The Supreme Court on Wednesday refused to review its earlier ruling granting solatium and interest to landowners retrospectively under the National Highways Act, even as it issued crucial clarifications and a cut-off date to balance landowners’ rights with the principle of finality in litigation. The court said that owners, whose lands were acquired between 1997 and 2015, would be entitled to solatium and interest. (HT PHOTO)
A bench comprising Chief Justice of India (CJI) Surya Kant and Justice Ujjal Bhuyan upheld its 2019 judgment as well as its February 4, 2025, order, declining to revisit the core finding that landowners are entitled to solatium and interest despite acquisitions being carried out under the special regime of the National Highways Act, 1956.
Reading out the operative part of the verdict in open court, the CJI made it clear that the financial implications cited by the National Highways Authority of India (NHAI) could not be a ground to dilute constitutional guarantees.
“The grant of solatium and interest cannot be made contingent upon the magnitude of the financial burden. Mere projection of financial liability does not constitute a valid ground for review,” the bench observed, even as it noted the authority’s revised estimate of liability at approximately ₹29,000 crore, down from the earlier projection of ₹100 crore.
The judgment is expected to have wide ramifications across the country, particularly in states with significant highway acquisition activity. It settles the long-standing tension between ensuring parity in compensation and maintaining the finality of concluded proceedings.
The court traced the controversy to its landmark 2019 ruling in Union of India Vs Tarsem Singh, where Section 3J of the National Highways Act was declared unconstitutional to the extent it denied solatium and interest to landowners. The provision, introduced in 1997, effectively excluded such statutory benefits for acquisitions under the highways law, resulting in unequal compensation when compared with acquisitions under the Land Acquisition Act.
Reaffirming that position, the bench reiterated that landowners whose lands were acquired between 1997 and 2015—before the 2013 land acquisition regime was extended—would be entitled to solatium and interest as part of “just compensation”. The court stopped short of allowing an unqualified reopening of all past cases, underlining that “endless reopening of settled claims cannot be permitted”.
In an important clarification, the court distinguished pending and concluded proceedings. It held that only those landowners whose compensation proceedings were pending as on March 28, 2008, the date on which the Punjab and Haryana High Court, in the Golden Iron & Steel Forgings case, struck down Section 3J, would be entitled to claim solatium and interest in terms of the law laid down.
For cases where compensation had been enhanced but the specific issue of solatium and interest had not been raised or decided, the court permitted landowners to seek such benefits, but with a caveat: interest on these components would be payable only from the date the claim was actually raised, and not for earlier periods of delay.
At the same time, the bench categorically barred the reopening of cases that had attained finality before March 28, 2008. “Once a judgment or order has attained finality and is not subject to appeal or review within the prescribed time, it cannot be reopened merely on the basis of a subsequent declaration of law,” held the bench, emphasising the need to preserve certainty in litigation.
The ruling effectively rejects NHAI’s plea, argued through solicitor general Tushar Mehta, for a purely prospective application of the 2019 judgment, while carving out a calibrated framework that limits retrospective claims to a defined category of cases. The authority argued that reopening settled awards would trigger large-scale litigation and disrupt infrastructure financing. The court held that constitutional principles of equality and just compensation could not be subordinated to fiscal considerations.