In a significant ruling on Tuesday, the Supreme Court of India upheld its 2019 decision on the retrospective application of compensation and interest benefits to farmers affected by land acquisitions under the National Highway Authority of India (NHAI) Act. The bench, comprising Justices Surya Kant and Ujjal Bhuyan, dismissed a plea by the NHAI that sought to limit the ruling’s applicability to future cases only, thus confirming that the decision would also cover past acquisitions where compensation had already been finalized.
The 2019 verdict, known as the Tarsem Singh decision, had found that Section 3J of the NHAI Act—which excluded the provisions of the 1894 Land Acquisition Act and thereby denied ‘solatium’ (a form of compensation) and interest to landowners—was unconstitutional under Article 14, which guarantees equality before the law.
Justice Surya Kant, who authored the landmark decision, emphasized that the NHAI’s request to have the ruling apply only prospectively would “nullify the very relief intended by the Tarsem Singh verdict.” He highlighted the fundamental principle that when a law is declared unconstitutional, any continued disparity based on that law strikes at the core of Article 14 and must be rectified.
The bench pointed out that Section 3J had created an unjust distinction between landowners based on arbitrary dates. Specifically, those whose lands were acquired between 1997 and January 1, 2015, were treated differently from those whose lands were acquired after the latter date when the 2013 Act began to apply to the NHAI.
Illustrating the consequences of a prospective-only application, Justice Kant noted that a landowner whose property was acquired on December 31, 2014, would be denied solatium and interest, whereas a neighbor whose land was taken a day later would receive these benefits. This disparity, he argued, was precisely what the 2019 decision aimed to correct.
The court also addressed concerns that the Tarsem Singh ruling might open a “Pandora’s Box” or contravene the doctrine of immutability, clarifying that the decision did not call for reopening cases that had attained finality. Instead, it simply ensures the application of statutory compensatory benefits, such as solatium and interest, to those unfairly excluded by the unconstitutional provision.
