Retrospective Justice: Supreme Court Affirms Landowner Rights in Tarsem Singh Case


Court: Supreme Court of India.

Case Name: UNION OF INDIA vs. TARSEM SINGH.

Citation: 2025 INSC 146 (Reportable)

Background

The Supreme Court's 2025 ruling in Union of India & Anr. v. Tarsem Singh & Ors. addresses a crucial aspect of land acquisition compensation under the National Highways Act, 1956. This case was initiated by a Miscellaneous Application (MA) filed by the National Highways Authority of India (NHAI) seeking clarification on the retrospective or prospective application of the 2019 Tarsem Singh judgment. The 2019 judgment declared Section 3J of the NHAI Act unconstitutional. This section had excluded the applicability of the Land Acquisition Act, 1894, thereby denying 'solatium' and 'interest' to landowners whose land was acquired for national highway projects. The 2025 decision is tagged with several appeals from various High Court rulings on the same issue.

Prior to the 1997 amendment to the NHAI Act, land acquisition for public purposes was governed by the Land Acquisition Act, 1894, which included provisions for solatium and interest. The 1997 amendment introduced Section 3J to expedite land acquisition by removing the applicability of the 1894 Act. This resulted in landowners not receiving these additional benefits, and a series of High Court challenges to Section 3J on the grounds that it created unequal treatment of landowners.

Legal Evolution

The 2013 Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, replaced the 1894 Act, and was made applicable to the NHAI Act in 2015. This meant that acquisitions made after the effective date would include 'solatium' and 'interest' payments, highlighting the unfairness of denying these benefits for acquisitions made between 1997 and 2015. The 2019 Supreme Court decision in Tarsem Singh explicitly declared that Section 3J of the NHAI Act violated Article 14 of the Constitution, which guarantees equality before the law.

The NHAI's application in 2025 sought to limit the 2019 ruling to future cases (prospective application) to avoid reopening previously settled cases and paying additional compensation. They argued that retrospective application would create a significant financial burden on the public, and go against the legal principle of "immutability," which protects final judgments from being overturned. Landowners, however, contended that limiting the judgment to prospective application would render the decision meaningless and create hostile discrimination, since most future cases would be covered by the 2013 Act.

Rationale

The Supreme Court rejected the NHAI's argument for prospective application of the 2019 Tarsem Singh judgment. The Court reasoned that applying the judgment prospectively would perpetuate the injustice that the Tarsem Singh ruling intended to rectify. It would create an arbitrary distinction between landowners whose land was acquired between 1997 and 2015 and those whose land was acquired before or after that period. The Court stressed that an unconstitutional law (Section 3J) cannot be the basis for treating a particular class of people differently.

The Court clarified that the 2019 ruling did not mean reopening cases or re-evaluating the land acquisition process itself, but rather mandating the payment of 'solatium' and 'interest'. It further dismissed NHAI's claim of a significant financial burden, stating that financial concerns could not override constitutional mandates. The Court emphasized that the additional financial burden should not justify the violation of the principles of fairness and equality, and that the costs are ultimately borne by the users of the infrastructure built on the acquired land. The Court also noted that the government, through the Solicitor General, had previously conceded to paying these benefits, and could not now retract its position.

Excerpt

  • "...granting such a clarification would effectively nullify the very relief that Tarsem Singh (supra) intended to provide, as the prospective operation of it would restore the state of affairs to the same position as it was before the decision was rendered."
  • "The impact of Section 3J was short-lived, owing to the applicability of the 2013 Act upon the NHAI Act from the date of 01.01.2015. As a result, two classes of landowners emerged, devoid of any intelligible differentia: those whose lands were acquired by the NHAI between 1997 and 2015, and those whose lands were acquired otherwise."
  • " That being so, the decision in Tarsem Singh (supra) also cannot be assailed on the grounds that it opens a Pandora’s Box or contravenes the doctrine of immutability, as it merely allows for the grant of ‘solatium’ or ‘interest’, which are inherently embedded as compensatory benefits under an expropriating legislation."
  • " Instead, the ultimate outcome of Tarsem Singh (supra) is limited to granting ‘solatium’ and ‘interest’ to aggrieved landowners whose lands were acquired by NHAI between 1997 and 2015. It does not, in any manner, direct the reopening of cases that have already attained finality."
  • "Ultimately, the burden is likely to be saddled onto the middle or upper-middle-class segment of society, particularly those who can afford private vehicles or operate commercial ventures. We are thus not inclined to entertain the plea for prospectivity on this limited tenet."
  • " We reaffirm the principles established in Tarsem Singh (supra) regarding the beneficial nature of granting ‘solatium’ and ‘interest’ while emphasising the need to avoid creating unjust classifications lacking intelligible differentia."

Points to Remember

  • The 2025 Supreme Court ruling confirms that the 2019 Tarsem Singh judgment applies retrospectively to land acquisitions under the NHAI Act between 1997 and 2015.
  • The judgment does not allow for reopening of cases or reevaluation of compensation amounts.
  • The ruling ensures the payment of 'solatium' and 'interest' to affected landowners who were previously denied these benefits due to Section 3J of the NHAI Act.
  • Section 3J of the NHAI Act was declared unconstitutional as it violated Article 14 of the Constitution.
  • The Supreme Court upheld the principles of equity, equality, and non-discrimination in its decision.
  • The financial burden on the public exchequer is not a valid reason to deny landowners their rightful compensation.
  • The ruling reinforces the principle that the finality of judgments protects rights, not injustice.

Conclusion

The Supreme Court's 2025 judgment in Union of India v. Tarsem Singh reaffirms the retrospective applicability of the 2019 Tarsem Singh judgment, ensuring that landowners who were denied ‘solatium’ and ‘interest’ between 1997 and 2015 are rightfully compensated. The decision underscores the importance of upholding constitutional principles of equality and non-discrimination, and ensures that the State cannot arbitrarily discriminate in matters of compensation. It serves as a significant reminder that legal finality should not perpetuate injustice. The judgment directs the relevant authorities to calculate and disburse payments of ‘solatium’ and interest.

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