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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
PRASANNA B. VARALE, M.G.S. KAMAL, JJ.
Bangalore Metro Rail Corporation Limited, Rep. By (Hennappa Gouder M.S., General Manager - Appellant
Versus
M/s. Sri. Balaji Corporate Services, Represented By Its Partner, Sri. K. Kuppuswamy and Ors. – Respondents
Writ Appeal No.890 Of 2022 (LA-KIADB) c/w Writ Appeal No.892 Of 2022 (LA-KIADB) And Writ Appeal No.1070 Of 2022 (LA-KIADB)
Decided On : 27-09-2023
The court analyzed the provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013) and the Karnataka Industrial Areas Development Act, 1966 (KIAD Act, 1966). It also referred to the Circular dated 25.10.2016 issued by the Central Board of Direct Taxes and the Income Tax Act, 1961. The court held that the compensation should be awarded under the Act, 2013 and that the exemption from income tax and deduction of tax at source provided under Section 96 of the Act, 2013 should be extended to the respondents.
Fact of the Case:
The writ petitions were filed by landowners claiming compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (Act, 2013) for the acquisition of their land for the Bangalore Metro Rail Project. The main issue was whether the compensation should be awarded under the Act, 2013 or under the Land Acquisition Act, 1894 (Act, 1894). The respondents argued that the compensation should be awarded under the Act, 2013 based on a resolution passed by the Karnataka Industrial Areas Development Board (KIADB). The appellants, Bangalore Metro Rail Corporation Limited and the Central Board of Direct Taxes, challenged the validity of the resolution and contended that the compensation should be awarded under the Act, 1894. The learned Single Judge allowed the writ petitions and granted compensation under the Act, 2013. The present appeals were filed against this order.
Finding of the Court:
The court analyzed the resolution passed by KIADB and the notifications issued under the Karnataka Industrial Areas Development Act, 1966. It held that the compensation should be awarded under the Act, 2013 based on the resolution and the notifications. The court also rejected the appellants' arguments regarding the validity of the resolution and the applicability of the Act, 1894. It held that the respondents were entitled to compensation under the Act, 2013 and that the exemption from income tax and deduction of tax at source provided under Section 96 of the Act, 2013 should be extended to them.
Ratio Decidendi: The court held that the compensation should be awarded under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 based on the resolution passed by the Karnataka Industrial Areas Development Board. It also held that the exemption from income tax and deduction of tax at source provided under Section 96 of the Act, 2013 should be extended to the respondents.
Result: The writ appeals were dismissed and the order of the learned Single Judge granting compensation under the Act, 2013 was upheld.
JUDGMENT :
These writ appeals arise out of a common order dated 21.04.2022 passed in W.P.No.43206/2018 c/w W.P.No.53718/2017 (LA-KIADB) by which, while allowing the said writ petitions learned Single Judge granted the following reliefs;
(b) quashed the endorsement at Annexure-S dated 19.09.2018 subject matter of W.P.No.43206/2018.
(c) quashed Official Memorandum produced at Annexure-A dated 06.10.2017 subject matter of W.P.No.53718/2017 and further directed the respondents to refund the tax deducted at source together with applicable interest from the date of deposit till the date of refund.
(d) Declared that the respondents are entitled to the compensation under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.
(e) Declared that the compensation payable thereof is exempt from payment of income tax and from deduction of tax at source under the Income Tax Act, 1961.
(f) The appellants and respondent-authorities herein are consequently directed to pass fresh/modified awards and to do all deeds and things as required under the Act, 2013 by granting exemption from tax under Income Tax Act, 1961 within a period of three months from the date of receipt of the copy of the order.
(g) The appellant and respondent-authorities are also directed to disburse/pay the compensation already deposited by them as per the earlier award and the amount deposited by the appellants before the court was also directed to be released in favour of the respondents.
2. Contempt petition in CCC No.1047/2022 has been filed by the respondents complaining disobedience of the aforesaid order of the learned Single Judge.
3. Since these appeals are filed against the common order involving common facts and issues they are heard together and taken up for common disposal.
4. Brief facts leading to filing of these appeals are that Respondents 1 and 2 in W.A.No.890/2022 claiming to be owners of properties bearing identification No.R1E-235 and No.R1E-235A situated at Sadaramangala Village, Whitefield Main Road, Bengaluru filed writ petition in W.P.No.43206/2018 contending interalia that; the property bearing No.R1E-235 was notified by respondent No.8-Karnataka Industrial Areas Development Board (hereinafter referred to as `KIABD' for short) for acquisition for the purpose of Bangalore Metro Rail Project-Phase-II; that in terms of Preliminary Notification dated 22.09.2015 and the Final Notification dated 04.04.2016 issued under Sections 28(1) and 28(4) of the Karnataka Industrial Areas Development Act, 1966 (hereinafter referred to as `KIAD Act’ for short) respectively and that the award dated 25.10.2018 was passed as per Annexure-AC. While property bearing No.R1E-235A was notified in terms of Preliminary notification dated:16.12.2017 and Final Notification dated:25.05.2018; that the General Award in respect of their property was passed on 25.10.2018 as per Annexure-AC & AD respectively.
5. Writ Petition No.53718/2017 filed by respondents 1 and 2 in W.A.No.892/2022 claiming to be owners of property bearing Nos.R1-171 and R1E-171 situated at Hoodi Village, K.R.Puram, Bangalore East Taluk, Bangalore Urban District. That the property No.R1-171 was notified by KIADB for acquisition for the purpose of Bangalore Metro Rail Project –Phase II in terms of Preliminary Notification dated 27.04.2015 and Final Notification dated 29.12.2015. While property No.R1E-171 was acquired vide Preliminary Notification dated 03.07.2017 and Final Notification dated 25.05.2017. That no award has been passed. That however, the KIADB had issued a Official Memorandum dated 06.07.2017 directing payment of compensation under the Land Acquisition Act, 1894 (hereinafter referred to as `Act, 1894’ for short).
6. The main grievance of the respondent Nos.1 and 2/petitioners in these writ appeals relate to quantum of compensation and deduction of income tax at
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