Section 121. Adjustment of claims of owners of private dams

Whenever the
  state including the corporation in the course of the construction of the
  improved canals in the rivers or waterways of the state, for the purpose
  of obtaining a sufficient depth or supply of water for  canal  purposes,
  has   utilized   private   dams   theretofore  lawfully  constructed  or
  maintained, in such a manner as to constitute the same an essential part
  or portion of the  improved  canals,  the  corporation  may  compromise,
  settle  and adjust the claims and demands of the owners of any such dams
  on such terms and conditions, including the payment to the owners of any
  such dams of such sums of money as to it may seem just and proper,  and,
  by  contract  or  otherwise,  make  proper provision with respect to the
  ownership of and for the  maintenance  and  upkeep  of  any  such  dams,
  provided,  however,  that  it  shall not sell, transfer or convey to any
  such owner any right, title or interest in or to the use of any part  or
  portion of the water impounded by such dams.