Recently i bought a land with bank loan in chennai .?

Recently i bought a land with bank loan in chennai . The land is village panchayat approved and also got a subdivision approval for the land . Have applied for building approval and it is in process . In the mean time applied for the patta . But the patta request has been rejected by the muncipality as it is the land provided by government to laundry men ( Vanaar maaniam : Tamil ) . Currently my building approval is in process , paid all the fees for the same . I want to know whether to proceed with my construction , or i am cheated ? if i am cheated what can i do next ?