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 the land acquired from them for highway development.

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, 2015 (when the new Land Acquisition Act of 2013, which provides for solatium payments, took effect) 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, 2015 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.

Solicitor General Tushar Mehta represented the NHAI and the Union of India.

[Live Coverage]