The Supreme Court yesterday upheld a High Court verdict that had declared Modhumoti Model Town illegal.
Metro Makers Ltd developed the controversial housing project filling up a 550-acre wetland identified as a flood flow zone in the Dhaka City Master Plan.
The SC Appellate Division delivered the verdict after around six months of concluding the hearing on five separate appeals filed in 2009 challenging separate portions of the HC verdict.

Of the appeals, Metro Makers filed two while Bangladesh Environmentalist Lawyers' Association (Bela), plot purchasers and Rajdhani Unnayan Kartripakkha (Rajuk) filed one each.
Following the apex court verdict, Bela lawyer Iqbal Kabir Lytton told The Daily Star the Modhumoti Model Town authorities and those who had purchased plots could not construct any structure in the project area.
From now on, the project area will remain as a free flood flow zone and the capital will also be freed of waterlogging.
Lytton said the fate of the plot purchasers would be known after the full text of the SC verdict had been obtained.
Earlier on June 8 last year, the HC declared 77 unauthorised housing projects in and around Dhaka illegal and directed the government to remove or demolish them within 60 days.
But the directives were not implemented since the full text of the HC verdict had not been released yet, he said.
The Daily Star earlier carried out several reports on illegal housing projects, including Modhumoti Model Town, and stopped running their advertisements on ethical grounds even before the HC ruling.
Yesterday, a six-member Appellate Division bench headed by Chief Justice Md Muzammel Hossain delivered the verdict, after around six months of concluding hearings on the appeals.
Details of the SC verdict are yet to be released.
The HC on July 27, 2005, declared Modhumoti Model Town project at Bilamalia and Baliarpur near Aminbazar of Savar unauthorised, illegal and against public interest, but directed that the interest of the purchasers be protected.
In August 2004, Bela filed a writ petition as public interest litigation with the HC, challenging the legality of the project, which was violating the Environment Conservation Act, Town Improvement Act and Rajuk rules.
In its petition, Bela said if the project continued, the character of the area would be destroyed and the environment polluted.
Bela also appealed to the apex court to pass necessary orders so that the city remained free of waterlogging.
Bela, Metro Makers Ltd, plot purchasers and Rajuk filed five separate leave-to-appeal petitions in 2006 with the SC against separate portions of the HC verdict.
Metro Makers and plot purchasers appealed to protect their interest, saying they had invested a lot of money for the project and its plots, and Rajuk appealed for declaring the project illegal.
The SC on March 19, 2009 upheld the HC verdict, but allowed Metro Makers, plot purchasers and Rajuk to move regular appeals before it against the HC verdict.
In the verdict, the SC yesterday allowed an appeal of Bela, dismissed the appeals of Metro Makers and plot purchasers and disposed of the appeal of Rajuk.
The Appellate Division on February 15 this year concluded hearings on the apparels and kept the appeals waiting for verdict any day.
Mahmudul Islam and Syeda Rizwana Hasan appeared for Bela, Rafique-ul Huq, Rokanuddin Mahmud, Ajmalul Hossain, Abdur Razzaq and ABM Siddiqur Rahman Khan for Metro Makers and plot purchases while AFM Mesbahuddin stood for Rajuk.