The Supreme Court dismissed 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 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 Division Bench comprising Justice Surya Kant and Justice Ujjal Bhuyan asserted, “...the decision in Tarsem Singh (supra) also cannot be assailed on the grounds that it opens a Pandora’s Box or contravenes the doctrine of immutability, as it merely allows for the grant of ‘solatium’ or ‘interest’, which are inherently embedded as compensatory benefits under an expropriating legislation.”

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 judgement.

Reasoning

Noting that the prayer in the Application expressly sought clarification that the decision in Tarsem Singh (supra) should be deemed to operate prospectively only, the Bench said, “However, in our considered view, granting such a clarification would effectively nullify the very relief that Tarsem Singh (supra) intended to provide, as the prospective operation of it would restore the state of affairs to the same position as it was before the decision was rendered.”

The Bench explained that rendering the decision in Tarsem Singh (supra) as prospective would create a situation where a landowner whose land was acquired on December 31, 2014 would be denied the benefit of ‘solatium’ and ‘interest’, whereas a landowner whose land was acquired the very next day, January 1, 2015—the date on which the Ordinance was promulgated, to read the 2013 Act into the NHAI Act, would be entitled to these statutory benefits.The Bench thus said,“In this specific instance, the landowners have no discretion or choice regarding the date of land acquisition or the surrender of possession. Thus, both equity and equality demand that no such discrimination be permitted, as allowing it would be unjust.”

As per the Bench, the outcome of Tarsem Singh (supra) is limited to granting ‘solatium’ and ‘interest’ to aggrieved landowners whose lands were acquired by NHAI between 1997 and 2015. It does not, in any manner, direct the reopening of cases that have already attained finality. “In fact, what the Applicant seeks to achieve, indirectly, is to evade responsibility and further delay the resolution of a settled issue where the directions given are unequivocal—Quando aliquid prohibetur ex directo, prohibetur et per obliquum i.e. ‘what cannot be done directly should also not be done indirectly’. This Court has, on several occasions, disapproved of the practice of filing Miscellaneous Applications as a strategic litigation tactic aimed at neutralising judicial decisions and seeking a second opportunity for relief”, the Bench affirmed.

The Court also discarded NHAI’s defence that this gave rise to a financial burden amounting to Rupees 100 crores and said, “Ultimately, the burden is likely to be saddled onto the middle or upper-middle-class segment of society, particularly those who can afford private vehicles or operate commercial ventures. We are thus not inclined to entertain the plea for prospectivity on this limited tenet.”

Finding no merit in the contentions raised by the Applicant, NHAI, the Bench held, “We reaffirm the principles established in Tarsem Singh (supra) regarding the beneficial nature of granting ‘solatium’ and ‘interest’ while emphasising the need to avoid creating unjust classifications lacking intelligible.”

“Consequently, we deem it appropriate to dismiss the present Miscellaneous Application”, it asserted while concluding, “Leave is granted in the other connected matters, and all the appeals are disposed of with a direction to the Competent Authority to calculate the amount of ‘solatium’ and ‘interest’ in accordance with the directions issued in Tarsem Singh (supra). In this context, the appeal arising out of SLP (C) Diary No. 52538/2023 is dismissed, as the challenge therein pertains to the High Court’s refusal to award Additional Market Value as another component of the compensation, while ‘solatium’ and ‘interest’ have already been granted.”

Cause Title: Union of India and another v. Tarsem Singh and others (Neutral Citation: 2025 INSC 146)

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