New Delhi, March 25 The Supreme Court stated on Wednesday that the constitutional guarantee of fair compensation cannot be compromised, and that compensation and interest in land acquisition cases cannot be contingent on the financial burden.
A bench comprising Chief Justice Surya Kant and Justice Ujjal Bhuyan made this observation while dismissing the National Highways Authority of India's (NHAI) plea seeking to overturn the Supreme Court's February 4, 2025, ruling – which stated that the 2019 decision allowing farmers to receive compensation and interest under the NHAI Act would apply retroactively.
The bench said that interest payable to landowners would be according to the Land Acquisition Act, which is nine percent, and not the NHAI Act, which has a five percent cap.
The court stated that NHAI sought a review of the decision on the grounds that the financial liability from compensation and interest to those whose land was acquired by NHAI was not Rs 100 crore as claimed, but around Rs 29,000 crore.
The Supreme Court, in its order on Wednesday, stated that while this contention is concerned, the court made it clear at the outset that even if the revised financial estimate is taken into account, it does not persuade it to revisit the merits of the earlier order.
"This court had unequivocally held that the fiscal implications of granting compensation and interest cannot override the substantive entitlement of land-losers. There is no gainsaying that the constitutional guarantee of just compensation cannot be rendered contingent upon the magnitude of the financial burden. Consequently, a mere escalation in the projected liability, howsoever significant, does not constitute, per se, a valid ground for review or modification of the judgement," the bench held.
The Supreme Court, which considered the review petition in open court, said it must be clarified that while the revised estimate of the monetary costs is taken on record, the same does not persuade the court to revisit the merits of the earlier adjudication.
It directed that all landowners whose claims regarding the compensation for their land acquired under the NHAI Act were pending on or after March 28, 2008, shall be entitled to seek the addition of "interest," "solatium," and "interest on the solatium" to their compensation claim.
The bench further directed that in the cases where compensation claims are pending on the aforesaid date, but the landowner has claimed "interest," "solatium," and "interest on solatium" after March 28, 2008, no interest on both components shall be payable for the period of delay.
"Such landowner shall be entitled to 'interest' and 'interest on solatium' only from the date on which such claims were raised," it said.
It added that if the claims of the landowners stood concluded prior to March 28, 2008, with no further appeal, writ petition, special leave petition, etc., then such landowners are not entitled to seek reopening, review, or modification of the said decision for the purpose of claiming "solatium" or "interest".
The bench said its earlier decisions on the issue required limited clarification on certain aspects to ensure a consistent and equitable understanding of the scope and effect of those decisions.
It said that the settled position of law is that the landowners who suffer acquisition of their land under the NHAI Act are entitled to interest, solatium, and interest on solatium as part of their compensation.
"However, as a matter of caution, we deem it appropriate to clarify that each claim for this entitlement cannot be treated in the same way. We say so for the reason that, in many cases, the landowners have chosen to approach the different authorities, like the competent authority, the arbitrators, or the courts, for the grant of 'solatium' and 'interest' decades after the cases regarding the quantum of the land acquisition compensation for their lands stood closed," it said.
The bench said this court is conscious of the legal necessity of giving quietus to the decided matters as once a judgement or an order passed by a court in a particular case has attained finality and is not the subject matter of further challenge before a prescribed forum, a subsequent change in the judicial interpretation would not entail a reversal of such decision inter-se the parties to that case.
"As such, we find that while, as a matter of legal principle, the landowners may be entitled to solatium and interest, they cannot be permitted to reopen old, stale claims which have been decided conclusively by a court of law," the bench said.
The Supreme Court said, however, where final remedy has not been exhausted and statutory appeals or applications have been filed after inordinate delay, claiming the benefit of 'interest', 'solatium', or 'interest on solatium', a balance must be struck between the entitlement of the landowners and the equities operating against their delay.
"A similar balancing exercise is usually undertaken by this court while considering cases for enhancement of land acquisition compensation in a belated appeal. The notable method used in such cases is the denial of 'interest' payable on the enhanced amount of compensation for the period of delay. A similar exercise must be undertaken for the land acquisition cases arising from the NHAI Act in the matter of grant of 'solatium', 'interest', and 'interest on solatium'," it said.
