Amaravati: The Andhra Pradesh government has reclaimed nearly 14,000 acres of land allotted to Brahmani Industries Ltd. in YSR Kadapa district, bringing to an end an 18-year saga marked by stalled investments, bank litigation and prolonged legal disputes.
District Collector Cherukuri Sridhar issued orders on Thursday directing revenue authorities to take possession of the land located in Ambavaram village of Jammalamadugu mandal after the company failed to utilise it for the purpose for which it had been allotted. The land is estimated to be worth around ₹5,000 crore at current market value.
Revenue officials have restored the land as government property by updating Webland, Adangal and 1-B records. The district registrar has also been directed not to permit any registrations, leases or other transactions involving the land. The reclaimed land is expected to be made available for future industrial development.
Steel Plant That Never Materialised
The ambitious project was announced in 2007 by Brahmani Industries, promoted by Obulapuram Mining Company (OMC) and backed by Karnataka mining baron Gali Janardhan Reddy. The proposal envisaged a large integrated steel plant in Jammalamadugu that was expected to transform the industrial landscape of Rayalaseema.
The then Y.S. Rajasekhara Reddy government allotted more than 10,700 acres for the steel plant. In addition, 3,115.64 acres were allotted in 2008 for a proposed commercial airport, flying academy and aviation-related industries at a concessional rate of ₹25,000 per acre.
However, the project never progressed beyond the planning stage. The death of Chief Minister Y.S. Rajasekhara Reddy in 2009, followed by investigations into illegal iron ore mining in Karnataka involving OMC promoters, funding constraints and multiple legal disputes brought the project to a standstill.
Axis Bank Loan Triggered Legal Complications
To finance the proposed steel plant, Brahmani Industries mortgaged the government-allotted land to Axis Bank and availed loans of around ₹350 crore. After the company defaulted on repayment, Axis Bank initiated recovery proceedings under the SARFAESI Act, claiming rights over the mortgaged assets.
The Andhra Pradesh government, however, argued that the land had been allotted subject to specific conditions for establishing the steel plant and related infrastructure. Since the project failed to take off, the government maintained that it was entitled to cancel the allotment and resume possession of the land.
The conflicting claims of the state government and the lender resulted in prolonged litigation before various judicial forums. Although the government had issued orders to resume the land in 2011, the legal disputes prevented revenue authorities from taking physical possession for more than a decade. With the litigation now resolved, the district administration has finally taken over the entire land parcel and restored it to government ownership.
Airport Land Also Remained Idle
The 3,115.64 acres allotted for a commercial airport, flying academy and aviation-related industries also remained completely undeveloped. Officials said the land lay vacant for years, covered with shrubs, with no construction activity undertaken by the company.
After the company failed to provide a satisfactory explanation for the prolonged delay, the government proceeded to cancel the allotment in accordance with the terms of the land grant.
With the resumption now complete, the Andhra Pradesh government has regained control over one of the state’s largest industrial land parcels, opening the possibility of re-allotting it to new investors as part of its industrial development strategy.