Karnataka High Court Settles Bennethora Land Acquisition Disputes Through Mediation, Rules No TDS on Compensation
In Karnataka Neeravari Nigam Vs Eranna, the Karnataka High Court sent a long-running land acquisition dispute to mediation and then disposed of the matter in line with a settlement signed by Karnataka Neeravari Nigam Limited (KNNL), the State authorities and the land losers. The Court also ruled that compensation paid under the settlement would carry no tax deduction at source.
How the Matter Reached the High Court
KNNL, the beneficiary of the acquisition, challenged the judgment and award dated 04.03.2021 passed in LACA No.727/2018 by the III Additional District and Sessions Judge, Kalaburagi.
The High Court recorded that the acquisition proceedings had stayed pending for an unusually long time and that the land losers had not been paid within a reasonable period. They had been compelled to start execution proceedings, a sign that the litigation had no finality. The Court noted the damage this caused on both sides:
- land losers were kept from enjoying compensation, which defeats the purpose of acquisition law that requires timely recompense for compulsory deprivation of property;
- KNNL and the State faced mounting statutory interest, additional interest and related liabilities;
- parallel execution proceedings and ancillary litigation consumed judicial time.
Concluding that an adversarial process might not serve justice efficiently here, the Court, drawing on the principles behind Section 89 of the Code of Civil Procedure, 1908, asked all counsel whether they would agree to mediation. The learned Advocate General, after obtaining instructions, said the State was willing, and counsel for the land losers, led by Sri Harshavardhan R. Malipatil, also agreed. The disputes were referred to mediation before Hon'ble Sri A. V. Chandrashekhar, former Judge of the High Court.