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No TDS on Compensation Paid for Compulsory Land Acquisition Under Mediation Settlement: Karnataka HC

Case Law Details

TaxGuru Citation
2026 taxguru.in 5556
Case Name
Karnataka Neeravari Nigam Vs Mayappa (Karnataka High Court)
Date of Judgement/Order
Only available for paid members
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Karnataka Neeravari Nigam Vs Mayappa (Karnataka High Court)

The Karnataka High Court considered a writ petition filed by Karnataka Neeravari Nigam Limited (KNNL), the beneficiary of acquisition proceedings, challenging a judgment and award dated 24 April 2018 passed in LACA No.583/2017 by the I Additional District Judge at Kalaburagi.

The Court noted that the acquisition proceedings had remained pending for an inordinately long period and that land losers had not received compensation within a reasonable or statutorily contemplated timeframe. It also observed that the land losers had been compelled to initiate execution proceedings for enforcement of decrees against the beneficiary, indicating prolonged litigation and lack of finality. The Court further recorded that continued pendency would prejudice all stakeholders. The land losers would continue to be deprived of timely compensation, while the State Government and the beneficiary would face increasing financial liabilities due to accrual of statutory interest and related obligations. The Court also observed that multiplicity of proceedings, including execution and ancillary litigation, would consume further judicial time.

In these circumstances, the Court considered that an adversarial adjudicatory process might not effectively serve the ends of justice. Exercising powers to adopt alternative dispute resolution mechanisms and referring to the principles underlying Section 89 of the Code of Civil Procedure, 1908, the Court suggested mediation to the parties with the objective of achieving a comprehensive, mutually acceptable, and time-bound settlement.

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