Supreme Court again rejects NHAI plea to prospectively apply 2019 verdict on solatium to landowners but...

The Supreme Court on Wednesday rejected the National Highways Authority of India’s (NHAI) plea for the prospective application of a 2019 judgment that struck down the exclusion of landowners from claiming solatium and interest payments for land acquired for highway development, while clarifying that concluded compensation cases cannot be reopened..The NHAI had urged the Court not to apply the verdict to landowners whose property was acquired before the 2019 Union of India v. Tarsem Singh ruling, citing the additional financial burden of approximately ₹29,000 crores that the State would have to incur otherwise.A Bench of Chief Justice of India (CJI) Surya Kant and Justice Ujjal Bhuyan today ruled that just compensation for land acquisition cannot be diluted merely by citing financial burdens."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," the Court said..However, the Court limited the 2019 ruling's benefit to landowners whose compensation claims have not already been decided finally. In other words, the Court held that cases where compensation has already been finalised cannot be reopened by citing the 2019 judgment. "We are of the view that while landowners may be entitled to solatium and interest as a matter of law, they cannot be permitted to reopen concluded claims which have attained finality," the Court said. .The Court went on to clarify,- Landowners whose compensation claims were pending as on March 28, 2008 (the date of the Punjab and Haryana High Court’s ruling in Golden Iron and Steel Forging v. Union of India, which first granted solatium and interest under the National Highways Act) shall be entitled to claim solatium and interest in terms of the law laid down in the 2019 ruling.- In cases where enhanced compensation has been granted but the issue of solatium and interest was not specifically claimed or decided, the landowners may seek such benefits, subject to law. However, interest on such components shall be payable only from the date on which such claim was raised.- In cases where the claims of landowners attained finality prior to March 28, 2008, and no proceedings were pending, such claims shall not be reopened. .With these clarifications, the Bench closed the review petition filed by the NHAI seeking a recall of the Supreme Court's earlier February 4, 2025 decision to uphold the 2019 verdict..In the 2019 verdict, the Court had held that the exclusion of landowners from getting the benefit of solatium under the 1894 Land Acquisition Act, merely because their land was acquired for NH projects, was violative of the right to equality under Article 14 of the Constitution. The NHAI, thereafter, sought a clarification that this 2019 judgment should apply prospectively so that concluded acquisitions would not be reopened.On February 4, 2025, the Court rejected this plea. It held that limiting the judgment prospectively would defeat the relief granted in Tarsem Singh and perpetuate unequal treatment among similarly placed landowners.Thereafter, NHAI filed a review petition against the 2025 order on which today's judgment was passed. .The Court noted that prior to the 2019 ruling, several High Courts had already intervened on the issue. In particular, a Division Bench of the Punjab and Haryana High Court in Golden Iron and Steel Forging v. Union of India (2008) had held that landowners under the National Highways Act would be entitled to solatium and interest, by reading down the statutory scheme. The Supreme Court observed that this 2008 ruling became a significant reference point in subsequent litigation. In Sunita Mehra v. Union of India (2019), the Court had already used March 28, 2008 as a cut-off to determine which claims could be granted solatium and interest, while clarifying that cases which had attained finality prior to that date ought not to be reopened.Building on this framework, the Court in the review judgment has now reaffirmed March 28, 2008 as the operative cut-off, holding that only those land acquisition cases which were pending on or after that date would be eligible for grant of solatium and interest. Claims that had attained finality prior to this date cannot be reopened..Solicitor General Tushar Mehta represented the NHAI and the Union of India..[Live Coverage].[Read Judgment]