NEW DELHI, Mar 25: The Supreme Court of India on Wednesday held that compensation, including solatium and interest in land acquisition cases, cannot be made contingent on the financial burden, asserting that the constitutional guarantee of just compensation cannot be diluted.
A bench of Chief Justice Surya Kant and Justice Ujjal Bhuyan made the observation while disposing of a plea filed by the National Highways Authority of India seeking review of the apex court’s February 4, 2025 verdict.
The court had earlier ruled that its 2019 decision allowing grant of compensation and interest to farmers whose land was acquired under the NHAI Act would apply retrospectively. Rejecting the review plea, the bench said that even a revised estimate of financial liability would not justify revisiting the earlier judgement.
“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 Chief Justice said.
The bench clarified that interest payable to landowners would be as per the Land Acquisition Act at nine per cent, instead of the five per cent cap under the NHAI Act.
The NHAI had sought a review claiming that the financial liability arising from payment of solatium and interest was not Rs 100 crore as earlier projected but nearly Rs 29,000 crore. However, the court said this contention did not warrant reconsideration of its earlier ruling.
At the same time, the court issued limited clarification, stating that while landowners are entitled to solatium and interest as part of just compensation, they cannot reopen claims that have already attained finality. It emphasised the need to maintain a balance between the rights of landowners and certainty in litigation.
The court noted that landowners had pursued different remedies, including arbitration and court proceedings, for enhancement of compensation, and all claims could not be treated alike.
Earlier, the top court had observed that pre-March 2018 land acquisition cases cannot be reopened for granting compensation with interest under the NHAI Act. It also reiterated that its 2019 judgement, which held that denial of solatium and interest violated Article 14 of the Constitution, would apply retrospectively, though settled matters cannot be revisited. (Agencies)
