A Court-Approved Mediation Settlement Supersedes Earlier Land Acquisition Awards and Decrees.

Karnataka Neeravari Nigam (KNNL), the beneficiary of a land acquisition, challenged the First Appellate Court’s judgment and award, stating that it had not been impleaded in the appeal.

During the writ proceedings, the parties reached a mediated settlement and filed a Memorandum of Mediation Agreement.

The agreement fixed the market value of dry land at ₹42,972 per acre and provided for statutory benefits subject to specified conditions, including the claimants’ waiver of interest for three and a half years.

The Deputy Commissioner had not signed the agreement, although the State had consented to it in principle and the authorized Land Acquisition Officer had signed it.

Whether the mediated settlement could be accepted despite the Deputy Commissioner’s failure to sign the agreement.

Whether the settlement should be recorded as a lawful settlement and form the basis for a decree, including directions concerning tax deducted at source (TDS).

The Court invoked Section 89 of the Code of Civil Procedure, 1908, read with Order XXIII Rule 3 CPC, under which a mediated compromise may be recorded as a lawful settlement and embodied in a decree.

On TDS, the Court relied on its earlier order dated 20 August 2025 in W.P. No. 102884 of 2025, which held that compensation for compulsory acquisition of land was not subject to TDS under the applicable provisions of the Income Tax Act.

The Court accepted the agreement because the dispute was principally between KNNL, as beneficiary, and the land claimant; the State had consented to the settlement in principle; and the authorized Land Acquisition Officer had signed it. In those circumstances, the Deputy Commissioner’s signature was dispensed with.

Applying its earlier ruling on TDS, the Court directed that payments under the agreement be made without TDS.

It then ordered that the agreement form part of its order and operate in substitution for any award, judgment, or decree of the Reference Court or Appellate Court.

The agreement was accepted as a lawful settlement under Section 89 read with Order XXIII Rule 3 CPC; payment was directed to be made without TDS; and the concerned courts were directed to draw up a decree in accordance with the agreement within 60 days of receiving a certified copy of the order.