KARNATAKA NEERAVARI NIGAM vs THE STATE OF KARNATAKA AND ORS

Court
Karnataka High Court

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IN THE HIGH COURT OF KARNATAKA


KALABURAGI BENCH

TH
DATED THIS THE 12 DAY OF OCTOBER, 2026

BEFORE

THE HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL

WRIT PETITION NO. 201186 OF 2019 (LA-RES)

BETWEEN:
KARNATAKA NEERAVARI NIGAM
TH
REGD OFFICE, 4 FLOOR, COFFEE BOARD
BUILDING, AMBEDKAR ROAD
BENGALURU
NOW REPRESENTED BY ITS
THE EXECUTIVE ENGINEER
KNNL, KARANJA PROJECT, DIV(1)
BIDAR, DIST:BIDAR
…PETITIONER








(BY SRI. SANJEEVKUMAR C PATIL., ADVOCATE)

AND:
1. THE STATE OF KARNATAKA THROUGH
SPECIAL LAND ACQUISITION OFFICER
KARANJA PROJECT, BIDAR

2.
THE DEPUTY COMMISSIONER
OFFICE OF DEPUTY COMMISSIONER
BIDAR-584101

3. NAGSHETTY S/O BHIMANNA
AGE:80 YRS, OCC:AGRI.,
DEAD BY LRS


Digitally signed
by SWETA
KULKARNI
Location: HIGH
COURT OF
KARNATAKA

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3A BHAGIRATHI W/O NAGSHETTY
AGE: 82 YEARS, OCC: HOUSEHOLD
R/O DHANNURA (H) TQ: BHALKI
DIST: BIDAR
…RESPONDENTS
(BY SRI. MALLIKARJUN SAHUKAR, AGA FOR R1 AND R2;
SRI.VAIJANATH A. BIRADAR ADV., FOR PROPOSED R3(A))

THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO 1)
ISSUE A WRIT OF CERTIORARI QUASHING THE JUDGMENT
AND AWARD DATED 02-01-2015 PASSED BY THE
HONOURABLE ADDL. DISTRICT JUDGE, BIDAR/SITTING AT
BHALKI, PASSED IN MA NO.366 OF 2014 PRODUCED AT
ANNEXURE-A; 2) TO REMIT THE MATTER TO THE FIRST
APPELLATE COURT DIRECTING TO HOLD FRESH PROCEEDINGS
BY IMPLEADING THE PETITIONER COMPANY AS RESPONDENT;
3) TO ALLOW THIS WRIT PETITION WITH COSTS AND GRANT
SUCH OTHER RELIEF/RELIEFS AS THIS HONOURABLE COURT
MAY DEEM FIT IN THE FACTS AND CIRCUMSTANCES OF THE
CASE AS STATED ABOVE WITH COSTS IN THE INTEREST OF
JUSTICE AND EQUITY.
THIS PETITION, COMING ON FOR PRELIMINARY HEARING
‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE VIJAYKUMAR A. PATIL

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ORAL ORDER
This petition is filed by the Karnataka Neeravari
Nigam, the beneficiary of the acquisition in question,
challenging the judgment and award passed by the First
Appellate Court.


2. It is not in dispute between the parties that the
petitioner, being the beneficiary of the acquisition, was not
arrayed as a party before the First Appellate Court and the
award came to be passed.


3. It is submitted at the Bar that the matter was
referred to mediation under the aegis of Mr. Justice
A.V.Chandrashekar, Retired Judge of this Court. It is
submitted that, after the detailed mediation process, the
parties have agreed on terms and the Memorandum of
Mediation Agreement has been filed. The same is placed
on record.

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4. The Memorandum of Mediation Agreement
reads as under:
MEDIATION AGREEMENT

“Thorough discussions were held in the
presence of the Learned Mediator, Justice A.V
Chandrashekar (Retired), the Managing Director
of Karnataka Neeravari Nigam (Hereinafter
“KNNL”), the Learned Advocate General,
Karnataka, Additional Advocate General,
Kalaburagi, the Learned Advocates appearing
for the parties, and the authorized
representatives of KNNL.
The parties have agreed as follows:
The present writ petition is one of several
land acquisition matters pertaining to various
irrigation projects which are being undertaken
and managed by KNNL. By order Dtd: 07-07-
2025, the Hon’ble High Court referred the
matters for mediation and connected cases. The
present compromise has been duly approved by
the State Government of Karnataka, considering
the various factors like the decision of the
Hon’ble Supreme Court and also settlement in
earlier mediation MSA No.200061/2017 and
other connected matter and deliberations
between the parties. The parties have
voluntarily agreed to settle the above matter on
the following terms:
(a) The market value of the land acquired is
calculation and arrived at Rs. 43890/- (Forty

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three thousand eight ninety only) per acre for
dry land.

(b) The Respondent/s (Claimant/s) is/are entitled
for all statutory benefits under Land Acquisition
Act, except for the period of delay in filing the
Appeal before the First Appellate Court.

(c) No interest is payable to the Respondent/s
(Claimant/s) for the period of delay in filing the
Appeal before the First Appellate Court.

(d) The Respondent/s (Claimant/s) agree that they
will give up statutory interest for a period of
Three and half years.

(e) It is agreed to between the parties that the
calculation of interest is made up to
04.04.2026.

(f) It is agreed to between the parties that, in case
the agreed amount is not paid within four
months from the signing of this agreement,
KNNL will not be entitled for exemption of
payment of interest for a period of three and
half years as outlined in clause (d).

(g) The Respondent/s (Claimant/s) has/have
understood and agreed that the payment of
amounts quantified in the present agreement
would be made through the P.D account of
KNNL of Chief Accounts Officer, KNNL, Dharwad.

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(Heard of Account "8443-00-106") as outlined in
G.O. No. AE 13 TAR 2023 dated 27.09.2024;

(h) The Respondent/s (Claimant/s) agree that the
present agreement would be a full and final
settlement of their claims and they would not be
entitled to any differential interest except in
accordance with the terms of this agreement;

(i) Respondent/s (Claimant/s) has/have agreed to
give an undertaking in writing about the
genuineness of their claim and undertake to
furnish copy of the - Passbook and Aadhar Card
immediately upon signing of the agreement;

(j) The Respondent/s (Claimant/s) agree that the
present agreement would be a full and final
settlement of their claims and they and/or their
legal heirs undertake to not agitate any further
claims in this regard, in the future;

(k) The Respondent/s (Claimant/s) agree to
withdraw all pending Execution Petition(s) in
terms of this agreement;

(l) KNNL would not be bound to pay any further
compensation or claim to a third party, should
any dispute arise between the Respondent/s
(Claimant/s) and such person, in respect of
ownership and claim of the acquired land;

(m) KNNL has agreed to pay the costs to the
Respondent/s (Claimant/s) which is equivalent
to the Court fee paid by the Respondent/s.
Consequently, KNNL is entitled for return of
Court fee from Hon'ble Court, as per law;

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(n) KNNL has undertaken that the payment of
agreed amount will be deposited directly to the
account of the Respondent/s (Claimant/s)
through the P.D. account of KNNL of the Chief
Accounts Officer KNNL, Dharwad. (Head of
Account "8443-00-106" as outlined in G.O No.
AE 13 TAR 2023 Dtd:27-09-2024;

(o) The present settlement shall not be considered
either as a precedent or a policy decision or a
proposal binding in KNNL for cases, other than
the present matter referred to Mediation.

The parties to this agreement have entered
into this compromise voluntarily, on their own
volition, without any coercion of
misrepresentation and the contents of this
agreement have been explained to and
understood by the Respondent/s (Claimant/s) in
their vernacular Kannada language as well.”


5. The same is accepted.


6. It is to be noticed that the Deputy
Commissioner, Bidar has not signed the agreement.
However, it is further to be noticed that the dispute is
mainly between the beneficiary of the acquisition and the
land loser, and that the State has, in principle, consented
to the agreement. Hence, the signature of the Deputy
Commissioner, Bidar is dispensed with.

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7. It is also to be noticed that the Land Acquisition
Officer, who has been authorized, has affixed the
signature to the agreement. In view of the same, the
mediation report is accepted.


8. An apprehension has been expressed by the
learned counsel for the claimants regarding possible
deduction of tax at source (TDS) and issuance of Form
16A in respect of the compensation amounts. This issue is
no longer res integra. This Court, in its earlier order dated
20.08.2025 in W.P.No.102884/2025 has categorically held
that compensation awarded on account of compulsory
acquisition of land is not subject to deduction of tax at
source under the applicable provisions of the Income Tax
Act. Accordingly, it is directed that all payments made
pursuant to the Mediation Agreement, whether to joint
accounts or individual accounts, shall be effected without
any deduction of tax at source.

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9. The Mediation Agreement recorded herein shall
form part of this order and shall be treated as a lawful
settlement between the parties within the meaning of
Section 89 of the Code of Civil Procedure, 1908 read with
Order XXIII Rule 3 CPC. The said settlement shall operate
in substitution of any award, judgment, or decree passed
by the Reference Court and/or the Appellate Court. The
concerned Courts are directed to draw up a decree in
terms of the Mediation Agreement, as affirmed by this
order, within a period of 60 (sixty) days from the date of
receipt of a certified copy of this order.


disposed of
10. Accordingly, the writ petition is in
terms of the memorandum of settlement.


Sd/-
(VIJAYKUMAR A. PATIL)
JUDGE


ABK
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