Court-approved mediation settlement substitutes prior land-acquisition awards and binds the parties.

Karnataka Neeravari Nigam (KNNL), the beneficiary of a land acquisition, challenged the First Appellate Court’s judgment and award dated 9 January 2015 in M.A. No. 433/2014, on the ground that KNNL had not been impleaded before that court.

During the writ proceedings, the matter was referred to mediation. The parties reached a settlement addressing the land value, statutory benefits, interest, payment, and finality of claims.

The settlement was approved by the State Government, although the Deputy Commissioner had not signed it.

Section 89 of the Code of Civil Procedure, 1908, read with Order XXIII Rule 3 CPC, permits a lawful settlement reached through mediation to be recorded and embodied in a decree.

The Court also relied on its earlier order dated 20 August 2025 in W.P. No. 102884/2025, which it stated had held that compensation for compulsory acquisition of land was not subject to deduction of tax at source under the applicable provisions of the Income Tax Act.

The Court accepted the parties’ voluntary settlement and noted that the dispute was principally between KNNL, as beneficiary, and the land losers.

Although the Deputy Commissioner had not signed the agreement, the State had consented to it in principle and the authorised Land Acquisition Officer had signed it; the Court therefore dispensed with the Deputy Commissioner’s signature.

Applying its stated position on tax deduction for compulsory-acquisition compensation, the Court directed that payments under the settlement be made without TDS.

It then treated the agreement as a lawful settlement under Section 89 read with Order XXIII Rule 3 CPC.

It directed that the agreement form part of the order, operate in substitution of any award, judgment, or decree of the Reference Court or Appellate Court, and be embodied in a decree by the concerned courts within 60 days of receipt of a certified copy of the order.

Payments under the agreement were directed to be made without deduction of tax at source.