Top court rejects NHAI’s review despite ₹29,000-crore liability

THe sublime margaret court on wed refused to critique its ruling granting solatium and stake to landowners retrospectively under the National Highways Act, while laying down a calibrated framework that limits the reopening of claims and introduces a clear cut-off date of March 28, 2008.A bench of Chief Justice of India 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.Dismissing NHAI’s review plea, the court held that financial implications, even to the tune of ₹29,000 crore, cannot dilute the constitutional guarantee of just compensation.The judgment, authored by the CJI, said that the court was not persuaded to revisit its earlier decision despite NHAI’s contention that the financial burden projected earlier was based on a clerical error. The authority had revised its liability estimate from a much lower figure to approximately ₹29,000 crore.The court, however, held that “a mere escalation in the projected liability, howsoever significant, does not constitute a valid ground for review,” reiterating that fiscal considerations cannot override substantive rights of land-losers.The ruling reaffirms the court’s 2019 judgment in Union of India Vs Tarsem Singh, where Section 3J of the National Highways Act, 1956 was effectively neutralised for creating discriminatory compensation by denying solatium and interest to landowners. The court maintained that those whose lands were acquired between 1997 and 2015 are entitled to these benefits in line with the Land Acquisition Act, 1894 and the 2013 land acquisition regime.The judgment is expected to have wide ramifications across the country, particularly in states with significant highway acquisition activity, as it settles the long-standing tension between ensuring parity in compensation and maintaining 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, had effectively excluded such statutory benefits for acquisitions under the highways law, resulting in unequal compensation when compared with acquisitions under the Land Acquisition Act.While refusing to interfere with the core principle of retrospective entitlement, the bench clarified that not all claims would be treated alike, particularly where proceedings had long attained finality. Emphasising the need to balance equality with legal certainty, the court held that concluded claims cannot be reopened merely because the law has since been clarified.The court drew a decisive line at March 28, 2008 -- the date of the Punjab and Haryana high court’s judgment in Golden Iron & Steel Forgings, which had struck down Section 3J. It ruled that only those landowners whose compensation claims were “alive” on or after this date, pending before a competent authority, arbitrator, or court, would be entitled to seek addition of solatium, interest, and interest on solatium.At the same time, the bench addressed concerns over delayed claims. It held that where landowners raised claims for these benefits after prolonged delay, they would not be entitled to interest for the period of such delay. In such cases, interest would accrue only from the date the claim was actually made, mirroring principles applied in belated appeals for enhanced compensation.For claims that had attained finality prior to March 28, 2008, with no pending proceedings or further challenge, the court categorically barred reopening. It held that such landowners would not be entitled to seek review, modification, or fresh claims for solatium or interest, underscoring that “old, stale claims” cannot be revived on the basis of subsequent judicial interpretation.In a consequential direction, the court set aside certain high court rulings and remanded matters back for recalculation of compensation strictly in line with its directions. It also clarified that amounts already paid towards solatium or interest would not be subject to recovery by the NHAI or the Union government.