Supreme Court Refuses NHAI's Plea To Review Retrospective Application Of Solatium To NH Acquisitions, But Bars Reopening Settled Claims

The Supreme Court on Wednesday rejected a review petition filed by the National Highways Authority of India (NHAI) seeking to declare that the 2019 'Tarsem Singh' judgment, which held that solatium and interest will be applicable to the land acquisitions carried out under the National Highway Act, will apply only prospectively.A bench comprising Chief Justice of India Surya Kant and Justice Ujjal Bhuyan refused to review the 2025 judgment which held that the 'Tarsem Singh' judgment will have retrospective application.At the same time, the Court clarified that claims which had already attained finality prior to March 28, 2008 cannot be reopened merely on the basis of the subsequent declaration of law.NHAI's additional financial implications cannot be a ground to reviewThe Court held that the financial implications of the ruling, projected by NHAI at around ₹29,000 crore, cannot be a ground to dilute the constitutional guarantee of just compensation to landowners. The Court observed that the grant of solatium and interest flows from the requirement of fairness in compensation and cannot be made contingent upon the magnitude of financial burden on the acquiring authority. "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 observed.Clarification on settled claimsAt the same time, the Court noted that certain aspects of the Tarsem Singh ruling required limited clarification to ensure consistency and certainty in its application. The Bench emphasised that while landowners are entitled to solatium and interest as a matter of law, the principle of finality of litigation must also be respected. It observed that landowners have pursued different remedies in various cases, including arbitration and court proceedings, and once such determinations have attained finality within the prescribed time, they cannot be reopened merely because of a subsequent judicial declaration.Clarifying the scope of entitlement, the Court held that landowners whose proceedings relating to determination of compensation were pending as on March 28, 2008 before the competent authority or court would be entitled to claim solatium and interest in accordance with law. It further stated that in cases where enhanced compensation had been granted but the issue of solatium and interest had not been specifically claimed or adjudicated, landowners may seek such benefits, subject to applicable legal principles. However, interest on such components would be payable only from the date on which the claim for solatium or interest was raised.Conversely, the Court made it clear that where compensation proceedings had concluded and attained finality prior to March 28, 2008, and no proceedings were pending, such claims cannot be reopened for the purpose of claiming solatium or interest. The Bench observed that endless reopening of settled claims would undermine certainty in litigation and disrupt the balance between the rights of landowners and the stability of legal determinations.With these clarifications, the Supreme Court disposed of the review petition filed by NHAI. After the judgment was pronounced, the Solicitor General requested the bench to also clarify in the judgment that the interest will be as per Section 3H of the NH Act. However, CJI Surya Kant said that such a clarification will contradict the earlier judgments in Tarsem Singh-I and Tarsem Singh-II.The review application sought recall of the Court's earlier order dated February 4, 2025, by which an application for clarification of the main judgment in Union of India v. Tarsem Singh (2019) had been dismissed. In that judgment, the Court had examined Section 3J of the National Highways Act, which excluded payment of solatium and interest to landowners, and declared the provision unconstitutional to that extent. The Court had held that landowners whose lands were acquired between 1997, when Section 3J was introduced, and 2015, when the regime under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 was extended to National Highways acquisitions, were entitled to the same benefits available under the Land Acquisition Act.In the present proceedings, NHAI contended that the earlier financial estimates placed before the Court were based on a clerical error and that the actual liability would be approximately ₹29,000 crore. Rejecting the argument, the Court stated that even if the corrected estimate were accepted, it would not persuade the Court to revisit the merits of the earlier decision. It underscored that the constitutional requirement of just compensation cannot be compromised on fiscal considerations alone.BackgroundTo recap, in Tarsem Singh, a bench of Justices Rohinton Nariman and Kant declared Section...

Supreme Court Refuses NHAI's Plea To Review Retrospective Application Of Solatium To NH Acquisitions, But Bars Reopening Settled Claims

Debby Jain

The Court observed that the NHAI's additional financial burden of ₹29,000 crore can't be a ground to review the judgment.

Tags