- 1 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 IN THE HIGH COURT OF KARNATAKA, AT DHARWAD DATED THIS THE 3RD DAY OF FEBRUARY 2026 BEFORE THE HON'BLE MRS JUSTICE K.S.HEMALEKHA WRIT PETITION NO.104664 OF 2024 (LA-RES) BETWEEN: M/S. N.K.UTILITIES LIMITED ACHANUR VILLAGE, BAGALKOT TALUK AND DISTRICT, REPRESENTED BY ITS DIRECTOR, BALAKRISHNAN S/O. NANDA KUMAR, AGED ABOUT 32 YEARS, NO.2, 1ST MAIN, 1ST CROSS, RMV 2ND STAGE, DOLLARS COLONY, BENGALURU. …PETITIONER (BY SRI. UMESH P.HAKKARAKI, ADVOCATE) AND: 1. IRAPPA S/O. YALLAPPA YANKANCHI AGED MAJOR, OCC: AGRICULTURE, RESIDING AT ACHANUR VILLAGE, BAGALKOT TALUK, BAGALKOT DISTRICT-587103. 2. THE SPECIAL LAND ACUISITION OFFICER KARNATAKA KAIGARIKA PRADESHABIVRUDDI, MANDALI, DAHRWAD-587103. 3. THE STATE OF KARNATAKA REPRESENTED BY DEPUTY COMMISSIONER, BAGALKOT-587103. …RESPONDENTS (BY MISS. GAYATRI S.R., ADVOCATE FOR R1; SRI. PRAVEEN K.UPPAR, AGA FOR R2 AND R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF CERTIORARI QUASHING THE IMPUGNED ORDER DATED 16-10-2019 PASSED BY II ADDL. SENIOR CIVIL JUDGE AND JMFC, BAGALKOT IN LAC NO. 23/2016 WHICH IS PRODUCED AT ANNEXURE-A; ISSUE SUCH OTHER WRIT OR ORDER OR DIRECTION AS THIS HON’BLE COURT DEEMS FIT INCLUDING AN ORDER AS TO COSTS IN THE INTEREST OF JUSTICE AND EQUITY AND ETC. MANJANNA E Digitally signed by MANJANNA E Location: HIGH COURT OF KARNATAKA DHARWAD BENCH Date: 2026.02.06 16:52:38 +0530 - 2 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: THE HON'BLE MRS JUSTICE K.S.HEMALEKHA ORAL ORDER The petitioner, claiming to be the beneficiary of the acquisition proceedings initiated under the provisions of the Karnataka Industrial Areas Development Act, 1966 (“KIAD Act” for short), has called in question the judgment and award dated 16.10.2019 passed in LAC No.23/2016 on the file of the II Additional Senior Civil Judge and JMFC, Bagalkot (“Reference Court” for short), on the ground that the said award is passed without impleading the petitioner and without affording it an opportunity of hearing. Brief Facts: 2. The land bearing R.S.No.17/1 measuring 11 acres 35 guntas situated at Achanur village of Bagalkot Taluk of Bagalkot District, was acquired pursuant to a preliminary notification issued under Sections 1(3), 3(1) and 28(1) of the KIAD Act for an industrial purpose, for the - 3 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 benefit of the petitioner-company. An award came to be passed by the Special Land Acquisition Officer on 22.01.2016. 3. Being dissatisfied with the award passed, respondent No.1 sought reference under Section 18(1) of the Land Acquisition Act, 1894 (“the Act” for short), which was registered as LAC No.23/2016. The Reference Court, by the judgment and award dated 16.10.2019 partly allowed the claim and enhanced the compensation. 4. Subsequently, respondent No.1 initiated proceedings in E.P.No.123/2023. In the said proceedings, the Executing Court, by order dated 08.07.2024 issued attachment warrant of movables of respondent No.2. The petitioner asserts that it was neither impleaded in the reference proceedings nor in the execution proceedings and that came to know about the impugned award only on receipt of the intimation regarding attachment, compelling the petitioner to approach this Court. - 4 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 5. Learned counsel for the petitioner submits that the petitioner, being the beneficiary of the acquisition squarely falls within the expression, “person interested” under Section 50(1) the Act. It is contended that the Reference Court proceeded to enhance the compensation without affording an opportunity to the petitioner to participate in the proceedings or adduce evidence on question of market value. 6. It is submitted that non-impleadment of the beneficiary and denying an opportunity of hearing is a fatal to the award as enhanced compensation ultimately fastened financial liability of the beneficiary. Reliance is placed upon the judgment of the Apex Court in the case of Union of India Vs. District Judge, Udhampur1, (“District Judge” for short) to contend that the beneficiary of an acquisition is entitled to participate in the acquisition proceedings. 1 1994(4) SCC 737 - 5 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 7. Learned counsel for respondent No.1 supports the impugned judgment and award passed by the Reference Court. 8. This Court has carefully considered the rival submissions and perused the material on record. 9. It is not in dispute that the reference proceedings in LAC.No.23/2016 were conducted without impleading the petitioner and without affording it an opportunity to participate in the proceedings. Law is well settled that though a beneficiary may not be entitled to seek a reference under Section 18 of the Act, the beneficiary is nevertheless a “person interested” within the meaning of Section 50(1) of the Act and is entitled to participate in the proceedings relating to determination of compensation. The judgment and award dated 16.10.2019 having been passed behind the back of the petitioner clearly suffers from the principles of violation of natural justice. - 6 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 10. The Apex Court in the case of District Judge has held at paragraph Nos.7 and 8 as under: 7. The next question, therefore, is whether the appellants have locus standi to object to the compensation determined by the competent authority under Section 8(3) of the Act. Section 2(d) of the Act defines: “The expression ‘person interested’ includes all persons claiming an interest in compensation to be made on account of the acquisition of land under this Act; and a person shall be deemed to be interested in land if he is interested in an easement affecting the land.” This point is no longer res integra. Dealing with a pari materia definition of “person interested” in Central Act this Court in Himalayan Tiles & Marbles (P) Ltd. v. Francis Victor Countinho [(1980) 3 SCC 223 : (1980) 3 SCR 235] had laid down thus : (SCR pp. 242-43 : SCC pp. 228-29, paras 13-14) “The only case which appears to have taken a contrary view is a Division Bench decision of the Orissa High Court in the case of State of Orissa v. Amarandra Pratap Singh [AIR 1967 Ori 180 : ILR 1967 Cut 510] where the High Court held that the expression ‘person interested’ did not include a - 7 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 local authority or a company on whose behalf acquisition is made by the State. At the same time, it was clearly held that it was open to the company in any proceeding before the Collector or court to appear and adduce evidence for the purpose of determining the amount of compensation. Thus, the preponderance of judicial opinion seems to favour the view that the definition of ‘person interested’ must be liberally construed so as to include a body, local authority, or a company for whose benefit the land is acquired and who is bound under an agreement to pay the compensation. In our opinion, this view accords with the principles of equity, justice and good conscience. How can it be said that a person for whose benefit the land is acquired and who is to pay the compensation is not a person interested even though its stake may be extremely vital? For instance, the land acquisition proceedings may be held to be invalid and thus a person concerned is completely deprived of the benefit which is proposed to be given to him. Similarly, if such a person is not heard by the Collector or a court, he may have to pay a very heavy compensation which, in case he is allowed to appear before a court, he could have satisfied it that the compensation was far too heavy having regard to the nature and extent of the land. We are, therefore, - 8 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 unable to agree with the view taken by the Orissa High Court or even by the Calcutta High Court that a company, local authority or a person for whose benefit the land is acquired is not an interested person. We are satisfied that such a person is vitally interested both in the title to the property as also in the compensation to be paid therefor because both these factors concern its future course of action and if decided against him, seriously prejudice his rights. Moreover, in view of the decision of this Court referred to above, we hold that the appellant was undoubtedly a person interested as contemplated by Section 18(1) of the Act. The High Court, therefore, committed an error in throwing out the appeal of the appellant on the ground that it had no locus to file an appeal before the Bench.” 8. This view was reiterated in Neelagangabai v. State of Karnataka [(1990) 3 SCC 617] ; Krishi Upaj Mandi Samiti v. Ashok Singhal [1991 Supp (2) SCC 419] ; Union of India v. Sher Singh [(1993) 1 SCC 608] and Bihar State Electricity Board v. State of Bihar [ Civil Appeal Nos. 1577-1600 of 1994, decided on Feb. 21, 1994] . Thus it is settled law that the requisitioning authority is a person interested since it is interested in the fixation of the proper and just market value or compensation of the land acquired on its behalf as well as to see that the - 9 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 true extent of the land is acquired and is free from encumbrances. The participation in the proceedings by the local officers is to enable not only the determination of the proper and just market value or compensation in their presence after laying necessary and relevant evidence but also to secure valid title to the land acquired so that land acquisition officer and the court determine just and proper market value of the lands. It is, therefore, clear that the appellant is a proper and necessary party under Order 1 Rule 10 CPC. It is also the person interested under Section 2(d) of the Act. Accordingly the view of the High Court that the appellants are not interested persons is clearly illegal. It is accordingly set aside.” 11. Similar question fell for consideration before this Court in the case of the Karnataka Industrial Areas Development Board Vs. Sri Byregowda2 (“Byregowda” for short), wherein this Court held that, the beneficiary is required to be heard in the reference matter before enhancing the compensation amount. As it is the beneficiary of acquisition upon whom the burden to pay the 2 W.P.No.55485/2017 C/w W.P.No.11178/2016 dated 20.11.2018 - 10 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 compensation and enhance compensation falls under the scheme of law relating to acquisition of land and therefore, consistent with the requirement of principles of natural justice, such beneficiary has to be afforded an opportunity of hearing and thus from the settled proposition of law, an argument to the contrary would offend the principle of audi, alterem partem, which even the God is stated to have followed before punishing Adam and Eve for eating the prohibited fruit. 12. 12. Having regard to the law declared, the judgment and award passed by the Reference Court dated 16.10.2019 without impleading the beneficiary is impermissible in law and as it directly violates principles of audi alterem partem, and the impugned order is unsustainable in law. 13. Accordingly, this Court pass the following: ORDER (i) The writ petition is allowed. - 11 - HC-KAR NC: 2026:KHC-D:1459 WP No. 104664 of 2024 (ii) The impugned judgment and award passed by the Reference Court in LAC.No.23/2016 is hereby set aside. (iii) Matter is remitted back to the Reference Court for fresh consideration. (iv) Parties are directed to be present before the Reference Court on 12.02.2026. (v) The beneficiary-petitioner shall be impleaded as party to the proceedings and the Reference Court after affording an opportunity of hearing pass appropriate orders as expeditiously as possible not later than 2 months from the date of receipt of copy of this order. Sd/- JUSTICE K.S.HEMALEKHA EM Ct:VH List No.: 1 Sl No.: 3