Supreme Court: In the review petition filed by the National Highways Authority of India (NHAI) seeking recall of Union of India v. Tarsem Singh, 2025 SCC OnLine SC 235 (Tarsem Singh-II), whereby the Supreme Court had refused to clarify whether the judgment in Union of India v. Tarsem Singh, (2019) 9 SCC 304 (Tarsem Singh-I) would operate prospectively, the Division Bench of Surya Kant,* CJ., and Ujjal Bhuyan, J., finally settled the controversy and issued the following directions to balance the competing considerations of entitlement and finality:
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Landowners whose claims relating to compensation were pending on or after 28 March 2008 were entitled to seek addition of solatium, interest, and interest on solatium.
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Where such claims were raised after 28 March 2008 with delay, the landowners would not receive interest for the delayed period. Interest would accrue only from the date the claim was actually raised.
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If compensation proceedings had attained finality before 28 March 2008, the matter cannot be reopened to claim solatium or interest.
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Matters pending before High Courts were remanded for recalculation of compensation in accordance with these directions.
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Amounts already paid to landowners should not be recovered.
Background
In the instant matter, the controversy traced back to legislative amendments introduced in the NH Act in 1997, when Section 3-J was inserted. This provision stipulated that the Land Acquisition Act, 1894 (1894 Act) would not apply to acquisitions under the National Highways Act. As a result, landowners whose lands were acquired under the NH Act were denied the statutory benefits of solatium and interest, which were otherwise available under Sections 23(1-A), 23(2), and 28 of the 1894 Act.
This disparity led to challenges before several High Courts on the ground that the denial of solatium and interest created an arbitrary classification violating Article 14, Constitution of India.
The P&H High Court in Golden Iron and Steel Forging v. Union of India, 2008 SCC OnLine P&H 498 and Madras High Court in T. Chakrapani v. Union of India, 2011 SCC OnLine Mad 2881, adopted a balanced approach and instead of striking down the entire statutory framework, they read down the provisions of the NH Act so as to extend the benefits of solatium and interest to landowners while preserving the independent acquisition scheme under the Act.
Subsequently, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act) replaced the 1894 Act, and by notification dated 28 August 2015 the compensation scheme under the 2013 Act was made applicable to acquisitions under the NH Act. However, acquisitions made between 1997 and 1 January 2015 remained outside the beneficial regime, resulting in unequal treatment of similarly placed landowners.
Earlier judgments leading to Review
Various High Courts held that landowners under the NH Act were entitled to solatium and interest on parity with acquisitions under the 1894 Act. In some appeals, this Court directed that such benefits would be available at least in cases where compensation proceedings were pending as on 28 March 2008, while concluded cases were not to be reopened.
In Tarsem Singh-I, this Court held that the denial of solatium and interest under Section 3-J was unconstitutional to that extent and that landowners whose lands were acquired between 1997 and 2015 were entitled to solatium, additional compensation and interest in terms of the 1894 Act.
In Tarsem Singh-II, the NHAI sought clarification as to whether the Tarsem Singh-I would operate prospectively. However, the Court rejected the plea and held that the right to solatium and interest is part of the constitutional requirement of just compensation under Article 300-A, and financial burden cannot be a ground to deny such entitlement.
NHAI’s Contentions
Seeking the recall or modification of Tarsem Singh-II and the NHAI contended that the earlier proceedings had proceeded on a clerical mistake regarding the financial implications of the judgment. It was submitted that the liability towards payment of solatium and interest had earlier been estimated at ₹100 crores, whereas the correct figure was approximately ₹29,000 crores, therefore there exist an error apparent on the face of the record, thus, warranting reconsideration of the decision.
Court’s Analysis
While acknowledging that the earlier estimate of liability was inaccurate, the Court held that the corrected financial projection did not justify revisiting the merits of the earlier decision. The Court unequivocally held that the fiscal implications of granting solatium and interest cannot override the substantive entitlement of land-losers. “There is no gainsaying that the constitutional guarantee of just compensation cannot be rendered contingent upon the magnitude of the financial burden.” The Court held that a mere escalation in the projected liability, howsoever significant, does not constitute a valid ground for review or modification of the judgement.
However, the Court found that certain aspects of the earlier judgments in Tarsem Singh-I and Tarsem Singh-II, required clarification to ensure consistent application, particularly in cases where claims were raised after long delay or after the proceedings had attained finality.
The Court reaffirmed that landowners whose lands were acquired under the NH Act are entitled to solatium, interest and interest on solatium as part of compensation. At the same time, the Court emphasized the need to give finality to concluded litigation. It was observed that once a judgment has attained finality and is not under challenge, a subsequent change in legal interpretation does not permit reopening of such concluded cases.
Where claims were filed after long delay but proceedings were still pending, the Court held that a balancing exercise must be undertaken, similar to cases of delayed appeals for enhancement of compensation, by restricting the grant of interest for the delayed period.
Court’s Directions
To balance the rights of landowners with the need for finality in litigation, the Court issued the following directions:
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Landowners whose compensation proceedings were pending on or after 28 March 2008 should be entitled to claim solatium, interest and interest on solatium.
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Where such claims were raised after delay, interest should not be payable for the period of delay and should run only from the date when the claim was made.
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Where compensation proceedings had attained finality prior to 28 March 2008 and no appeal or challenge was pending, such cases cannot be reopened to claim solatium or interest.
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The impugned judgments of the High Courts were set aside and the matters were remanded for recalculation of compensation in accordance with the directions issued by the Supreme Court.
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Amounts already paid to landowners should not be recovered.
Accordingly, the Court disposed of review petition, with limited clarifications regarding delayed claims and finalised cases.
[NHAI v. Tarsem Singh, Review Petition (Civil) No. 2528 of 2025, decided on 25-3-2026]
*Judgment by Chief Justice Surya Kant
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