The process of land acquisition for national highways has, for a long time, been a source of considerable emotional and economic stress for families all over India. To many households, land is not merely a piece of property, but a source of livelihood, heritage, stability, and identity. When the government decides to acquire land for highway construction or expansion, landowners naturally expect just compensation reflecting not only the market value of the land but also the hardships associated with compulsory acquisition. However, for almost two decades, this expectation remained unmet for scores of families who were affected by acquisitions made by NHAI.
The root of this injustice was one lone provision in the National Highways Act, 1956: Section 3J. It denied landowners much-needed statutory benefits afforded by the Land Acquisition Act, hence offering lower compensation in comparison. Years of litigation, confusion, and injustice followed, pending the Supreme Court judgment popularly referred to as the Tarsem Singh judgment, pronounced in 2019, and further clarified in February 2025.
Section 3J of the NHAI Act: Background and Controversy
Section 3J held that none of the provisions of the Land Acquisition Act would apply to
acquisitions conducted under the National Highways Act. In practice, this meant that land
owners whose lands were acquired by the NHAI were deprived of several important monetary
protections, including:
➢ Solatium: this is a statutory additional amount of compensation awarded because
acquisition is compulsory
➢ Interest-Statutory interest, compensation for delays in payment.
➢ Additional benefits such as enhanced compensation available under the earlier Land Acquisition Act
Meanwhile, other landowners whose properties were affected by various public projects continued to enjoy such protections. The resulting disparate treatment generated an inequitable scenario wherein two landowners in the same district could receive substantially different benefits solely because of the different statutory schemes applicable to their acquisitions.
This led to a number of landowners and their counsel contesting Section 3J before various High Courts, which ultimately brought it before the Supreme Court.
Solatium and Interest: Definitions and Implications
Understanding the hardship engendered by Section 3J requires clarity on solatium and interest.
➢ Solatium: Compensation paid for land forcibly acquired, representing that the deal was not a voluntary one and thus causing disturbed feelings and social adjustment. According to the Land Acquisition Act, solatium is imposed as 30% of the land market value, and it supplements the total compensation sizeably.
➢ Interest: Compensation for delayed payment, acknowledging that most government acquisitions involve long periods between takeover of land and actual payment. Statutory interest guards against loss of real value because of time delay.
Excluding these components under Section 3J resulted in comparatively reduced compensation in NHAI acquisitions, notwithstanding the mandatory and involuntary character of the acquisition process.
The 2019 Landmark Judgment: Union of India v. Tarsem Singh
In 2019, the Supreme Court delivered a landmark judgment in Union of India v. Tarsem Singh that curtailed the ambit of the legal regime for land acquisition related to highways. The Court declared Section 3J unconstitutional and violative of Article 14, Right to Equality. The judgment found that landowners whose lands were being acquired for highways were wrongly divested of their solatium and interest, stating: For acquisitions conducted between 1997 and 2015, land owners were entitled to solatium and interest.
The differential treatment arising from the exclusion of such benefits constituted irrational classification among landowners subject to different statutory regimes.
The Tarsem Singh judgment came as a relief for thousands of families who felt that they had been discriminated against. Thereafter, thousands of landowners approached the government for recalculating their compensation, while several High Courts passed orders granting solatium and interest in compliance with the guidelines issued by the Supreme Court.
Clarification Required: the 2019 Judgment
Even after the 2019 judgment, the NHAI had sought clarification on prospective application. More precisely, the NHAI contended that the Tarsem Singh judgment should only be applied prospectively to avoid reopening of closed cases and causing financial burdens on the government. The central question of selective application of justice involved a fundamental constitutional question: if solatium and interest form part of just compensation, should their award be guided by the date of acquisition?
This question was finally clarified by the Supreme Court in 2025.
Clarification by the Supreme Court in February 2025: Retrospective Relief
On 4 February 2025, the Supreme Court has reiterated that the Tarsem Singh judgment operates retrospectively. By a detailed order penned by Justices Surya Kant and Ujjal Bhuyan, the Court denied the prayer of NHAI for prospective application and held thus:
➢ Tarsem Singh judgment is to be applied retrospectively.
➢ The landowners whose land was acquired between the years 1997 and 2015 are entitled
to solatium and interest.
➢ Denying these benefits based on acquisition date violates equality and constitutional
protections.
➢ Financial cost cannot be a valid reason to deprive individuals of constitutional rights.
➢ Only the computation of solatium and interest needs any change; all other items of the
award remain the same.
The Court then used a simple example to demonstrate the unfairness of such prospective application: land acquired on 31 December 2014 would get no solatium, but land acquisition on 1 January 2015 would get the full benefits. Such a temporal distinction is bereft of rational reasoning and is contrary to basic tenets of fairness. The Court also made it clear that the addition of solatium and interest in such cases does not amount to reopening the merits of the case in courts but merely ensures that land owners receive benefits the law had always sought to grant them.
Implications for Landowners
The 2025 clarification significantly redefined landowners’ legal and financial rights. Its implications go beyond the realm of technical accounting to include:
➢ Fairness has been restored: compensation now reflects the actual effect of compulsory acquisition.
➢ Equal treatment: Recognition that NHAI acquisitions should not be treated any
differently from land acquisitions under the other statutory regimes.
➢ Constitutional protection: The Court has reiterated that financial matters cannot
outweigh constitutional rights.
➢ Recalculation opportunities: Even cases that have been closed may be entitled to further compensation.
➢ Increased total compensation: Adding solatium and interest greatly increases the total compensation and may result in quite substantial amounts.
This jurisprudence advances justice for landowners who had been denied rightful entitlements for an extended period.
Practical Guidance for Affected Landowners
Following are the advisable steps for the landowners whose land was acquired by the NHAI between 1997 and 2015:
➢ Review past award documents to check whether solatium and interest were included.
➢ Consult a legal professional to establish the specific amount to which one may be entitled.
➢ Representation for recalculation to be presented to the Competent Authority (Land Acquisition).
➢ Use the High Court to seek enforcement, if necessary, for rights recognized under the Tarsem Singh rulings and subsequent clarifications.
Many landowners have since hired legal experts to calculate the amount owed on top of what was paid. With the order from the Supreme Court, authorities are bound to act accordingly.
Conclusion
Historically, Section 3J of the NHAI Act deprived landowners of just compensation. The Supreme Court’s judgments in Tarsem Singh (2019) and the clarification in 2025 have duly addressed this inequity, reiterating that solatium and interest form an inherent part of just compensation for highway-related acquisitions. The current doctrine upholds that all those whose land was taken for highways enjoy the same protection as all other landowners in the country. For landowners affected during 1997–2015, the legal framework now supports a robust right to seek additional compensation previously denied.
