Prakash S/O Byroji Rao, Dead by His Legal Heirs P Manjula Vs Special Land Acquisition Officer

THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENTS TO MAKE PAYMENT OF COMPENSATION AMOUNT AS PER THE ORDER OF THE HON’BLE SUPREME COURT OF INDIA DATED 17/04/2025 PASSED IN CA 5309/2025 WITHOUT DEDUCTING ANY AMOUNT TOWARDS TAX DEDUCTION AT SOURCE (TDS). A CERTIFIED COPY OF THE ORDER DATED 17/04/2025 IS HEREBY PRODUCED AS ANNEXURE-A.

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THIS PETITION COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

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CORAM: HON'BLE MRS. JUSTICE K.S. HEMALEKHA

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HC-KAR

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ORAL ORDER

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The petitioners have approached this Court seeking a writ of mandamus directing the respondents to pay compensation in terms of the order passed by the Hon'ble Apex Court in C.A.No.5309/2025 dated 17.02.2025, without deducting any amount towards Tax Deduction at Source (‘TDS’ for short).

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Heard learned counsel for the petitioners and learned counsel for the respondents.

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Brief facts:

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The petitioners are the absolute owners of the land bearing Sy.No.47, measuring 6 acres, 4 guntas of tank fed land and 1 acre of dry land situated at Basavana Ganguru Village, Holalluru Hobli, Shivamoga Taluk and District. The said land was acquired by the respondents for alignment of upper Thunga canal in the year 1997, notification under Section 4(1) of the Land Acquisition Act, 1894 (‘Act, 1894’ for short) on 11.09.1997, followed by

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the final notification. The possession of the land was taken

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on 19.12.2000. The Land Acquisition Officer (‘LAO’ for short) passed an award on 23.07.2001 by fixing compensation to the claimants at the rate of 1,00,000/for the tank fed land and 47,000/- for the dry land. Not being satisfied, the petitioners sought reference under Section 18 of the Act, 1894, which was numbered as L.A.C.No.58/2001.

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The Civil Court enhanced compensation to 2,00,000/- per acre for tank fed land and 1,00,000/- per acre for dry land. The petitioners preferred M.F.A.No.8540/2015 before Division Bench of this Court seeking further enhancement to `105/- per square feet. The Division Bench of this Court dismissed the M.F.A.No.8540/2015 on 12.06.2024 on the ground of delay in filing the appeal. Aggrieved by which, the petitioners approached the Apex Court in S.L.P.No.20149/2024. The Apex Court, by order dated 17.04.2025, partly allowed the Special Leave Petition by

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awarding `105/- per square feet for the land of the petitioners’ land. The petitioners subsequently, submitted a representation to respondent No.2 seeking release of compensation in terms of the said Apex Court’s order dated 17.04.2025.

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Learned counsel for the petitioners contends that deduction of TDS from compensation under the Act, 1894 is impermissible in view of the judgment of the Apex Court in Commissioner of Income Tax, Faridabad Vs.

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Ghanshyam (HUF)¹ (Ghanshyam). He further relies on the judgment of this Court in M/s. Power grid Corporation of India ltd. Vs. The Assistant Commissioner, Mysore Division and Others² (M/s. Power grid Corporation) , wherein this Court applied the ratio in Ghanshyam ’s case and directed that no TDS to be deducted from the compensation payable under the Land Acquisition Act.

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1 (2009) 8 SCC 412

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2 W.P.No.43215/2015 and connected matters.

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HC-KAR

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Per contra , learned Additional Government

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Advocate submits that the compensation due to the petitioners shall be deposited strictly in accordance with the order of the Apex Court in C.A.No.5309/2025 and as per law.

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The proceedings relating to acquisition have attained finality. The Apex Court in C.A.No.5309/2025, while awarding compensation of `105/- per square feet held in paragraph No.4 as under:

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“4. In view of the fact that the higher compensation of Rs.105/- per sq. feet awarded by the High Court for the adjoining land has already been upheld by this Court in Civil Appeal No.7587/2021 and other connected appeals, we are satisfied that the appellants are also entitled to the compensation at the above mentioned higher rate.”

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The apprehension of the petitioners is that 10% TDS would be deducted, as has been done in identical matters by the respondents. The Apex Court in

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Ghanshyam’s case stated supra has categorically held

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that the interest awarded under Section 28 of the Act, 1894 forms part of the “enhanced compensation”, whereas, the “interest” under Section 34 pertains only to delay in making payment after the compensation is determined. The relevant observations are, “ interest under Section 28 of the Act, 1894 is an accretion to the value of the land and hence forms part of the enhanced compensation or consideration. On the other hand, interest under Section 34 is payable only for delay in making payment after the amount is determined”.

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9. This Court in M/s. Power grid Corporation

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stated supra applying the above ratio held that the interest under Section 28 forms part of the compensation and therefore, no TDS can be deducted on such payments.

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In view of the authoritative pronouncement of the Apex Court in the case of Ghanshyam and this Court in the case of M/s. Power grid Corporation stated supra and the fact that the compensation awarded to the petitioner under Act, 1894, constitutes “enhanced

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compensation”. The respondents are not entitled to deduct any amount towards TDS while making payment of the same and hence, this Court pass the following:

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ORDER

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i. The writ petition is allowed .

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ii. Respondent Nos.1 and 2 are directed to make payment of the compensation amount to the petitioner as per the order of the Apex Court in C.A.No.5309/2025 dated 17.04.2025 without deducting any amount towards TDS.

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iii. Respondent No.2 shall deposit the said amount within eight weeks’ from the date of the receipt of the copy of this order.

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Sd/-

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_____________________ JUSTICE K.S. HEMALEKHA

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AT

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List No.: 1 Sl No.: 11

Prakash S/O Byroji Rao, Dead by His Legal Heirs P Manjula v. Special Land Acquisition Officer

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Prakash S/O Byroji Rao, Dead by His Legal Heirs P Manjula v. Special Land Acquisition Officer

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