Breaking: Mere Escalation In Projected Liability Not Valid Ground For Review: Supreme Court Dismisses NHAI Review Petition In Tarsem Singh Case

The Supreme Court dismissed the review petition filed by the NHAI seeking the review of the judgment dismissing the NHAI’s application seeking prospective application of its judgment in Union of India & Anr. v. Tarsem Singh & Ors (2019) while reaffirming the principles established in that case regarding the beneficial nature of granting ‘solatium’ and ‘interest’.

The Court unequivocally ruled that the massive financial implication—corrected by the NHAI from ₹100 crore to approximately ₹29,000 crore—cannot override the substantive constitutional entitlement of landowners to receive just compensation.

While the Bench maintained that Section 3J of the National Highways Act was unconstitutional for denying solatium and interest, it provided three critical clarifications to balance these rights with the doctrine of finality, effectively barring the reopening of cases that had concluded prior to March 28, 2008, without any pending litigation.

The Bench of Chief Justice Surya Kant and Justice Ujjal Bhuyan observed, "This court had unequivocally held that the fiscal implications of granting solatium and interest cannot override the substantive entitlement of landowners. There is no gainsaying that the constitutional guarantee of just compensation cannot be rendered contingent upon the magnitude of the financial burden. Consequently, a mere escalation in the projected liability, however significant it may be, does not constitute per se a valid ground for review or modification of the judgment."

Solicitor General Tushar Mehta appeared for the NHAI, whereas AOR Mayank Kshirsagar appeared for one of the Intervenors.

The Miscellaneous Application, before the Apex Court, was filed by the National Highways Authority of India (NHAI) through its Project Director, seeking clarification regarding the judgment Union of India & Anr. v. Tarsem Singh & Ors (Civil Appeal No. 7064 of 2019) to the extent that the judgment is to be applied prospectively, thereby precluding the reopening of cases where land acquisition proceedings have already been completed and the determination of compensation had also attained finality. This Miscellaneous Application was tagged with several appeals filed by the NHAI challenging the decisions of various High Courts at the instance of private parties, wherein relief was granted relying on the said judgment. This also included a Special Leave Petition preferred by a private party whose lands were acquired by NHAI.

The Court added, "Then two things were clarified. Regardless, thereto and upon a careful consideration of the submissions advanced on behalf of NHAI, it appears that certain aspects of the judgment rendered in Tarsem Singh 1 and Tarsem Singh 2 warrant limited clarification. The necessity for such clarification arises not from any error in principle, but to ensure a consistent and equitable understanding of the scope and effect of those decisions."

The Bench observed, "The instant proceedings, therefore, are confined strictly to that limited exercise. Then what are the three clarifications we have made? One is that the undisputed position of law settled by successive judgments in the High Courts and this court is that the landowners who suffer acquisition of their land under the National Highways Act are entitled to interest and solatium as part of their compensation. In the same way, this right has been recognized...However, as a matter of caution, we deem it appropriate to clarify that each claim for the entitlement cannot be treated in the same way. We say so for the reason that in many cases the landowners have chosen to approach different authorities like the competent authority, the arbitrator, or the courts for the grant of solatium and interest decades after the cases regarding the quantum of land acquisition compensation for the land were closed. This court is conscious of the legal necessity of giving finality to decided matters."

The Court concluded, "A similar exercise must be undertaken for the land acquisition cases arising from the NH Act in the matter of grant of interest and solatium. Consequently, now we have said: first, all landowners whose claims regarding quantum and/or components of compensation for their lands acquired under the National Highways Act were alive on or after 28th March 2008—that is the date when Golden Iron was pending—and if they were pending before one of the prescribed fora, they shall be entitled to seek addition of solatium and interest according to their compensation claim. Second, in cases where compensation claims were alive on the aforesaid date, but the landowner had claimed interest and solatium after 28th March 2008, no interest on both components shall be payable for the period of delay."

"Such landowners shall be entitled to interest and solatium only from the date when such claim is raised. And third, if the claims of the landowners were concluded prior to 28th March 2008 and no further appeal, writ petition, special leave petition, etc., were pending, then such landowners are not entitled to seek reopening, review, or modification of the final decision for the purpose of claiming solatium or interest. With this clarification, it has been concluded", it concluded.

Factual Background

The erstwhile Land Acquisition Act, of 1894 facilitated the acquisition of land by the Government for public purposes. Section 3J, along with several other provisions, were inserted into the NHAI Act vide the National Highways Laws (Amendment) Act, 1997 (1997 Amendment). Accordingly, it was provided that a determination of compensation would be made by the Competent Authority, and if not accepted by either party, it would then be determined by an arbitrator appointed by the Central Government. In addition, this newly introduced process did not envisage either ‘solatium’ or ‘interest’ and rather declared through Section 3J that ‘nothing in the Land Acquisition Act, 1894 shall apply to an acquisition under this Act’.

Upon its incorporation and coming into force, several High Courts began to strike down Section 3J of the NHAI as unconstitutional in the light of its effect of treating similarly situated individuals differently. A Notification was issued under Section 105, read with Section 113, wherein it was specified that the provisions of the 2013 Act would apply to acquisitions carried out under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (2013 Act). Then came the judgment in Tarsem Singh (supra) wherein it was held that Section 3J of the NHAI Act, by excluding the applicability of the 1894 Act and thereby denying ‘solatium’ and ‘interest’ for lands acquired under the NHAI Act, was violative of Article 14 of the Constitution.

This triggered a chain reaction of writ petitions being filed across various High Courts by aggrieved landowners whose lands had been acquired by the NHAI in the period between 1997 and 2015 and who had not been granted the benefit of ‘solatium’ or ‘interest’, seeking parity with those who were found entitled to these statutory benefits before 1997 and post-2015. Since the High Courts restored parity in these cases, NHAI sought clarification of the 2019 judgment. After the Court dismissed the NHAI's Application, it filed a review petition of the said judgment.

Accordingly, the petition was disposed of.

Cause Title: National Highways Authority of India v. Tarsem Singh and others [R.P.(C) No.2528/2025 in MA 1773/2021 in C.A. No.7064/2019]