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No TDS on compensation under a mediated land acquisition settlement: Karnataka HC

Case Law Details

TaxGuru Citation
2026 taxguru.in 5698
Case Name
Executive Engineer Vs State (Karnataka High Court)
Date of Judgement/Order
Only available for paid members
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Executive Engineer Vs State (Karnataka High Court)

In , the Karnataka High Court considered a writ petition filed by Karnataka Neeravari Nigam Limited (KNNL), the beneficiary of land acquisition proceedings, seeking to quash the judgment and award dated 13.04.2017 passed in LACA No.235 of 2016 by the I Additional District Judge, Kalaburagi. The Court noted that the acquisition proceedings had remained pending for an inordinately long period and that the land losers had not received compensation within a reasonable or statutorily contemplated timeframe. The Court observed that the prolonged litigation had compelled land losers to initiate execution proceedings and had exposed both the State and the beneficiary authority to increasing liabilities on account of statutory interest and related consequences.

Recognising that continued adversarial litigation would prejudice all stakeholders and result in multiplicity of proceedings, the Court explored alternative dispute resolution under Section 89 of the Code of Civil Procedure, 1908. The State Government, after obtaining necessary instructions, agreed to mediation, and the land losers also consented to the process. The matter was accordingly referred to mediation before former High Court Judge Justice A.V. Chandrashekhar.

Several rounds of mediation were conducted involving representatives of the State Government, KNNL, and the land losers. After negotiations and governmental deliberations, the parties arrived at a mutually acceptable settlement, which was recorded in a written Mediation Agreement. The agreement comprehensively resolved disputes relating to compensation, interest, timelines for payment, and closure of pending proceedings.

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