The Supreme Court on Tuesday dismissed the National Highways Authority of India’s (NHAI) plea seeking to limit compensation benefits for landowners whose properties were acquired between 1997 and 2015 for highway projects. The court reaffirmed that these landowners are entitled to solatium and interest, reinforcing the principle of fair compensation.
A bench comprising Justices Surya Kant and Ujjal Bhuyan rejected NHAI’s argument that the 2019 ruling in the Tarsem Singh case should apply only prospectively. The bench emphasized that denying rightful compensation would violate Article 14 of the Constitution, which guarantees the right to equality.
Legal Dispute Over Compensation
The issue arose due to a 1997 amendment to the National Highways Act, which excluded highway land acquisitions from the benefits of the Land Acquisition Act, 1894. As a result, landowners were paid only base compensation. This changed in 2015 when the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, reinstated these benefits.
The Supreme Court held that once a provision is declared unconstitutional, any continued disparity must be rectified, particularly when it impacts only a specific group of people.
Financial Burden Not Justifiable
NHAI had contended that applying the Tarsem Singh judgment retrospectively would impose an additional financial burden of ₹100 crore on the government. The court, however, dismissed this concern, stating that the financial burden of acquiring land cannot override the constitutional mandate of Article 300A, which ensures that no person can be deprived of their property without legal authority.
The court also pointed out that NHAI had already made such payments to landowners before 1997 and after 2015. Furthermore, it noted that highway projects are largely developed under public-private partnerships (PPP), meaning the financial impact would not solely fall on the government.
“Since most national highways are being developed under the PPP model, the financial burden will ultimately be passed on to the relevant project proponent… 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,” the court stated.
Fair Compensation and Equity
The Supreme Court dismissed concerns that retrospective benefits would reopen settled cases, clarifying that the Tarsem Singh ruling applies only to land acquisitions made between 1997 and 2015. It warned that further delays in compensation would only prolong disputes unnecessarily.
The court directed NHAI to comply with the 2019 judgment, ordering the competent authority to calculate and disburse solatium and interest to eligible landowners.
Highlighting the importance of fairness, the court stated, “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.”
This ruling reaffirms the commitment to fair compensation for landowners, setting a strong precedent for future land acquisition cases.
Sources By Agencies
