New Delhi, Mar 25: Reaffirming that the constitutional guarantee of just compensation cannot be diluted, the Supreme Court on Wednesday held that solatium and interest in land acquisition cases cannot depend on the extent of financial burden.
A bench comprising Chief Justice Surya Kant and Justice Ujjal Bhuyan made the observation while disposing of a plea by the National Highways Authority of India (NHAI), which had sought a review of the apex court’s February 4, 2025 verdict. The earlier ruling had held that the 2019 judgment allowing compensation and interest to farmers under the NHAI Act would apply retrospectively.
The bench clarified that interest payable to landowners would be as per the Land Acquisition Act at nine per cent, and not the five per cent cap under the NHAI Act.
The court noted that NHAI had sought a review, claiming the financial liability was not ₹100 crore as earlier projected but nearly ₹29,000 crore. However, it made it clear that even a revised estimate would not justify revisiting the earlier decision.
“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,” the court observed, adding that mere projection of financial liability is not a valid ground for review.
The bench, however, said some clarification was needed to ensure consistency in applying the judgment. It reiterated that landowners are entitled to solatium and interest as part of just compensation, but clarified that not all claims stand on the same footing.
The court said landowners who have already pursued remedies such as arbitration or court proceedings cannot reopen cases that have attained finality. “Endless reopening of settled claims cannot be permitted,” it observed, stressing the need to balance landowners’ rights with legal certainty.
Referring to earlier observations, the court reiterated that pre-2018 land acquisition cases cannot be reopened for granting fresh compensation with interest under the NHAI Act.
In its 2019 ruling, the apex court had held that denying solatium and interest under the NHAI Act violated Article 14 (right to equality), as Section 3J excluded the applicability of the Land Acquisition Act, 1894. The court had rejected NHAI’s argument that the decision should apply prospectively due to the heavy financial burden. (Agency)
