Today, On 25th March, The Supreme Court of India has dismissed the plea of National Highways Authority of India seeking prospective application of the 2019 ruling that struck down excluding landowners from solatium and interest. The Court reaffirmed that landowners deserve compensation.
The Supreme Court dismissed the National Highways Authority of India’s (NHAI) request to make a 2019 judgment which invalidated the exclusion of landowners from solatium and interest for land acquired for highway projects operate only prospectively.
NHAI had urged that the ruling not be applied to acquisitions concluded before the 2019 Union of India v. Tarsem Singh decision, warning that doing otherwise would impose an estimated additional liability of about Rs.29,000 crore on the State.
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A Bench comprising Chief Justice of India Surya Kant and Justice Ujjal Bhuyan held that just compensation for land acquisition cannot be reduced simply because of financial implications.
The Court said,
“The grant of solatium and interest cannot be made contingent upon the magnitude of the financial burden. The constitutional guarantee of just compensation cannot be diluted on that basis. Mere projection of financial liability does not constitute a valid ground for review,”
At the same time, the Court confined the reach of the 2019 ruling to cases where compensation claims have not already attained finality. In other words, matters in which compensation has been conclusively settled cannot be reopened in reliance on the 2019 judgment.
The Court further clarified the following points:
- Landowners whose compensation claims were pending as of March 28, 2015 (the date the 2013 Land Acquisition Act, which provides for solatium, came into force) are entitled to seek solatium and interest in accordance with the 2019 decision.
- Where enhanced compensation was awarded but solatium and interest were neither specifically claimed nor decided, landowners may seek those benefits subject to law; however, interest on such components will run only from the date the claim for them was made.
- Claims that had attained finality prior to March 28, 2015, with no proceedings pending, will not be reopened.
With these clarifications, the Bench dismissed the NHAI’s review petition challenging the Supreme Court’s February 4, 2025 order, which had upheld the 2019 Tarsem Singh verdict.
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In its 2019 decision, the Court ruled that excluding certain landowners from solatium under the 1894 Land Acquisition Act solely because their land was acquired for national highway projects violated the equality guarantee under Article 14.
The NHAI subsequently sought a prospective-only application to avoid reopening concluded acquisitions. On February 4, 2025, the Court rejected that plea, observing that a prospective limitation would undermine the relief granted in Tarsem Singh and continue unequal treatment of similarly situated landowners.
The NHAI then filed the review petition addressed by today’s ruling.
Solicitor General Tushar Mehta appeared for the NHAI and the Union of India.