Review Petition Fails
The Supreme Court on Wednesday rejected a review petition filed by the National Highways Authority of India (NHAI), which had asked the Court to hold that the 2019 judgment in Tarsem Singh would apply only prospectively to acquisitions under the National Highways Act.
A Bench of Chief Justice of India Surya Kant and Justice Ujjal Bhuyan declined to revisit the 2025 judgment that gave retrospective effect to the Tarsem Singh ruling. At the same time, the Court clarified that parties cannot reopen claims that had already attained finality before March 28, 2008 merely because a later judgment declared the law.
Financial Liability Not a Ground for Review
The Court held that NHAI’s projected financial liability of around ₹29,000 crore could not justify any dilution of the constitutional guarantee of just compensation to landowners.
The Bench said the right to solatium and interest flows from the requirement of fairness in compensation. It added that the size of the acquiring authority’s financial burden does not control that right.
“The grant of solatium and interest cannot be made contingent upon the magnitude of the financial burden. The constitutional guarantee of just compensation cannot be diluted on that basis. Mere projection of financial liability does not constitute a valid ground for review,” the Court observed.
Court Clarifies the Position on Pending Cases
While rejecting the review plea, the Court said certain parts of the Tarsem Singh ruling required limited clarification so that courts and authorities could apply the judgment with consistency and certainty.
The Bench stressed that landowners remain entitled in law to solatium and interest. However, it also underlined that courts must respect the finality of litigation. The Court noted that landowners had pursued different remedies in different matters, including arbitration and court proceedings. Once those determinations attained finality within the prescribed time, parties could not reopen them solely because of a later judicial declaration.
The Court then clarified that landowners whose compensation proceedings remained pending on March 28, 2008 before the competent authority or a court can claim solatium and interest in accordance with law.
Enhanced Compensation Cases
The Court further held that landowners may seek those benefits even in cases where authorities or courts had already granted enhanced compensation but neither side had specifically claimed nor adjudicated solatium and interest.
However, the Court clarified that interest on those components would run only from the date on which the landowner raised the claim for solatium or interest.
Finalised Claims Stay Closed
The Bench drew a clear line for matters that had already concluded. It held that where compensation proceedings had concluded and attained finality before March 28, 2008, and no proceedings remained pending, parties cannot reopen those matters to seek solatium or interest.
The Court said endless reopening of settled claims would erode certainty in litigation and unsettle the balance between the rights of landowners and the stability of judicial and statutory determinations.
Solicitor General’s Request Rejected
After pronouncing the judgment, the Solicitor General requested the Bench to clarify that interest would be payable in terms of Section 3H of the National Highways Act.
Chief Justice Surya Kant declined that request and said such a clarification would contradict the earlier judgments in Tarsem Singh-I and Tarsem Singh-II.
What the Review Petition Sought
Through the review application, NHAI had asked the Court to recall its earlier order dated February 4, 2025, by which it had dismissed an application seeking clarification of the main judgment in Union of India v. Tarsem Singh (2019).
In the 2019 decision, the Court examined Section 3J of the National Highways Act, which excluded payment of solatium and interest to landowners, and declared that provision unconstitutional to that extent. The Court held that landowners whose lands were acquired between 1997, when Section 3J came into force, and 2015, when the regime under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 became applicable to National Highways acquisitions, would receive the same benefits available under the Land Acquisition Act.
NHAI’s Corrected Estimate Did Not Help
In the present proceedings, NHAI argued that an earlier financial estimate placed before the Court contained a clerical error and that the actual liability would come to about ₹29,000 crore.
The Court rejected that submission. It said that even if it accepted the corrected estimate, that figure would still not persuade it to revisit the merits of the earlier ruling. The Bench reiterated that fiscal considerations alone cannot override the constitutional requirement of just compensation.
Tarsem Singh Background
In Tarsem Singh, a Bench of Justices Rohinton Nariman and Surya Kant declared Section 3J of the National Highways Act, 1956 unconstitutional to the extent that it denied solatium and interest under the Land Acquisition Act, 1894 for acquisitions made under the National Highways Act.
The Court held that the provisions of the Land Acquisition Act relating to solatium under Section 23(1A) and (2), and interest under the proviso to Section 28, would apply to acquisitions under the National Highways Act.
After that ruling, NHAI moved the Supreme Court and sought clarification on whether the 2019 judgment would operate prospectively, so that parties could not reopen cases in which land acquisition proceedings had already concluded and compensation had attained finality.
February 2025 Judgment
In February 2025, the Bench of Justices Surya Kant and Ujjal Bhuyan rejected that contention. The Court held that any clarification restricting the judgment to prospective operation would effectively wipe out the relief that Tarsem Singh had intended to confer.
The Bench observed:
“The broader purpose behind Tarsem Singh was to resolve and put quietus upon the quagmire created by Section 3(j) of the National Highway Act, which led to unequal treatment of similarly situated individuals. The impact of Section 3(j) was short-lived owing to the applicability of the 2013 Act upon the National Highway Act from 1 January 2015. As a result, two classes of landowners emerged devoid of any intelligible differentia – those whose lands were acquired by the NHAI between 1997-2015 and those whose lands were acquired otherwise…Both equity and equality demand that no such discrimination be permitted, as allowing it would be unjust.”
Equality and Article 14
The Bench further said that when a provision is declared unconstitutional, and the resulting disparity strikes at the core of Article 14, the Court must correct that disparity, especially when it affects a selected group.
The Court also rejected NHAI’s argument that the ruling would open a “Pandora’s box.” It said the judgment only allowed payment of solatium and interest, which remain compensatory benefits embedded in expropriatory law.
Financial Burden Argument Earlier Rejected
The Bench also rejected an earlier contention regarding a financial burden of about Rs.100 crores. It observed:
“If this burden has been borne by NHAI in the case of 1000s of other landowners, it stands no reason that it should also be shared by the NHAI in this instance in order to eliminate discrimination…the financial burden of acquiring land cannot be justified in the light of constitutional mandate of Article 300A…since most national highways are being developed under the public-private partnership model, the financial burden will ultimately pass on to the relevant project proponent…even the project proponent would not have to bear the compensation cost out of pocket. It is the commuters who would bear the actual brunt of this cost. The burden will be transferred to the middle or upper middle class segment of society, particularly those who can afford private vehicles and operate commercial ventures.”
Case Details
The Supreme Court then disposed of the review petition filed by NHAI.
Case Title: National Highways Authority of India Versus Tarsem Singh and Ors.
Case Number: R.P.(C) No. 2528/2025 in MA 1773/2021 in C.A. No. 7064/2019.
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