joint Receivers had taken legal action as against them and 50 cases were pending in various Courts and one Special Leave Petition is also filed before the Supreme Court of India.

 

 

 https://www.latestlaws.com/judgements/madras-high-court/2022/april/2022-latest-caselaw-8457-mad/

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