Karnataka High Court settles Bennethora land acquisition dispute through binding mediation agreement

Background of the dispute

The writ proceedings in Karnataka Neeravari Nigama Limited Vs Shakuntalabai arose from a long-standing land acquisition controversy relating to an irrigation project implemented by Karnataka Neeravari Nigam Limited (KNNL). KNNL, as the project implementing agency and beneficiary of the acquisition, approached the Karnataka High Court challenging the judgment and award dated 20.06.2019 passed in LACA No.63/2019 by the III Additional District and Sessions Judge, Kalaburagi.

The High Court noted at the outset that:

  • The underlying acquisition proceedings had been pending for an unduly long period.
  • The land losers had not been paid compensation within the period contemplated either reasonably or under the statutory regime of the Land Acquisition Act.
  • Several land losers had already moved execution courts to enforce decrees passed in their favour against the acquiring body and beneficiary.

This background highlighted a situation where neither side had effective closure: land losers were waiting for compensation, while KNNL and the State were facing escalating liabilities due to statutory interest, additional interest and other incidentals accruing during prolonged litigation.

Court’s concern over prolonged litigation

The High Court was conscious that the ordinary adversarial process had, in this case, resulted in:

  • Continued deprivation of compensation to land losers, undermining the core objective of acquisition laws which require prompt and fair recompense for compulsory dispossession of land.
  • Mounting financial exposure for KNNL and the State Government on account of interest components and other statutory add-ons accruing year after year.
  • Proliferation of multiple proceedings – appeals, references, execution petitions and other ancillary cases – thereby burdening the judicial system and delaying finality.

The Court, therefore, examined whether continued adjudication in the regular manner would truly serve the interests of justice, efficiency and fairness to all sides, especially when the number of similar land acquisition matters pending before the Bench exceeded 10,000.

Shift towards mediation under Section 89 CPC

In light of these realities, the High Court invoked the principles underlying Section 89 of the Code of Civil Procedure, 1908. That provision encourages courts to explore alternative dispute resolution tools such as mediation when such processes can produce a more effective, consensual and time-bound outcome.

The Court, after hearing all sides, mooted the idea of referring the disputes to mediation, with the following objectives:

  • Achieving a comprehensive settlement covering compensation, interest and all connected issues.
  • Avoiding further multiplicity of proceedings and uncertainty.
  • Putting an end to execution proceedings and other litigations emanating from the same acquisition.

Following the Court’s suggestion:

  • The learned Advocate General, after obtaining instructions from the State Government and concerned departments, informed the Court that the State was prepared to attempt resolution through mediation. This indicated a conscious policy choice to use consensual mechanisms in long-pending acquisition matters.
  • Learned counsel representing the land losers, led by Sri Harshavardhan R. Malipatil, similarly consented to mediation, recognising that it could secure faster disbursal of compensation and spare the claimants the rigours of continued litigation.

Given this consensus, the Court formally referred the disputes to mediation and requested Hon’ble Sri Justice A. V. Chandrashekhar, former Judge of the Karnataka High Court, to act as Mediator.

Mediation process and outcome

Conduct of mediation

Pursuant to the Court’s reference: