The Supreme Court has upheld compensation for property losses suffered in the 1996 Thoothukudi communal clashes, subject to deduction of insurance payments. It directed Tamil Nadu to pursue recovery from those responsible and report its recovery steps to the Madras High Court.
New Delhi: The Supreme Court has held that Tamil Nadu cannot disown responsibility for compensating victims of the 1996 Thoothukudi clashes, while directing the State to invoke statutory remedies against those responsible for the damage.
The order in The Government of Tamil Nadu & Others v. D.G. Rajan alias Gnanaraj & Another was passed by Justice S.V.N. Bhatti and Justice N.V. Anjaria on October 27, 2026, and uploaded on November 7. It disposes of the State’s petitions and separately rejects the claimants’ pleas for a higher interest rate.
Commission’s assessment versus ₹2 lakh cap
Following clashes beginning on May 10, 1996, the State appointed a commission to examine their causes, identify victims, assess property damage and recommend compensation. After the report, a 1998 government order limited property-loss compensation to ₹2 lakh or the actual damage, whichever was lower.
The claimants challenged that limitation. The High Court directed payment in accordance with the commission’s assessment, and the State brought the dispute to the Supreme Court. The amounts recorded for the three claims were ₹1,84,42,775, ₹70 lakh and ₹85.74 lakh.
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State’s objections and the Court’s conclusion
Tamil Nadu argued that the commission’s recommendations were advisory, that a district committee had assessed lower losses and that insurance receipts must be deducted to prevent double compensation. The claimants defended the assessment while accepting that compensation could not be recovered twice.
In paragraph 12, the Court stressed the expectation that State institutions protect people and their property. It found that expectation had not been fulfilled in this incident and rejected the State’s attempt to disown its compensatory responsibility.
The Bench also addressed the burden on taxpayers. It held that the Tamil Nadu Property (Prevention of Damage and Loss) Act, 1992 provided mechanisms for action against those responsible, and directed the State to initiate the penal and civil consequences under that enactment.
Insurance deduction, payment and recovery
The respondents must submit their insurance claim forms, final disbursal orders and amounts received to the District Collector within four weeks of the order. After verification, the State must pay the balance compensation, with interest, within the four-week period directed by the Court.
The State must seek recovery from those responsible or, to the extent available, their properties. An affidavit on recovery steps must be filed before the High Court within eight weeks; further reporting will follow that court’s directions. These periods run from the October 27 order, not its later upload.
The Court declined to enhance the interest rate in the connected petitions, finding the existing compensation and interest fair. The order does not specify a fresh interest rate.
Case: The Government of Tamil Nadu & Others v. D.G. Rajan alias Gnanaraj & Another
Numbers: SLP(C) Nos. 13089–13091/2025; connected SLP(C) Nos. 27653, 27654 and 27652/2025
Court: Supreme Court of India
Bench: Justices S.V.N. Bhatti and N.V. Anjaria
Order: October 27, 2026
Outcome: State petitions disposed of with payment and recovery directions; interest-enhancement petitions dismissed.
