Supreme Court rejects NHAI plea for prospective application of Tarsem Singh verdict on solatium to land owners

The Supreme Court on Monday rejected a plea by the National Highways Authority of India (NHAI) seeking prospective application of the Court's 2019 judgment in Union of India v. Tarsem Singh in which it was held that provisions of Land Acquisition Act, 1894 relating to solatium and interest will apply to acquisitions made under the National Highways Act, 1956 (NH Act)..The Court in its 2019 judgment had ruled that Section 3J of the National Highways Act, to that extent it excludes solatium and interest contained in Section 23(1A) and (2) and interest payable in terms of section 28 proviso of the Land Acquisition Act, is unconstitutional. The NHAI moved a plea seeking a declaration that the judgment will apply only prospectively.A Bench of Justices Surya Kant and N Kotiswar Singh rejected this plea on Monday stating that if the prayer is allowed, it will nullify the Tarsem Singh verdict."The plea seeks application (of judgment) prospectively. But if we grant the prayer in application then it will nullify the Tarsem Singh judgment. The judgment settled quagmire created by 3J of NH Act," the Court said.It might also create disparities between persons whose lands were acquired at different times, the Bench opined."One category was 2015 to 2019 one was otherwise. When a disparity is created we need to see the affected segment. Equity demands that such a prayer is not entertained," the Court stated. Further, it also said that if NHAI's plea is allowed, then it will lead to revisiting a lot of land acquisition matters and create further delays in such individual cases"It cannot lead to revisiting the cases and open a pandoras box... the ultimate aim was to grant solatium and interest to aggrieved landowners whose lands were taken by NH. What applicant tries to seek indirectly is to further delay the issue. What cannot be done directly cannot be indirectly," the Bench today said..The Court also rejected the argument raised by NHAI regarding the₹ 100 crore burden that the body will have to suffer."The ₹100 crore burden of NHAI does not persuade us. Since all the NH are under public private model the burden will move to project proponent and then to consumers who can afford vehicles to use such highways," the Court ruled.Hence, it reaffirmed the beneficial solatium granted under Tarsem Singh. ."Competent authority directed to calculate solatium and interest as per Tarsem Singh. Present application is disposed of," the Court ordered..The National Highways Act, 1956, as originally enacted, did not provide for the acquisition of land. Thus, till the National Highways Laws (Amendment) Act, 1997, all acquisitions for the purpose of National Highways were made under the Land Acquisition Act, and the owners were given, in addition to market value, solatium as well as interest under the provisions of that Act.In 1997, amendments were made to the NH Act. By which Section 3J was inserted. It reads:“Land Acquisition Act 1 of 1894 not to apply – Nothing in the Land Acquisition Act, 1894 shall apply to an acquisition under this Act.”This provision led to disputes as no solation was allowed.When the matter came up before the Supreme Court, it was argued by the Central government that that the National Highways Act is a complete Code which expressly excluded the application of the provisions of the Land Acquisition Act.That being the case, it is clear that absent discrimination or manifest arbitrariness, the non-award of solatium and interest that is awardable under the Land Acquisition Act would not fall foul of Article 14 of the Constitution of India.The top court, in 2019, rejected this argument.A Bench of Justices Rohinton Nariman and Surya Kant held that the object of the 1997 Amendment was to speed up the process of acquiring lands for National Highways. Awarding of solatium and interest has nothing to do with achieving this object, as it is nobody’s case that land acquisition for the purpose of national highways slows down as a result of the award of solatium and interest.The Court held that the 1997 amendments discriminated between persons whose lands were acquired for national highways and those whose lands were acquired for other persons. Thus, the Court held that a classification made between different sets of landowners whose lands happen to be acquired for the purpose of National Highways and landowners whose lands are acquired for other public purposes has no rational relation to the object sought to be achieved by the Amendment Act, i.e. speedy acquisition of lands for the purpose of National Highways. On this ground alone, the Amendment Act falls foul of Article 14, the Supreme Court concluded.Therefore, it struck down Section 3J to the extent of excluding solatium and interest..The NHAI then moved the present plea for applying the judgment prospectively..[Read Judgment]