Belur Property Owners Can Withdraw Half The Deposited Compensation As Karnataka HC Remands Enhanced Awards For Beneficiary Hearing

The State acquired the claimants’ properties in Belur for the “Tourism Heritage Passport” project, pursuant to preliminary notification dated 15 July 2010 and final notification dated 30 September 2011.

The Special Land Acquisition Officer (SLAO) awarded compensation at ₹177 per square foot.

On references under Section 18 of the Land Acquisition Act, 1894, the Reference Court enhanced compensation to ₹1,500 per square foot in LAC No. 8/2014 and ₹1,680 per square foot in LAC Nos. 6, 7 and 9/2014, with statutory additions and interest.

The State appealed, challenging the enhanced valuation and raising, among other matters, the non-joinder of the acquisition beneficiary in three references.

The claimants opposed the appeals and sought permission to withdraw part of the deposited compensation.

Under Section 18 of the Land Acquisition Act, 1894, a claimant may seek a reference to the civil court for determination of compensation; an award on reference is appealable under Section 54(1) of that Act.

The Court relied on Karnataka Industrial Areas Development Board v. Sri Byregowda and Others, W.P. No. 55485/2017 (LA-KIADB) c/w W.P. No. 11178/2016, decided 20 November 2018, for the principle that the acquisition beneficiary, upon whom the burden of paying enhanced compensation falls, must be afforded an opportunity to be heard consistently with natural justice.

The Court also referred to the State Government circular dated 7 March 2024, which stated that the beneficiary should be made a party to such proceedings.

The State had contested the references but had not raised before the Reference Court the objection that the beneficiary was absent.

Nevertheless, the beneficiary would bear the liability for any enhanced compensation and, under the principle of natural justice stated in Byregowda, was entitled to an opportunity to be heard.

The Court therefore considered remand necessary so the beneficiary could participate and the Reference Court could reconsider the matters afresh.

It did not decide the State’s objections to the valuation, limitation or evidentiary basis for enhancement; all parties’ contentions and the opportunity to place relevant material were left open.

The beneficiary is to be joined in all matters except LAC No. 6/2014, where it is already on record, and the Reference Court must provide it an opportunity to be heard.

The parties were directed to appear before the Reference Court on 4 November 2026, and the references are to be decided within three months of receipt of the judgment.

The claimants were permitted to withdraw 50% of the compensation already deposited, upon furnishing relevant bank details; all contentions were kept open.