The Supreme Court today has clarified and significantly narrowed the scope of its 2019 ruling in Union of India v. Tarsem Singh in the context of land acquisition under the National Highways Act. The Court held that while landowners are entitled to solatium and interest as part of compensation, this entitlement cannot be used to reopen cases that have already attained finality.

The Bench of Chief Justice of India, Justice Surya Kant and Justice Ujjal Bhuyan made it clear that the exercise before it was limited to clarifying the scope and effect of its earlier decisions, and not correcting any error in principle. It was observed that clarification was necessary to ensure a consistent and equitable application of the law across cases arising under the National Highways Act.

Reaffirming settled legal principles, the Court held that landowners whose lands were acquired are entitled to solatium and interest, including interest on solatium. However, it cautioned that such entitlement cannot be applied uniformly in all situations, particularly where claims are raised after long delays or after proceedings have concluded. The court rejected concerns raised on behalf of the authorities regarding the fiscal impact, observing:

“Compensation cannot be rendered contingent upon the magnitude of the financial burden. A mere escalation in projected liability does not constitute a valid ground for review or modification of the judgment.”

At the same time, the Court drew a firm line on the issue of finality. It held that once a judgment or order in a land acquisition case has attained finality and is not subject to further challenge, a subsequent change in judicial interpretation cannot be a ground to reopen such concluded proceedings. Emphasising this principle, the Bench noted that permitting such reopening would undermine certainty in the administration of justice.

The Court clarified that only those cases where compensation proceedings were pending as on 28 March 2015 would be eligible to seek the benefit of solatium and interest. Even in such cases, where landowners approached authorities or courts belatedly to claim these components, the Court directed that interest may be denied for the period of delay, in order to balance equities.

“A balance must be struck between the entitlement of landowners and the equities operating against their delay,” the Bench observed, drawing an analogy with established practices under the land acquisition regime where delayed claims often result in denial of interest for the default period.

The Court also clarified that the computation of interest must strictly follow the provisions of the National Highways Act. It noted that where the statute prescribes a specific mechanism for interest, the same must be adhered to, thereby dispelling any ambiguity arising from the application of provisions of the Land Acquisition Act.

In conclusion, the Court directed the competent authorities to recalculate compensation payable to landowners, including solatium and interest on solatium, strictly in accordance with the principles laid down in the judgment. It further indicated that any grievances arising from such recalculation may be pursued before the appropriate forum in accordance with law.

Also Read- https://thebarbulletin.com/nhai-retrospective-tarsem-singh-supreme-court/