You can definately build in 1200sf feet land. I would be good if your land frontage is big between 28 to 35 feet. That will give a good look on the building with adequate side spacing. Also this will ehance the area your neigbourhood. You can build a ground G+1 building with around 900sq feet each floor. The cost of it if the building contractor charges 1000Rs per sq feet thn it will be 18 lacs plus 6 lacs for other facilities like overhead tank, sump, flooring (tiles or marbles), septic (if no drainage), compound wall, bore well and approvals. Approximatly it will take 24 to 25 lacs for a G+1 building.
Another one more thing is that put a little consideration on the road because this will enhance the look and value to the property. If possible tar the road until the compound wall in front of your house. Do not have any untarred area infront of your house. The cost is small but the effect on the look is very enhancing. Generally in foreign developed countries this is how house and road interfacing is done and creates a very decent look. In India this is not practised and the house owners are not bothered about what happens after the compound wall as they believe it is the governments jobs to do it. However it is the house owner who uses the road daily and I think he or she sould pay attention on this. Unkept road spoils the look even on a very big beautiful house.
The problem in velachery is there are few half ground plots available. Even those plots will be 20*60 mostly. The house contructed out of those plot will look like a train. At least you should construct house by keeping entrance at the side. That may give some good look to the house
It is easily possible to build a good house in 1200 sq ft land.A lot depends on the frontage though.I know a guy who bought a triangular piece of land and managed to build a beautiful office-cum-residence on it.It would be worthwhile to get a good architect for the job even if you have to pay more for his services.
Whne building a house the the frontage is very important as it gives an inpresive look. A land frontage of 30feet is good as it gives a 24feet buildup frontage on the house. In Velachery is the price is high and split from a one ground land is not suitable. I noticed that Madipakam has many half ground land coming on sale which is around 20 to 25 lacs.
You might want to consider that.